WHETHER THE WIDOW OF AN EMPLOYEE IS ENTITLED TO GET FAMILY PENSION UNDER THE EMPLOYEES FAMILY PENSION SCHEME, 1971 ON THE FAILURE OF THE EMPLOYEE TO EXERCISE HIS OPTION UNDER THE SCHEME?

[Mr. M. GOVINDARAJAN]

Employees Family Pension Scheme, 1971 was introduced with the object to give pension to the employees who are in EPF scheme. The EPF corporation issued a notification on 09.04.1971.  The said scheme came into effect from 01.03.1971. According to para 4 of the scheme every employee, who is a member of the Employees Provident Fund or of Provident Funds of factories and other establishments exempted under Section 17 of the Act as on 28.02.1971 had to exercise their option in Form I within a period of 3 months from the 1^st March, 1971 and furnish the same to the corporation immediately after the specified time.  The employees who opt or who are entitled to become a member of the Family Pension Fund subsequently after 01.03.1971 be asked to furnish the particulars concerning themselves and their family in Form 2 and the same is to be sent wherever necessary. 

In ‘Rajasthan State Road Transport Corporation V. President, Rajasthan Roadways Union and another’ – 2012-IV-LLJ-293 (SC) the employee, Hira Singh was appointed as a driver  in the appellant corporation and promoted to the post of Assistant Traffic Inspector .  In the year 1971. The appellant corporation issued the Notification to all its unit offices for wide publicity among employees so that they can exercise option if they wanted to get the benefit of the scheme.  More employees opted for the pension scheme and some employees of the scheme did not opt for this scheme. 

The employee did not opt for the pension scheme. The employee died on 30.05.1982. The Contributory Provided Fund accumulated at the time of the death of the employee was disbursed to the wife of the employee.  Initially no claim has been made on the family pension. The union, on behalf of the wife of the deceased employee, raised a dispute on the family pension after a lapse of nine years. The State Government referred the dispute to the Tribunal. The Tribunal held in favor of the wife of the deceased employee. The Tribunal held that the employee was not informed of his right to exercise his option under the scheme. The Corporation was directed to distribute the family pension to the wife of the deceased employee.  The Corporation filed appeal before the High Court against the order of the Tribunal.  The High Court upheld the order of the Tribunal. taxmanagementindia.com

The Union submitted the following before the Supreme Court:

• The Tribunal as well as the High Court have misunderstood the provision of the scheme and omitted to take not of all relevant and material facts for adjudication of the claim raised for the family pension;
• There was a complete misreading of the facts which led to incorrect reasoning resulting into rendering a wrong judgment on facts as well as on law.

The Union side submitted that Supreme Court shall not interfere with the concurrent findings rendered by all the authorities below and that no question of law has been raised for determination by the Supreme Court. 

The Supreme Court noticed that the notification was sent to all employees of the appellant corporation for information with a request that they should give wide publicity to the scheme and the notification was sent by the Corporation to the Regional Manager/Administrative Officer/Depot Manager/Assistant Depot Manager, RSRTC and all the offices informing about the notification issued by the Regional Provident Fund Commissioner and directed to see that option from each subscriber of opted is a list of optees in the prescribed proforma be  obtained  and sent along with declaration forms and option forms executed by the subscriber with special messenger positively by 31.08.1971.

The Supreme Court further noticed that facts would indicate that several employees at that time had opted and few of them did not opt for that, since they were interested to get provident fund under the scheme and not the family pension under the scheme, after the death of the employee. There is no reason to think that the employees were unaware of the notification issued by the PF Department.  \Facts would indicate that the sife of Hari Singh had already received the entire provident fund amount since the employee did not opt for the pension scheme.  However after nine years the union is raising a dispute which, according to the Supreme Court is not tenable, The Supreme Court held that the High Court and the Tribunal have committed a grave error in not properly appreciating the facts of the case and rendered a perverse finding which necessarily calls for interference. The Supreme Court allowed the appeal filed by the Corporation and set aside the award of the Tribunal confirmed by the High Court.