### Employees Exercising Pre-Retirement Option Under Unamended Pension Scheme Are Entitled to Higher Pension

The petitioners are retired employees of various cooperative banks and federations in Chhattisgarh who superannuated prior to September 1, 2014.

Following the Supreme Court’s ruling in R.C. Gupta v. RPFC, the EPFO issued a circular on March 23, 2017, allowing eligible employees to opt for higher pension by diverting 8.33% of their actual salary (exceeding the statutory ceiling) into the Pension Fund.

The petitioners submitted joint options, deposited the required differential contributions, and were subsequently granted higher pensions via revised Pension Payment Orders (PPOs).

However, citing the subsequent judgment in EPFO v. Sunil Kumar B. (2022), the respondent-EPFO issued impugned orders (e.g., dated 22.03.2023) withdrawing the higher pension and restoring the lower original pension, contending that employees who retired before 01.09.2014 without exercising an option under the pre-amended scheme were ineligible.

1. Whether the EPFO’s action of reducing the higher pension previously granted to the petitioners is legally sustainable in light of the Supreme Court's rulings in R.C. Gupta and Sunil Kumar B.?

2. Whether the petitioners fall under the exclusionary category of Paragraph 50.7 or the beneficial category of Paragraph 50.8 of the judgment in Sunil Kumar B. v. Ors.?

The court applied Paragraph 11 of the Employees’ Pension Scheme, 1995 (both pre and post 2014 amendment) regarding the determination of pensionable salary.

It relied heavily on the precedent in R.C. Gupta v. Regional Provident Fund Commissioner (2018), which established that the proviso to Clause 11(3) did not contain a restrictive cut-off date for exercising options for higher pension.

Furthermore, the court applied the directions from EPFO v. Sunil Kumar B. (2023), specifically Paragraph 50.8, which protects the rights of employees who retired before 01.09.2014 having exercised their option under the unamended scheme, and Paragraph 50.7, which excludes those who never exercised any such option.

The court analyzed the respondents’ contention that Paragraph 50.7 of the Sunil Kumar B. judgment barred the petitioners because they retired before 01.09.2014.

The court rejected this, noting that the term "without exercising any option" in Paragraph 50.7 refers to employees who made no attempt to opt for higher contributions during their membership.

In the present case, the petitioners had indeed submitted joint options and deposited differential arrears following the R.C. Gupta ruling and the EPFO’s own 2017 circular.

The court reasoned that since the petitioners had exercised their options and the EPFO had accepted their contributions and revised their PPOs, their case was squarely covered by Paragraph 50.8 of Sunil Kumar B., which protects pre-2014 retirees who exercised options under the unamended Paragraph 11(3).

The court further observed that the EPFO cannot unilaterally withdraw a benefit granted in compliance with Supreme Court directives under the guise of "rectifying a mistake," as the grant of higher pension was in accordance with the law then prevailing.

It held that the petitioners are entitled to higher pension as they had exercised their options under the pre-amended scheme and their cases are governed by Paragraph 50.8 of the Sunil Kumar B. judgment.

The Court directed the EPFO to restore the higher pension forthwith and release all arrears within 90 days, failing which the amount would carry 6% per annum interest.