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2022 Supreme(SC) 1130

SUPREME COURT OF INDIA
Uday Umesh Lalit, CJI., Aniruddha Bose, Sudhanshu Dhulia, JJ.
The Employees Provident Fund Organisation & Anr. etc. – Appellants
Versus
Sunil Kumar B. & Ors. etc. – Respondents
Civil Appeal Nos 8143-8144 of 2022 (Arising out of the Special Leave Petition (C) Nos. 8658-8659 of 2019) with Civil Appeal Nos of 2022 (Arising out of Special Leave Petition (C) Nos. 16721-16722 of 2019), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 3289 of 2021), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 3287 of 2021), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 1701 of 2021), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 8547 of 2021), Civil Appeal Nos of 2022 (Arising out of Special Leave Petition (C) Nos.15063-15064 of 2022 @ Diary No.46219 of 2019), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 1366 of 2021), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 2465 of 2021), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 3290 of 2021), Civil Appeal No of 2022 (Arising out of Special Leave Petition (C) No. 1738 of 2021), Writ Petition (C) No.318 of 2022, Writ Petition (C) No.1218 of 2020, Writ Petition (C) No.1332 of 2020, Writ Petition (C) No.1312 of 2019, Writ Petition (C) No.875 of 2019, Writ Petition (C) No.832 of 2019, Writ Petition (C) No.601 of 2019, Writ Petition (C) No.500 of 2019, Writ Petition (C) No.512 of 2019, Writ Petition (C) No.466 of 2019, Writ Petition (C) No.86 of 2021, Writ Petition (C) No.1356 of 2021, Writ Petition (C) No.1379 of 2021, Writ Petition (C) No.767 of 2021, Writ Petition (C) No.477 of 2021, Writ Petition (C) No.414 of 2021, Writ Petition (C) No.1134 of 2018, Writ Petition (C) No.390 of 2019, Writ Petition (C) No.511 of 2019, Writ Petition (C) No.1459 of 2020, Writ Petition (C) No.349 of 2019, Writ Petition (C) No.372 of 2018, Writ Petition (C) No.360 of 2018, Writ Petition (C) No.233 of 2018, Writ Petition (C) No.141 of 2018, Writ Petition (C) No.118 of 2018, Writ Petition (C) No.250 of 2018, Writ Petition (C) No.406 of 2018, Writ Petition (C) No.368 of 2018, Writ Petition (C) No.393 of 2018, Writ Petition (C) No.395 of 2018, Writ Petition (C) No.371 of 2018, Writ Petition (C) No.374 of 2018, Writ Petition (C) No.385 of 2018, Writ Petition (C) No.367 of 2018, Writ Petition (C) No.369 of 2018, Writ Petition (C) No.411 of 2018, Writ Petition (C) No.466 of 2018, Writ Petition (C) No.269 of 2019, Writ Petition (C) No.327 of 2019, Writ Petition (C) No.352 of 2019, Writ Petition (C) No.69 of 2018, Writ Petition (C) No.804 of 2018, Writ Petition (C) No.594 of 2018, Writ Petition (C) No.884 of 2018, Writ Petition (C) No.778 of 2018, Writ Petition (C) No.874 of 2018, Writ Petition (C) No.1149 of 2018, Writ Petition (C) No.1167 of 2018, Writ Petition (C) No.1430 of 2018, Writ Petition (C) No.1433 of 2018, Writ Petition (C) No.1428 of 2018, Writ Petition (C) No.380 of 2018, Writ Petition (C) No.498 of 2022, Contempt Petition (C) Nos.1917-1918 of 2018 in Civil Appeal Nos.10013-10014 of 2016 and Contempt Petition (C) Nos.619-620 of 2019 in Civil Appeal Nos.10013-10014 of 2016
Decided On : 04-11-2022

Advocates appeared:
For the Parties : Mr. C.A. Sundaram, Sr. Adv. (for EPFO) Mr. Siddharth, AOR Ms. Rohini Musa, Adv. Mr. Abhishek Gupta, Adv. Mr. Zafar Inayat, Adv. Mr. Amit Kumar Agrawal, Adv. Mr. Prasenjit Keswani, Adv. Mr. Rohan Thawani, Adv. Mr. Upmanyu Tewari, Adv. Ms. Sonia Dube, Adv. Mr. Shatadru Chakraborty, Adv. Ms. Surbhi Anand, Adv. M/S. Legal Options, AOR Mr. Manish Singhvi, Sr.Adv. Mr. Deepak Goel, AOR Ms. Urvashi Sharma, Adv. Ms. Pooja Dhar, AOR Mr. Ramjee Pandey, AOR Mr. Girijesh Pandey, Adv. Ms. Alapana Pandey, Adv. Mr Ajay Kumar Tiwari, Adv. Mr. Raghvendra Shukla Adv. Mr. Uday Prakas, Adv. Mr. Somanatha Padhan, AOR Mr. Anand Varma, AOR Mr. Rajesh Gupta, Adv. Harpreet Singh, adv. Mr. Ajay Chandra, Adv. Mr. Sumit R. Sharma, AOR Mr. Udayaditya Banerjee, AOR Ms.Shreya Bhojnagarwala Adv. Mrs. Lalita Kaushik, AOR Ms. Madhumita Bhattacharjee, AOR Ms. Srija Chowdhury, Adv Mr. Anant, Adv Ms. Manjula Gupta, AOR Mr. Jagjit Singh Chhabra, AOR Mr. Saksham Maheshwari, Adv. Mr. Anand Dilip Landge, AOR Mrs. Rani Chhabra, AOR Ms. Riya Sethi, Adv. Ms. Binisa Mohanty, Adv. Mr. Mritunjay Kumar Sinha, AOR Mr.Aditya Dhawan Adv Ms.Kiran Dhawan, Adv. Mr. Shashank Shekhar,Adv Mr. Ronak Baid, Adv. Mr. Chander Shekhar Ashri, AOR Mr. Y. Raja Gopala Rao, AOR Ms. Vismai Rao, Adv. Mr. Korada Pramod Kumar, Adv. Mr. Dhuli Gopi Krishna, Adv. Mr. Y Ramesh, Adv. Mr. K K Venugopal, AG (NP) Mr. Vikramjit Banerjee, ASG Mr. Sanjay Kumar Jain, ASG Mr. R.Balasubramanian, Sr.Adv. Mr. Ankur Talwar, Adv Ms. Ruchi Kohli, Adv. Mr. Chinmayee Chandra, Adv. Mr. Siddhartha Sinha, Adv. Mr. Prashant Rawat, Adv. Mr. Tathagat Sharma, Adv. Mr. Raman Yadav, Adv. Mr. Shivam Singhania, Adv. Mr. Nring Chamwibo Zeliang, Adv. Mr. Amrish Kumar, AOR Mr. Rahul Pratap, AOR Mr. R.Anand Padmanabhan, adv. Mr. Shashi Bhushan Kumar, AOR Mr. Himanshu Gupta, Adv. Mr. Manoj C. Mishra, AOR Mr. Ashwin Kumar D S Adv. Ms. Surbhi Mehta, AOR Mr. Pranesh, AOR Bahar U Barqi, Adv. Maroof Ahmad, Adv. Mr. Aftab Ali Khan, AOR Mr. Anil Nag, AOR Mr. Mohit Paul, AOR Mr. Kartik Nayar, Adv. Mr. Rishab Kumar, Adv. Ms. Rangoli Seth, Adv. Mr. Jamshed P. Cama, Sr.Adv. Mr. Soumya Chakraborty, Sr.Adv. Mr Benny P Thomas, Adv. Mr. Rajiv Shukla, Adv. Ms. Shivani Kapoor, Adv. Mr. Prakash Ranjan Nayak, AOR Mr. Md. Shahid Anwar, AOR Mr. Syed Rehan, Adv. Mr. Devendra Nath Tripathi, Adv. M.Jaggannath R., Adv. Dr. K P Kylasanatha Pillay, Sr.Adv. Mr. C.M Sundaram Iyer, Mr. A. Venayagam Balan, AOR Mr. Jayanth Muth Raj, Sr.Adv. Ms. V.P. Seemanthini, Sr.Adv. Ms. Anu K. Joy, Adv. Mr. Alim Anvar, Adv. Mr. Abraham C.Mathews, Adv. Mr. Nikhil Goel, Adv. Mr. Santhosh Krishnan, Adv. Mr. Devashish Bharuka, Adv. Mr Sriram P. Adv. Mr. Nishe Rajen Shonker, AOR Mr. Devashish Bharuka, Adv. Mr. Mohammed Sadique T.A., AOR Ms. Anu K. Joy, Adv. Mr. Alim Anvar, Adv. Mr. Santhosh Krishnan, Adv. Mr. Shaji J. K., Adv. Mr. Babu K., Adv. Mr. Sibo Sankar Mishra, AOR Mr. Rishabh Sancheti, Adv. Ms. Padma Priya, Adv. Mr. Anchit Bhandari, Adv. Mr. Suyash Jain, Adv. Mr Zeeshan Ali, Adv. Mr Shubham Jain, Adv. Mr. K. Paari Vendhan, AOR Mr S.D. Singh, Adv Mr. Harsh Nandwana, Adv Ms. Bharti Tyagi, AOR Ms. Meenu Singh, Adv. Ms. Shweta Sinha, Adv. Mr. Ram Kripal Singh, Adv Mr. Siddharth Singh, Adv. Mr. V.N. Koura, Adv. Mrs. Paramjeet Benipal, adv. Mr. Avneesh Arputham, Adv. Ms. Anuradha Arputham, Adv. M/S. Arputham Aruna And Co, AOR Mr. Varinder Kumar Sharma, AOR Mr. Shantanu Sharma, Adv. Mr. Sajeev Agarwal, Adv. Mr. Dinesh Mohan Sinha, Adv. Mr Bikash Chandra, Adv. Mr. D D Sharma, adv Mr. Rajeev Kumar Deora, Adv. Mr. Kaushal Kishore, Adv. Mr. Pramod Kumar Singh, Adv. Mr. Naresh Kumar Sharma, Adv. Mr. Vijay Pal, Adv. Ms. Kajal Kumar, Adv. Mr Ravinder Kumar Wadhwa, Adv. Mr. Gunnam Venkateswara Rao, AOR Mr. Rohit Ghosh, Adv. Ms.Anushka Sharda, Adv. M/S. Khaitan & Co., AOR Mr. Rakesh Sinha, Adv. Mr. MG Akbar, Adv. Mr. Jeemoon Raju K, Adv. Mr. Sushant, Adv. Ms. Himoli Choudhary, Adv. Mr. Arvind Gupta, AOR Mr. Rajivkumar, AOR Mr. Puneet Taneja, AOR Mr. Manmohan Singh Narula, Adv. M/S. Parekh & Co., AOR Mr. Anil Nag, AOR Mr. Siddharth Mittal, AOR Mr Tabrez Malawat, Adv Mr. Sourajit Sarkar, Adv. Mr. Syed Hamza, Adv. Mr Sujeet Kumar, Adv Mr Abhaya Nath Das, Adv Mr Rahul Gupta, Adv Ms Riya Soni, Adv Mr S S Bandyopadhyay, Adv Mr Satish Kumar, AOR Mr. Punit Dutt Tyagi, AOR Mr. Ashish Bhan, Adv. Mr. Syed Jafar Alam, AOR Mr. Rajendra Dangwal, Adv. Mr. Kaustub Narendran, Adv. Mr. Preet Pal Singh, AOR Mr. Rahul Kaushik, AOR Ms. Sangeet Bharti, Adv. Mr.Ashish Kumar, Adv. Mr. Sushil Kumar Singh, AOR Mr. Ankit Goel, AOR Mr. Ajit Pudussery, AOR Mr. Vijayan K., Adv. Mr. R.K. Kapoor, Adv. Mr. Rajat Kapoor, Adv Ms. Kheyali Singh, AOR Mr. Ashish Rana, AOR Mr. L.K. Paonam, Adv. Ms. Tomthinnganbi Koijam, Adv. Mr. Niraj Bobby Paonam, Adv. Mr. S. K. Bhattacharya, AOR Mr. Karunakar Mahalik, AOR Mr. Upendra Narayan Mishra, Adv. Mr. Manoranjan Mishra, Adv. Mr. Pradeep Kumar, Adv. Roopam Rai, Adv. Mr. Shyam Sundar Rai, Adv. Mr. Upendra Mishra, Adv. Mr. C. K. Sasi, AOR M/S. M. V. Kini & Associates, AOR Mr. Rishi K Awasthi, Adv. Mr. Prashant Kumar, Adv. Mr. Piyush Vatsa, Adv. Ms. Ritu Arora, Adv. Mr Avinash Ankit, Adv. Yukti Anand, Adv. Mr. Santosh Kumar - I, AOR Mr. P. A. Noor Muhamed, AOR Ms Giffara S. Adv Mr. M. Gireesh Kumar, Adv. Mr. Ankur S. Kulkarni, AOR Ms. Puspita Basak, Adv. Mr. Sunil Kumar, Adv. Mr. Sandeep Kumar Dwivedi, Adv. Mr. Awadhesh Kumar, Adv. Mr. Pradeep Kumar Dwivedi, Adv. Mr. Raghuvendra Upadhyay, Adv. Mr. Kisalaya Shukla, Adv. Ms. Purnima Jain, Adv Mr.Manish Kumar Mishra, Adv. Mr A Tiwari, Adv. Mr. Rakesh Mishra, AOR Mr. R. Basant, Sr Adv Mr. Raghenth Basant, Adv Ms. Liz Mathew, AOR Mr. Vishnu Pazhanganat, Adv Mr. Akshay Sahay, Adv Ms. Roopali Lakhotia, Adv Mr. Ajay Krishna, Adv. M/S. Karanjawala & Co., AOR Mr. P.N. Ravindran, Sr. Adv. Mr. Roy Abraham, Adv. Ms. Reena Roy, Adv. Ms. Seema Jain, Adv. Mr. Akhil Abraham, Adv. Mr. Audhinder Lal, Adv. Ms. Purva, Adv. Mr. Himinder Lal, AOR Mr. Thampan Thomas, Adv. Mr. K.V. Mohan, AOR Ms. Tessy Varghese, Adv. Mr. Vinosh K K., Adv. Ms. Vandana Sehgal, AOR Mr. Anand Dilip Landge, AOR Mr. P. S. Sudheer, AOR Mr. Rishi Maheshwari, Adv. Ms. Anne Mathew, Adv. Mr. Bharat Sood, Adv. Ms. Shruti Jose, Adv. Mr. R. Venkataramani, Sr.Adv. Mr. Vikas Singh, Sr.Adv. Mr. Gopal Sankaranarayanan, Sr.Adv. Mr. Purushottam Sharma Tripathi, AOR Mr. Ravi Chandra Prakash, Adv. Mr. Mukesh Kumar Singh, Adv. Mr. Abhishek Tripathi, Adv. Mr Amit , Adv Mr. Rajiv Kumar, Adv. Ms. Sushma Singh, Adv. Mr. Trilok Nath Saxena, Adv. Mr. Vipin Kumar Saxena, Adv. Mr. Vipin Sandu, Adv. Mr. Yatish Yadav, Adv. L.Nidhiram Sharma, Adv. Ms. Vani Vyas, Adv. Mr. Shantanu Jugtewat, Adv. Mr. Ikshit Singhal, Adv. Mr Ranvir Singh Chillar, Adv. Mr Chandra Kant Sukumar Sarkar, Adv. Mr. Narendra Kumar Goyal, Adv. Ms. Kajal Rani, Adv. Mr. Lakshmeesh S. Kamath, AOR Ms. Samriti Ahuja, Adv. Mr. Abhay Singh, adv. Ms. Ankita Agarwal, Adv. Mr. Hetu Arora Sethi, AOR Mr. Ankit Acharya, AOR Mr. Manoj V George, Adv. Manju E George, Adv. Mr. B D Das, Adv. Ms. Shilpa Liza George, AOR KM Vignesh Ram, Adv. Ms. Akriti Seth, adv. Mr. Nasib Masih, Adv. Presly Mathai, adv. Dr. K.P. Kylasanatha Pillay, Sr. Adv. Mr. V. Chitambaresh, Sr. Adv. Ms. Rashmi Singhania, AOR Ms. Pooja Dhar, AOR Mr. Hitesh Kumar Sharma, Adv. Mr. Akhileshwar Jha, Adv. Ms. Deepti S. Rane, Adv. Mr. Subhash S. Kadam, Adv. Ms. Madhvi S.Sawant, Adv. Ms. Kavya S.Lokande, Adv. Ms. Sneha S.Deshmukh, Adv. Ms. Kavita S.M., Adv. Mr. Naresh Kumar, AOR

Headnote:(A) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 - Section 6A - Amendment to the Employees’ Pension Scheme, 1995 - Legality of amendments introduced in 2014 quashed by High Courts - Amendments capping pensionable salary at Rs. 15,000/- and requiring 1.16% contribution from employees is arbitrary and ultra vires the Act - The High Court's findings demonstrated that the changes did not reflect the realities of wage structures, potentially depriving employees of a just pension and creating arbitrary classifications. (Paras 11-12, 37-47)

(B) Judicial Review - The statutory authority has the power to modify schemes under Section 7 of the Act, but amendments should align with the provisions of the Act for legality - Amendments cannot violate the fundamental rights of employees nor create arbitrary classifications (Paras 12, 40-44)

Facts of the case:
The appeals arise from judgments of the High Courts of Kerala, Rajasthan, and Delhi, which quashed the 2014 amendments to the Employees' Pension Scheme, arguing it imposed unjustified limitations on pension benefits for employees, contrary to the intention of the original legislation.

Findings of Court:
The amendments limiting pensionable salary to Rs. 15,000/- per month were held to be arbitrary without a rational basis. The court ruled that no justification was provided for the alleged depletion of funds, dismissing concerns presented by the Employees' Provident Fund Organization.

Issues: The legal issues revolved around the validity of the amendments concerning pensionable salary and employee contributions; the applicability of the scheme on exempted versus non-exempted establishments; and the retrospective effects of the amendments on existing members.

Ratio Decidendi: The court asserted that a beneficial scheme must be construed to favor employees, and legal rights cannot be arbitrarily altered. The amendments unjustifiably restrict pension benefits, and the necessity for employee contributions under the amended scheme lacks statutory backing.

Result: Appeals allowed; 2014 amendments set aside.

JUDGMENT

Aniruddha Bose, J.

Leave granted.

2. In this judgment, we shall deal with the legality of certain amendments and modifications made by the Central Government to the Employees’ Pension Scheme, 1995 (“1995 Scheme”). Such scheme has been made in pursuance of, inter-alia, Section 6 A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“the Act”). Such changes, inter-alia, are sought be effected in paragraphs 3, 6, 11, 12 and 14 of the 1995 scheme. The Act originally did not provide for any pension scheme and Section 6 A was introduced to the said Act by way of an amendment made in 1995. The amendment of 1995 contemplated formulation of a scheme for employees’ pension and the pension fund was to comprise of deposit of 8.33 per cent of the employers’ contribution made towards provident fund corpus as per the prevailing Statue. Paragraph 11 of the scheme dealt with determination of pensionable salary. At that point of time, maximum pensionable salary was Rs.5000/- and this sum had been enhanced subsequently to Rs.6500/-. Pensionable salary was raised to Rs.15000/- by a notification dated 22nd August 2014 [numbered G.S.R. 609 (E)], which was to be effective from 1st September 2014. This notification brought certain other modifications in the scheme mainly restricting its coverage and we shall discuss these modifications later in this judgment.

3. In the appeals before us, judgments of the High Courts of Kerala, Rajasthan and Delhi are assailed. In the case of P. Sasikumar & Others v. Union of India (UOI) Represented by the Secretary to Govt. of India Ministry of Labour & Department of Employment and Others [in Writ Petition (C) No. 13120 of 2015], a Division Bench of the Kerala High Court in its judgment delivered on 12th October 2018 set aside the Employees’ Pension Amendment (Scheme), 2014 conceived in G.S.R. 609 (E). The Delhi High Court in its judgment delivered on 22nd May 2019 in the case of Bhartiya Khadya Nigam Karamchari Sangh and Anr. v. Union of India and Ors. [in Writ Petition (C) No. 5678 of 2018] followed the view expressed by the Kerala High Court and quashed a circular issued by the provident fund authorities on 31st May 2017 precluding exempted establishments from the benefits of higher pension. In a decision delivered on 28th August 2019 in the case of Union of India and Others v. Jale Singh and Others [in D.B. Special Appeal Writ No. 436 of 2019] a Division Bench of the Rajasthan High Court also expressed the same opinion. Appeals arising out of SLP (C) No. 3289 of 2021, SLP (C) No. 3290 of 2021, SLP (C) No. 2465 of 2021 and SLP (C) No. 3287 of 2021 are directed against the aforesaid judgment of the Rajasthan High Court and a subsequent decision of a Bench of equal strength delivered on 24th September 2019 in the same line. The appeals originating from SLP (C) Nos. 15063-15064 of 2022 are against the judgment of the Delhi High Court delivered on 22nd May 2019, whereas in appeals having their roots in SLP (C) No. 1366 of 2021, SLP (C) No. 1738 of 2021, judgments of the Delhi High Court delivered following the case of Bhartiya Khadya Nigam Karamchari Sangh (supra) have been assailed. In another judgment delivered by the same Bench of the Kerala High Court in the case of Sunil Kumar and Ors. v. Union of India & Ors. [in Writ Petition (C) No. 602 of 2015] on the same day, i.e. 12th October 2018, the aforesaid notification of 22nd August 2014 was invalidated. That judgment is under challenge in the appeals in connection with SLP (C) Nos. 16721-16722 of 2019. In a contempt action brought before the Kerala High Court by aspiring beneficiaries of the pension scheme for implementation of the directions issued in the judgment dated 12th October 2018, certain directions have been issued by the Kerala High Court. The judgment to that effect delivered on 6th November 2020 is impugned in SLP (C) No. 854


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