“No Option Exercised, Pension Scheme Applies”: Delhi HC Dismisses DTC Plea, Says “Deemed Pension Optee” Entitled to Pension Despite CPF Benefits
Isabella Mariam
The Delhi High Court, Division Bench comprising Justice C. Hari Shankar and Justice Ajay Digpaul, delivered its judgment on March 18, 2025, in a case concerning the eligibility of a retired employee for pension benefits under the Delhi Transport Corporation (DTC) pension scheme. The case cantered on the applicability of an office order issued by the DTC in 1992, which deemed employees to have switched from the Contributory Provident Fund (CPF) Scheme to the General Provident Fund (GPF)-cum-Pension Scheme unless they explicitly opted out within a stipulated period. The High Court was tasked with determining whether the respondent was entitled to pension benefits despite continuing contributions to the CPF scheme until retirement.
The respondent, Anil Luthra, joined the DTC on June 2, 1969, and retired on September 30, 2011, after 42 years of service. At the time of his appointment, the only retirement benefit available to employees was under the CPF scheme, which required both the employee and the employer to make regular contributions. Over the years, the government introduced changes in pension schemes for public sector employees, and in 1992, the DTC adopted a pension scheme in line with the one applicable to Central Government employees.
On November 27, 1992, the DTC issued an Office Order introducing the GPF-cum-Pension Scheme. Under Paragraph 9 of the Office Order, all employees were required to exercise their choice within 30 days, opting either to remain under the CPF scheme or switch to the Pension Scheme. If no option was exercised within the stipulated period, the employee would be deemed to have opted for the Pension Scheme. The respondent did not submit an option within the prescribed period.
Despite the automatic application of the Pension Scheme under the deeming provision, the respondent continued contributing to the CPF scheme throughout his service. Upon his retirement in 2011, he received benefits under the CPF scheme, including the employer’s contribution. Subsequently, he claimed pensionary benefits, arguing that he had never explicitly opted out of the Pension Scheme and was, therefore, entitled to its benefits.
The respondent filed an application before the Central Administrative Tribunal (CAT), asserting his right to pension benefits based on the 1992 Office Order. The CAT cited in his favor, holding that since the respondent had not opted out of the Pension Scheme, he was deemed to have joined it by default. The tribunal directed the DTC to grant pensionary benefits to the respondent. The DTC challenged this judgement, arguing that the respondent’s continued contributions to the CPF scheme demonstrated his implicit decision to remain within it and that accepting CPF benefits upon retirement precluded him from claiming pension benefits under the Pension Scheme.
The High Court examined the arguments presented by both parties and analysed precedents governing similar cases. The key legal precedent considered was the Supreme Court’s judgement in University of Delhi v. Shashi Kiran (2022) 15 SCC 325. The Supreme Court had held that when a government order explicitly states that an employee will be deemed to have switched to a pension scheme unless they opt out, the legal consequence follows automatically, irrespective of subsequent conduct or contributions to the CPF scheme.
The court observed: "Failure on the part of the employee to exercise his option to continue under the CPF Scheme within the period stipulated in the Office Order/Notification would result, ipso facto, in his being deemed to have switched over to the Pension Scheme."
The High Court further examined the provisions of the 1992 Office Order and concluded that the deeming clause in Paragraph 9 was absolute. It noted that the intent of the order was to ensure a transition to a pension-based system unless an employee explicitly chose otherwise. The fact that the respondent continued making CPF contributions did not alter the legal effect of his non-exercise of the option within the prescribed time.
The court also referenced the case of UOI v. S.L. Verma (2006) 12 SCC 53, where the Supreme Court stated that a legal fiction, once created, could not be undone by subsequent conduct. The judgement established that an employee who did not opt out within the prescribed period automatically became a pension beneficiary and could not later be classified as a CPF member, even if CPF contributions had continued post facto.
The Delhi High Court dismissed the writ petition filed by the Delhi Transport Corporation (DTC) and upheld the directions issued by the Central Administrative Tribunal in favor of the respondent, Anil Luthra. The Court ruled that the respondent is a “deemed pension optee” under para 9 of the 1992 Office Order, given that he had not exercised any option to remain under the CPF Scheme within the prescribed period. The Court observed that “once the employee is a deemed pension optee, the fact that he subsequently availed CPF benefits would not disentitle him from the benefit of the Pension Scheme.”
The Court upheld the Tribunal’s order requiring DTC to release the respondent’s pension from the date following his retirement. It directed that the respondent is entitled to pension “in accordance with the Pension Scheme from the date following his retirement.” Additionally, the respondent was directed to refund the DTC’s share of the CPF contribution. The Court recorded, “as directed by the Tribunal, the respondent shall refund the DTC’s share in the respondent’s CPF account, credited to him on retirement, within a period of two months.”
The Court also upheld the Tribunal’s finding that para 9 of the 1992 Office Order created an automatic legal consequence, stating that “the legal fiction under para 9 is clear and inexorable.” Finally, the Court refused to interfere with the Tribunal’s dismissal of the DTC’s review petition, observing that “no case for review was made out.” Consequently, the writ petition stood dismissed, confirming the respondent’s entitlement to pensionary benefits with arrears.
Advocates Representing the Parties
For the Petitioner: Mrs. Avnish Ahlawat, Standing Counsel, with Mr. Nitesh Kumar Singh, Advocate.
For the Respondent: Mr. Yudhvir Singh Chauhan and Mr. Aditya Sharma, Advocates.
Case Title: Delhi Transport Corporation v. Anil Luthra
Neutral Citation: 2025: DHC:1700-DB
Case Number: W.P.(C) 2966/2016
Bench: Justice C. Hari Shankar, Justice Ajay Digpaul
[Read/Download order]
