Sanchayita Lahkar

The High Court of Calcutta Single Bench of Justice Shampa Dutt (Paul) set aside multiple EPFO orders that had refused joint options for higher pension filed by employees of exempted establishments. The Court held that the EPFO’s approach was inconsistent with the Supreme Court’s rulings on higher-pension eligibility and was based on an incorrect and unauthorized reading of internal trust-rule provisions, which could not limit statutory rights. Observing that ceiling-based clauses in trust rules could not override the EPF Act, statutory schemes, or the Apex Court’s directions, the Bench directed the EPFO to reassess the applications in accordance with the governing law and the principles laid down by the Supreme Court.

The petitions were filed by retired employees of several exempted establishments, including units of Steel Authority of India Limited, IRCON International Limited, Hindustan Cables Limited, Contai Cooperative Bank, Bharat Petroleum Corporation Limited, and others. All petitioners had been in service on 1 September 2014 and had submitted joint option forms seeking pension on actual wages under the Employees’ Pension Scheme, 1995 following the Supreme Court’s decision recognising eligibility for such options. Each establishment maintained its own provident fund trust under exemptions or relaxations granted under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

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The employees asserted that their joint options, submitted through employers along with required wage records and undertakings, were rejected by the EPFO through separate orders. These orders stated that the relevant trust rules restricted contributions to the pension fund to the statutory wage ceiling and therefore the employees were ineligible for higher pension. In some instances, demand notices were initially issued and amounts were deposited by employees before rejection orders were later uploaded.

The establishments submitted clarifications, trust-rule extracts, and correspondence showing provisions such as overriding clauses stating that statutory EPF provisions would prevail over internal trust rules. Petitioners relied on directions issued in earlier Supreme Court judgments and EPFO circulars inviting eligible employees to exercise joint options. EPFO produced show-cause notices, trust-rule provisions, circulars, and affidavits stating that eligibility had to be determined strictly based on the existing trust rules and that amendments made after the Supreme Court judgment could not be considered.

The Court recorded that the Supreme Court in R.C. Gupta had held that “exercise of option under para 26(6) of the EPF Scheme could not be construed to estop the employee from exercising a similar option under para 11(3) of the EPS… The deposit and acceptance of contributions on actual salary in the PF Scheme without any documentation of exercise of option has been construed to be a deemed exercise of option.”

Referring to Sunil Kumar B., the Court set out that the Supreme Court had observed: “We shall now address the question as to whether the members from an exempted establishment under the 1952 Act would be entitled to the benefits of enrolling in the Scheme beyond the ceiling limit… We find from Section 17(A) of the Act that the investment of the provident fund for the trust fund are also to be as per the directions of the Central Government… Section 6-A of the Act also envisages coverage of employees of exempted establishments under Section 17(6) of the Act within the Pension Scheme.”

The Court further quoted that “the Pension Scheme ought to apply to the employees of the exempted establishments in the same manner as this Scheme applies to the employees of unexempted or regular establishments” and recorded that “it further appears that the EPFO completely overlooked the trust Rules of the Establishments, which clearly provide that the more beneficial corresponding provisions of the Act and Scheme shall prevail.”

On the EPFO’s reliance on internal rules and refusal to allow amendments, the Court noted the finding that “the contention of the EPFO that without amendment of trust rules, the benefit is not applicable to the petitioners is not maintainable, in view of the fact that the Supreme Court did not observe or direct that the trust rules of an exempted establishment had to be amended in order to extend the benefit to its employee.”

Analysing Rule 31A(3), the Court quoted the authority’s reasoning that “which provision is beneficial is subjective consideration” and then stated: “This Court finds that the said consideration by the authority is clearly not in accordance with law and also against the principles of natural justice… under no circumstances can it be said to be ‘a subjective consideration’ and such observation is clearly beyond the scope of law.”

Regarding EPFO’s clarification dated 18.01.2025, the Court recorded that “the clarification in its (EPFO) order dated 18.01.2025, relating to exempted Establishment… is totally against the directions of the Supreme Court” and that “the authority has given its own interpretation, which is in complete contradiction/violation of the judgment in Sunil Kumar B. (Supra)… Such clarifications/directions is not only in complete violation of the directions of the Supreme Court in Sunil Kumar B.”

The Court finally observed: “As to how is EPFO aggrieved, if an employer agrees (by filing joint Section form, there being no burden on the authorities (EPFO). In denying the same the PF authorities are acting against the purpose of a beneficial legislation.” It further stated that “Such thought process and conduct of the authorities who are to implement these beneficial legislations, is not acceptable by this Court, as the same is not only against the principle of natural justice, but is clearly an abuse of the process of law, being not in accordance with law.”

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The Court directed that “the order dated 18.01.2025 and the order dated 05.02.2025 are hereby quashed and set aside. Any joint option application presented on or before 31.01.2025, or before any other further extension of time by the authority… shall be accepted by the respondents.”

“On remittance of the differential contribution amount to the pension scheme, to the Employees’ Provident Fund Organisation, by the employees, along with applicable interest, higher pension shall be disbursed to them from the succeeding month of their remittance. The writ petitions are allowed” with “no order as to costs,” and disposed of connected applications while vacating any interim orders.

Case Title: Anuradha Roy & Ors. Vs The Union of India & Ors.

Neutral Citation: 2025: CHC-AS:2078

Case Number: WPA 15459 of 2025 with connected writ petitions WPA 10854, 21136, 15534, 11574, 16097, 18723, 11151, 11226, 7700, 11349, 11092, 11596, 11352 and 11599 of 2025

Bench: Justice Shampa Dutt (Paul)