Employees of exempted establishments are entitled to pension benefits under the EPS 1995 based on actual salary, as clarified by the Supreme Court.

JUDGMENT :

A.D. Maria Clete, J.

Heard.

2. The Writ Petitioners in all the WPs were employees either working or retired from Handicrafts and Handlooms Exports Corporation of India Ltd (for short HHEC). In all these writ petitions, they were seeking to challenge the order passed by the 4^th Respondent Regional Provident Fund Commissioner (Pension) dt. 4.10.2019. The impugned orders in all the WPs contained identical statements which are as follows:-

“Please refer to your grievance of subject cited above in this regard, it is informed that as per Circular No Pension-1/12/33 EPS Amendment/96- vol.II/4432 dated 31.05.2017, the order is not applicable on exempted establishment. Further, no directions in this regard has been issued by Head Office for exempted establishment.”

3. In these writ petitions, notices were issued on different dates, with liberty granted to the petitioners to serve the respondents privately as well. Despite the writ petitions being pending for five years, the petitioners' counsel has not ensured service of notice on respondents 7 to 9. Meanwhile, the main writ petitions have now been listed for final disposal. The counsels appearing in these matters have failed to serve notice on the employer under whom the petitioners are working. Furthermore, the respondents who have been served have not filed any counter affidavits in these cases.

4. Although the writ petitions were filed by individual petitioners, their grievances were identical. Consequently, they were clubbed together, and after hearing all parties concerned, a common order has been passed. The petitioners were employed under the Handicrafts and Handlooms Exports Corporation of India Ltd. (HHEC), a company that had obtained an exemption from the Provident Fund but remained an unexempted establishment under the Employees' Pension Scheme (EPS). The exemption was granted by the Central Government under Section 17(1A) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. As a result, the provident fund contributions deducted from the employees were maintained in a separate trust created by HHEC, which is the 9th respondent in these proceedings.

5. The petitioners asserted that they contributed 12% of their salary towards the provident fund, with an equal contribution made by HHEC. Initially, this amount accrued interest at a rate of 12%, which was later gradually reduced by the EPFO authorities. In 1995, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, was amended to introduce Section 6A, which established the Employees’ Pension Scheme (EPS), 1995. Under this provision, the employer was required to allocate a portion of the provident fund contribution toward the pension fund, with 8.33% of the employee’s pay designated for pension benefits.

6. When the Employees’ Pension Scheme (EPS), 1995, was introduced, the maximum pension receivable by an employee was initially Rs. 5,000 per month. This limit was later increased to Rs. 6,500 per month with effect from 01.06.2001 and subsequently raised to Rs. 15,000 per month from 01.09.2014. The contribution towards the pension scheme was solely the employer’s responsibility, with no direct financial role for employees. The petitioners opted to enroll as members of the EPS, 1995. Deductions were made only up to the maximum pensionable salary. Subsequently, through GSR No. 134 dated 28.02.1996, effective from 16.03.1996, paragraph 11(3) of the scheme was introduced, limiting the maximum pensionable salary to Rs. 6,500 per month. The relevant paragraph reads as follows:

“Provided that if at the option of the employer and employee, contribution paid on salary exceeding [rupees six thousand and five hundred/Rs. 6,500] [Added by G.S.R. 134, dated 28.2.1996 (w.e.f. 16.3.1996). ][per month from the date of commencement of this Scheme or from the date salary exceeds [rupees six thousand and five hundred/Rs. 6,500] [Added by G.S.R. 134, dated 28.2.1996 (w.e.f. 16.3.1996). ] [whichever is later, a