Rajendra Agricultural University Statutes | Default Retiral Benefit Scheme Is Pension & Gratuity Unless Employee Specifically Opts For Contributory Provident Fund: Supreme Court

The Supreme Court ruled in favor of a retired University professor. A Bench of Justices Pamidighantam Sri Narasimha and Manoj Misra held that under the Rajendra Agricultural University Statutes, 1976, the default retiral benefit scheme is General Provident Fund-cum-pension-cum-gratuity, unless an employee specifically opts for the Contributory Provident Fund scheme. The Court set aside the Patna High Court's judgment and directed the University to provide the appellant with pension benefits within four months. Background Mukesh Prasad Singh was appointed as Junior Scientist cum Assistant Professor by Rajendra Agricultural University in 1987. During his appointment, the University was governed by the Rajendra Agricultural University Statutes, 1976. Chapter 16 of these Statutes dealt with pension and provident fund benefits for University employees. The University Statutes provided for two schemes of retiral benefits: (i) Contributory Provident Fund, which employees had to specifically opt for, and (ii) General Provident Fund-cum-pension-cum-gratuity for those who did not opt for the Contributory Provident Fund. To implement these provisions, the University issued an Office Order on February 21, 2008. It gave the employees one month to opt for either of two types of Contributory Provident Fund schemes. The order clearly stated that employees who did not exercise any option would automatically be included in the Pension Scheme as per Chapter 16.1 of the University Act. Though Singh did not submit any option for the Contributory Provident Fund, his name was not included in the pension and gratuity scheme either. After making several failed representations to have his name included, Singh filed a writ petition before the Patna High Court. He superannuated on January 30, 2019, during the pendency of his petition. The Single Judge dismissed his petition on February 27, 2019, ruling that Singh had not opted for pension benefits despite being given opportunities in 1990, 1995, 1996, and 2008. His writ appeal was also dismissed by the Division Bench on November 24, 2022, on similar grounds. Aggrieved, Singh approached the Supreme Court. Arguments Mr. Singh's counsel argued that as per the University Statutes, the default retiral scheme was General Provident Fund-cum-pension-cum-gratuity, and employees needed to explicitly opt for the Contributory Provident Fund if they wanted that scheme. Since Mukesh Singh never opted for the Contributory Provident Fund, he was automatically entitled to pension benefits. The University's counsel argued that Singh had failed to exercise his option for pension benefits despite multiple opportunities. Thus, he remained under the Contributory Provident Fund scheme. Court's Reasoning Firstly, the Court examined Chapter 16.1(b)(i) of the University Statute, which clearly stated that employees “will be entitled to pension provided they do not opt for subscribing to the Contributory Provident Fund”. The Court found that this provision, along with Chapter 16.1(e), established that the default retiral scheme applicable to University employees was General Provident Fund-cum-pension-cum-gratuity, unless the employee specifically opted for the Contributory Provident Fund scheme. Secondly, the Court found that the 2008 Office Order had the same effect. Clause IV of the order explicitly provided that employees who did not exercise their option for Contributory Provident Fund “shall be included in the Pension Scheme in terms of the Chapter (16.1) of the Act”. The Court concluded that not exercising any option automatically included the employee in the General Provident Fund-cum-pension-cum-gratuity scheme. Thirdly, the Court noted that the Patna High Court had recognized this position in several other cases of employees of the same University. In Arjun Kumar v. State of Bihar (CWJC 2041 of 2012, order dated 10.12.2012), the High Court had held that “the option was to be exercised only by those who wanted to be in the CPF scheme”. The Supreme Court observed that since the High Court had granted relief to similarly placed persons, it should not have dismissed Mukesh Singh's petition. Thus, the Court determined that since Mukesh Singh had not exercised his option under the 2008 Office Order, he had not opted 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 Consequently, the Supreme Court allowed the appeal. It set aside the Patna High Court's order, and directed that Mukesh Singh be provided retiral benefits under the pension-cum-gratuity scheme Citation : 2025 LiveLaw (SC) 316Case : Mukesh Prasad Singh v. The Then Rajendra Agricultural University (Now Dr. Rajendra Prasad Central Agricultural University) & Ors. Click Here To...

Rajendra Agricultural University Statutes | Default Retiral Benefit Scheme Is Pension & Gratuity Unless Employee Specifically Opts For Contributory Provident Fund: Supreme Court

Pranav Kumar

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