The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.10610 of 2014 TP Southern Odisha Distribution Ltd(TPSODL) …. Petitioner Mr. D.P.Nanda, Sr. Advocate -versus- Government of Orissa and others …. Opposite Parties Mr.Sisir Mohanty, Advocate for O.P.No.2 to 4. CORAM: JUSTICE A.K. MOHAPATRA Order No. 26. 1. This matter is taken up through Hybrid Arrangement (Virtual ORDER 04.03.2024 /Physical Mode). I.A. No.2859 of 2024 2. 3. Heard learned Senior Counsel for the Petitioner. This I.A. has filed seeking modification of order dated 31.01.2024. 4. Learned Senior Counsel for the Petitioner submitted that inadvertently there is some mistakes in order dated 31.01.2024. 5. Considering such submissions, the I.A. is allowed. Necessary corrections be carried out by recalling the order dated 31.01.2024. W.P.(C) No.10610 of 2014 6.
Legal Reasoning
Heard Mr.D.P.Nanda, learned senior Counsel appearing for the Petitioner and Mr.Sisir Mohanty, learned counsel appearing for the Regional Provident Fund Commissioner. 7. By filing the present Writ Petition, the Petitioner, which is an electricity distribution company that came into existence after reformation of electricity generation and distribution in the State of // 2 // Odisha pursuant to the Orissa Electricity Reforms Act, 1995, has approached this Court questioning the authority of the Opposite Party-Regional Provident Fund Commissioner to demand a certain amount towards outstanding Provident Fund dues in respect of 449 employees, who have been admittedly engaged in between the year 1998 to 2004 with a further prayer to quash the letters under Annexure-15, 16 and 26 . The Writ Petitioner has also prayed for a further direction to the Opposite Parties to transfer/refund the accumulated provident fund amount/ pension fund amount which have been collected in the meantime from the Petitioner Company with accrued interest thereon in respect of 449 employees as per the
Decision
list under Annxure-14 to the Writ Petition by treating the aforesaid 449 employees to be excluded employees under Section 16 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. 8. The factual background leading to the filing of the present Writ Petition in a nutshell, is that the Orissa State Electricity Board, (in short ‘OSEB’), was a Board, which was in charge of generation/distribution of electricity in the State of Orissa. In the year 1975 the OSEB applied for exemption from the applicability of the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. On such application, the appropriate Government i.e. Government of Odisha accorded exemption vide order dated 19.11.1975 under Annexure-1 to the Writ Petition. While this was the position, in the year 1990 the OSEB framed OSEB Employees Pension (including Old Age and Family Pension) Rules, 1992 with effect from 01.04.1990. The Regulation so formulated by the OSEB in the year 1990 was objected to and assailed by the EPF Commissioner. Eventually, the matter went up to the Hon’ble Supreme Court. The Hon’ble Supreme Court directed the State Government to nominate a senior Officer to submit a report // 3 // with regard to grant of exemption from Section 16 of the EPF & MP Act. Pursuant to the aforesaid order, the Commissioner-cum- Secretary, Labour & Employment Department basing upon the report submitted by the nominated Officer granted exclusion to OSEB from the purview of EPF & MP Act keeping in view the pension scheme adopted by the OSEB vide order dated 28.01.1997. 9. The order dated 28.01.1997 granting exclusion to the OSEB was again questioned by the Regional Provident Fund Commissioner by filing a Writ Petition bearing OJC No.17006 of 1997 before this Court. A Division Bench of this Court after hearing the counsels for both sides was pleased to dismiss the Writ Petition vide judgment dated 19.12.2020. While disposing of the Writ Petition, Hon’ble Division bench of this Court has categorically held that “ The impugned order is a declaration of satisfaction of the appropriate Government which is the State Government in the present case. Once the Conditions were satisfied, Section 16 of the Act came into play and the Act ceased to apply to the benefits under the said Provident Fund Rules and/or Pension Rules. For operation of Section 16 no Gazettee Notification is necessary.” The Division Bench while disposing of the above noted Writ Petition has further observed that “when Pension Regulations were framed with effect from April 1, 1990 the conditions contained in Section 16(1)(C) of the Act came to be satisfied in respect of the Employees covered by the said Provident Fund Rules and Pension Regulations of the OSEB. We are unable to accept the contention that it is a case for exemption under section 17 and not exclusion under Section 16 of the Act.” 10. While this was the position in the year 1996 the electricity generation and distribution in the State of Odisha was further reformed and accordingly by virtue of a new Legislation i.e. Orissa Electricity Reforms Act, 1995, the OSEB initially divided into two // 4 // entities, one for distribution of electricity i.e. GRIDCO and other for generation of electricity i.e. OHPC. Subsequently the distribution Company, GRIDCO was sub-divided into four Companies i.e. CESCO, WESCO, NESCO & SOUTHCO The present petitioner is one of such distribution utility Company which came into existence from 26.11.1998 ( now it is known as TPSODL), Furthermore, the distribution company so created including the Petitioner’s company framed its Pension and provident Fund Regulation and Trust by adopting GRIDCO Pension and Provident Fund Regulation and Trust. 11. After creation of the Petitioner’s company on 26.11.1998, the employees who were engaged by the OSEB in the SOUTHCO division is concerned, were all taken over by the Petitioner’s Company. In addition to the employees who have been transferred from the OSEB, the Petitioner’s Company also appointed certain employees in between 26.11.1998 to 31.12.2004. Such employees were kept under non-pensionary category and they became the members of the SOUTHCO Provident Fund Trust. The Petitioner company has deposited its contribution in the EPF organization. 12. On 18.07.2011 on the demand of similarly placed employees of the organization, the Board of the Petitioner’s company convened a meeting on 08.06.2011 and in the said meeting a decision was taken to extent the benefit of pension to the employees of the Petitioner’s company in the light of the decision of the OPTCL/GRIDCO in respect of 449 employees, who were recruited in between 26.11.1998 to 31.12.2004 after the Petitioner’s company came into existence. Further, it appears from the record the SOUTHCO invited option from the employees who joined the Petitioner’s Company in between 1998 – 2004 to come over pension scheme. In response to the aforesaid invitation all the 449 non-pensionary employees submitted // 5 // their option and expressed their desire to come over to the pension scheme and accordingly they became the members of the Pension and GPF scheme of the Petitioner’s Company. 13. Finally, after the aforesaid 449 non-pensionary employees submitted their options to come over to the Pension and GPF scheme of SOUTHCO Utility. The Petitioner submitted an application before the Regional Provident Fund Commissioner with a request to transfer the accumulated Provident Fund and Pension amount from EPF Organisation to GPF Trust of the Petitioner Company on the ground that the abovenoted 449 employees have not only given their consent to come over to the Pension and GPF scheme but also they satisfied the conditions as laid down in section 16 of the EPF & MP Act 1962. As a result of which such employees come under the exclusion as provided under Section 16 of EPF & MP Act. Such application filed by the Petitioner’s company was considered by the Regional Provident Fund Commissioner and finally vide order dated 08.1.2013 under Annexure-15 to the Writ Petition, the Petitioner Company was asked to prefer an application under Section 17 for exemption of the EPF & MP Act, 1952. 14. Thereafter, the Petitioner again applied for refund of money deposited in respect of 449 employees on the ground that two other similar Company i.e., NESCO & WESCO have implemented their scheme. On perusal of the record, it appears that the Petitioner made several requests to RPF Commissioner for return/refund of pension fund amount along with accrued interest in respect of 449 employees which have been deposited by the Petitioner’s Company. Finally, on 05.05.2014 the RPF Commissioner, Berhampur, Opposite Party No.3 passed an order with regard to non deposit of contribution in respect of 449 employees. 15. On perusal of the letter dated 05.05.2014 under Annexure-27, // 6 // it is revealed that so far 449 employees who have joined between 26.11.1998 to 31.12.2004 are concerned, they have not been specifically exempted. Accordingly, it was intimated that the Petitioner’s company may apply for exemption as has been suggested earlier by Opposite Party No.3. Further, the said letter also reveals that no communication has been made to the Office of Opposite Party No.3 by the Petitioner in the aforesaid context and that the Petitioner’ company has not deposited the dues for the last two years in respect of the 449 employees, who have joined prior to 31.12.2004. Accordingly, the Petitioner’s company was advised to apply for exemption and to deposit the dues in respect of the aforesaid 449 employees in which they got exemption from the appropriate Government as provided under section 16 & 17 of the EPF & MP Act. 16. Mr.Nanda, learned senior counsel appearing for the Petitioner at the outset submitted that since the OSEB has been granted specific exclusion by the appropriate Government and the Petitioner’s Company being an offshoot company of the OSEB, no specific exclusion is required. He further contended that the Petitioner company is also covered by the exclusion granted to the OSEB by the appropriate Government on 21.08.1997. Therefore, no further declaration is required with regard to exclusion of the exemption from the appropriate Government so far the Petitioner’s company is concerned, referring to the provisions contained in Section 16 of EPF & MP Act, learned senior counsel for the Petitioner contended that the provision will have automatic operation subject to the satisfaction of the twin conditions laid down therein. 17. In the aforesaid context, he also submitted that the present Petitioner’s company having satisfied the aforesaid twin conditions, no specific exclusion is required from the appropriate Government // 7 // and the same is to be presumed by the EPF authorities. Since the conditions are satisfied by the Petitioner’s company. In such view of the matter, learned counsel for the Petitioner submitted that withholding of the amount which has already been deposited by the EPF authority would be highly illegal and arbitrary. Therefore, the Opposite Parties be directed to refund the amount deposited by the Petitioner company in respect of those 449 employees along with accrued interest thereon to the Trust maintained by the Petitioner’s company within a stipulated period of time. 18. Mr.Mohanty, learned counsel for the EPF Organisation on the other hand contended that the exclusion under section 16 of the Act is granted in respect of an establishment. He further contended that exclusion was granted to the OSEB on 28.01.1997. Thereafter the present Petitioner’s company has come into existence. So far the present Petitioner is concerned, it was contended that there was no declaration granting specific exclusion to the Petitioner company as required under section 16 of the EPF & MP Act. He also contended that under Section 17 of the Act the appropriate Government has the power to grant exemption by virtue of a Notification to a certain category of establishment from operation/application of any of the provisions of 1952 Act. Such exemption can be granted either prospectively or retrospectively by the appropriate Government. 19. While defending the action of the Opposite Parties, particularly Opposite Party Mo.3 in not transferring the amount to the Trust maintained by the Petitioner’s Company, learned counsel for the Opposite Parties submitted that the Opposite Party No.3 has acted in consonance with the provisions contained in the EPF & MP Act 1952. He also contended that in absence of specific exclusion or exemption in respect of the Petitioner’s company by the appropriate Government, the Petitioner could not be returned/refunded the // 8 // deposit in respect of the aforesaid 449 employees by transferring the same to the Trust maintained by the Petitioner. In course of his argument, he also referred to the letters of the Opposite Party No.3 extensively to submit before this Court that the Petitioner company has been repeatedly indicated to get the exemption from the appropriate Government, failing which the Petitioner’s company shall be liable to pay the EPF dues in respect of the aforesaid 449 employees. In such view of the matter, learned counsel for the Opposite parties contended that the Writ Petition filed by the Petitioner is devoid of merit and the prayer made therein is without any legal basis. Therefore, the Opposite Parties are under no legal obligation to transfer the amount in question to Provident Fund Trust maintained by the Petitioner company. 20. Having heard learned counsel appearing for the parties, on a careful examination of the factual background of the present case and the materials on record, this Court is of the view that the question that is required to be determined is as to whether the Petitioner Company is entitled to get exclusion under section 16 of the Provident Fund Act or as the case may be, the exemption under section 17 of the Act, 1952 ? Learned senior counsel appearing for the Petitioner referring to the exclusion granted to the OSEB earlier for the year 1996 and 1997 and further affirmation of the exclusion dated 28.01.1997 by a Division Bench of this Court in OJC No.17006 of 1997 disposed of on 19.12.2000, submitted before this Court that the employees of the Petitioner’s Company who have come on transfer from the earlier OSEB are covered under the exclusion granted to the OSEB by the appropriate Government earlier pursuant to the order under Annexure-3. The dispute in the present Writ Petition is with regard to 449 employees, who have been appointed in between 1998 to 2004. 17. So far those employees are concerned, learned counsel for the // 9 // Petitioner submitted that those employees have given consent and willingness to come over to the Trust created by the Petitioner’s company, which is more beneficial to the employees than the benefits as provided under section 16 of the Act. In such view of the matter, learned senior counsel for the Petitioner contended that the operation of section 16 thereby excluding certain establishments from operation of the Statute being automatic, the Petitioner’s company has not given any application seeking exclusion. He further contended that in view of the decision in the earlier Writ Petition by a Division Bench no declaration under section 16 is required. Mr. Mohanty, learned counsel for the Opposite Parties on the other hand contended that the exclusion having been granted to the OSEB cannot come to the aid of the Petitioner’s company, thereafter the Opposite Parties are bound by the EPF & MP Act. In absence of exclusion/exemption as provided under section 16 and 17 of the EPF & MP Act, the Opposite Parties are bound to collect provident fund dues from the Petitioner. In the event of failure it is well within their authority to take penal action against the Petitioner’s company. 21. This Court on a careful analysis of the provisions contained under sections 16 & 17 of the EPF & MP Act observes that Section 16 applies to a certain category of establishments on the fulfillment of certain conditions mentioned therein. Therefore, Section 16 of the EPF & MP Act deals with exclusion from the purview of the Statute subject to the conditions mentioned in Section 16. Moreover, Section 16 does not reveal that any declaration is required for the purpose of exclusion from the purview of EPF & MP Act, 1952. Similarly Section 17 confers powers on the appropriate Government i.e. Government of Odisha in the present case, to exempt certain categories of establishment from the purview of any of the provisions of any scheme. Such exemption was to be granted by // 10 // publishing a Notification in the Official Gazette of the appropriate Government. For the purpose of granting such exemption Section 17 of the Act lays down a procedure to be followed by the appropriate Government and the consideration is to be made by such Government while granting such exemption. The basic factors that is required to be examined by the appropriate Government is that the employees concerned are in enjoyment of any other provident fund benefits which are not less beneficial to the employees than the benefit provided under this Act or any scheme concerning the employees in any other establishment of a similar character. 22. For better understanding of the issues involved in the present case, this Court would like to quote the provisions contained in Section 16 & 17 of the EPF & MP Act 1952. 16. Act not to apply to certain establishments – (1) This Act shall not apply – a) to any establishment registered under the Co- operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State relating to co- operative societies, employing less than fifty persons and working without the aid of power; or b) to any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefit of contributory Provident Fund or old age pension in accordance with any Scheme or rule framed by the Central Government or the State Government governing such benefits; or c) to any other establishment set up under any Central, Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age pension in accordance with any Scheme or rule framed under that Act governing such benefits; 17. Power to exempt – (1) The appropriate Government may, by notification in the Official Gazette, and subject to such conditions as may be specified in the Notification, (exempt, whether prospectively or retrospectively, from the operation) of all or any of the provisions of any Scheme- a) any (establishment) to which this Act applies, if, // 11 // in the opinion of the appropriate Government, the rules of its Provident Fund with respect to the rates of contribution are not less favourable than those specified in Section 6 and the employees are also in enjoyment of other Provident Fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in any other (establishment) of a similar character; or the employees relation in to b) any (establishment) if the employees of such (establishment) are in enjoyment of benefits in the nature of Provident Fund, pension or gratuity and the appropriate Government is of opinion that such benefits, separately or jointly, are on the whole not less favourable to such employees than the benefits provided under this Act or any Scheme in relation to employees in any other (establishment) of a similar character: (Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate Government within such time limit as may be specified in the Scheme.) 23. Taking into consideration the fact that the Petitioner company is having a scheme of its own and such scheme is being managed by a Trust created by the Petitioner company and that the benefits as claimed by the learned counsel for the Petitioner are more beneficial than the benefits available under the Statute, the Petitioner’s company satisfies such criteria for getting declaration by the appropriate Government with regard to the aforesaid 449 employees. Thus, it would be desirable that the Petitioner approaches the Government by establishing the fact that they have given consent to come over to the scheme of the Petitioner’s company and same is more beneficial than the benefits which would have accrued in their favour under the Statute. 24. In the aforesaid backdrop this Court, without entering into the factual dispute involved in the present case is of the considered view that it is not disputed that no specific exclusion and exemption has // 12 // been granted in favour of such 449 employees of the Petitioner’s company although it is not in dispute that such exclusion was granted to the establishment viz; the OSEB of which the Petitioner’s company is an offshoot. To resolve the dispute, this Court deems it proper to dispose of the Writ Petition by directing the Petitioner to approach the appropriate Government i.e. Opposite Party No.1 by filing an appropriate application along with supporting documents claiming either the exclusion under Section 16 or exemption under Section 17 of the EPF & MP Act 1952 within four weeks from today. In the event such an application is filed before Opposite Party No.1, the Opposite Party No.1 shall do well to examine the application in the light of Sections 16 & 17 of the EPF & MP Act. and further, by taking into consideration the exemption granted by the Appropriate Government till the year 1990 and that the exclusion granted in the year 1997 having been affirmed by the order of a Division Bench of this Court, and shall take a final decision within a period of two months from the date of filing such application. It is further directed that till a final decision is taken by the Opposite Party No.1 in the manner as has been directed herein above, the Opposite Parties shall not take any coercive action against the Petitioner’s company. The final decision so taken be communicated to the Petitioner within two weeks from the date of taking such a decision. 25. With the aforesaid observation/direction, the Writ Petition stands disposed of. Anil ( A.K. Mohapatra ) Judge Signature Not Verified Digitally Signed Signed by: ANIL KUMAR SAHOO Designation: Junior Stenographer Reason: Authentication Location: High Court of Orissa Date: 11-Mar-2024 09:39:49