Employees who exercised options for higher pension contributions during their service are eligible for benefits under the pre-amended scheme. In the absence of a mandatory cut-off date for such options, the unilateral withdrawal of previously sanctioned higher pension benefits after retirement is illegal and unsustainable.

Headnote:(A) Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Employees Pension Scheme, 1995 - Paras 2(ix), 11(3), and 11(4) - Entitlement to higher pension - Determination of pensionable salary based on actual wages exceeding statutory ceiling - Requirement of joint option - Effect of pre-amendment and post-amendment scheme interpretations. (Paras 20, 22)

(B) Pensionary benefits - Claim for higher pension based on actual salary - Employees who retired prior to a specific amendment date having exercised prior options for higher contribution - Whether such employees are entitled to benefit of higher pension scheme - Held, employees who exercised the required option during their service period are entitled to the benefit irrespective of retirement date, as the scheme did not prescribe a fixed cut-off date for submission of such options. (Paras 23, 27, 28)

(C) Administrative Law - Arbitrariness in withdrawal of service benefits - Recovery of pension arrears - Unilateral withdrawal of previously sanctioned higher pension without reasonable justification constitutes illegal administrative action - Compliance with judicial directives regarding adjustment of accounts. (Paras 32, 33)

Facts of the case:
The petitioners, who were members of the employees pension fund, challenged the legality of orders issued by the statutory authorities discontinuing the higher pension previously granted to them. The petitioners had retired prior to the 2014 amendment of the scheme. Relying on past directives, they had submitted joint options for higher pension contributions during their service. After the pension was initially revised and increased, the authorities withdrew the higher pension benefit, reducing it back to the original statutory ceiling, citing the lack of eligibility for employees who retired before the specified amendment date.

Findings of Court:
The Court held that the reliance of the respondents on provisions denying benefits to those who retired prior to the amendment was misplaced. Since the petitioners had duly exercised their options while in service, their cases fell under the category of employees covered by the pre-amendment scheme rather than the category of those who failed to exercise such options. The withdrawal of the higher pension was deemed arbitrary and unsustainable in law.

Issues: The main issues were whether the petitioners, having retired before the statutory amendment, were eligible for higher pension benefits based on actual wages, and whether the respondent authorities were justified in withdrawing the higher pension already granted through revised payment orders.

Ratio Decidendi: Employees who exercised valid options for pension contributions on actual wages during their service tenure carry a vested right to receive higher pension benefits. In the absence of an explicit cut-off date under the original scheme for exercising these options, the statutory authority cannot retroactively deny these benefits. The withdrawal of such benefits, once granted upon compliance with all conditions, is illegal and violative of the principles of social welfare legislation. (Paras 27, 32)

Result: Petitions allowed; impugned orders reducing pensions are quashed and set aside; respondents directed to restore the higher pension and release arrears with interest.

CAV ORDER

1. Since an identical issue and common question of facts and law are involved in the bunch of these writ petitions, they are heard analogously and are being decided by this common order.

2. The petitioners have filed the present petitions challenging the legality and validity of letters issued by the respondent – Employees’ Provident Fund Organisation, Regional Office, Raipur (C.G.), whereby the respondent authority has discontinued the higher pension previously granted to them and started paying lower pension as detailed in the subsequent paragraph.

3. The petitioners have claimed following reliefs:-

(a) Issuance of direction to respondent No.1 to restore the higher pension to the petitioners and also to pay the arrears with interest @ 18% for delayed payment.

(b) The petitioners have also prayed for issuance of direction to the EPF Organisation to extend the date 26.06.2023 of filling application regarding pension on higher wages.

Or alternatively,

(c) They seek direction to the EPF Organisation to return the entire contributory amount of the petitioners along with the interest @ of 20%.

4. For the sake of convenience, facts of WPS No. 4132 of 2023 are taken into consideration for deciding the issue involved in the present writ petition as lead case.

5. The brief facts as projected by the petitioner are that :-

(a) He was employed in Zila Sahkari Kendriya Bank Maryadit, Bilaspur, District Bilaspur (C.G.)/respondent No.2. He joined service on 14.06.1976 and retired on 30.11.2014. During his service tenure, he was a member of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the schemes framed thereunder.

(b) Initially, his monthly pension was sanctioned at Rs. 2,190/- by the Employees’ Provident Fund Organisation (in short “the EPFO”). The Government of India, Ministry of Labour amended the paragraph 11 of the Employees Pension Scheme, 1995 w.e.f. 01.09.2014 and has amended para 11 as under :-

“11(4) The existing members as on the 1^st day of September, 2014, who at the option of the employer and employee, had been contributing on salary exceeding six thousand and five hundred rupees per month, may or a fresh option to be exercised jointly by the employer and employee continue to contribute on salary exceeding fifteen thousand rupees per month and the pensionable salary for the existing members who prefer such fresh option shall be based on the higher salary.

Provided that the aforesaid members have to contribute at the rate of 1.16 percent on salary exceeding fifteen thousand rupees as an additional contribution from and out of the contribution s payable by the employees for each month under the provisions of the Act or the rules made thereunder.

Provided further that the fresh option shall be exercised by the member within a period of six months from the 1^st day of September, 2014:

Provided also that the period specified in the second proviso may, on sufficient cause being shown by the member, be extended by the Regional Provident Fund Commissioner for a further period not exceeding six months:

Provided also that if no option is exercised by the member within such period (including the extended period ), ti shall be deemed that the member has not opted for contribution over wage ceiling and the contributions to the Pension Fund made over the wage ceiling in respect of the member shall be diverted to the Provident Fund account of the member along with interest as declared under the Employees’ Provided Fund Scheme from time to time.”

(c) It is the case of the petitioner that the EPFO was not allowing the members to contribute at the option of employer and employee exceeding Rs. 6500/- per month from the date of commencement of this Scheme or from the date salary exceeds Rs. 6500/- to the employees who have retired, therefore, they have filed writ petition before the High Court of Himachal Pradesh wherein the writ petition was allowed and the Division Bench of Himachal Pradesh High Court has reversed the judgme

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2026 Supreme(Online)(Chh) 23301

IN THE HIGH COURT OF CHHATTISGARH AT BILASPURNARENDRA KUMAR VYAS, JLalman Sahu – AppellantVersusEmployees Provident Fund Organization – RespondentWPS No. 4132 of 2023

Cases Referred (7)

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
NARENDRA KUMAR VYAS, J
Lalman Sahu – Appellant
Versus
Employees Provident Fund Organization – Respondent
WPS No. 4132 of 2023