### Employees retired prior to 2014 having exercised pre-amendment options are entitled to higher pension.

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) on wages exceeding the statutory ceiling.

Following the Supreme Court's decision in *R.C. Gupta v. Regional P.F. Commissioner* (2018), which held that there was no cut-off date for exercising options for higher pension under the unamended scheme, the EPFO issued a circular on March 23, 2017, allowing eligible employees to submit joint options and deposit differential contributions.

The petitioners complied, deposited the required arrears, and were granted higher pensions via revised Pension Payment Orders (PPOs).

However, citing the subsequent Supreme Court judgment in *EPFO v. Sunil Kumar B.* (2022), the respondents issued the impugned orders (e.g., dated March 22, 2023) discontinuing the higher pensions and reducing them to the original lower rates, claiming the petitioners were ineligible under Paragraph 50.7 of the *Sunil Kumar B.* judgment.

1. Whether the action of the EPFO in reducing the higher pension already granted to the petitioners is legal and justified in light of the Supreme Court's directions in *R.C. Gupta* and *Sunil Kumar B.*

2. Whether the petitioners fall under the exclusion category (Para 50.7) or the protection category (Para 50.8) of the *Sunil Kumar B.* judgment regarding those who retired prior to September 1, 2014.

The Court applied Paragraph 11(3) of the unamended Employees’ Pension Scheme, 1995, and Paragraph 26(6) of the EPF Scheme, 1952, regarding contributions on actual wages.

It relied heavily on the precedent in *R.C. Gupta v. Regional P.F. Commissioner*, which established that the proviso to Rule 11(3) of the Pension Scheme does not contain a cut-off date for exercising the option to contribute on higher salary.

It further interpreted the specific directions in *EPFO v. Sunil Kumar B. (2023) 12 SCC 701*, specifically Paragraph 50.8, which protects employees who retired before September 1, 2014, if they had exercised the option under Paragraph 11(3) of the pre-amendment scheme.

The court reasoned that the respondents' reliance on Para 50.7 of the *Sunil Kumar B.* judgment—which excludes employees who retired prior to 2014 *without* exercising an option—was misplaced in the current instance.

The court observed that the petitioners had indeed submitted their joint options and deposited the differential contributions following the 2017 circular, which was issued in compliance with the *R.C. Gupta* ruling.

Therefore, the court held that the petitioners' cases are governed by Para 50.8 of the *Sunil Kumar B.* judgment, which covers pre-2014 retirees who *did* exercise the option.

The court dismissed the EPFO's argument that the high pension was a "mistake" that could be rectified, noting that the grant of higher pension was in strict conformity with the law laid down by the Supreme Court.

Furthermore, the court rejected the "financial difficulty" argument, clarifying that the deposits made by the petitioners and the arrears paid by the EPFO were distinct legal entitlements and not an "excess return".

It held that the petitioners are eligible for higher pensions as they had exercised their options and fulfilled the requirements prior to the reduction.

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

All writ petitions in the bunch were allowed.