EPF Pension Case: Supreme Court To Consider If Reference To Larger Bench Is Needed In View Of 'RC Gupta' Decision

The Supreme Court on Wednesday decided to consider the issue whether to refer to a larger Bench, the appeals filed by Employees Provident Fund Organization and others including Union of India, challenging the judgments of various High Courts which quashed the Employee's Pension (Amendment) Scheme, 2014.A Bench of Justice UU Lalit and Justice Ajay Rastogi observed that it will consider if they are of a prima facie view that the matter needs to be heard by a three-judge Bench and accordingly pass an order by Tuesday, August 24.The question of referral came up in consideration of submissions made by Senior Advocate C Aryama Sundaram on behalf of the EPFO, with regards to the top Court's judgement in the case of R.C. Gupta and Ors. v Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors, which was delivered by a coordinate bench of 2-jude bench. Sundaram made detailed submissions before the Court regarding the RC Gupta judgement as to how it did not consider certain aspects including the necessity of remittance, pension scheme being completely different from the provident fund regime, etc and therefore can only be relied upon to a limited extent in the present case.The Bench said, "Our difficulty is that whether there is reasoning or no reasoning, the final conclusion of RC Gupta is that irrespective of whatever time has elapsed, there is no cut off date and it is permissible for somebody to pay arrears for months gone by and have right to switch over to provident fund scheme, to pension fund scheme." The bench observed that it cannot ignore a ruling laid down by a coordinate bench.In R.C. Gupta and Ors. v Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors, which was decided by a Bench led by Justice Gogoi in October 2016, the Supreme Court had struck down the six-month opt-in window from 1 September 2014, for employees to continue making uncapped pension contributions.Today, the bench observed that it cannot go into the question whether RC Gupta is correct or not."There is one school of thought that whatever RC Gupta has laid down, whether it was discussed or not, their Lordships are certainly of the view that it hardly matters and is mere adjustment from one account or the other. Whether that sentence is correct or not we are not going into that. This is the basic fulcrum of the judgement. They also say, the cut off date has no significance as it is a mere adjustment, and in any case you are entitled to the money, so if you take it from left or right hand it is your money, that is how they have perceived. Whether its correct is a different issue."The bench wondered if it will be proper on its part to consider the issue in variance with the decision in RC Gupta. If any doubt is raised regarding the said decision, the bench said the proper course might be to refer it to a larger bench."When one of the issues on which you may hang your case is RC Gupta and if you are having doubts about that, will it be proper on our part to continue hearing that rather than refer it to Bench of three judges who will not be hindered by any such consideration and can then bestow attention without being bothered by any kind of value of RC Gupta as a precedence, as they are a larger Bench." Justice Lalit said."Your endeavour is to say that matter is concluded by RC Gupta but In case we feel RC Gupta has perhaps not taken an aspect into account, like the judgement in Pawan Hans, which has stated that invested money lying in pension fund has a different characteristic and if we come to that level, we will be taking a diametrically opposite view." the bench told the respondents.The Bench clarified that it is not saying anything as to whether the judgement is correct, good or bad, all it is saying is that a doubt may come up."All we are asking is will it be worthwhile for us to spend two-three more days and arrive at that conclusion or we should refer to a three judge bench now." the Bench asked the Counsels.Senior Advocate R Venkatramani, appearing for one of the respondents, suggested that " If by any reason and in any manner RC Gupta has to be doubted, its relevance or applicability, then it has to be referred to three judges. And if entire fulcrum of case is on principle that there is no difference between provident and pension fund there is a principle of law settled in RC Gupta."Senior Advocate Meenakshi Arora, appearing for one of the respondents, pointed out that the Government accepted RC Gupta's judgement and issued a letter to implement RC Gupta which is a significant aspect and needs to be considered. However, later they tried to create an arbitrary distinction saying that it will be extended to those who are not in an exempted organisation, she added."As of now, prima facie we think Mr Sundaram has a case, what do we do now", the bench said.Responding to the Court's statement, Senior Counsel Gopal Sankaranarayanan opined that there are certain provisions...

EPF Pension Case: Supreme Court To Consider If Reference To Larger Bench Is Needed In View Of 'RC Gupta' Decision

Srishti Ojha

The bench said that it was of the prima facie view that EPFO has made out a case.

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