### Employees opting for higher pension under pre-amended Paragraph 11(3) are eligible for revised benefits regardless of retirement date.

The petitioners were employees of various cooperative banks and federations who retired prior to September 1, 2014.

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

The petitioners submitted joint options, deposited differential contributions (returning provident fund amounts they had received), and were subsequently granted higher pensions via revised Pension Payment Orders (PPOs).

However, following the 2022 Supreme Court judgment in *EPFO v. Sunil Kumar B.*, the EPFO issued impugned orders in 2023 discontinuing these higher pensions and reducing payments back to the original lower rates, contending that pre-2014 retirees were ineligible unless they had exercised the option prior to retirement.

1. Whether the action of the EPFO in discontinuing/reducing the higher pension previously granted to the petitioners is legal and valid.

2. Whether the petitioners, having retired prior to 01.09.2014 but having exercised joint options under the 2017 circular, fall under the exclusionary category of Paragraph 50.7 or the protected category of Paragraph 50.8 of the *Sunil Kumar B.* judgment.

The court applied Paragraph 11(3) of the Employees’ Pension Scheme, 1995 (pre-amendment), which allows pension based on higher salary upon joint option.

It relied on *R.C. Gupta v. Regional P.F. Commissioner*, which established that the proviso to Rule 11(3) did not contain a restrictive cut-off date for exercising such options.

The court further interpreted the directions in *EPFO v. Sunil Kumar B.* (2023) 12 SCC 701, specifically Paragraph 50.7 (excluding retirees who never exercised any option) and Paragraph 50.8 (protecting retirees who exercised options under Paragraph 11(3) of the unamended scheme).

It also applied the principle that an employee ceases to be a member of the Pension Fund upon reaching 58 years of age under Para 2(ix) of the EPS, 1995.

The Court analyzed the distinction between Paragraphs 50.7 and 50.8 of the *Sunil Kumar B.* judgment.

The EPFO argued the petitioners were excluded under 50.7 as they retired before 2014 without exercising an option *during* active service.

However, the High Court held that the word "any" in Paragraph 50.7 (referring to those who retired "without exercising any option") must be interpreted strictly; since the petitioners *had* exercised joint options pursuant to the *R.C. Gupta* ruling and the 2017 circular, and those options were accepted and acted upon by the EPFO, they did not fall under the "no option" category.

The Court reasoned that *Sunil Kumar B.* affirmed the *R.C. Gupta* logic and did not intend to strip away benefits from those who had already complied with the requirements and deposited differential funds.

Consequently, the Court found that the petitioners were governed by Paragraph 50.8, making them eligible for the higher pension as the unamended scheme lacked a cut-off date.

It held that the petitioners are entitled to the higher pension as they had exercised their options under the legal framework established by *R.C. Gupta* and accepted by the department.

The Court quashed the impugned orders reducing the pension and directed the EPFO to restore the higher pension forthwith.

Arrears resulting from the illegal reduction must be released within 90 days, failing which an interest of 6% per annum shall apply.

All writ petitions were allowed.