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Synopsis

The Supreme Court recently directed the disbursal of retiral benefits to a professor of a central university under the General Provident Fund-cum-pension-cum-gratuity scheme in accordance with the law and subject to adjustments of the benefits, if any, availed by him under the Contributory Provident Fund scheme.

A bench of Justices P. S. Narasimha and Manoj Misra stated that since it was an admitted fact that the appellant, Mukesh Kumar Singh, did not exercise his option under the office order of February 21, 2008, he did not opt for the Contributory Provident Fund Scheme. Therefore, as per the university statutes and the office order, he was entitled to retiral benefits under the General Provident Fund-cum-pension-cum-gratuity scheme.

Allowing his appeal, the bench said, "The High Court wrongly dismissed his writ petition on the ground that he did not exercise his option. In fact, being included under the second retiral scheme is a consequence of non-exercise of option provided under the Office Order. Further, once the High Court granted relief to similarly placed persons, it ought not to have dismissed the appellant’s writ petition."

The appeal arose from a high court order of November 24, 2022, that dismissed the appellant’s writ appeal against the single judge’s order of February 27, 2019, by which his writ petition to be included in the university’s General Provident Fund-cum-pension-cum-gratuity scheme of retiral benefits was dismissed.

The appellant was appointed as Junior Scientist-cum-Assistant Professor by the respondent-university, namely the then Rajendra Agricultural University (now Dr. Rajendra Prasad Central Agricultural University) in 1987. At the time of his appointment, the university was governed by the Rajendra Agricultural University Statutes, 1976.

As per Chapter 16 of the university statutes, there were two schemes of retiral benefits: (i) Contributory Provident Fund, which employees must opt for and which disentitles employees from receiving pension and General Provident Fund as per Chapter 16.1(b)(i) and 16.1(e); and (ii) General Provident Fund, pension, and gratuity for those employees who do not opt for the Contributory Provident Fund.

In order to implement these provisions, the respondent university invited options from its employees at various points.

The appellant did not submit his option to opt into the Contributory Provident Fund within the time stipulated in Clause (II) of the office order. At this stage, the natural consequence as per Clause (IV) of the office order itself, as well as Chapter 16.1(b)(i) of the university statutes, should have been that the appellant was included in the second scheme of retiral benefits, i.e., General Provident Fund-cum-pension-cum-gratuity.

However, when the respondent-university published a list of employees in this scheme on April 12, 2008, the appellant found that his name was not included. After submitting several representations for his name to be included, the appellant preferred a writ petition before the high court under Article 226 of the Constitution to be included under the scheme for pension, gratuity, and General Provident Fund on superannuation. During the pendency of this writ petition, the appellant superannuated on January 30, 2019.

The single judge of the high court dismissed the writ petition by order on February 27, 2019, reasoning that the appellant did not opt for these retiral benefits despite being given the option in 1990, 1995, 1996, and 2008. The appellant’s writ appeal was dismissed by order of November 24, 2022, on a similar ground that the appellant did not exercise his option, and hence remains under the Contributory Provident Fund scheme.

After hearing the counsels for the parties and upon considering the clear provisions of the university statutes and the office order, and referring to the decisions of the high court in cases of similarly placed persons relied on by the counsel for the appellant, the bench said, "We are of the opinion that the impugned order is liable to be set aside and the present appeal must be allowed."

The court pointed out that Chapter 16 of the university statutes that was in force at the time of the appellant’s appointment clearly stipulated the applicable scheme of retiral benefits for the university’s employees.

It noted that Chapter 16.1(a) provided that the scheme for pension, General Provident Fund, and Contributory Provident Fund should be as mentioned in the chapter. Chapter 16.1(b)(i) stated that employees appointed by the respondent-university “will be entitled to pension provided they do not opt for subscribing to the Contributory Provident Fund.” Chapter 16.1(c) provided for various kinds of pension and gratuity, and Chapter 16.1(e) provided that those who are not admitted to the Contributory Provident Fund should get the benefit of the General Provident Fund.

"These provisions clearly show that the default retiral scheme applicable to the University’s employees is General Provident Fund-cum-pension-cum-gratuity, unless the employee has specifically opted for the Contributory Provident Fund scheme," the bench said.

The court also noted that the 2008 office order, issued to implement the provisions of Chapter 16 of the university statutes, also had the same effect.

It allowed the employees to opt for two kinds of Contributory Provident Fund schemes within one month from issuance, and Clause (IV) provided that the employees who do not exercise their option for either scheme “shall be included in the Pension Scheme in terms of Chapter (16.1) of the Act.” Therefore, even under the office order, non-exercise of any option to opt into the Contributory Provident Fund automatically entitles the university employees, including the appellant, to be included in the General Provident Fund-cum-pension-cum-gratuity scheme, the court said.

The bench also pointed out that, in fact, the high court had taken note of this position while disposing of writ petitions with similar prayers by other employees of the respondent-university.

In the decision of Arjun Kumar v. State of Bihar and Ors (2012), a single judge of the high court allowed the writ petition by holding that the option was to be exercised only by those who wanted to be included in the Contributory Provident Fund Scheme, while other employees would be covered by the General Provident Fund-cum-pension-cum-gratuity scheme as per Chapter 16.1 of the university statutes.

The court thus set aside the impugned order of November 24, 2022, passed by the High Court of Judicature at Patna and directed the disbursal of retiral benefits under the General Provident Fund-cum-pension-cum-gratuity scheme in accordance with the law by making the necessary computation within a period of four months.

Case Title: Mukesh Prasad Singh Vs The Then Rajendra Agricultural University (Now Dr Rajendra Prasad Central Agricultural University) & Ors