Decided on February 05,2003

N.K. Mathew Appellant
The Provident Fund Commissioner, Sub Regional Office Respondents


C.N. Ramachandran Nair, J. - (1.) THE petitioners in all these cases were employees of Madura Coats Limited, which was closed down and the petitioners were retrenched from service. The petitioners [were members of the EPF Scheme, 1971 and as such they are allowed to join the new Employees Pension Scheme, 1995. There is no dispute with regard to the eligibility of the petitioners for pension under the Employees Pension Scheme, 1995. However, the petitioners are questioning the granting of pension by the Provident Fund Commissioner with effect from the dates of submission of applications by them. The contention of the petitioners is that the petitioners were retrenched on the same date from the same employer which closed down it's business and ordered retrenchment of all the employees together. There is no dispute that a retrenched employee is also entitled to pension based on his length of service as provided under Rule 12 of the EPF Scheme. However, the dispute is only against the action of the Provident Fund Commissioner in applying Clause 7 of Rule 12 which provides that reduced pension at the rate of three per cent for every year where the employee retires from service below the age of superannuation, that is 58 years.
(2.) I heard counsel for the petitioners, and standing counsel for the Provident Fund Commissioner. While the petitioners' case is that the petitioners never opted for any retirement prior to the date of superannuation, because such a continency never arose as the company retrenched the petitioners leaving no option to continue in service. Rule 12(7) applies only to the case of an employee opting to retire prior to the date of superannuation. This arises only when there is continuation of employment and not to a case of retrenchment on account of closure of business. Therefore I feel the Provident Fund Commissioner committed a fundamental mistake in applying Rule 12(7) to the petitioners and limiting their claim from the dates on which applications were submitted by them taking those dates as the dates of option for retirement from service and for pension. In fact the date of making application for pension has no significance and even under Rule 12(7) of the Scheme the date on which an employee retires from service is the relevant date to be considered for reduction in pension on account of premature retirement at the rate of three per cent for every year of reduction in service. This being a case of retrenchment, which is conceded in the impugned order itself, petitioners are entitled to pension based on the length of service for which they qualify for pension till the date of retrenchment, irrespective of the date on which they made application. By making belated application the payment of pension gets delayed and the petitioners are the sufferers and not the department. Therefore the date of making application for pension has no significance so far as it is made within time. The Original Petitions are disposed of vacating the impugned orders of the Provident Fund Commissioner, and directing the Commissioner to treat the petitioners as retrenched employees and grant relief based on the length of service till retrenchment. An order will be passed by the Commissioner within one month from the date of receipt of a copy of this judgment, which will be produced by the petitioners.;

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