The Rajasthan State Road … vs Goverdhan Lal Soni on 9 September, 2020


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Supreme Court of India

The Rajasthan State Road … vs Goverdhan Lal Soni on 9 September, 2020

Author: Ashok Bhushan

Bench: Ashok Bhushan, R. Subhash Reddy, M.R. Shah

                                                                        REPORTABLE

                                      IN THE SUPREME COURT OF INDIA
                                       CIVIL APPELLATE JURISDICTION

                                      CIVIL APPEAL NO.1789 of 2020

                         RAJASTHAN STATE ROAD TRANSPORT
                         CORPORATION AND OTHERS                 ...APPELLANT(S)

                                                    VERSUS

                         GOVERDHAN LAL SONI AND ANR.            ...RESPONDENT(S)

                                                    WITH

                                      CIVIL APPEAL NO.1812 OF 2020

                         THE RAJASTHAN STATE ROAD
                         TRANSPORT CORPORATION
                          AND OTHER                             ...APPELLANT(S)

                                                    VERSUS
                         MANGLA RAM
                         AANWALA                                ...RESPONDENT(S)




                                             J U D G M E N T

ASHOK BHUSHAN, J.

Signature Not Verified

Digitally signed by
MEENAKSHI KOHLI

1. These appeals have been filed by Rajasthan Road
Date: 2020.09.09
15:54:52 IST
Reason:

Transport Corporation and others (hereinafter

Page 1 of 44
referred to as Corporation) challenging the

judgments dated 05.03.2018 and 30.08.2018

respectively of the Division Bench of Rajasthan

High Court dismissing the D.B.Special Appeals filed

by the appellants. Both the appeals having raised

similar issues it shall be sufficient to refer the

facts and pleadings in Civil Appeal No.1789 of 2020

for deciding both the appeals.

2. Goverdhan Lal Soni, the respondent No.1 was

appointed as Junior Assistant on 02.04.1974 in

Rajasthan State Agro Industries Corporation

Limited. The State Government closed the Rajasthan

State Agro Industries Corporation Limited and

declared all its employees as Surplus. The State

Government took a decision to absorb services of

all surplus employees in different Corporations.

The Bureau of Public Enterprises, Government of

Rajasthan issued a Circular on 02.07.1991

containing guidelines of absorption of surplus

employees in public enterprises. The guidelines

Page 2 of 44
also contained provisions for various benefits to

be extended to the absorbed employees. The

Respondent No.1 in pursuance of Circular dated

02.07.1991 was absorbed by Rajasthan State Road

Transport Corporation vide order dated 03.10.1996.

The Corporation issued a notification dated

12.02.1997 in relation to the absorbed employees

laying down the procedure for the employees, who

want to opt either C.P.F Scheme or the G.P.F. and

Pension Scheme.

3. The respondent gave his option on 22.03.1997

for Pension under Rajasthan State Road Transport

Pension Regulations, 1989. In Rajasthan State Agro

Industries Corporation Limited, the respondent No.1

was governed by Contributory Provident Fund Scheme

and the Pension Scheme was not applicable in

Rajasthan State Agro Industries Corporation

Limited. The Corporation on 29.07.1997 noticing

that the respondent No.1 after coming to the

Page 3 of 44
service of Corporation has given option of Pension

directed for transfer of amount deposited in

Provident Fund Account and family pension so that

same can be deposited in the account of General

Provident Fund as well as pension fund.

4. Rajasthan Agro Industries Corporation Limited

wrote a letter dated 18.08.1998 to Financial

Advisor of the Corporation referring to a letter of

the corporation dated 29.07.1998 informing that

Pension being not applicable in Agro Industries

Corporation, Capital Value, amount in regard to

absorbed employee is not due to corporation. The

letter mentioned that in the Agro Industries

Corporation, Provident Fund Scheme was applied in

which regard contribution of Provident Fund is

deposited in office of Commissioner, Provident

Fund, Government of India, which amount can be

transferred at the level of Corporation. Regional

Provident Fund Commissioner transferred the

Page 4 of 44
contribution of Employees as well as contribution

of Employer deposited with the Provident Fund

Commissioner to the Corporation. Certificate of

account transfer was issued transferring the

aforesaid amount to the corporation.

5. A circular dated 09.02.1999 was issued by the

corporation referring to earlier circular dated

12.02.1997 mentioning that those employees who

produce their option letter to get benefit of

Rajasthan State Road Transport Corporation

Employees Corporation Pension Regulations, 1989,

only upon receipt of capital amount from Rajasthan

State Agro Industries Corporation Limited, they

shall be entitled to get benefit of Corporation

Pension.

6. The respondent, who had joined the corporation

on 10.10.1996, wrote a letter dated 06.07.2010 to

the Finance Advisor and Chief Accounts Officer of

the Corporation praying for approval of pension.

Page 5 of 44
Letter also mentioned that in compliance of letter

of Chief Manager dated 19.02.1997, CPF amount has

been received by Corporation. The respondent No.1

sent several reminders with regard to approval of

his pension. The respondent was superannuated on

30.06.2012. A writ petition No. 8847 of 2012 was

filed by the respondent No.1 in the High Court of

Rajasthan, Bench at Jaipur, praying for following

reliefs: –

“(i) By issuing an appropriate writ, order
or direction to the Respondents to
consider the case of petitioner for
extending the benefits of the GPF and
Pension Scheme of 1989 in the light of the
condition No.11(b) of the Circular dated
02.07.1991 by taking note of his option
form for the same.

(ii) Hon’ble High Court may kindly quash
and set aside the circular dated
09.02.1999 (Annexure-8) issued in the garb
of Notification dated 12.02.1997.

(iii) Hon’ble High Court may kindly direct
the respondent to grant pension to the
petitioner if petitioner gets retired
during the pendency of the writ petition.”

Page 6 of 44

7. Learned Single Judge of the High Court by

judgment dated 05.07.2017 after noticing the

submission of writ petition as well as the

corporation, held that writ petitioner had already

opted for Pension, his case cannot be distinguished

from an earlier judgment of High Court dated

24.05.2007, Mahaveer Prasad Jain Versus Jaipur

Vidhyut Vitran Nigam Ltd. SB Civil Writ Petition

No. 3116 of 2004.Learned Single Judge allowed the

writ petition directing that writ petitioner be

treated to be entitled to get pension, however, the

same would be subject to petitioner returning the

amount under the CPF Scheme. The appellant

aggrieved by the judgment of learned Single Judge

filed D.B.Special Appeal(writ) No.1799 of 2017

before the Division Bench which appeal was

dismissed on 05.03.2018. This appeal has been filed

challenging the judgment of the Division Bench

dated 05.03.2018.

Page 7 of 44

8. In Civil Appeal No.1812 of 2020, the

respondent Mangla Ram Aanwala was also initially

appointed in Rajasthan State Agro Industries

Corporation Limited and in pursuance of circular

dated 02.07.1991, he was also absorbed in the

corporation by order dated 03.10.1996 on the post

of Junior Accountant. Respondent also gave an

option on 25.02.1997 for opting for GPF and Pension

Scheme. On 30.06.2012, the respondent also attained

the age of Superannuation. Not being given the

benefit of GPF and Pension, S.B.Civil Writ Petition

No.8100 of 2017 was filed by the respondent which

was allowed by learned Single Judge on 29.11.2007

in terms of judgment of the learned Single Judge in

writ petition of Goverdhan Lal Soni(Supra). The

appellant filed Special Appeal Writ No.1314 of 2018

which has been dismissed on 30.08.2018 against

which Civil Appeal No.1812 of 2020 has been filed.

Page 8 of 44

9. We have heard Mrs. Ritu Bhardwaj for the

appellant and Shri Rishabh Sancheti and Shri

P.B.Suresh for the respondents.

10. Learned Counsel for the appellant submits that

respondent was absorbed from Rajasthan State Agro

Industries Corporation Limited where Pension Scheme

was not applicable and the respondent was governed

only by Contributory Provident Fund (CPF) Scheme.

It is submitted that the absorption of Employees in

Rajasthan State Road Transport Corporation was on

the terms and conditions as laid down in circular

dated 02.07.1991 of Bureau of Public Enterprises,

Government of Rajasthan. The Agro Industries

Corporation from where the respondent had come on

absorption in Rajasthan State Road Transport

Corporation was covered only by CPF Scheme, hence,

for availing the benefits of Pension Scheme the

former Organization of the respondent was liable to

transfer not only the balance in CPF Account but

Pension Fund in proportion of Employees own

Page 9 of 44
subscription and Organization’s contribution

respectively.

11. The Rajasthan State Agro Industries

Corporation Limited vide letter dated 18.08.1998

having refused to transfer the capital value amount

regarding absorbed employee, the conditions under

para 11(b) of Circular dated 02.07.1991 were not

fulfilled and the corporation cannot undertake the

liability of payment of pension.

12. It is submitted that on retirement of the

respondent, entire benefit under the CPF Scheme as

well as Gratuity of Rs.10 Lakhs and other benefits

were taken by the respondent. It is submitted that

respondent is already getting the pension from

Employees Provident Fund Organization. The

respondent has also availed the benefit of Loan of

amount of more than Rs.18 Lakhs from the

Corporation which was possible only due to the

reason that the respondent was member of CPF Scheme

Page 10 of 44
and he can avail loan out of contribution of the

employees as well as the contribution of the

Employer.

13. It is further submitted that both learned

Single Judge and Division Bench had not adverted to

mandatory conditions as given in paragraph 11(b)

and without recording any satisfaction and finding

that the mandatory condition has been fulfilled,

direction has been issued for grant of Pension. The

respondent who has already availed the benefit

under CPF Scheme cannot be directed to given the

benefit of Pension which shall amount to extending

the double benefits.

14. Learned counsel appearing for the respondents

in both the appeals have refuted the submission of

the counsel for the appellant and submits that the

entire contribution of the respondent which was

credited were transferred by the Regional Provident

Fund Commissioner with regard to which a

Page 11 of 44
certificate of account transfer has also been

issued by Regional Provident Fund Commissioner

which has been brought along with the counter

Affidavit filed on behalf of respondent No.1,

Goverdhan Lal Soni. Regional Provident Fund

Commissioner having transferred the entire amount

to the corporation, nothing more was due to be

transferred.

15. The respondent has exercised the option of

Pension benefit within the period prescribed i.e.

before 31.03.1997. The case of the respondent was

fully covered by the judgment of the Rajasthan High

Court dated 05.07.2017 in Mahaveer Prasad Jain’s

Case. He submits that the judgment of learned

Single Judge dated 05.07.2017 was also affirmed by

the Division Bench vide judgment dated 19.12.2007

in Jaipur Vidhyut Vitran Nigam Ltd. through its

Chairman versus Mahaveer Prasad Jain, which appeal

was dismissed on 19.12.2007.

Page 12 of 44

16. It is submitted that Special Leave Petition

against the Division Bench judgment dated

19.12.2007 has also been dismissed by this Court

vide its order dated 09.05.2008 in Special Leave to

Appeal (Civil) No.10904 of 2008. The case of

Mahavir Prasad Jain was also a case of absorption

from Rajasthan State Agro Industries Corporation

Limited into Rajasthan State Electricity Board

(Jaipur Vidhyut Vitran Nigam Ltd.).

17. The notification dated 12.02.1997 laid down

procedure to be adopted in relation to absorbed

employees. Subsequent circular dated 09.02.1999

informing that only on transfer of Capital amount

from the concerned department benefit of Pension

can be extended was not applicable on the

respondent No.1 since he was already covered by

1991 circular and has exercised his option on

22.03.1997 with regard to receiving of payment

under GPF Scheme as well as Gratuity. With regard

Page 13 of 44
to Pension under CPF Scheme it is submitted that

the said pension has been accepted since the

respondent had no option. The gratuity amount was

paid directly in account of the respondent.

18. It is further submitted that both the

Rajasthan State Agro Industries Corporation Limited

as well as Rajasthan State Road Transport

Corporation are two arms of the Government and it

was the State responsibility to ensure that the

respondent No.1 could have received the Pension in

pursuance of his option exercised on 22.03.1997.

19. Learned counsel for the parties have relied on

several judgments of this Court and Rajasthan High

Court which shall be referred to while considering

the submission in detail.

Page 14 of 44

20. From the pleadings of the parties and materials

on record, following undisputed facts have

emerged:-

i) the respondents in these appeals were

employees of Agro Industries Corporation

who were declared surplus after the Agro

Industries Corporation was closed.

ii) Bureau of Enterprises issued guidelines

dated 02.07.1991 for absorption of surplus

employees of the State Public Enterprises.

The guidelines enumerated the benefits and

mechanism for receiving the benefits by

the absorbed employees.


     iii)    that     by     order        dated    03.10.1997,          the

            respondents          were     absorbed       in    Rajasthan

            State     Road        Transport       Corporation.          The

            respondents           while      working          under     the

            Rajasthan             State       Agro             Industries




                                                                Page 15 of 44

Corporation Limited were covered by only

CPF Scheme.

iv) Both          Employees        and          Employer’s

    contributions       towards    the     Provident     Fund

were deposited with the Regional Provident

Fund Commissioner. The Regional Provident

Fund Commissioner transferred both

Employees contribution of Provident Fund

as well as Employer’s contribution of

Provident Fund to the Rajasthan State Road

Transport Corporation and certificate of

account transfer was also issued by office

of Regional Provident Fund Commissioner,

certifying the above said transfer. After

the absorption, respondent opted for the

Pension Scheme within the prescribed

period i.e. 31.03.1997.

Page 16 of 44

v) The respondent in Rajasthan State Road

Transport Corporation were continued in

the CPF Scheme and the contribution of the

Employees and Employers were deposited and

after retirement of the respondent, the

entire amount accumulated has been paid to

the respondent with gratuity and other

benefits.

21. The corporation has both CPF and Pension

Scheme. The Pension Scheme which is applicable in

the Corporation is Rajasthan State Road Transport

Corporation Employees’ Pension Regulations 1989.

Regulation 3 of the Regulations, 1989 provides for

exercise of option by the existing regular

employees for pensionary and gratuity benefits.

Bureau of Public Enterprises, Government of

Rajasthan, had issued guidelines dated 02.07.1991

under which surplus employees of State Public

Enterprises were to be absorbed in other Public

Enterprises.

Page 17 of 44

22. Before we enter into the submissions raised by

the counsel of the parties it is necessary to

notice the relevant statutory Regulations

applicable in the RSRTC and the Circular dated

02.07.1991 by which Bureau of Public Enterprises,

State Enterprises Department, Government of

Rajasthan issued terms and conditions for

absorption of surplus employees of State Public

Enterprises. The Rajasthan State Road Transport

Corporation Employees Pension Regulations, 1989

have been framed in exercise of power under Section

45 of the Road Transport Corporation Act, 1950.

Regulation 3(l) defines ‘option’ which is to the

following effect:

“3(l) “Option” means a written consent of
the existing regular employee for
pensionary and gratuity benefits alongwith
the adoption of the General Provident Fund
Regulations 1989 or to continue as member
of the existing CPF scheme covered under
the BPF Act, 1952 within a period of 90
days from the date of publication of RSRTC
Pension Regulations. Any existing employee
who does not exercise the option within
specified period of 90 days shall be

Page 18 of 44
deemed to have exercised option in favour
of the Pension & CPF Regulations.”

23. Regulation 3(k) has defined “existing employee”

as meaning ‘an employee who is in service of the

Corporation as on 1.4.1989’. The option under

Regulation 3(l) was contemplated from existing

employee.

24. Several employees including the respondent who

became surplus in their earlier employment were

absorbed by Rajasthan State Road Transport

Corporation vide order dated 03.10.1996. The

Corporation issued a notification dated 12.02.1997

with regard to 30 employees who had come from

Rajasthan State Agro Industries Corporation

Limited, out of whom some employees wanted to take

benefit of Contribution Provident Fund and some

employees wanted to take benefit of Corporation

Pension Scheme. The notification contained

necessary instructions with regard to the above.

Learned counsel for the appellant has relied and

referred to Clause 2(vi) of the notification which

Page 19 of 44
is relevant with regard to the respondent. Clause

2(vi) is as follows:

“2(vi)Those employees who give their
option under Employee Pension
Scheme, 1989, their deducted
Provident Fund Contribution amount
of earlier service on receiving back
from P.F. Commissioner office by
their employer will be forwarded to
Corporation as per instructions
given by R.S.R.T. Corporation about
pension, gratuity, P.F. and Leave
encashment etc. For receiving the
above contribution after editing by
Accounts Department (Establishment),
Head Office, this amount will be
received. After receiving amount,
concerned amount of pension to
Manager (Pension) and concerned
amount of General Provident Fund to
A.G.M. (G.P.F.) will be forwarded.”

25. After issuance of notification dated

12.02.1997, the Corporation asked for option from

employees who were absorbed in the Corporation to

give their option. As noted above, the option under

Regulation 3(l) was to be taken from the ‘existing

employees’ but after absorption of employees in the

Corporation from Rajasthan State Agro Industries

Corporation Limited, the Corporation adopted same

Page 20 of 44
statutory mode with regard to the absorbed

employees as per statutory scheme. Hence, option

was asked from absorbed employees. The respondent

gave option on 27.03.1997, i.e., before 31.03.1997

which was last date for option.

26. Another Regulation which needs to be noted is

Regulation 43 of Regulations, 1989 which deals with

transfer to pension fund by Corporation. Regulation

43 is as follows:

“43. TRANSFER TO PENSION FUND BY CORPORATION

The Corporation shall transfer the
pension contributions @ 10% on the basic
wages plus D.A. to the R.S.R.T.C. pension
Fund latest by 10th of succeeding month.

The employer’s share with interest
except for those existing employees as on
01.04.1989, who have opted for continuing
the C.P.F. benefits shall be transferred
to the R.S.R.T.C. Pension Fund and the
employee’s share with interest shall be
transferred to the R.S.R.T.C. GPF Fund.”

27. The second part of Regulation 43 as extracted

above contemplates transfer of employer’s share for

existing employees who have opted for Pension Fund

and employees’ share with interest in the G.P.F.

Fund.

Page 21 of 44

28. Clause 2(vi) of notification dated 12.02.1997

as extracted above is also in the same line as of

Regulation 43.

29. The respondent having opted for pension,

Regulation 43 read with notification dated

12.02.1997 becomes relevant and applicable with

regard to the respondent.

30. Now, we come to the Circular dated 02.07.1991

issued by the Bureau of Public Enterprises,

Government of Rajasthan, which is the guidelines

for absorption of surplus employees of State Public

Enterprises. We had heard this appeal earlier and

reserved the judgment. At the time of preparation

of judgment we found ambiguity in the record of the

appeal pertaining to correct wordings of clause

11(b) of Circular dated 02.07.1991. By our orders

dated 29.07.2020 we directed both the parties to

bring on record correct clause 11(b) of Circular

dated 02.07.1991. In pursuance of our order dated

29.07.2020 both the parties have filed their

affidavits. In the affidavit filed in application

Page 22 of 44
I.A.No.76182 of 2020 filed by the respondent, the

copy of Circular dated 02.07.1991 has been brought

on record. At the time of hearing on 14.08.2020,

learned counsel for the petitioner has also not

disputed the correctness of the copy of the

Circular dated 02.07.1991 as brought on the record

by respondent. Clause 11 of the Circular dated

02.07.1991 which is relevant for the present case

brought on record by I.A.No.76182 of 2020 is to the

following effect:

“11. In case the surplus employees covered
under CPF Scheme, on absorption:-

(a) In an enterprise having CPF Scheme,
the balance in CPF account of the surplus
employees shall be transferred to the
absorbing enterprise. On absorption the
surplus employees would be governed by CPF
Scheme and rules of the absorbing
enterprise.

(b) In an enterprise having pension
scheme, the balance in CPF Account of
surplus employees would be transferred to
absorbing enterprise for credit to the GPF
Account of the employees and the Pension
Fund in proportion of employees own
subscription and organisation’s
contribution respectively. The eligible
period of service rendered in relieving
enterprise would be considered as

Page 23 of 44
qualifying service under pension scheme of
absorbing enterprise.”

31. The petitioner also filed affidavit on

14.08.2020 and has not disputed the correctness of

clause 11 as brought on record by the respondent.

32. Both CPF and Pension Schemes are beneficial

Schemes for the employees which are of different

nature. In a Contributory Provident Fund Scheme

Employer makes matching contributions to the

Employees contribution and both are kept in

separate account and on retirement of employees

both are released to the employee along with the

interest. The Pension is a periodic payment to the

employee after the retirement from the service by

the Employer. Payment of Pension is made under

scheme floated by Employer. Pension Scheme

contemplates a fund out of which the pension is

payable to an employee. The payment of pension is

dependent on various considerations and conditions.

This Court in Pepsu Road Transport Corporation,

Page 24 of 44
Patiala versus Mangal Singh and others, (2011) 11

SCC 702, while considering Pension Scheme and

contributory Provident Fund Scheme under Pepsu Road

Transport Corporation Employees’ Pension/Gratuity

and General Provident Fund Regulations, 1992 made

following observations in paragraph 34:-

“34. Pension is a retirement benefit
partaking of the character of regular
payment to a person in consideration of
the past services rendered by him. We
hasten to add that although pension is not
a bounty but is claimable as a matter of
right, yet the right is not absolute or
unconditional. The person claiming pension
must establish his entitlement to such
pension in law. The entitlement might be
dependent upon various considerations or
conditions. In a given case, (sic whether)
the retired employee is entitled to
pension or not depends on the provisions
and interpretation of the rules and
regulations. The contributory provident
fund appears to be a simple mechanism
where an employee is paid the total amount
which he has contributed along with the
equal contribution made by the employer
ordinarily at the time of retirement of an
employee. In short, we quote what was
repeatedly said by this Court that
“pension is payable periodically as long
as the pensioner is alive whereas CPF is
paid only once on retirement.” Therefore,
conceptually, pension and CPF are separate
and distinct.”

Page 25 of 44

33. Now reverting to the facts of the present case,

we need to first consider as to what were the

conditions which were to be fulfilled by the

respondent for receiving the pension. As noted

above, paragraph 11(b) of guidelines dated

02.07.1991 was applicable in the present case with

which both the parties are in agreement. It is the

case of both the parties that it is clause 11(b)

which is applicable in the case of the respondent.

34. Clause 11 begin with the words “in case surplus

employees were covered under CPF scheme on

absorption;”- in an Enterprise having Pension

Scheme, (i) the balance in CPF account of surplus

employee will be transferred to absorbing

Enterprise for credit of CPF account of the

employee, and (ii) the pension fund in proportion

of employees’ own subscription and organization’s

contribution respectively; (iii) the eligible

period of service rendered in relieving Enterprise

Page 26 of 44
would be considered as qualifying service under

Pension Scheme of absorbing Enterprise.

35. The circular dated 02.07.1991 provided for

absorption from one State Public Enterprise to

another Public Enterprise. All Public Enterprises

were not governed by common CPF and Pension Scheme,

for example, Rajasthan Agro Industries Corporation

Limited did not have a pension scheme for its

employees whereas Rajasthan State Road Transport

Corporation ltd. has Pension Scheme. When an

employee who is governed by CPF Scheme in his

erstwhile employment opts for CPF Scheme in

absorbing Enterprise, the balance amount in CPF

account is transferred and the employees continue

in CPF Scheme. There can be two categories of

surplus employees, one category may have in its

erstwhile Employment Pension Scheme and another

category may have only CPF Scheme. In a case where

in erstwhile employment employee is governed by

Page 27 of 44
Pension Scheme and he opts for Pension Scheme in

the absorbing Enterprise, there is no difficulty in

implementing of Pension Scheme since balance in CPF

account as well as Pension Fund shall be

transferred in corresponding accounts in absorbing

Enterprise.

36. In this context, we refer to Clause 12 of

Circular dated 02.07.1991 which is to the following

effect:

“(12)In case the surplus employees were
covered by pension scheme, on
absorption:-

(a)In an enterprise having pension
scheme the relieving enterprise
would transfer the balance of GPF
Account of the employee and his
share in the Pension Fund of the
relieving organisation to the
absorbing organisation for credit
to GPF Account and Pension Fund
respectively.

(b)In an enterprise having CPF Scheme,
the balance of GPF Account and
share in Pension Fund would be
transferred to the absorbing
enterprise for credit to the CPF
Account. On absorption, the surplus
employees would be governed by CPF
Scheme and rules of the absorbing
enterprise.”

Page 28 of 44

37. The respondent in his earlier employment was

covered by the CPF Scheme and both employee’s

contribution as well as employer’s contribution

were deposited in the Provident Fund. Alongwith

affidavit filed by the respondent in this appeal

Certificate of Accounts Transfer, issued by the

Regional Provident Fund Commissioner, Jaipur has

been brought on record. The total deposit of

respondent No.1 with the Regional Provident Fund

Commissioner, Jaipur was (a) contribution of

employee Rs.92,504/-; (b) contribution of employer

Rs.1,01282/-. Both the above amounts were

transferred to the Rajasthan Road State Transport

Corporation after the respondent was absorbed in

the Rajasthan State Road Transport Corporation.

38. The contention which has been pressed by the

learned counsel for the appellant before us is that

there was no transfer of capital amount of the

erstwhile employer of respondent. Learned counsel

for the appellant has relied and refer to the

Page 29 of 44
letter dated 18.09.1998 issued by the Rajasthan

State Agro Industries Corporation Limited. This has

been brought on record as Annexure-P/1. A perusal

of Annexure-P/1 indicates that Rajasthan State Road

Transport Corporation by letter dated 29.07.1998

requested the Rajasthan State Agro Industries

Corporation Limited for transferring capital value

amount in regard to the respondent. The erstwhile

employer of the respondent informed the appellant

that capital value amount in regard to the absorbed

employees is not due to the Rajasthan State Road

Transport Corporation. The appellant was informed

that contribution of Provident Fund amount is

deposited in the account of Commissioner, Provident

Fund, Government of India which can be got

transferred. The question to be answered is as to

whether apart from transfer of employee’s

contribution and employer’s contribution deposited

in the account of Commissioner, Provident Fund,

there is any other amount which required to be

Page 30 of 44
transferred to the appellant for the purpose of

making the respondent eligible for the benefit of

pension. Regulation 43 of the Regulations, 1989 is

the provision of transfer of Pension Fund by

Corporation. The Regulation makes it clear that

except those employees who have opted for

continuing to CPF, employer’s share shall be

transferred to the Rajasthan State Road Transport

Corporation Pension Fund and the employees share

with interest shall be transferred to Rajasthan

State Road Transport Corporation GPF Fund. For the

employees who were entitled to grant of pension

there is mention of only two Funds that is Pension

Fund and GPF Fund. The employer’s share was to be

transferred to Pension Fund and employee’s share

shall be transferred to GPF Fund. Clause 11 sub-

cause (b) of Circular dated 02.07.1991 also refers

to only two accounts i.e. GPF Account and Pension

Fund. As per clause 11(b) in an Enterprise having

pension scheme, the balance in CPF Account of

Page 31 of 44
surplus employees would be transferred to absorbing

Enterprise for credit to the GPF Account of the

employees and the Pension Fund in proportion of

employees own subscription and organisation’s

contribution respectively. Thus, employee’s

contribution shall go to the GPF Account and

employer’s proportion should be credited to the

Pension Fund. Clause 11(b) makes it clear that when

the respondent was absorbed in Rajasthan State Road

Transport Corporation, the balance in CPF Account

of the surplus employees would be transferred in

GPF Account and the Pension Fund respectively. The

certificate issued by the Regional Provident Fund

Commissioner which has been filed at Annexure R-8

makes it clear that contribution of employee

Rs.92.504/- and contribution of employer

Rs.101282/- have been transferred to the Rajasthan

State Road Transport Corporation which was the

amount credited with Regional Provident Fund

Commissioner. The entire amount having been

Page 32 of 44
transferred to the Rajasthan State Road Transport

Corporation it was the obligation of the Rajasthan

State Road Transport Corporation to credit the

aforesaid amount in respect of Pension Fund and GPF

Fund. Neither Regulations, 1989 nor Circular dated

02.07.1991 refers to any capital amount. There was

no obligation of erstwhile employer of the

respondent to transfer any capital amount. Neither

any such capital amount was contemplated by 1989

Regulations or by Scheme of absorption dated

02.07.1991. The Circular dated 02.07.1991 is in

conformity with the Regulations, 1989 and a reading

of Regulation 43 of Regulations 1989 as well as

Circular dated 02.07.1991 makes it abundantly clear

that for benefit of Pension Scheme what was

required to be transferred by the erstwhile

employer was the employees contribution which was

to get transferred into the GPF Account and the

employer’s contribution to be credited in the

Pension Fund. Nothing more was required to be done

Page 33 of 44
by the respondent or erstwhile employer for

fulfilling any condition or statutory requirement

with regard to the respondent’s claim of pension.

After transfer of the amount aforesaid, the

respondent having given option regarding opting the

pension scheme, it was statutory obligation of the

appellant to credit both the aforesaid amounts and

thereafter continues to deposit 10% in the Pension

Fund and after retirement calculates the pension

accordingly.

39. The notification dated 12.02.1997 specially

Clause 2(vi) on which reliance has been placed by

the learned counsel for the appellant also does not

refer to any sum as a capital amount which needs to

be transferred to the appellant for making employee

eligible for Pension. The circular dated 09.02.1999

filed by the appellant as Annexure-P/2 does refer

to capital amount but it relies on notification

dated 12.02.1997 specifically on Clause 2(vi).

Clause 2(vi) of notification dated 12.02.1997 does

not refer to any capital amount. Thus, the

Page 34 of 44
statement in Circular dated 09.02.1999 that only

upon receipt of capital amount from Rajasthan State

Agro Industries Corporation Limited employees were

entitled to get benefit of Corporation Pension is

unfounded and without any basis. Clause 2(vi)

contemplates that those employees who give their

option under Employee Pension Scheme, 1989 their

deducted Provident Fund Contribution amount of

earlier service on receiving back from P.F.

Commissioner Office by their employer will be

forwarded to Corporation. We have already noticed

that both employee’s contribution and employer’s

contribution which were deposited with Provident

Fund Commissioner Office was transferred to

Corporation. Thus, what was contemplated by Clause

2(vi) of notification dated 12.02.1997 was complied

with.

40. We are satisfied that there was no justifiable

ground for the appellant for not sanctioning the

Page 35 of 44
claim of pension of the respondent after his

retirement.

41. Learned counsel for the appellant has

emphasized that the respondent continued to receive

pension under the CPF Scheme which fact has not

been denied by the respondent. The respondent’s

case was that the said amount was accepted by the

respondent since he had no option his pension

having not been sanctioned by the appellant. We are

of view that it was open for the Corporation-

appellant while sanctioning the pension to the

respondent to deduct the amount of pension received

by him under CPF Scheme and the pension could have

been accordingly fixed by reducing the pension

amount already received by the respondent which

respondent was getting under CPF Scheme but that

could not have been a reason for denying pension to

the respondent. The payment of gratuity to the

respondent was also made of Rs. 10 lakh which was

paid in the account of the respondent.

Page 36 of 44

42. Learned Single Judge allowing the writ petition

filed by the respondent for grant of pension has

put a condition that said entitlement is subject to

refund of the amount received by him under the CPF

Scheme. Learned Single Judge has also rightly

directed that neither the appellant nor the

respondent shall be entitled for any interest

meaning thereby that whatever amount was received

by the respondent he was to refund it without any

interest accrued on it and whatsoever amount was to

be received by the respondent under his entitlement

to pension he was not to receive any interest. It

is useful to refer to direction of the learned

Single Judge contained in paragraph 5 which is to

the following effect:

“5. In the circumstances, the writ
petition is allowed. It is directed that
the petitioner shall be treated to be
entitled to get pension. However, the same
would be subject to his returning/
refunding the amount received by him under
the CPF Scheme. In view of the aforesaid
direction, neither the petitioner nor the
respondents would be entitled to any

Page 37 of 44
interest. The exercise may be conducted by
the respondents within fifteen days of the
amount of CPF is refunded/returned to
them.”

43. Counsel for the respondent has placed reliance

on the judgment of Rajasthan High Court in the writ

petition of Mahaveer Prasad Jain. The Division

Bench judgment of Rajasthan High Court in D.B.

Special Appeal(writ) No.1326 of 2007 decided on

19.12.2007 in Jaipur Vidhyut Vitran Nigam Ltd.

through its Chairman and Anr. versus Mahaveer

Prasad Jain,reported in 2008 (2) WLN 337,need to be

noticed in some detail.

44. In the above case decided by the Division Bench

the surplus employee was an employee of Rajasthan

State Agro Industries Corporation Limited who was

absorbed in Jaipur Vidhyut Vitran Nigam. The case

of pension of the employee was allowed by the

learned Single Judge against which Special Appeal

was filed against the judgment of Learned Single

Page 38 of 44
Judge. The appellant accepted that respondent would

be governed by the pension scheme and his case is

covered by clause 11(b) of Circular dated

02.07.1991. The Division Bench has held that

employee being not covered by Pension Scheme in his

earlier employment, his case is governed by clause

11 of Circular dated 02.07.1991. In paragraph 6

Rajasthan High court made the following

observation:

“6. We now advert to the second
contention. The counsel for the appellant
informed us that the Rajasthan State
Electricity Board (as it then was) had
both the Central Provident Fund Scheme as
well as Pension Scheme for its employees.
According to the counsel the employees of
the Board were given option to either opt
for CPF Scheme or Pension Scheme. On the
absorption of the original petitioner
(respondent No. 1 herein), his CPF Account
was closed and instead GPF Account was
opened by the Board on 02.08.2001.

Moreover he was asked to deposit
employee’s share of CPF amount which he
did. A perusal of the paragraph 13 of the
guidelines would show that it is in two
parts. Clause (a) thereof applies where
the employee was covered under CPF Scheme
and absorbing enterprise also has CPF
Page 39 of 44
Scheme. Clause (a) provides that the
balance in the CPF Account of surplus
employee shall be transferred to the
absorbing enterprise and on absorption the
surplus employee would be governed by the
CPF Scheme and the rules of absorbing
enterprise while Clause (b) of Para 11
provides that where the absorbing
enterprise is having CPF Scheme, the
balance in the CPF account of the surplus
employees shall be transferred to the
absorbing enterprise for credit to the CPF
Account of the employees and the Pension
Fund in proportion of employees and the
pension fund in proportion of the
employees subscription and organisation’s
contribution respectively. It further
provides that the eligible period of
service rendered in relieving enterprise
would be considered as qualifying service
under pension scheme of absorbing
enterprise. In view of the admitted fact
that the CPF account of the present
respondent was closed after he was
absorbed in the RSEB and that he was
called upon to deposit employees’ share of
CPF amount which he did, it is apparent
that the present appellants accepted that
the respondent would be governed by the
pension scheme and that his case is
covered by 11(b). In this view of the
matter, the rejection of the petitioner’s
claim for pension was not legally proper.
Merely because the respondent No. 1 had
withdrawn the entire CPF amount prior to

Page 40 of 44
his absorption would not make any
difference because the CPF account was
closed by the Board on the employee’s
absorption.”

45. In the above case also the balance of C.P.F.

amount was deposited in absorbing organization even

though in the said case the employee has withdrawn

the entire C.P.F. amount prior to his absorption in

the subsequent employment. In the present case the

respondent has not withdrawn any amount and both

the employees and employer contributions were

transferred to the Rajasthan State Road Transport

Corporation by Regional Provident Fund

Commissioner. Against the judgment of the Division

Bench of the Rajasthan High Court dated 19.12.2007,

Special Leave Petition (C)No.10904 of 2008 was also

filed by Jaipur Vidyut Vitran Nigam Ltd. which was

dismissed by this Court on 09.05.2008.

46. In view of the foregoing discussion, we are of

the considered opinion that respondent had made out

a case for grant of pension by the appellant and

Page 41 of 44
both the learned Single Judge and the Division

Bench did not commit any error in allowing the

claim of the respondent for pension.

47. The direction of learned Single Judge in

paragraph 5 as stated above amply protected the

interest of the appellant.

48. We may also notice that the respondent, who

attainted the age of superannuation on 31.10.2012,

immediately filed the writ petition in the year

2012 itself being Writ Petition No.8847 of 2012

which writ petition was entertained and direction

was issued by the learned Single Judge. No delay

was caused by the respondent in approaching the

High Court for relief of Pension. Before filing the

writ petition the respondent has also sent

representation in the year 2010 raising his claim

for Pension which ought to have alerted the

appellant to take appropriate steps.

49. There being an interim order passed by this

Court on 13.08.2018 in this appeal, the impugned

judgment of the High Court could not be given

Page 42 of 44
effect by the appellant. Learned Single Judge while

allowing the writ petition of the respondent

although directed the appellant to return the

benefit received by him under the CPF Scheme but

had not fixed any time for deposit. In ends of

justice we allow a period of two months from this

order to the respondent to refund the entire amount

under the C.P.F. Scheme including excess gratuity.

On such deposit being made by the respondent, the

Rajasthan State Road Transport Corporation shall

sanction the pension to the respondent and take

steps regarding payment of pension but without any

interest thereon.

50. But looking to the facts of the present cases,

to balance equities between the parties ends of

justice be served in directing the Corporation to

pay pension to the respondents only with effect

from the date on which deposit is made by

respondents. The pension received by respondents

under CPF Scheme shall be allowed to be retained by

Page 43 of 44
the respondents. This means that the amount

received as pension under the CPF need not be given

back by the respondents and the same shall not be

deducted when the pension is computed and paid by

the appellant to the respondents. Subject to above

modifications in the impugned judgment of the High

Court, we dismiss both the appeals.

……………………….J.

( ASHOK BHUSHAN )

……………………….J.

( K.M. JOSEPH )

New Delhi,
September 09, 2020.

Page 44 of 44



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