### Retrospective Higher Pension Is Permissible for Employees Who Exercised Joint Options Prior to Retirement

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

They retired prior to 01.09.2014.

During their service, they contributed to the Provident Fund on wages exceeding the statutory ceiling of Rs. 6,500/-.

Following the Supreme Court’s decision in R.C. Gupta v. Regional Provident Fund Commissioner (2018) and a subsequent EPFO circular dated 23.03.2017, the petitioners submitted joint options and deposited differential arrears to claim higher pension.

The EPFO initially revised their pensions upward and issued new Pension Payment Orders (PPOs).

However, in 2023, the EPFO issued impugned orders reducing the petitioners' pensions back to the original lower rates, citing the Supreme Court’s later judgment in EPFO v. Sunil Kumar B. (2022), arguing that employees who retired before 1-9-2014 without exercising an option under the pre-amended scheme were ineligible.

1. Whether the petitioners, having retired prior to 01.09.2014 but having exercised joint options under the pre-amended scheme (as interpreted in R.C. Gupta), are entitled to the restoration of their higher pension.

2. Whether the petitioners 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 of the Employees’ Pension Scheme (EPS), 1995, specifically the proviso to Paragraph 11(3) regarding contributions on wages exceeding the ceiling.

It relied heavily on the precedent in R.C. Gupta v. Regional P.F. Commissioner, which clarified that there was no cut-off date for exercising options under the unamended EPS 1995 for those who had contributed on actual higher salaries.

Furthermore, it applied the categorization established in EPFO v. Sunil Kumar B. (2023) 12 SCC 701, specifically Paragraph 50.7 (excluding those who retired without exercising any option) and Paragraph 50.8 (protecting those who retired after exercising an option under the unamended scheme).

The EPFO contended that because the petitioners retired before 01.09.2014, they had "exited" the scheme and were ineligible under Paragraph 50.7.

However, the Court observed that the petitioners had submitted their joint options and deposited the necessary differential amounts in accordance with the R.C. Gupta ruling and the EPFO’s own 2017 circular.

The Court held that the word "any" in the phrase "without exercising any option" implies a total absence of such an election; since the petitioners had exercised their options (albeit post-retirement based on the judicial clarification), they were governed by Paragraph 50.8 of Sunil Kumar B., which covers employees retired before 1-9-2014 who exercised options under the 1995 scheme.

The Court rejected the EPFO’s plea of "rectifying a mistake," noting that the grant of higher pension was a valid implementation of the law as it stood following R.C. Gupta.

It ruled that the petitioners' cases were covered by Paragraph 50.8 of the Sunil Kumar B. judgment because they had exercised their options under the unamended scheme.

The Court quashed the impugned orders that reduced the pensions and directed the EPFO to restore the higher pension forthwith.

The respondents were ordered to calculate and release all arrears within 90 days, with 6% annual interest applicable in case of default.