Supreme Court Directs University to Grant Pension Benefits, Holds Non-Exercise of CPF Option Automatically Entitles Employee to General Provident Fund-Cum-Pension Scheme
Kiran Raj
The Supreme Court has directed that an employee of Dr. Rajendra Prasad Central Agricultural University be included in the General Provident Fund-cum-pension-cum-gratuity scheme, setting aside the High Court's order that denied him pensionary benefits. The bench comprising Justice Pamidighantam Sri Narasimha and Justice Manoj Misra held that the university’s statutory provisions mandated pension benefits for employees who did not opt for the Contributory Provident Fund scheme. The Court observed that the appellant’s non-inclusion in the pension scheme was inconsistent with the university's regulations and past High Court decisions on similarly placed employees.
The appellant was appointed as a Junior Scientist cum Assistant Professor in 1987 at the respondent university, which was then known as Rajendra Agricultural University. At the time of his appointment, the service conditions were governed by the Rajendra Agricultural University Statutes, 1976. Chapter 16 of the University Statutes provided for two categories of retiral benefits: one under the General Provident Fund-cum-pension-cum-gratuity scheme and another under the Contributory Provident Fund scheme. Employees who did not opt for the Contributory Provident Fund were automatically entitled to pensionary benefits under the first scheme.
To implement these statutory provisions, the university issued an Office Order on February 21, 2008, allowing employees who were appointed before September 1, 2005, to exercise their option for one of the two Contributory Provident Fund schemes within a stipulated time frame. The Office Order stated that employees who failed to opt for the Contributory Provident Fund scheme would automatically be included in the pension scheme in accordance with Chapter 16 of the University Statutes.
The appellant did not submit an option for the Contributory Provident Fund scheme. However, when the university published a list of employees entitled to pensionary benefits on April 12, 2008, his name was not included. The appellant made multiple representations seeking his inclusion in the pension scheme but did not receive a favorable response. Consequently, he filed a writ petition before the High Court under Article 226 of the Constitution of India, seeking recognition of his entitlement to pension benefits.
The learned single judge of the High Court dismissed the writ petition on February 27, 2019, holding that the appellant had not exercised an option for pension benefits when given the opportunity in 1990, 1995, 1996, and 2008. The appellant's writ appeal was also dismissed on November 24, 2022, on the same grounds. Following these decisions, the appellant approached the Supreme Court, challenging his exclusion from the pension scheme.
The Supreme Court examined the statutory provisions governing retiral benefits at the university and the implications of the Office Order issued in 2008. It noted that Chapter 16 of the University Statutes explicitly provided that all university employees were entitled to pension benefits unless they opted for the Contributory Provident Fund scheme. The Court stated:
"Chapter 16.1(b)(i) states that employees appointed by the respondent-University 'will be entitled to pension provided they do not opt for subscribing to the Contributory Provident Fund'."
The Court further observed that the Office Order of February 21, 2008, reinforced this statutory position by stating that employees who failed to exercise an option for the Contributory Provident Fund would be automatically included in the pension scheme. The Court recorded:
"Clause (IV) of the Office Order provides that the employees who do not exercise their option for Contributory Provident Fund shall be included in the Pension Scheme in terms of Chapter (16.1) of the Act."
The Supreme Court noted that the High Court had previously granted relief to similarly placed employees of the university who had not opted for the Contributory Provident Fund scheme. It referred to Arjun Kumar v. State of Bihar and Ors., where the High Court held that the default retiral scheme was the pension scheme, and employees were required to opt only if they sought to be included in the Contributory Provident Fund. The Court quoted the relevant portion of the High Court’s decision:
"The Statutes were very clear that all employees appointed by the University would be entitled to pension except those who have opted for subscribing for CPF. There is nothing ambiguous regarding the said point in the Statutes. In the said circumstances, it was futile action on the part of the University that they have repeatedly sought for exercise of option with respect to employees of the University who have not got the benefit of pension scheme. As a matter of fact, the option was to be exercised only by those who wanted to be in the CPF scheme."
The Court also referred to other High Court decisions, including Dr. Vijay Kumar Jaiswal v. Bihar Agriculture University and Ramjanam Prasad v. Rajendra Agricultural University, where employees who had not opted for the Contributory Provident Fund were held entitled to pensionary benefits.
The Supreme Court observed that the appellant’s exclusion from the pension scheme was inconsistent with these past decisions and with the statutory provisions of the university. It recorded:
"Since it is an admitted fact that the appellant did not exercise his option under the Office Order dated 21.02.2008, he did not opt in for the Contributory Provident Fund Scheme. Therefore, as per the University Statutes and the Office Order, he is entitled to retiral benefits under the General Provident Fund-cum-pension-cum-gratuity scheme."
The Court noted that the High Court erred in dismissing the appellant’s writ petition on the ground that he had not exercised an option for pension. The Court held:
"Being included under the second retiral scheme is a consequence of non-exercise of option provided under the Office Order. Further, once the High Court granted relief to similarly placed persons, it ought not to have dismissed the appellant’s writ petition."
The Supreme Court allowed the appeal and set aside the impugned order of the High Court. It directed that the appellant be granted retiral benefits under the General Provident Fund-cum-pension-cum-gratuity scheme, stating:
"We allow the appeal, set aside the impugned order dated 24.11.2022 in LPA No. 1111/2019 passed by the High Court of Judicature at Patna, and direct that the appellant be provided retiral benefits under the General Provident Fund-cum-pension-cum-gratuity scheme in accordance with law and subject to adjustments of the benefits, if any, availed by the appellant under the Contributory Provident Fund scheme."
The Court further directed the university to complete the necessary computations and disburse the retiral benefits within four months. It stated:
"Necessary computation and disbursement in that regard shall be made within a period of four months from today."
The appeal was accordingly allowed with no order as to costs.
Case Title: Mukesh Prasad Singh v. The Then Rajendra Agricultural University (Now Dr. Rajendra Prasad Central Agricultural University) & Ors.
Neutral Citation: 2025 INSC 312
Case Number: SLP (C) No. 4644 of 2023
Bench: Justice Pamidighantam Sri Narasimha, Justice Manoj Misra
[Read/Download order]
