Deductions Made Under GPF Scheme Do Not Automatically Entitle Employees To Pension Benefits : Madras High Court

Background Facts

The Respondent introduced the General Provident Fund (GPF) Scheme for the welfare of its employees in the year 1992 and the subscription to the said scheme was made compulsory for all the employees, after a continuous service of one year. Mr. Gandhimohan, General Secretary of Pipmate Integrated Staff Welfare Association along with retired employees (Petitioners) filed a petition, seeking the respondents to quantify, fix, and disburse appropriate pension and family pension to retired and deceased employees, respectively, as per CCS (Pension) Rule 1972. This petition was disposed of, allowing the petitioners to submit a fresh representation to the respondents. Despite the submission of the fresh representation, the respondents issued an order dated 05.07.2017 rejecting the claims made by the petitioners.

Aggrieved by the same, the petitioners, filed the writ petition.

The petitioners contended that they were entitled to pension benefits based on the GPF Scheme introduced by the respondent. According to the petitioners, the GPF Scheme was made compulsory for all employees after a year of continuous service, as per a letter issued by the respondent. They contended that contributions were deducted from their salaries as per this scheme. The petitioners asserted that assurances were given by the respondent organization regarding benefits such as gratuity, pension, and family pension.

The petitioners further contended that they should not be penalized for the government's inaction because despite resolutions passed by the governing body of the respondent organization to approach the government for approval and funding of a pension scheme, no concrete action was taken by the government.

On the other hand, it was contended by the Respondents that there was no formal pension scheme in place for the employees of the respondent organization. They contended that while the GPF Scheme was introduced, it does not included provisions for pension benefits. The respondents argued that any decision regarding the extension of pension benefits to employees of the respondent organization required approval from the government.

Findings of the Court

The court observed that while the GPF Scheme was in place, it did not included provisions for pension benefits. The court emphasized that deductions made under the GPF Scheme do not automatically entitle employees to pension benefits. The court acknowledged that any decision regarding the extension of pension benefits to employees of the respondent organization required approval from the government.

The court relied on the W.P.No.1264 of 2019 wherein the Division bench of Madras High Court held that the employees of Autonomous Bodies cannot claim pension unless there is a specific pension scheme in place, and requests for a pension scheme similar to the government's do not grant them the same rights as government employees.

The court further observed that the resolutions were passed by the governing body of the respondent organization to approach the government for approval of a pension scheme, however no action was taken by the government. The court held that the petitioners failed to establish a legal basis for their claim for pension benefits.

With the aforesaid observations, the writ petition was dismissed.

Case No. : W.P.No.34295 of 2017

Case Name: Pipmate Integrated Staff Welfare Association vs. Chief Secretary, Government of Puducherry

Citation: 2024 LiveLaw (Mad) 193

Counsel for the Petitioners : M/s. S. Ranjeni Ramadass

Counsel for the Respondents : Mr. M. Nirmal Kumar, Government Advocate (Pondicherry) and Mr.T. M. Naveen

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