The Punjab and Haryana High Court has ruled that retired employees cannot be automatically excluded from the benefits of the Employees' Pension (Amendment) Scheme, 2014, just because they didn’t exercise the joint option before September 1, 2014.
The bench, comprising Justice Sureshwar Thakur and Justice H.S. Grewal, dismissed the Employees’ Provident Fund Organisation’s (EPFO) argument that pensioners who missed this option deadline should be denied higher pension benefits.
"We are unable to agree with the EPFO's argument that mere non-exercise of the joint option before 01.09.2014 disqualifies the petitioners," the Court stated.
Background of the Scheme
The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 governs the pension and provident fund system in India. In 1995, the Employees' Pension Scheme (EPS) was introduced, mandating 8.33% of the employer's contribution towards pension, along with a 1.16% contribution from the Central Government.
A 1996 amendment allowed employees earning above the wage ceiling to contribute based on actual salary — but only through a joint option with the employer within a year. In 2014, this proviso was removed and the wage ceiling was raised from ₹6,500 to ₹15,000 per month.
The High Court closely referred to earlier Supreme Court decisions:
- R.C. Gupta Case: The Supreme Court had clarified that the cut-off date for exercising the joint option was not rigid if contributions on higher wages were already made.
- Sunil Kumar B. Judgment (2022): A three-judge bench held that employees who didn’t opt before retirement or retired before 01.09.2014 without exercising the joint option were not entitled to benefits under the amended scheme.
However, the Punjab & Haryana High Court emphasized that such disqualification cannot be automatic or assumed without proof.
“Unless the EPFO proves that (a) the employee retired before 01.09.2014 and (b) did not exercise the joint option, he cannot be denied pension benefits,” the Court highlighted.
The Court said these two conditions must be clearly proven with evidence, and both are interconnected.
The EPFO claimed that after the Sunil Kumar judgment, new circulars were issued (like the one on 29.12.2022) to supersede earlier ones. They argued that joint options accepted after the 2014 amendment were invalid as the enabling provision was removed. They even suggested overpaid pensions may need to be recovered.
However, the High Court disagreed. It stressed that the employees were valid members of the pension fund, and if their membership is disputed, it must be decided under Section 26A of the EPF Scheme, 1952.
“There is no dispute over the petitioners' valid membership in the Pension Fund,” the Court concluded.
Title: EMPLOYEES PROVIDENT FUND PENSIONERS WELFARE ASSOCIATION Vs UNION OF INDIA AND ORS
