### Employees Exercising Pre-Retirement Paragraph 11(3) Options are Entitled to Higher Pension Without Cut-off Dates

The petitioners are retired employees of various cooperative banks and federations in Chhattisgarh.

They retired prior to September 1, 2014.

Following the Supreme Court’s decision in *R.C. Gupta v. Regional Provident Fund Commissioner* (2018), which held that there was no cut-off date for exercising options for higher pension under the unamended Pension Scheme, the EPFO issued a circular on March 23, 2017, inviting joint options from eligible retirees.

The petitioners submitted joint options and deposited the required differential contributions.

Consequently, the EPFO revised their Pension Payment Orders (PPOs) and granted higher pensions.

However, following a subsequent Supreme Court judgment in *EPFO v. Sunil Kumar B.* (2022), the EPFO discontinued the higher pension and restored the lower original pension via impugned orders dated March 22, 2023, claiming the petitioners were ineligible under the new classification.

1. Whether the EPFO’s action in withdrawing higher pensions already granted—on the grounds that the petitioners retired prior to September 1, 2014, without exercising a prior option—is legally sustainable.

2. Whether the petitioners’ cases fall under Paragraph 50.7 (ineligible) or Paragraph 50.8 (eligible) of the Supreme Court’s directions in the *Sunil Kumar B.* judgment.

The Court applied Paragraph 11 of the Employees’ Pension Scheme, 1995 (EPS), regarding the determination of pensionable salary.

It relied extensively on the precedent set in *R.C. Gupta v. Regional Provident Fund Commissioner (2018) 14 SCC 809*, which established that the proviso to Clause 11(3) is a beneficial provision without a cut-off date for exercising options.

It further applied the qualifying directions from *EPFO v. Sunil Kumar B. (2023) 12 SCC 701*, specifically Paragraph 50.7 (excluding those who retired before 2014 without *any* option) and Paragraph 50.8 (covering those who retired before 2014 having exercised the option).

The Court also referenced the definition of "Member" under Para 2(ix) of the EPS.

The Court analyzed the specific status of the petitioners in light of the *Sunil Kumar B.* directives.

The EPFO argued that the petitioners were ineligible under Para 50.7 because they retired prior to September 1, 2014, and had not exercised an option under the pre-amended scheme.

The Court rejected this, noting that the petitioners *had* in fact submitted joint options (facilitated by the 2017 circular) and deposited the differential amounts, which the EPFO had already verified and acted upon by issuing higher PPOs.

The Court interpreted the term "any option" in Para 50.7 as applying only to those who remained entirely silent.

Since the petitioners exercised their options based on the law established in *R.C. Gupta*, their cases are governed by Para 50.8, which protects retirees who exercised options under Para 11(3) as it stood prior to the 2014 amendment.

The Court found that once the EPFO accepted the contributions and granted the higher pension in compliance with Supreme Court mandates, it could not unilaterally withdraw the benefit by claiming a "mistake".

The Court quashed the impugned orders reducing the petitioners' pensions and directed the respondent-EPFO to restore the higher pensions forthwith.

It further ordered that all arrears arising from the illegal reduction be released within 90 days, failing which an interest rate of 6% per annum would apply.

The writ petitions were allowed.