Abdul Rashid Makroo v. State of JK & Ors.

Judgment

1. The dispute in the present petition pertains to the interest claimed by the petitioner for a period from March 2005 till May 2011, when the accumulations/amount lying in the C P Fund account of the petitioner remained with the respondents. It is stated that the petitioner was earlier employed with J&K State Industrial Development Corporation Limited and he was having C. P. Fund Account No. JK/IC-127/16223. The contributions were regularly remitted by the petitioner’s employer under the C. P. Fund arrangement till August 2001.

2. The petitioner while being employed with SIDCO, was sent on deputation to another Corporation i.e. J&K State Power Development Corporation vide order No. 1245-GAD of 1997 and as the said corporation was not having its own Service Rules, therefore, the Corporation was following the Service Rules of Government of J&K. In the year 2001, the petitioner was absorbed in the J&K State Power Development Corporation Limited and the petitioner started contributing towards G. P. Fund Account w.e.f. October 2001.

3. In the year 2006, the petitioner came to know that the State Government vide SRO-23 dated 1st February 2005 has ordered discontinuance of charging of interest to such C.P Fund account holders who have ceased to contribute towards their accounts for more than three years. MOHAMMAD ALTAF NIMA 2022.03.29 12:17 I attest to the accuracy and integrity of this document SWP No. 2052/2017

4. The respondent No. 3 had added up interest upto 2005-2006 and thereafter though the said SRO was not applicable, the charging of the interest was ceased. As soon as the petitioner came to know, he made a representation dated 9th October 2006 stating therein that the petitioner does not fall under the ambit of SRO 23 as he has not discontinued making his subscription under the Provident Fund arrangement, and further that his C.P Fund accumulation along-with updated interest be transferred to his GP Fund Account. The previous employer of the petitioner i.e. JK SIDCO also vide its communication dated 31st August 2006 and the current employer of the petitioner i.e. JKSPDC vide its communication dated 18th October 2006 requested the CPF Office to transfer the accumulated amount along-with upto date interest to the petitioners G. P. Fund Account. As no action was taken for more than six months, the petitioner approached the respondent No. 2 in the matter by filing various representations dated 15th May 2007, 1st September 2007, 3rd March 2009, 3rd July 2009 and 24th May 2009, but the respondents slept over the matter and failed to take any decision.

5. After a delay of 6 years, the respondents No. 3 issued a communication dated 24th May 2011 enclosing a copy of communication of respondent No. 2 dated 8th October 2010 and through this communication, instructions were issued to pay interest to the petitioner upto the date of issuance of SRO and cheque dated 6th July 2011 for an amount of Rs. 5, 96,157.00 lacs was issued which was due amount to the petitioner as on 1st February 2005. As the petitioner was deprived of the interest on the said amount for a period of six years, the petitioner approached the respondent No. 2 vide his representation dated 13th June 2011 and sought withdrawal of the above communication and when the petitioner did not get any response, the petitioner again re-agitated the matter and the respondent No. 2 furnished a report to respondent No. 1 vide its letter dated 12th April 2012 stating therein that as a result of protracted correspondence with Additional Provident Fund Commissioner,

Srinagar for justifying the reasons for such negligence, he vide his letter dated 19th August 2011 attributed the delay for such negligence to dealing assistant/receipt clerk of his office and further stated that the MOHAMMAD ALTAF NIMA 2022.03.29 12:17 I attest to the accuracy and integrity of this document SWP No. 2052/2017 action would be taken against him. Further, the respondent No. 1 directed the respondent No. 2 vide its communication dated 25th May 2012 to pay all the claims due under law/rules to the petitioner and also conduct enquiry personally to identify officers/officials responsible for such delay and proposed action against them including recovery of excess interest, if any and that PFO has to pay due to the delay.

6. The respondent No. 3 came up with another report dated 7th August 2012 by holding some of its officials responsible for the delay and concluded that as the amount was lying with this office, if the authority deems it fit to pay the interest to the outgoing member, that office shall have no objection.

7. The respondent No. 2 vide its communication dated 23rdFebruary 2013 addressed to respondent No. 1 conveyed that the matter is required to be placed before the Board of Trustees for final decision.

8. After a delay of four years, the matter was placed before the Board of Trustees which is the highest decision-making body and the Board of Trustees decided to stick to the earlier decision and pay the interest up to the date of issuance of SRO. The said decision was taken on 6th July 2017 but was never communicated to the petitioner nor the petitioner was given any right of hearing before deciding his rights. The petitioner impugned the order dated 6th July 2017 and also communication/order dated 8th October 2010 on the grounds that it was because of the respondents that there has been a delay of payment of the due amount to the petitioner for six years, thus depriving the petitioner to earn interest on the said amount as per the applicable rules. It is also stated that no right of hearing was afforded to the petitioner before passing the impugned order and further that SRO 23 was not applicable in case of petitioner as despite repeated requests, the respondents did not transmit the amount to the account of the petitioner and took six years to decide the claim of the petitioner.

9. The petitioner in support of his claim has placed on record the various communication issued by the respondents.

10. Response stands filed by the respondents in which it is stated that the petitioner submitted his application form for the transfer of his C.P. SWP No. 2052/2017 MOHAMMAD ALTAF NIMA 2022.03.29 12:17 I attest to the accuracy and integrity of this document Fund accumulations from C. P. Fund to his new G. P. Fund account in October 2006 which he was supposed to submit on the date he ceased to subscribe towards C. P. Fund and further that the case of the petitioner was processed under proper rules and interest was calculated as per SRO 23 being an inoperative account from August 2001. However, the petitioner did not accept the same and requested the dealing assistant, Head Clerk and Section Officer verbally to keep the case pending, as such there was no delay on the part of the Provident Fund Office. Respondents in their response have admitted so far as the representations made by the petitioner are concerned. It is further stated that the case of the petitioner was put before the Board of Trustees in 2017 and on the recommendation of the Board, the interest was paid up to the issuance of SRO 23 i.e. upto 1st February 2005 which was otherwise to be paid upto August 2004 as per SRO 23.

11. Mr S. A. Makroo, learned senior counsel vehemently argued that not only the petitioner but also the erstwhile as well as subsequent employer of the petitioner requested the respondents to transfer the amount lying in the C.P. Fund account of the petitioner to G.P fund, but despite that, needful was not done. It was only in the year 2011, the cheque of Rs. 5,96,157/- was issued. Mr Makroo, learned senior counsel further submits that the respondents are solely responsible for the delay of six years caused in the payment particularly when petitioner had been representing before them for transferring the amount and further it has been established in the enquiry conducted by the respondents themselves that the dealing assistant was of the notion that he had to wait till the case was decided by the Worthy Provident Fund Commissioner as the petitioner was disputing the applicability of the SRO.

12. Per contra, Mr. Sajad Ashraf, learned GA submits that as per SRO 23, the payment of interest is restricted to three years from the date of ceasing of the subscription and he further submits that there was no delay on the part of the respondents.

13. Heard and perused the record. MOHAMMAD ALTAF NIMA 2022.03.29 12:17 I attest to the accuracy and integrity of this document SWP No. 2052/2017

14. The only issue is with regard to the payment of interest for a period, for which the accumulations/amount in CP Fund account of the petitioner remained with the respondents. From the record, it is evident that the petitioner first time requested the respondent No. 2 for transferring the C. P. Fund accumulation along with updated interest to G. P. Fund account of the petitioner vide communication dated 9th October 2006. However, prior to that, the erstwhile employer of the petitioner vide letter dated 31st August 2006, had also requested the respondent No. 3 to transfer the said accumulation along-with interest from C. P. Fund to G.P. Fund Account of the petitioner and later on, the subsequent employer of the petitioner too made similar request to the respondent No. 3.

15. The SRO was issued on 1st February 2005 and as per the communication dated 8th October 2010, the Deputy Fund Commissioner (C) communicated the respondent No. 3 to pay interest up to the date of issuance of SRO 23 dated 1st February 2005.

16. The petitioner has placed on record the communication dated 12th April 2012 addressed by the Deputy Fund Commissioner to the respondent No. 1 wherein it is mentioned that the respondent No. 3 has stated that the delay has occasioned because of negligence of dealing assistant/receipt clerk of his office and he has further stated that the appropriate action shall be initiated against them. Further, a perusal of the enquiry report dated 7th August 2012 reveals that the delay has been attributed to the wrong notion nurtured by the dealing assistant of the Additional Provident Fund Commissioner.

17. From the record, it is thus evident that the delay in making the payment has occasioned due to the negligence of the officials of the respondents and for such delay, the petitioner cannot be made to suffer. The letter dated 8th October 2010 that provides for payment of interest only up to the date of issuance of SRO is also not sustainable being arbitrary as no reason is forthcoming as to why the interest was not to be paid beyond the issuance of SRO particularly when the amount was lying with the respondents and despite requests the same was not transferred in the GP Fund account of the petitioner and on same analogy the order dated 6th MOHAMMAD ALTAF NIMA 2022.03.29 12:17 I attest to the accuracy and integrity of this document SWP No. 2052/2017 July 2017 also is not sustainable. As such, this Court has no hesitation to hold that the respondents without any rhyme and reason, have denied the payment of interest for the delayed payment to the petitioner arbitrarily. Though the petitioner has claimed interest from March 2005 till May 2011, but as the erstwhile employer of the petitioner first time intimated the respondents to transfer the accumulations along-with up to date interest to the G. P. Fund account of the petitioner vide letter dated 31st August 2006, so this court is of the considered opinion that the petitioner is entitled to the interest for the delayed payment @ 6% per annum from September 2006 to May 2011.

18. Viewed, thus both the orders dated 8th October 2010 and 6th July 2017 are quashed and the respondents are directed to pay interest on the amount wrongly withheld by the respondents @ 6% per annum from September 2006 to May 2011 within a period of three months from the date a copy of this order is served on the respondents.

19. Disposed of. SRINAGAR 24.03.2022 Altaf (RAJNESH OSWAL) JUDGE Whether the order is speaking? Yes/No. Whether the order is reportable? Yes/No. MOHAMMAD ALTAF NIMA 2022.03.29 12:17 I attest to the accuracy and integrity of this document SWP No. 2052/2017