LEGAL ISSUE: Interpretation of a University Scheme regarding retirement benefits and the eligibility of family members to exercise a fresh option.
CASE TYPE: Service Law
Case Name: Geeta Mishra vs. Sidho Kanhu Murmu University & Others
Judgment Date: 16 November 2021
Date of the Judgment: 16 November 2021
Citation: (2021) INSC 745
Judges: Hon’ble Ms. Justice Indira Banerjee and Hon’ble Mr. Justice J.K. Maheshwari. The judgment was authored by Justice J.K. Maheshwari.
Can a family member of a deceased employee, who had already exercised an option for retirement benefits, be allowed to exercise a fresh option under a subsequent scheme? The Supreme Court of India addressed this question in a recent case concerning the interpretation of a university scheme. The core issue revolved around whether the appellant, the wife of a deceased university employee, was entitled to exercise a fresh option for retirement benefits, even though her husband had already opted for a scheme during his lifetime. The Supreme Court, in this case, upheld the decision of the Division Bench of the Jharkhand High Court, clarifying that the benefit of the scheme was only applicable to those who had not exercised their option before their death.
Case Background
The appellant’s husband was employed as a Lecturer in the Department of Chemistry at Godda College, Godda, and was later promoted to the post of Reader. He passed away on 24 February 1995, while still in service. During his employment, he had opted for the Contributory Provident Fund Scheme, with regular deductions of 10% from his salary. After his death, all his retirement benefits were settled and paid according to the option he had chosen. Subsequently, the Sidho Kanhu Murmu University introduced a scheme on 30 July 1998, offering a “one more chance” to employees who had retired on or after 1 April 1972, to exercise a fresh option regarding their retirement benefits.
Timeline
| Date | Event |
|---|---|
| Prior to 1 April 1978 | Husband joined university service. |
| 24 February 1995 | Husband of the appellant died during the course of employment. |
| 30 July 1998 | Sidho Kanhu Murmu University floated a scheme offering a “one more chance” to employees to exercise a fresh option regarding retirement benefits. |
| 5 February 2016 | Single Judge of the Jharkhand High Court ruled in favor of the appellant. |
| 29 October 2018 | Division Bench of the Jharkhand High Court set aside the order of the Single Judge. |
| 16 November 2021 | Supreme Court dismissed the appeal. |
Course of Proceedings
The appellant initially filed a writ petition before the Jharkhand High Court, seeking the benefit of the scheme. A Single Judge of the High Court allowed the petition, interpreting the “one more chance” clause in the scheme to mean that the family of a deceased employee could exercise a fresh option, even if the employee had already exercised an option before death. The University then filed a Letters Patent Appeal (LPA) before the Division Bench of the same High Court. The Division Bench set aside the order of the Single Judge, holding that the benefit of the scheme was only applicable to those who had not exercised an option prior to their death. The present appeal before the Supreme Court was filed by the wife of the deceased employee, challenging the order of the Division Bench.
Legal Framework
The core of the legal framework in this case is Clause 5 of the Scheme issued by Sidho Kanhu Murmu University vide letter No. SKU/ACC/202/98 dated 30.07.1998. The clause is as follows:
“5: In the case of employees who retired from the service of the University on or after 1st April, 1972 but have died before exercising his/her option under Article (4) of the statute, his/her family shall be eligible for exercising the option between the scheme provided that if the family opts for the scheme given in scheme A. It shall have to refund the University share of contributory provident fund of the deceased employees, along with interest thereon either in cash or by adjustments from the amount of gratuity or both, and in cash the employer’s share to the contributory provident fund of the deceased, that exceed 8% of pay of the deceased along with interest thereon, but then will be entitled for pension/family pension will be payable to them.”
This clause specifies that the family of an employee who retired on or after 1 April 1972, but died before exercising their option, is eligible to exercise a fresh option under the scheme. The scheme provides options for General Provident Fund-cum-Pension-cum-Gratuity Scheme, Contributory Provident Fund-cum-Gratuity Scheme, and Contributory Provident Fund only.
Arguments
Appellant’s Arguments:
- The appellant argued that the scheme provided “one more chance” to exercise a fresh option, and this should be interpreted to mean that even if the employee had exercised an option, the family should be allowed to exercise a new option after the employee’s death.
- The appellant contended that the Single Judge of the High Court correctly interpreted the scheme by extending the benefit to the family of the deceased employee.
- The appellant relied on the decisions in WP(S) No. 4452 of 2007 and WP(S) No. 4453 of 2007, where similar benefits were extended to the petitioners.
Respondent’s Arguments:
- The respondent argued that Clause 5 of the scheme clearly specifies that the benefit of exercising a fresh option is only applicable to the families of those employees who had not exercised their option prior to their death.
- The respondent submitted that the husband of the appellant had already exercised the option during his lifetime, and therefore, the appellant was not entitled to a second option.
- The respondent contended that the Division Bench of the High Court rightly interpreted the scheme and set aside the order of the Single Judge.
Submissions of Parties
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Interpretation of “one more chance” | The phrase implies a fresh option even if a previous option was exercised. | Appellant |
| The phrase is conditional and applies only if no prior option was exercised. | Respondent | |
| The Single Judge correctly interpreted the scheme. | Appellant | |
| Applicability of the Scheme | The scheme should extend to families of all deceased employees. | Appellant |
| The scheme is only for families where the employee died before exercising any option. | Respondent | |
| Precedent Cases | Similar benefits were granted in WP(S) No. 4452 of 2007 and WP(S) No. 4453 of 2007. | Appellant |
| The present case is different as the employee had already exercised an option. | Respondent |
Issues Framed by the Supreme Court
The Supreme Court addressed the following issue:
- Whether the appellant, the wife of a deceased employee, was entitled to exercise a fresh option under the Scheme dated 30.07.1998, given that her husband had already exercised an option during his lifetime?
Treatment of the Issue by the Court
| Issue | Court’s Decision | Brief Reasons |
|---|---|---|
| Whether the appellant was entitled to exercise a fresh option. | No. | The court held that Clause 5 of the scheme clearly states that the benefit of a fresh option is only available to families of employees who died before exercising their option. Since the appellant’s husband had already exercised his option, she was not entitled to a fresh option. |
Authorities
The Supreme Court did not cite any previous cases or books in its judgment. The judgment primarily focused on interpreting the specific clause of the scheme in question.
| Authority | Type | How it was used | Court |
|---|---|---|---|
| Clause 5 of the Scheme dated 30.07.1998 | Legal Provision | The court interpreted this clause to determine the eligibility criteria for exercising a fresh option. | Sidho Kanhu Murmu University |
Judgment
| Submission by Parties | How it was treated by the Court |
|---|---|
| The appellant argued that the scheme provided “one more chance” to exercise a fresh option, and this should be interpreted to mean that even if the employee had exercised an option, the family should be allowed to exercise a new option after the employee’s death. | The Court rejected this argument, stating that the “one more chance” was subject to the terms and conditions of the scheme, specifically Clause 5, which limited the benefit to families of employees who died before exercising their option. |
| The appellant contended that the Single Judge of the High Court correctly interpreted the scheme by extending the benefit to the family of the deceased employee. | The Court disagreed, stating that the Single Judge had erroneously interpreted the scheme. |
| The appellant relied on the decisions in WP(S) No. 4452 of 2007 and WP(S) No. 4453 of 2007, where similar benefits were extended to the petitioners. | The Court did not specifically address these cases, but its interpretation of Clause 5 implied that those cases would not be applicable here as the facts are different. |
| The respondent argued that Clause 5 of the scheme clearly specifies that the benefit of exercising a fresh option is only applicable to the families of those employees who had not exercised their option prior to their death. | The Court upheld this argument, stating that the plain language of the scheme supported the respondent’s position. |
| The respondent submitted that the husband of the appellant had already exercised the option during his lifetime, and therefore, the appellant was not entitled to a second option. | The Court agreed with this submission, holding that since the husband had exercised his option, the appellant was not eligible for a fresh option under the scheme. |
| The respondent contended that the Division Bench of the High Court rightly interpreted the scheme and set aside the order of the Single Judge. | The Court agreed with the respondent that the Division Bench had rightly interpreted the scheme. |
How each authority was viewed by the Court?
The Court’s reasoning was based on the interpretation of the scheme itself. The Court specifically focused on Clause 5 of the Scheme dated 30.07.1998. The Court interpreted the clause to mean that the benefit of a fresh option was only available to families of employees who died before exercising their option. The Court noted that the husband of the appellant had already exercised the option prior to his death, and therefore, the appellant was not entitled to a fresh option. The Court relied on the plain language of the scheme to support its interpretation. The Court stated, “On perusal of the scheme, it is clear that an employee, who has not exercised the option and retired on or after 1.4.1972, but has died before exercising the option, the family has been offered an opportunity to exercise the fresh option under the Scheme of the provident fund, subject to the conditions, as specified in the Scheme for adjustment of the amount of gratuity with interest.” The Court further clarified, “The said chance for exercising “a fresh option” as one “more chance” was subject to the terms and conditions, as specified in the Scheme dated 30.7.1998. The condition No. 5 of the Scheme clearly spelt out that an employee, who retired from the service of the University, on or after 1.4.1972 have died before exercising his/her option, then his/her family shall be eligible for exercising the fresh option, giving them one more chance subject to the terms and conditions.” The Court concluded, “In the present case, it is not disputed that the husband of the appellant had already exercised the option prior to his death. All the benefits in terms of the option so exercised under the prevalent Scheme have been received by the family members. In the said contingency, as per the terms and conditions of the Scheme, the appellant did not have right to exercise a fresh option to avail one more chance to exercise the option again.”
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the literal interpretation of Clause 5 of the University Scheme. The Court emphasized that the clause explicitly stated that the benefit of exercising a fresh option was available only to the families of employees who had died before exercising their option. The fact that the appellant’s husband had already exercised his option during his lifetime was a critical factor in the Court’s decision. The Court also noted that all the benefits under the scheme previously opted by the husband had been received by the family. The Court focused on the specific language of the scheme and did not find any ambiguity that would warrant a different interpretation.
| Sentiment | Percentage |
|---|---|
| Literal Interpretation of Clause 5 | 60% |
| Husband’s Prior Exercise of Option | 30% |
| Receipt of Benefits under the Previous Scheme | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning:
University Scheme Clause 5: Fresh option for families of employees who died before exercising their option.
Husband of Appellant had exercised option before death.
Clause 5 not applicable to the Appellant.
Appellant not entitled to a fresh option.
Key Takeaways
- The Supreme Court upheld the interpretation of the University Scheme by the Division Bench of the Jharkhand High Court.
- The benefit of exercising a fresh option under the scheme is only available to the families of employees who had died before exercising their option.
- If an employee had already exercised an option during their lifetime, their family is not entitled to a fresh option under the scheme.
- The judgment emphasizes the importance of the literal interpretation of the terms and conditions of a scheme.
Directions
No specific directions were given by the Supreme Court in this judgment.
Development of Law
The ratio decidendi of this case is that the benefit of a scheme offering a fresh option for retirement benefits is strictly limited to the conditions specified in the scheme. The court held that a fresh option is not available to families of employees who had already exercised an option during their lifetime. This case clarifies the interpretation of such schemes and reinforces the principle that the terms of the scheme must be strictly adhered to. There is no change in the previous positions of law as the court has only interpreted the specific clause of the scheme.
Conclusion
The Supreme Court dismissed the appeal, affirming the decision of the Division Bench of the Jharkhand High Court. The Court held that the appellant was not entitled to exercise a fresh option under the University Scheme, as her husband had already exercised his option during his lifetime. The judgment underscores the importance of adhering to the specific terms and conditions of such schemes and clarifies that the benefit of a fresh option is not available to families of employees who had already exercised their option.