HIGH COURT OF CHATTISGARH AT BILASPUR
WRIT PETITION NO 07 of 2001
WRIT PETITION s NO 7090 of 2007
WRIT PETITION NO 1335 of 2005
R Mukhopadhyay, Legal Manager
M K Khastagir
Hari Singh Kanwar
...Petitioners
Versus
1 Union of India through Secy.
Ministry of Law, New Delhi.
2 Coal Mines Provident Fund
Commissioner
3 Regional Coal Mines Provident Fund
Commissioner
4 South Eastern Coalfields Limited
5 Commissioner, Coal Mines Provident
...Respondents
! Petitioner in Person In W P No 07 of 2001
Mr Gary Mukhopadhyay, For petitioner in W P s No 7090 of 07
Mr R Mukhopadhyay & Mr Gary Mukhopadhya For petitioner in W P No 1335 of 2005
^ Mr S K Beriwal, Advocate For respondent Union of India in all the petitions
Mr Alok Bakshi Advocate For respondent-Coal Mines appears on behalf of Mr A S Provident Fund in all the
Geharwar, Advocate petitions
Mr P S Koshy, Advocate For respondent SECL in W P No 07 of 2001 & WPs No 7090 of 07
Mr H B Agarwal, Sr Adv with For respondent SECL in Miss Rinki Tamrakar, Advocate W P No 1335 of 2005
HON MR DHIRENDRA MISHRA & HON MR R N CHANDRAKAR JJ
Dated: 16/06/2009
: Judgment
O R D E R
(Passed on 16th June, 2009)
Dhirendra Mishra, J
1. These petitions are being disposed of by this common
order, as the petitioners in these petitions have impugned the
constitutional validity of Para-61 of the Coal Mines Provident
Fund Scheme (for short `the Scheme’) framed in exercise of the
powers conferred by Section 3 of the Coal Mines Provident Fund
and Miscellaneous Provisions Act, 1948 (for short `the Act,
1948′).
2. For the purpose of this order, reference is made to the
facts of W.P. No.07/2001 (R. Mukhopadhyay Vs. Union of India &
ors).
3. Briefly stated, facts of the case are that the petitioners
herein have been retired as Officers working under the South
Eastern Coalfields Limited (for short `SECL’). Petitioners
namely R. Mukhopadhya & M.K. Khastagir became members of the
Coal Mines Provident Fund (for short `CMPF’) after joining
their services in the erstwhile Rewa Coalfields Limited &
Chrimiri Colliery Company Limited respectively. Whereas,
petitioner-Hari Singh Kanwar joined National Coal Development
Corporation (for short `NCDC’), a Central Government
undertaking, and became member of NCDC Provident Fund (for
short `NCDCPF’). After nationalization of the Coal Mines in
the year 1973, NCDC as well as erstwhile private sector
companies came under the management of Coal Mines Authority
Limited. Subsequently, coal industry was reorganized and Coal
India Limited (for short `CIL’), a government company, was
formed with its subsidiaries companies including SECL. The SECL
and Central Coalfields Limited (for short `CCL’) are also
government companies registered under the Companies Act, 1956.
After nationalization, NCDC got merged with CIL and Head-office
of NCDC, Ranchi became the registered office of CCL. After
formation of CCL, NCDCPF was renamed as Central Coalfields
Limited Staff Provident Fund (for short `CCLSPF’) and the rules
applicable to the members of NCDCPF continued to be same as the
members of CCLSPF.
As per Rule 15 (a) of the CCLSPF Rules, CCLSPF was a
contributory provident fund. Contribution of each member
was deducted from his salary and equal amount was
contributed by the company to the fund. Both these
amounts were deposited to the fund balance in the credit
of the members. Similarly, CMPF is also a contributory
fund. The employer is to contribute equal amount as the
employee and both the amounts are to be deposited with
CMPF through SECL every month.
Rule 19 (d) of CCLSPF Rules provides that interest
payable on the balance of the fund of the member is to be
calculated at the close of financial year in the manner
prescribed for the General Provident Fund of the
Government of India, whereas, interest is to be paid to
the members of CMPF as per Para-61 of the Scheme.
After nationalization of the Coal Mines in the year
1973, all the employees of the coal mines came under the
same employer i.e. CIL, however, service conditions for
the employees including provident fund rules continued to
remain separate. In exercise of powers conferred under
Section 3 (E) of the Act, 1948, the Coalmines Family
Pension Scheme, 1971 was superceded and a new pension
scheme was framed as Coal Mines Family Pension Scheme,
1998. However, benefits of this scheme were not extended
to the members of CCLSPF and members of Coalmines
Authority Limited Staff Provident Fund.
The above exclusion caused resentment amongst the
members of CCLSPF and in these circumstances the Board of
Trustees of CCLSPF resolved to merge CCLSPF with CMPF so
that the members of CCLSPF could also became eligible for
pension and accordingly merger was effected vide gazette
notification dated 8.10.2004. In consequence of the above
merger all the amount in the credit of the members of
CCLSPF was transferred to CMPF and accordingly, petitioner
Hari Singh Kanwar also became eligible for pension subject
to compliance of conditions imposed by subsequent gazette
notification dated 13.2.2003. After petitioner- Hari Singh
Kanwar became member of CMPF, he was paid interest
annually in terms of Para-61 of the Scheme.
4. The common grievance of the petitioners in these petitions
is that the members of CMPF are denied interest on their
deposits towards provident fund from the date the same is
deducted from their salary and equal amount is deposited by the
SECL in their CMPF account.
5. Contention of learned counsel for the petitioners is that
the contribution of CMPF amount of the petitioners is to be
deposited every month and therefore, they should also be paid
interest with effect from the date of deposit. Prior to merger
of CCLSPF in CMPF, petitioner-Hari Singh Kunwar was paid
interest in the manner of calculation of interest under the
General Provident Fund, as per Rule 19 (d) of the CCLSPF Rules.
Rule 11 (2) sub-para (iii) of GPF (Central Services) Rules
clearly stipulates that interest shall be paid on all sums
credited to the subscriber’s account after last day of the
preceding year from the date of deposit upto the end of the
current year. The manner of calculation of interest under the
Scheme is given in Para 61 (2) according to which no interest
is to be paid to the employee for the monthly contribution from
the date of deposit. Where opening balance of the employee is
Nil in any particular financial year in that case he will not
be entitled for any interest for the whole year though he has
regularly deposited the monthly contribution towards provident
fund. Under Para 61 (2) of the Scheme the employee suffers
recurring loss of interest throughout his service career in
this manner.
Petitioner-Hari Singh Kanwar was getting interest on
his deposits from the date of deposit and interest was
calculated in the manner prescribed in Rule 11 of GPF (CS)
Rules. After the date of merger of CCLSPF and CMPF, he
became entitled for CMPF only after depositing substantial
amount with interest to the pension fund, however, the
benefit which he was enjoying since joining coal industry
was taken away after merger as per the Scheme.
Calculation of interest under Para 61 (2) of the Scheme is
illegal and arbitrary.
6. On the other hand learned counsel for respondents No.2 & 3
submitted that the Scheme has been framed by the Central
Government to offer best possible return on provident fund
contribution and its investment with maximum security on
deposits, at the same time discharging the duties under the
Scheme keeping the corpus dependable. Because of prudent
investment by the CMPF organization, its subscribers are
getting higher rate of interest than the GPF subscribers, as
would be evident from the comparative table. The provisions of
GPF & CMPF Act cannot be compared. The Scheme under CMPF Act
has been framed as industry-specific, whereas, Employees
Provident Fund Scheme, 1952 covers around 30 million employees
who are paid interest on monthly running basis. The said
scheme debars a subscriber to become its member whose monthly
salary exceeds Rs.6500/- under Para 2 (f)(ii) of the E.P.F.
Scheme, 1952. Whereas, there is no such bar and limitation
under the Scheme. Apart from this, the members of the Scheme
are getting benefit of 12% matching contribution from the
employer. In absence of any ceiling of income, the Senior
Executive of Coal Company is getting matching contribution of
Rs.7,000/- to 8,000/- per month from their employer apart from
the interest that would accrue on such contribution. Under the
EPF Scheme, 1952 contribution for some employees is 10% of the
gross wage while for others it is 12% of gross wage, whereas,
the Scheme provides for 12% contribution across the board,
irrespective of class of employees and their earnings.
It was further argued that W.P. No.6402/2002 (P.N.
Chakrovorthy Vs. Union of India & others) and W.P.
No.6431/02 (G.K. Mitra Vs. Union of India & others) were
filed before the High Court of Madhya Pradesh seeking
similar relief and the same were dismissed by the High
Court on 26.2.2004. Special Leave Petition (Civil)
No.10382/2004 was filed by the petitioner in W.P.
No.6420/02 before the Hon’ble Supreme Court and the same
was also dismissed in limine vide order dated 17.9.2004.
(Annexures R-16 to R-18 in W.P. No.1335/05).
7. Similar arguments were advanced by learned counsel for the
respondent-Union of India and respondent-SECL.
8. Mr. Gary Mukhopadhyay, learned counsel for the petitioners
submits that the earlier petitions filed for similar relief
were dismissed with an observation that “it is submitted by the
learned counsel for the respondents that the Board of Trustees,
after considering various aspects of the matter, have decided
that interest should be calculated on the original balance at
the end of the year. No authority has been produced before
this Court by the petitioner to show that the Scheme is
arbitrary and ultra-vires of the Act”. S.L.P. has also been
dismissed at the threshold without entering into the merits.
Relying upon the judgment in the matter of D.S.
Nakara and others Vs. Union of India reported in AIR 1983
SC 130 it was argued that the absence of precedent cannot
be a ground to dismiss a petition challenging
constitutional validity of a scheme framed under the Act.
Further relying upon the judgment of the Hon’ble Supreme
Court in the matter of Kunhayammed & others Vs. State of
Kerala & another reported in (2000) 6 SCC 359 it was
argued that where a SLP is dismissed by a non-speaking
order without assigning reasons for dismissing the SLP, it
would neither attract the doctrine of merger so as to
stand substituted in place of the order put in issue
before it nor would it be a declaration of law by the
Court under Article 141 of the Constitution for there is
no law which has been declared.
9. We have heard learned counsel for the parties.
10. So far as the last argument advanced by learned counsel
for the respondent- Coal Mines Provident Fund that a writ
petition for similar relief has been dismissed by the High
Court of Madhya Pradesh and S.L.P. against the order of
dismissal has been further dismissed by the Hon’ble Supreme
Court is concerned, after perusal of the order of dismissal
passed by the High Court and subsequent dismissal by the
Hon’ble Supreme Court, we find substance in the arguments of
the petitioners that the petition has been dismissed only on
the ground that no authority has been produced to show that the
scheme is arbitrary and ultra-vires of the Act. Appeal against
the above order has been dismissed at the threshold and it does
not assign reasons for dismissing the special leave petition.
Relying upon the judgments in the matters of D.S. Nakara
(supra) & Kunhayammed (supra), we hold that dismissal of the
earlier writ petition for similar relief finally by the Hon’ble
Supreme Court will not make the instant petitions non-
maintainable and we propose to decide the same on merits.
11. Before entering into the merits of the rival contentions,
we propose to trace the history of the legislation under
consideration. The Act, 1948 (Annexure R-1) was enacted with
an object of making provisions for framing of provident fund
scheme; family pension scheme; deposit linked insurance scheme
and bonus scheme for the persons employed in the coal mines.
In exercise of powers under Section 3 of the Act, 1948 a Coal
Mines Provident Fund Scheme (Annexure R-2) was framed vide
notification dated 11.12.1948. In further exercise of powers
under Section 3 of the Act, 1948 a Coal Mines Family Pension
Scheme, 1971 (Annexure R-3) was also framed. Coal Mines
Deposit Linked Insurance Scheme, 1976 (Annexure R-4) was also
framed in exercise of powers under Section 3 (G) of the Act,
1948. However, in further exercise of powers under Section 3
(E) of the Act, 1948 Coal Mines Pension Scheme, 1998 (CMPS)
(Annexure R-5) was prepared in supercession of Coal Mines
Family Pension Scheme, 1971. As already stated in foregoing
paragraphs, the provisions of CMPS were not applicable to the
members of CCLSPF. After the Board of Trustees of CCLSPF
decided to merge CCLSPF with CMPF and after notification of the
same, the CMPS Rules were applicable to the erstwhile employees
of NCDC.
The Scheme is in force in whole of the country and
the same is applicable to all the coal mines workers
working under different subsidiaries companies of the CIL.
Para-27 of the Scheme provides for rate of contribution
towards provident fund by the employee and the employer.
Para-29 provides for recovery of member’s contribution
from his salary. Para-37 cast a duty upon the employer to
ask every member of the fund to declare particulars
concerning himself and his nominee in Form-A for
communication to the Commissioner. Contribution Cards are
also issued under the Scheme to the members. Period of
currency of contribution card is one year. Para-41
mandates that the employer shall on or before expiration
of period of currency prepare a contribution card in
respect of each member employee by him or a ledger in the
Form-YY. Under Para-42 every employer is to submit to the
Commissioner or such other officer subordinate to him, as
may be authorized by him on his behalf, contribution
cards. Para-42 (5) cast a duty on the employer to submit
statement of contribution in Form-VV for currency period
calculated on the basis of ledger in Form-YY. Para-50A
provides for the manner in which remittance of CMPF amount
is to be deposited to the current account of CMPF with the
Imperial Bank. Para-54 provides that all the moneys
belonging to the CMPF shall be either deposited in the
Imperial Bank of India or any such other scheduled banks
as may be approved by the Central Government from time to
time, or invested in securities mentioned or referred to
in Clauses (a) to (d) of Section 20 of the Indian Trust
Act, 1882. Sub-para 2 of Para-54 requires that the Board
shall prepare a classified summary of the asset of the
funds as on 31st March of each year or on such other dates
as the Central Government may specify. Para-61 of the
Scheme deals with the manner in which the Commissioner
shall credit the account of each member, interest in
respect of period of currency of the cards expiring in
such financial year. Para-61 (2) describes the manner in
which interest is to be calculated. The interest for the
period of currency of the card is to be credited with
effect from the last day of the period on the opening
balance at the credit of the member on the first day
thereof.
12. The petitioners have impugned the above provision of
computation of interest on the ground that by adopting the
above manner of computation of interest, the petitioners are
deprived of the interest for the amount deposited by them
during currency of financial year. It was argued that after
deducting the contribution towards provident fund from the
salaries of the petitioners, the respondents are duty bound to
pay interest from the date of deduction from the salary and
deposit in the provident fund account. Denial of payment of
interest from the date of deposit is infringement of their
fundamental rights. Relying upon the judgment in the matter of
Alok Shanker Pandey Vs. Union of India & others reported in
(2007) 3 SCC 545 it was argued that interest is normal
accretion on capital with passage of time. Provision regarding
interest and its calculation for general provident fund is
mentioned in Rule 11 of GPF (Central Services) Rules. From
perusal of the same it would be evident that the interest is
payable to the members of GPF from the date of deposit,
however, Para-61 of the Scheme deprives the members of CMPF
from interest from the date of deposit, which is per-se
arbitrary and irrational and the same debars the petitioners of
their legitimate claim.
13. We have already referred the development of law that has
taken place since 1948. The above legislation is a beneficial
legislation enacted for the benefits of coal mines employees.
Initially, provisions were made only for generation of
provident fund of the member employees under the Scheme.
Subsequently, another scheme was framed for family pension
after retirement of the employee. Family Pension Scheme was
reframed in the year 1998 superceeding earlier scheme of 1971.
Earlier 1998 Coal Mines Family Pension Scheme (CMPS) excluded
such employees who are not the members of the CMPF Scheme.
However, considering the resentment of NCDC employees, who were
governed by CCLSPF, the Board of Trustees decided to merge
CCLSPF into CMPF and thereafter benefit of family pension was
also made available to other employees of coal industries who
were not covered in the past. Before the merger of CCLSPF,
members of CCLSPF were entitled for interest on the amount
deposited by them towards provident fund in accordance with the
manner in which the interest was computed under Rule 11 of GPF
(CS) Rules. As per Rule 19 (d) of CCLSPF Rules the deficit in
the revenue account in any year was to be met by a grant from
the Corporation now Company. The members of CMPF are also
entitled for family pension, benefit which was not available to
the members of CCLSPF. The procedure of investment of
accumulated provident fund has been detailed in Para 54 of the
Scheme.
It is not a case where the petitioners are denied
total interest on their deposits. The grievance of the
petitioners is that the manner in which the interest is
computed, as per Para-61 of the Scheme, deprives them from
payment of interest from the date their contribution is
deposited in the provident fund. Rate of interest
deposited in provident fund account of the members, the
manner in which provident fund so deposited is to be
invested and the manner in which the interest is to be
computed for payment to its members are the financial
decisions that are to be taken by a responsible Government
keeping in view the overall interest of the concerned
employees. The Scheme has been framed in the exercise of
powers under Section 3 (E) of the Act, 1948 by the Central
Government. From various beneficial schemes framed by the
Central Government from time to time in their exercise of
powers under Section 3 (E) of the Act, it cannot be said
that the Central Government is oblivious to the welfare of
the coal mines employees. In these circumstances we are
of the opinion that we cannot sit in judgment over the
decision of the Central Government as appellate authority
in exercise of powers under Article 226 of the
Constitution of India.
14. So far as the challenge to constitutional validity of Para-
61 of the Scheme on the ground that the manner of computation
of interest in GPF is beneficial to the employees as the
interest is computed from the date of deposit, whereas, the
employees under the CMPF scheme are deprived of the interest on
the amount which is deposited during the currency of financial
year is concerned, there are several distinguishing features
under both the schemes, as already detailed in foregoing
paragraphs. There is difference in the rate of interest payable
to the employees who are members of GPF and CMPF. It is
settled law that challenge to constitutional validity of the
statute cannot be based on comparative study of provisions of
the impugned statute with another statute on the same subject
but derived from different source. When a statute is impugned
under Article 14 of the Constitution of India, in that case the
Court has to decide whether the statute is so arbitrary or
unreasonable that it must be struck down.
15. In the matter of Union of India & others Vs. Dhanwanti
Devi and others reported in (1996) 6 SCC 44, property of
respondent-Owner was acquired under the Jammu & Kashmir
Requisitioning & Acquisition of Immovable Properties Act, 1968
for public purpose vide notification under Section 7 of the
Act. The Land Acquisition Officer awarded compensation to the
land owner with 10% escalation on account of passage of time.
Feeling dissatisfied therewith the claimant-land owner sought
reference under Section 8 of the Act to the Arbitrator, who
enhanced the compensation and also awarded 15% solatium and 4%
interest per annum on the enhanced compensation. The appellants-
Union of India & others questioned the same by filing an appeal
in the High Court, however, the award of the Arbitrator was
subsequently confirmed and the appeal was dismissed. Allowing
the appeal and setting aside the award of solatium and interest
on the compensation, the Hon’ble Supreme Court in Para-11 of
the judgment held thus:-
“11. Taking the question of entitlement to interest
as a first question, as vehemently argued by Shri
Vaidyanathan, broadly speaking, the act of taking
possession of immovable properties generally implies
an agreement to pay interest on its consideration for
deferred payment. In a court of equity, when the
seller parts with possession of immovable property,
the purchaser becomes its owner while the seller
receives money as consideration in lieu of the
property. The seller, therefore, is entitled to claim
interest in place of his retaining possession of the
property from the date the purchaser takes possession
of the property till the date of payment. On this
premise, claim for interest is sought against the
State when it exercises its power of eminent domain
and acquires the property of a citizen for public
purpose. This principle was extended in equity to
recompensate the owner for deprivation of his
possession and enjoyment thereof in accordance with
law. It was, therefore, held in equity that the owner
is entitled to interest on the principal amount of
award from the date of taking possession unless the
statute under which the land was acquired expresses
its contrary intention. It is on this premise that
the right to receive interest takes the place of
right to retain possession and its enjoyment. It is
equally settled law that equity operates where
statute does not occupy the field. Conversely, when
the statute occupies the field the equity yields
place to the statute.”
16. In the instant matter we have already held that the Act,
1948 is a beneficial legislation enacted for the purposes of
protecting interest of the employees of coal mines. Various
beneficial schemes were framed subsequently from time to time
keeping in view the interest of the employees. In the matter
of State of Tamil Nadu and another Vs. Ananthi Ammal and others
reported in AIR 1995 SC 2114 it was held that provisions of one
statute cannot be declared ultra-vires by a process of
comparative study of the provisions of another statute. It has
been further held that when the statute is impugned under
Article 14 of the Constitution what the court has to decide is
whether the statute is so arbitrary or unreasonable that it
must be struck down. At best, a statute upon a similar subject
which derives its authority from another source can be referred
to, if its provisions have been held to be reasonable or have
stood the test of time, only for the purpose of indicating what
may be said to be reasonable in the context.
17. On the basis of aforesaid discussion, we are of the
opinion that the manner of computing interest under Para-61 of
the Scheme cannot be termed to be so arbitrary and unreasonable
so that the same may be termed to be violating the provisions
of Article 14 of the Constitution of India.
18. In the result, the petitions have no substance, the same
deserve to be dismissed and accordingly, the same are hereby
dismissed. No orders as to costs.
JUDGE JUDGE