Supreme Court Dismisses State Appeal in Madhya Pradesh Employees Group Insurance Scheme Case. High Court's Finding That Automatic Compulsory Membership Under Para 3(d) of 1985 Scheme Requires No Fresh Option for Employees Over 50 Is Upheld and State's New Argument Left Open.

Case Note & Summary

By way of background, the appeal before the Supreme Court arose from a writ petition filed by the respondent, Joginder Nath Monga, in the High Court of Madhya Pradesh concerning retiral benefits and family insurance benefits payable on the death of his wife, Dr. (Smt.) Satyawati Monga, who was employed as Professor of Pathology at G.R. Medical College, Gwalior. She was due to retire on September 1, 1987 but died on December 14, 1986. The State of Madhya Pradesh had introduced the Government Servants Family Benefit Fund Scheme in 1974 (1974 Scheme) and later replaced it with the Madhya Pradesh Employees Group Insurance Scheme, 1985 (1985 Scheme) with effect from June 1985. Under the 1974 Scheme, Class I employees contributed Rs.30 per month and were entitled to Rs.30,000 on retirement or death; under the 1985 Scheme, the contribution increased to Rs.80 and the benefit to Rs.80,000. The material facts show that the respondent was paid death-cum-retirement benefit and arrears of pension on February 6, 1988, General Provident Fund on February 25, 1988, and family insurance benefit of Rs.30,000 on February 25, 1988. He filed Misc. Petition No. 106/90 before the High Court claiming interest on the delayed payment of retiral benefits and asserting that his deceased wife was covered by the 1985 Scheme, so Rs.80,000 was payable instead of Rs.30,000. The State contested, contending that the 1985 Scheme was not applicable because the deceased had not opted for it and had not started contributing at the enhanced rate of Rs.80; therefore only Rs.30,000 was payable under the 1974 Scheme. The High Court allowed the writ petition by judgment dated November 5, 1992, holding that the respondent was entitled to benefit under the 1985 Scheme, directing payment of an additional Rs.50,000 with interest at 18% per annum on delayed payment from two months after the date of death until actual payment. The High Court also held that it had jurisdiction despite the Administrative Tribunals Act, 1985, because the respondent was not entitled to invoke the State Administrative Tribunal under Section 19. The core legal issues before the Supreme Court were whether the deceased employee was entitled to the benefits of the 1985 Scheme despite not exercising an option and not contributing at the enhanced rate, and whether the High Court correctly interpreted para 3(d) of the notification dated March 27, 1985. The State's counsel confined submissions to the applicability of the 1985 Scheme and did not press the jurisdictional issue. Before the Supreme Court, the State argued that the 1985 Scheme did not apply because the deceased had not opted for it and had not paid Rs.80; alternatively, the counsel contended for the first time that para 3(d) did not correctly reflect the position and that the 1985 Scheme had no application to employees who had crossed 50 years of age on the date of introduction, relying on para 3 of the Scheme. The respondent argued that para 3 read with para 4(2) did not exclude employees over 50 and that the High Court's interpretation was correct. The Supreme Court's analysis relied on the plain wording of para 3(d) of the notification, which stated that all employees who were members of the present Family Benefit Fund Scheme shall be members of the new Scheme compulsorily, with a proviso that present members who had completed 50 years of age might opt to remain in the old Scheme by giving an option within the prescribed time limit. The Court noted that it was not the State's case that the deceased had submitted any option to remain in the 1974 Scheme. The mere fact that she had not started contributing at the enhanced rate of Rs.80 could not mean that she had exercised an option to remain under the 1974 Scheme. As to the new argument that para 3(d) was inconsistent with para 3 of the 1985 Scheme and that the Scheme did not apply to employees over 50, the Supreme Court declined to entertain it because it had not been raised before the High Court, and left that question open. The final decision was that the appeal failed and was dismissed with no order as to costs. The High Court's directions were affirmed, including payment of additional Rs.50,000 as family insurance benefit and interest at 18% per annum. The Court did not disturb the jurisdictional finding of the High Court because it was not challenged.

Headnote

Issue of Consideration

Final Decision

Appeal dismissed; no order as to costs. High Court's directions upheld, including payment of additional Rs.50,000 family insurance benefit and interest @ 18% p.a. The question whether 1985 Scheme applies to employees who had attained 50 years was left open.

Law Points