Provident Fund's “Reserve & Surplus” Amount Transferred To Statutory Fund, Employees Can't Claim It Separately From Provident Fund Dues : Calcutta HC

The Calcutta High Court bench comprising of Justice Shampa Dutt (Paul) held that once a provident fund trust is dissolved and its funds are transferred to the statutory Provident Fund, employees cannot claim a separate share from the “Reserve & Surplus” fund after receiving their full dues. Background Facts The petitioners were the employees of Hindustan Cables Ltd. (HCL). They were also members of HCL provident fund trust. It provided special exemption under the Employees' Provident Fund & Miscellaneous Provisions (EPF & MP) Act, 1952. The special exemption was cancelled by the government on 17th October, 2011. Therefore the Regional Provident Fund Commissioner (RPFC), Durgapur transferred all funds from the trust to the statutory Provident Fund. Also the trust had an extra Reserve & Surplus fund of ₹15.26 crore for workers and ₹12.83 crore for officers. But it was not distributed by the respondents. The petitioners retired between 2016 and 2018. They received their provident fund dues and pensions. Later, they claimed that they were also entitled to a separate share from the Reserve & Surplus fund. The RPFC rejected the petitioner's request on 8th march 2018. It was held by the RPFC that the Reserve & Surplus fund was already merged into the statutory fund, so the petitioners were not entitled to separate payment. The petitioners filed an RTI application. It was found by the petitioners that the HCL Board of Trustees had allocated the Reserve & Surplus fund among members in 2011. But it could not distribute it because their authority was revoked. Aggrieved by the same, the petitioners filed a writ petition for quashing the refusal order and praying for direction upon the respondents to make payment from the “Reserve and Surplus” fund. It was argued by the petitioners that they were entitled to a share of the "Reserve & Surplus" fund from the provident fund trust of Hindustan Cables Ltd. (HCL). It was further contended that as per Clause 44 of the Trust Deed, the surplus amount should have been distributed among the members when the trust was dissolved in 2011 after the cancellation of its exemption. However, the Regional Provident Fund Commissioner (RPFC), Durgapur, refused to release this amount in 2018. It was further contended by the petitioners that similar payments had been made to employees of other HCL units. It was submitted by the petitioners that there was delay in filing writ petition, as their cause of action arose after their superannuation when they received the provident fund dues between the period 2016-2018. On the other hand it was contended by the respondents that the petitioners had already received their full provident fund dues and pensions at the time of their retirement. They stated that when the exemption for Hindustan Cables Ltd.'s (HCL) provident fund trust was cancelled in 2011, all funds including the "Reserve & Surplus" amount, were transferred to the statutory Provident Fund. It was further contended by the respondents that the petitioners had no separate right to claim any additional amount from the surplus fund, since the petitioners retired after this transfer. It was further pointed out by the respondents that the petitioners never raised any claim in 2011 when the exemption was withdrawn. Therefore petitioners' claim was delayed and unjustified when they filed it in 2023. The judgment in K.D. Sharma v. Steel Authority of India Ltd. (2008) was relied upon by the respondents wherein the Supreme Court held that petitioners must disclose all relevant facts in writ petitions and cannot suppress or distort material information. Findings of the Court It was found by the court that the petitioners received the provident fund dues and pensions on retirement in 2016-2018. The provident fund also included the share of the Reserve & Surplus fund. It was observed by the court that the exemption granted to the Hindustan Cables Ltd. (HCL) provident fund trust was cancelled in 2011. Therefore all funds including the Reserve & Surplus fund were transferred to the statutory Provident Fund under the Regional Provident Fund Commissioner (RPFC). It was further observed by the court that the petitioners did not raise any claim at the time when exemption was cancelled in 2011. But they raised it much later in the year 2023 after their retirement. It was noted by the court that the petitioners had been paid their provident fund dues, which already included their share of the surplus fund. Therefore, there were no outstanding dues to be paid. With the aforesaid observations, the writ petition was dismissed. Case Name : Dilip Kumar Choudhury & Ors. v. The Regional Provident Fund Commissioner, Durgapur, EPFO & Ors. Case No. : WPA 27817 of 2023 Counsel for the Petitioners : Piush Chaturvadi, Harisankar Chattopadhyay, Satabdi Bhattacharya, Subhendu Sanyal, Asutosh Pandey ...

Provident Fund's “Reserve & Surplus” Amount Transferred To Statutory Fund, Employees Can't Claim It Separately From Provident Fund Dues : Calcutta HC

Namdev Singh

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