Once Contributions Are Accepted Under Paragraph 26(6), Higher Pension Cannot Be Denied: Kerala High Court Quashes EPFO’s Rejection, Directs Disbursal of Enhanced Pension”
Safiya Malik
The High Court of Kerala Single Bench of Justice Murali Purushothaman has quashed the orders denying higher pension to retired employees on the ground that contributions were not made in accordance with Paragraph 26(6) of the Employees' Provident Fund Scheme, 1952. The Court held that once contributions from both employer and employee have been accepted under the said provision, the claim for higher pension cannot be denied. The Court set aside the impugned orders and directed the Provident Fund authorities to disburse enhanced pension to the petitioners based on actual wages within three months. The writ petitions were disposed of accordingly.
The petitioners are retired employees of the Thiruvananthapuram Regional Co-operative Milk Producers Union Ltd. (4th respondent), a central society registered under the Kerala Co-operative Societies Act, 1969. They retired on various dates after 01.09.2014. During their employment, the petitioners and their employer contributed to the Provident Fund on actual salary, beyond the statutory wage ceiling.
The dispute arose from the Employees' Provident Fund Organisation’s (EPFO) decision to deny higher pension, citing that during the periods from April 2004 to October 2006 and from October 2007 to February 2008, the employer paid contributions based on the statutory limit and not actual wages. The petitioners had exercised their joint option for higher pension pursuant to the Supreme Court’s judgment in Employees Provident Fund Organisation and Another v. Sunil Kumar B. and Others [2022 (7) KHC 12]. However, their applications were rejected.
In WP(C) No.40261 of 2024, the petitioners sought to quash Exhibit P15 and similar orders rejecting their joint option and to declare their entitlement to higher pension under paragraph 44(ix) of the Sunil Kumar judgment. They also sought declaration that the remittances made with interest for the periods in question disqualified the EPFO from denying their claims. A separate writ petition, WP(C) No.1932 of 2025, was filed to challenge Exhibit P18, another rejection order, and sought identical relief.
According to the petitioners, although there was a brief discontinuity in payments beyond the ceiling during 2004–2008 due to directions from the Government and litigation, the arrears were later remitted by the 4th respondent, including interest. These payments were accepted by the EPFO, and thus the conditions under Paragraph 26(6) were fulfilled.
In earlier proceedings, including WP(C) No.30882/2014 and WA No.1591/2003, the High Court had permitted such remittances on actual wages. As per an interim order dated 09.03.2004, the employer was allowed to deposit excess contributions in a separate account, pending a final decision. After the writ appeal was dismissed in 2006, the 4th respondent, with the Government’s approval, transferred the deposited amount to EPFO. Further remittances were made for September 2007 to January 2008 as well.
Exhibits P12 and P13 confirmed that lump sum payments totaling over ₹53 lakh (inclusive of interest) were made on 16.11.2006 and 26.03.2008 respectively. The 4th respondent asserted that remittances were made in compliance with the directions issued by the Court and as instructed by the Assistant Provident Fund Commissioner.
Despite these records, the 2nd respondent (Regional PF Commissioner) rejected the applications on the ground that contributions were not made monthly and the lump sum payments were only credited as arrears against the months of November 2006 and March 2008, without proper month-wise appropriation. Based on this reasoning, the EPFO held that Paragraph 26(6) conditions were not satisfied, and hence higher pension could not be granted.
The petitioners argued that these grounds were legally unsustainable, particularly since the EPFO had already received and acknowledged the remittances along with administrative charges. The 4th respondent also confirmed submission of split-up data and month-wise breakups through Exhibit R4(c), showing detailed allocation of lump sum amounts across the relevant periods.
The Court examined the factual and legal background, noting:
“The joint options of the petitioners were rejected by the 2nd respondent on the ground that the employee and employer did not contribute on actual wages during various months for the period from 2004–2006 to 2007–2008.”
However, the Court recorded that the 2nd respondent did not dispute receipt of payments for the said period: “The 2nd respondent does not dispute that the payment for this period was received in two bulk payments.”
The Court found that rejection was based solely on the claim that contributions were not appropriated month-wise:
“The only contention raised is that the amount received was not appropriated to the respective months, and therefore, the petitioners are not eligible for higher pension.”
Citing the 4th respondent’s affidavit, the Court noted: “The 4th respondent furnished proof of remittance of both employee and employer contributions under Para 26(6) of the EPF Scheme, 1952, for the period 2004–2005 to 2007–2008.”
The Court also considered the evidentiary support produced by the employer: “The statement showing the month-wise break-up of the lump-sum remittance for the said period is produced as Ext. R4(c). It is stated that administrative charges were also paid as provided under Para 26(6).”
Noting that the EPFO had accepted the contributions, the Court held: “Admittedly, the Employees Provident Fund Organisation has received contributions from both employees and employer under Para 26(6) of the EPF Scheme, 1952, for the period 2004–2005 to 2007–2008.”
The Court concluded:
“The petitioners and the 4th respondent having complied with the requirements under the said paragraph, and the Employees Provident Fund Organisation accepted the contributions, the 2nd respondent cannot deny the petitioners the benefit of higher pension.”
The Court issued the following directions:
“Accordingly, Ext.P15 in both writ petitions and Ext.P18 order in W.P (C) No. 1932 of 2025 and similar orders issued to other petitioners are set aside. It is declared that the petitioners are entitled to get higher pension on actual wages.”
It further ordered: “The respondents 2 and 3 are directed to take consequential steps to disburse higher pension to the petitioners based on the split-up data submitted by the 4th respondent within a period of three months from the date of receipt of a copy of this judgment.”
The Court also clarified: “It is made clear that this judgment will not stand in the way of respondents 2 and 3 initiating any proceedings against the employer in terms of the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 or the Scheme.”
Advocates Representing the Parties
For the Petitioners: Mr. P.N. Mohanan, Mr. C.P. Sabari, Ms. Amrutha Suresh, and Mr. Gilroy Rozario, Advocates
For the Respondents: Ms. Nita N.S., Standing Counsel for EPFO; Ms. Latha Anand, Standing Counsel; Mr. T.C. Krishna, Deputy Solicitor General of India (In-Charge)
Case Title: Gopinathan Pillai M. & Others v. Union of India & Others
Neutral Citation: 2025:KER:15578
Case Numbers: WP(C) Nos. 1932 of 2025 and 40261 of 2024
Bench: Justice Murali Purushothaman
[Read/Download order]
