Employee cannot be denied pension for employer error : Supreme Court
According to the Justices Abhay S. Oka and Rajesh Bindal's bench, an employee cannot be denied his entitlement to a pension without his deliberate consent.
Employee cannot be denied pension for employer error : Supreme Court
In the case of Calcutta State Transport Corporation vs. Ashit Chakraborty & Ors., the Supreme Court ruled on Monday that an employee cannot be refused a pension just because the employer made some erroneous deductions.
According to the Justices Abhay S. Oka and Rajesh Bindal’s bench, an employee cannot be denied his entitlement to a pension without his deliberate consent.
The Calcutta State Transport Corporation and other parties’ appeal of the high court’s division bench order on March 5, 2021 was dismissed by the supreme court.
The single bench’s ruling requiring the employer to release one Ashit Chakraborty and others’ pension was affirmed by the division bench.
Chakraborty joined the Corporation in 1981 as a conductor. Only the Contributory Provident Fund Scheme was relevant at the time because there was no pension plan in place.
The Calcutta State Transport Corporation Employees’ Service (Death cum Retirement Benefits) Regulations, 1990 were created by the Corporation in 1991 as part of its authority under Section 45 of the Road Transport Corporation Act, 1950, with the prior approval of the State Government. The Regulations became effective with backwards compatibility on April 1, 1984.
The 1990 Regulations required that current Corporation employees submit a written option within six months of the date the 1990 Regulations were published expressing their desire to join the said pension plan rather than continue to hold a CPF in order to receive the benefits of the said scheme.
The 1990 Regulations also stated that it would be optional for current employees but mandatory for new hires beginning on the day the 1990 Regulations were notified.
In 2017, Chakraborty, who selected a pension plan, voluntarily retired. Without receiving any pension, he was only paid the amount designated for CPF contributions and gratuities, which compelled him to file a writ suit with the high court. The Corporation argued that regular contributions to the provident fund were taken out of the employee’s paycheck in its appeal to the top court.
He was getting the statements sent to him. He never voiced a protest, though. Only after his retirement did he bring up the subject. He shouldn’t be permitted to use the pension programme benefits in such a situation. The employee replied that he had decided whether to take advantage of the pension plan.
Following that, it was the employer’s responsibility to accurately compute his wage and make the necessary deductions. He shouldn’t be made to suffer as a result of the Corporation’s mistakes, should there be any. He received whatever compensation was given to him upon his retirement, keeping in mind that a similar sum might be due at his retirement. Furthermore, he was unaware that the Corporation would not provide him his pension.
The bench agreed with the employee’s argument, saying that it couldn’t be used as a defense against his legitimate claim “simply because there were some incorrect deductions from his salary and he was treated as a member of the CPF Scheme.”
The court dismissed the idea that other employees in similar situations would also stake their claims, stating that this would not stop it from providing the employee with the remedy that is rightfully his.
“Rather, this argument demonstrates that the Corporation was negligent in applying the 1990 Regulations to a number of employees, despite the fact that these were informed on 4.1.1991 and took effect retroactively on 1.4.1984. There are attempts to offer technical arguments, but they are unpersuadable. The employees cannot be made to suffer because of any error on the part of the Corporation, the bench ruled.
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