### Employees retired pre-2014 having exercised para 11(3) options are entitled to higher pensionary benefits.

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

During their service, they contributed to the Employees’ Provident Fund (EPF).

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

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 later Supreme Court judgment in *EPFO v. Sunil Kumar B.* (2022), the respondent-EPFO issued impugned letters (e.g., dated March 22, 2023) discontinuing the higher pensions and reverting the petitioners to lower pension rates.

The EPFO contended that since the petitioners retired before September 1, 2014, without exercising the option *at the time of service*, they were ineligible under para 50.7 of the *Sunil Kumar B.* judgment.

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

Whether the petitioners, having retired prior to September 1, 2014, but having exercised joint options subsequently under the circulars following *R.C. Gupta*, fall under the exclusion category of paragraph 50.7 or the protected category of paragraph 50.8 of the *Sunil Kumar B.* judgment.

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

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

It further interpreted the directions in *EPFO & Anr. v. Sunil Kumar B. & Ors. (2022)*, specifically distinguishing between those who retired without "any" option (Para 50.7) and those who retired upon "exercising option" under the unamended scheme (Para 50.8).

The court also noted the principle that administrative mistakes can only be rectified if the initial grant was contrary to law, citing *Union of India v. Narendra Singh*.

The court analyzed the status of the petitioners in light of the "F.I.L.A.C." framework as clarified by the Supreme Court.

The EPFO's primary defense was that Para 50.7 of *Sunil Kumar B.* barred retirees prior to 2014 who hadn't opted *while in service*.

However, the High Court observed that the petitioners *had* already exercised their options and deposited differential amounts in accordance with the 2017 circular issued post-*R.C. Gupta*.

The court interpreted the word "any" in Para 50.7 of *Sunil Kumar B.* as meaning "none whatsoever".

Since these petitioners had exercised a joint option (even if post-retirement, as permitted by *R.C. Gupta*) and the EPFO had already verified and acted upon these options by issuing higher PPOs, their cases were governed by Para 50.8, which protects those who retired after exercising the option.

The court rejected the EPFO's argument that they could "rectify a mistake" because the grant of higher pension was not a mistake but a compliance with the law existing at the time of the grant.

It held that petitioners were titled to higher pension as they had exercised the option under para 11(3) of the pre-amended scheme.

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

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

The writ petitions were allowed.