# THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR. ETC v. SUNIL KUMAR B. & ORS. ETC

- **Citation:** [2022] 11 S.C.R. 959
- **Court:** Supreme Court of India
- **Decided:** 2022-11-04
- **Case number:** Civil Appeal No. 8143 of 2022
- **Bench:** Uday Umesh Lalit, Aniruddha Bose, Sudhanshu Dhulia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-employees-provident-fund-organisation-anr-etc-v-sunil-kumar-b-ors-etc-35706
- **Pages:** 42

## Headnote

Service Law:
Employees' Provident Funds and Miscellaneous Provisions
Act, 1952: ss. 6A, 7 - Employees' Pension Scheme, 1995 - Paras 3,
6, 11, 12 and 14 - Certain amendments and modifications made by
the Central Government to the Employees' Pension Scheme, 1995 -
Legality of - Changes sought be effected in paragraphs 3, 6, 11,
12 and 14 of the 1995 scheme, whereby s. 6A was introduced to the
said Act, which contemplated formulation of a scheme for employees'
pension and the pension fund was to comprise of deposit of 8.33
per cent of the employers' contribution made towards provident fund
corpus and determination of pensionable salary; that the maximum
pensionable salary was enhanced from Rs.5000/- to Rs.6500/- by a
notification G.S.R. 609(E) dated 22nd August 2014, to be effective
from 1 st September 2014; that the Central Government was to
contribute to the fund at the rate of 1.16 per cent of the pay of the
members, the employees within the changed pension regime drawing
more than Rs.15000/- per month have to also contribute at the rate
of 1.16 % on salary exceeding Rs.15000/- as additional contribution
each month under the amended provisions; fresh option was to be
exercised by the member within a period of six months, and if not, it
would be deemed that the concerned member has not opted for
contribution over the wage Ceiling - Several writ petitions filed in
different High Courts seeking invalidation of this notification - Writ
petitions also filed u/Art. 32 challenging the Notifications - Held:
Provisions contained in the notification no. G.S.R. 609(E) dated
22nd August 2014 are legal and valid - Amendment to the pension
scheme brought about by the notification would apply to the
employees of the exempted establishments in the same manner as
A
B
C
D
E
F
G
H
960
SUPREME COURT REPORTS
[2022] 11 S.C.R.
the employees of the regular establishments - Employees who had
exercised option under the proviso to paragraph 11(3) of the 1995
scheme and continued to be in service as on 1st September 2014,
would be guided by the amended provisions of paragraph 11(4) of
the pension scheme - Members, who did not exercise option, as
contemplated in the proviso to paragraph 11(3) of the pension
scheme (as it was before the 2014 Amendment) would be entitled to
exercise option under paragraph 11(4) of the post amendment
scheme - Scheme as it stood before 1st September 2014 did not
provide for any cutoff date and thus those members shall be entitled
to exercise option in terms of paragraph 11(4) of the scheme, as it
stands at present - Time to exercise option under paragraph 11(4)
of the scheme, under these circumstances, shall stand extended by
a further period of four months - Employees who had retired prior
to 1st September 2014 without exercising any option under
paragraph 11(3) of the pre-amendment scheme have already exited
from the membership thereof, thus, they would not be entitled to the
benefit of this judgment - Employees who have retired before 1st
September 2014 upon exercising option under paragraph 11(3) of
the 1995 scheme shall be covered by the provisions of the paragraph
11(3) of the pension scheme as it stood prior to the amendment of
2014 - Requirement of the members to contribute at the rate of 1.16
per cent of their salary to the extent such salary exceeds Rs.15000/
- per month as an additional contribution under the amended scheme
is held to be ultra vires the provisions of the 1952 Act - Operation
of this part of its order is suspended for a period of six months - No
flaw is found in altering the basis for computation of pensionable
salary - View taken by the Division Bench in the case of R.C. Gupta's
case so far as interpretation of the proviso to paragraph 11(3) (preamendment) pension scheme is concerned, is upheld - Fund
authorities to implement the directives contained in the said judgment
within the stipulated period - Impugned judgment modified
accordingly - Constitution of India - Arts. 14 and142.
Constitution of

## Text

_Characters 0–39,972 of 101,044. This is a partial read: ask again with offset=39972 for what follows._

A
B
C
D
E
F
G
H
959
 [2022] 11 S.C.R. 959
959
THE EMPLOYEES PROVIDENT FUND ORGANISATION &
ANR. ETC.
v.
SUNIL KUMAR B. & ORS. ETC.
(Civil Appeal No. 8143 of 2022)
November 04, 2022
[UDAY UMESH LALIT, CJI, ANIRUDDHA BOSE AND
SUDHANSHU DHULIA, JJ.]
Service Law:
Employees' Provident Funds and Miscellaneous Provisions
Act, 1952: ss. 6A, 7 - Employees' Pension Scheme, 1995 - Paras 3,
6, 11, 12 and 14 - Certain amendments and modifications made by
the Central Government to the Employees' Pension Scheme, 1995 -
Legality of - Changes sought be effected in paragraphs 3, 6, 11,
12 and 14 of the 1995 scheme, whereby s. 6A was introduced to the
said Act, which contemplated formulation of a scheme for employees'
pension and the pension fund was to comprise of deposit of 8.33
per cent of the employers' contribution made towards provident fund
corpus and determination of pensionable salary; that the maximum
pensionable salary was enhanced from Rs.5000/- to Rs.6500/- by a
notification G.S.R. 609(E) dated 22nd August 2014, to be effective
from 1 st September 2014; that the Central Government was to
contribute to the fund at the rate of 1.16 per cent of the pay of the
members, the employees within the changed pension regime drawing
more than Rs.15000/- per month have to also contribute at the rate
of 1.16 % on salary exceeding Rs.15000/- as additional contribution
each month under the amended provisions; fresh option was to be
exercised by the member within a period of six months, and if not, it
would be deemed that the concerned member has not opted for
contribution over the wage Ceiling - Several writ petitions filed in
different High Courts seeking invalidation of this notification - Writ
petitions also filed u/Art. 32 challenging the Notifications - Held:
Provisions contained in the notification no. G.S.R. 609(E) dated
22nd August 2014 are legal and valid - Amendment to the pension
scheme brought about by the notification would apply to the
employees of the exempted establishments in the same manner as
A
B
C
D
E
F
G
H
960
SUPREME COURT REPORTS
[2022] 11 S.C.R.
the employees of the regular establishments - Employees who had
exercised option under the proviso to paragraph 11(3) of the 1995
scheme and continued to be in service as on 1st September 2014,
would be guided by the amended provisions of paragraph 11(4) of
the pension scheme - Members, who did not exercise option, as
contemplated in the proviso to paragraph 11(3) of the pension
scheme (as it was before the 2014 Amendment) would be entitled to
exercise option under paragraph 11(4) of the post amendment
scheme - Scheme as it stood before 1st September 2014 did not
provide for any cutoff date and thus those members shall be entitled
to exercise option in terms of paragraph 11(4) of the scheme, as it
stands at present - Time to exercise option under paragraph 11(4)
of the scheme, under these circumstances, shall stand extended by
a further period of four months - Employees who had retired prior
to 1st September 2014 without exercising any option under
paragraph 11(3) of the pre-amendment scheme have already exited
from the membership thereof, thus, they would not be entitled to the
benefit of this judgment - Employees who have retired before 1st
September 2014 upon exercising option under paragraph 11(3) of
the 1995 scheme shall be covered by the provisions of the paragraph
11(3) of the pension scheme as it stood prior to the amendment of
2014 - Requirement of the members to contribute at the rate of 1.16
per cent of their salary to the extent such salary exceeds Rs.15000/
- per month as an additional contribution under the amended scheme
is held to be ultra vires the provisions of the 1952 Act - Operation
of this part of its order is suspended for a period of six months - No
flaw is found in altering the basis for computation of pensionable
salary - View taken by the Division Bench in the case of R.C. Gupta's
case so far as interpretation of the proviso to paragraph 11(3) (preamendment) pension scheme is concerned, is upheld - Fund
authorities to implement the directives contained in the said judgment
within the stipulated period - Impugned judgment modified
accordingly - Constitution of India - Arts. 14 and142.
Constitution of India: Art. 14 - Reasonable classification -
Provident Funds Employees' Pension Scheme, 1995 - Employees of
the pension scheme - Held: Cannot be considered as a homogenous
group - No distinction can be made among different categories of
employees based on their monthly salary to determine for whom the
scheme shall operate in a particular manner - It is within the power
A
B
C
D
E
F
G
H
961
and authority of the statutory authorities to reasonably classify
different sets of employees and categorise them for the nature of
benefits they might get from an existing scheme - Classification of
the employees made by the authorities on the basis of the salary
drawn in the 2014 amendment meets the test of reasonable
classification contemplated inArt. 14.
Allowing the appeals, the Court
HELD : 1. The provisions contained in the notification no.
G.S.R. 609(E) dated 22nd August 2014 are legal and valid. So far
as present members of the fund are concerned, this Court has
read down certain provisions of the scheme as applicable in their
cases. The amendment to the pension scheme brought about by
the notification no. G.S.R. 609(E) dated 22nd August 2014 shall
apply to the employees of the exempted establishments in the
same manner as the employees of the regular establishments.
The employees who had exercised option under the proviso to
paragraph 11(3) of the 1995 scheme and continued to be in service
as on 1st September 2014, will be guided by the amended
provisions of paragraph 11(4) of the pension scheme. The
members of the scheme, who did not exercise option, as
contemplated in the proviso to paragraph 11(3) of the pension
scheme (as it was before the 2014 Amendment) would be entitled
to exercise option under paragraph 11(4) of the post amendment
scheme. Their right to exercise option before 1st September 2014
stands crystalised in the judgment of this Court in the case of
R.C. Gupta . The scheme as it stood before 1st September 2014
did not provide for any cutoff date and thus those members shall
be entitled to exercise option in terms of paragraph 11(4) of the
scheme, as it stands at present. All the employees who did not
exercise option but were entitled to do so but could not due to
the interpretation on cut-off date by the authorities, ought to be
given a further chance to exercise their option. Time to exercise
option under paragraph 11(4) of the scheme, under these
circumstances, shall stand extended by a further period of four
months. The employees who had retired prior to 1st September
2014 without exercising any option under paragraph 11(3) of the
pre-amendment scheme have already exited from the membership
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC.
A
B
C
D
E
F
G
H
962
SUPREME COURT REPORTS
[2022] 11 S.C.R.
thereof. They would not be entitled to the benefit of this judgment.
The employees who have retired before 1st September 2014 upon
exercising option under paragraph 11(3) of the 1995 scheme shall
be covered by the provisions of the paragraph 11(3) of the pension
scheme as it stood prior to the amendment of 2014. The
requirement of the members to contribute at the rate of 1.16 per
cent of their salary to the extent such salary exceeds Rs.15000/
- per month as an additional contribution under the amended
scheme is held to be ultra vires the provisions of the 1952 Act.
This Court suspends operation of this part of its order for a period
of six months. This Court does so to enable the authorities to
make adjustments in the scheme so that the additional contribution
can be generated from some other legitimate source within the
scope of the Act, which could include enhancing the rate of
contribution of the employers. This Court does not find any flaw
in altering the basis for computation of pensionable salary. This
Court agrees with the view taken by the Division Bench in the
case of R.C. Gupta so far as interpretation of the proviso to
paragraph 11(3) (pre-amendment) pension scheme is concerned.
The fund authorities shall implement the directives contained in
the said judgment within a period of eight weeks, subject to
directions contained earlier in this paragraph. The judgments
impugned are modified accordingly. [Paras 44 and 45][997-F-H;
998-A-H; 999-A-H]
2.1 The employees' argument is that the obligation is only
on the employer to remit the sum from one fund to the other.
There is no ceiling limit and the remittance required to be made
is of 8.33 per cent of the employee's pay. But this point also,
does not aid the employees. While paragraphs 3 and 6 of the
scheme have laid down what the fund would be constituted of and
who would be the members of the pension scheme, paragraph
11, which is an integral part of the pension scheme, specifies the
criteria for those who become mandatory members and, from
among the existing members, who may be permitted to exercise
option to remain in the scheme in spite of drawing salary beyond
the ceiling limit. It is a fact that those who are covered by
paragraph 26(6) of the provident fund scheme automatically enters
into the pension scheme as well. But this provision cannot be
held to have precluded the Central Government from laying down
A
B
C
D
E
F
G
H
963
conditions to remain eligible for the pension scheme and specify
wage or salary ceiling for individual employees beyond which the
scheme may not operate. The submission that the pension scheme
considers employees as a homogenous group and no distinction
can be made among different categories of employees based on
their monthly salary to determine for whom the scheme shall
operate in a particular manner cannot be accepted. It is well within
the power and authority of the statutory authorities to reasonably
classify different sets of employees and categorise them for the
nature of benefits they might get from an existing scheme. In
fact, the scheme, at its inception was made applicable to those
drawing wages upto Rs.5000/-. The provision relating to
exercising option was introduced later, in the year 1996. [Para
30][990-D-H; ]
2.2 The amendment was made in exercise of power
otherwise vested in the authority making such amendment and
the amendments were made on the basis of certain relevant
materials and not whimsically. The scope of judicial scrutiny to
test the constitutionality of the amendment provisions becomes
narrow. Classification of the employees made by the authorities
on the basis of the salary drawn in the 2014 amendment meets
the test of reasonable classification contemplated in Article 14 of
the Constitution of India. This Court is alive to the concern
expressed by the High Court as regards impact on the economic
stability of retired employees suddenly being deprived of pension.
But, based on such macro-level social disparities, this Court does
not think in exercise of judicial power this Court can require the
State to operate a pension scheme in a particular manner. These
factors would be for the policy makers to examine and prescribe.
This Court cannot issue directions on the Central Government
to work out statutory scheme in a particular fashion. So far as
fixing of cut-off date is concerned, the 2014 amendment
specifically provides for that. In the case of R.C. Gupta's case,
the wording of the scheme in paragraph 11(3) was different. Thus,
the ratio of that judgment cannot be applied to the changed
provision of the scheme. Fixing of cut-off date was considered in
the case of Mafatlal Group Staff Association and held to be
permissible. [Paras 32 and 33][991-G-H; 992-A-B; 992-F-H]
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC.
A
B
C
D
E
F
G
H
964
SUPREME COURT REPORTS
[2022] 11 S.C.R.
2.3 The requirement in the scheme for employee's
contribution to the extent of 1.16 per cent for option members is
illegal. There is nothing in the 1952 Act which requires payment
to the pension fund by an employee. Section 6A of the Act also
does not have any such stipulation. Since the Act does not
contemplate any contribution to be made by an employee to
remain in the scheme, the Central Government under the scheme
itself cannot mandate such a stipulation. What is to be considered
is that for the mandatory members, the Central Government
continues to contribute the requisite 1.16 per cent of their salary.
For option members, additional contribution by them is
contemplated in order to remain in the scheme. A legislative
amendment of the Act would have been necessary, providing for
contribution to be made by an employee. To that extent, the
provision of the scheme requiring contribution by an individual
employee is ultra vires the parent act. At the same time, it cannot
be ignored the fact that the pension amount to be paid has been
calculated on projections that the corpus would include the option
employees' additional contribution of 1.16 per cent. This Court
also cannot mandate the Central Government to contribute to a
pension scheme, in absence of a legislative provision to that effect.
It would be for the administrators to readjust the contribution
pattern within the scope of the statute and one possible solution
could be to raise the level of the employer's contribution in the
scheme. The operation of this part of judgment is suspended for
a period of six months so that the legislature may consider the
necessity of bringing appropriate legislative amendment on this
count. For the said period, the scheme as it stands shall continue.
Till such time, if no such legislative exercise is undertaken, the
duty to contribute 1.16 per cent of the salary shall apply on option
members as well. This contribution shall be adjusted depending
on any amendment that may be brought. For the period of six
months, however, the opting employees shall make payment of
1.16 per cent contribution as stop gap measure. In the event no
amendment to the statute or the scheme is made within such
extended time, then the administrators of the fund will have to
operate the pension fund for the option members from out of the
existing corpus.[Para 35][993-D-H; 994-A-C]
2.4 The change of methodology comes within the power of
the Central Government to modify a scheme under Section 7 of
A
B
C
D
E
F
G
H
965
the 1952 Act read with item 10 of the Schedule III to the Act as
also paragraph 32 of the scheme. This alteration of computation
is ancillary to determination of scale of pension along with
pensionary benefits and paragraph 32 of the pension scheme
specifically authorises the Central Government to alter the rate
of contribution payable under the Scheme or the scale of any
benefit admissible under the scheme. There is a reasonable basis
for effecting change in the computation methodology for
determining pensionable salary and there is no illegality or
unconstitutionality in effecting this amendment. [Para 36][994C-F]
2.5 Clause 1(3) of the pension scheme contemplates
keeping within its fold the establishments to which the 1952 Act
applies. These establishments would include exempted
establishments as well. The employees of exempted
establishments are integrated into the pension scheme and the
employees of an exempted establishment should not be deprived
of the benefit of getting option to remain in the pension scheme
while drawing salary beyond the ceiling limit, in situations where
similarly situated employees of unexempted establishments can
exercise such option. In the event the scheme is construed in a
way which would exclude them, that would lead to artificial
classification of otherwise same categories of employees. Thus,
the pension scheme ought to apply to the employees of the
exempted establishments in the same manner as this scheme
applies to the employees of unexempted or regular
establishments. [Para 38][995-D-E]
2.6 One of the arguments against their inclusion into the
scheme by exercising option is that the corpus of the contribution
for exempted establishments have been kept in separate coffers
maintained by the trust created for such purpose and not with
the authorities specified under the Act. Taking that factor into
account, in order to be entitled to the benefits of the pension
fund, the employer and the employee, simultaneously with
exercising option in terms of the order of this Court, shall also
have to give an undertaking of transferring the employers'
contribution at the stipulated rate maintained by the trusts, which
shall be equivalent to and not lower than the sum which would
have been transferable, had such fund been maintained by the
provident fund authorities. Such transfer shall take place,
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC.
A
B
C
D
E
F
G
H
966
SUPREME COURT REPORTS
[2022] 11 S.C.R.
immediately after exercise of such option, within such period as
may be directed by the administrators of the pension fund. [Para
39][995-F-H; 996-A]
2.7 The paragraph 11(4) provides for extending the pension
coverage in respect of individual employees drawing salary more
than Rs. 15000/- per month. This paragraph however, is subject
to two conditions: The first one is that to be eligible for the benefits
of extended coverage, the existing members as on 1 st September
2014 must contribute at the rate of 1.16 per cent on salary
exceeding Rs. 15,000/- per month. The second one is that a fresh
option should be exercised within a period of six months from
the first day of September 2014. The scheme contemplates that
those members of the fund who had exercised option to remain
in the scheme as per the requirement of proviso to paragraph
11(3) of the scheme, as it stood prior to the 2014 amendment,
would be able to give fresh option with the employer if their salary
cross the ceiling limit. In respect of that provision, this Court in
the R.C. Gupta's case had held that the said proviso did not
contemplate a cut-off date. So far as the first condition is
concerned, viwes are expressed as regards legality of having such
a provision. In relation to the second condition, the eligibility for
enhancement cannot be restricted to those employees only who
had exercised the option to remain in the scheme once their salary
went beyond the capping of Rs. 6500/- per month. In case of R.C.
Gupta's case, it has been specifically held that there was no cut-off
date in proviso to paragraph 11(3) as it stood before the 2014
amendment. The interpretation given to the proviso to paragraph
11(3) prior to 2014 amendment does not require any
reconsideration. The reasoning of the two-judge Bench of this
Court on this point , is accepted. As there was no cut-off date to
be contemplated prior to the 2014 amendment, limiting the
entitlement of enhanced pension coverage to those employees
only who had already exercised an option under Clause 11(3) of
the unamended scheme would be contrary to the ratio of the
decision of this Court held in the case of R.C. Gupta's case. It is
not held that no option was required to be exercised as per proviso
to paragraph 11(3) of the scheme, as it stood prior to 2014
amendment. As held in the case of R.C. Gupta's case, there was
no time-limit for exercising such option. [Para 40, 41][996-B-H;
997-A-B]
A
B
C
D
E
F
G
H
967
2.8 The dual option, as is contemplated in paragraph 11(4)
of the pension scheme (post 2014 amendment), has to be merged
into one. In the event the employer and employee jointly opt for
coverage beyond the salary limit of Rs. 15000/-, without giving
an earlier option under the unamended Clause 11(3) of the
pension scheme, they would not be automatically excluded from
their right to exercise option under paragraph 11(4) of the scheme,
post amendment. [Para 42][997-B-C]
2.9 The other condition for enhanced coverage relates to
the date within which such fresh option is to be exercised by a
member, which is stipulated to be within a period of six months
from 1st September 2014. It would be legitimate to proceed on
the basis that several members did not exercise such option
earlier because of the stand taken by the Provident Fund
authorities that option under proviso to paragraph 11(3) of the
scheme (prior to 2014 amendment) has to be exercised within a
specified date, which stand was negated in the decision of R.C.
Gupta's case. The time limit for coverage beyond the ceiling
amount should be extended by a further period of four months
from today to enable all the members of the pension fund drawing
more than Rs.6500/- to exercise the joint option as contemplated
in paragraph 11(4) of the pension scheme (post 2014 amendment).
Once such joint option is exercised, the transfer of fund from the
provident fund corpus to the pension fund shall be effected in
terms of the scheme. [Para 43][997-C-F]
R.C. Gupta and Others vs. Regional Provident Fund
Commissioner, Employees Provident Fund Organisation
and Other (2018) 14 SCC 809 - affirmed.
Bengal Immunity Company Limited v. State of Bihar
and Others (1955) 2 SCR 603; Union of India and
Another v. Raghubir Singh (Dead)by Lrs. Etc. (1989)
2 SCC 754 : [1989] 3 SCR 316; Keshav Mills Co. Ltd.
v. Commissioner of Income Tax Bombay North,
Ahmedabad (1965) 2 SCR 908; Waman Rao and Others
v. Union of India and Others (1981) 2 SCC 362 : [1981]
2 SCR 1 - held inapplicable.
Case Law Reference
(2018) 14 SCC 809
affirmed
Para 4
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC.
A
B
C
D
E
F
G
H
968
SUPREME COURT REPORTS
[2022] 11 S.C.R.
(1955) 2 SCR 603
held inapplicable
Para 28
[1989] 3 SCR 316
held inapplicable
Para 28
(1965) 2 SCR 908
held inapplicable
Para 28
[1981] 2 SCR 1
held inapplicable
Para 28
CIVIL APPELLATE/ORIGINAL/INHERENT JURISDICTION
: Civil Appeal Nos.8143-8144 of 2022.
From the Judgment and Order dated 12.10.2018 of the High Court
of Kerala at Ernakulam in Writ Petition (C) Nos.602 and 13120 of 2015.
With
Civil Appeal Nos.8145-8146, 8147, 8149, 8155, 8156, 8150-8151,
8152, 8148, 8153, 8154 OF 2022, Writ Petition (C) Nos.318 of 2022,
1218 of 2020, 1332 of 2020,1312 of 2019, 875 of 2019, 832 of 2019, 601
of 2019, 500 of 2019, 512 of 2019, 466 of 2019, 86 of 2021, 1356 of 2021,
1379of 2021, 767 of 2021, 477 of 2021, 414 of 2021,1134 of 2018, 390 of
2019, 511 of 2019, 1459 of 2020, 349 of 2019, 372, 360, 233, 141, 118,
250, 406, 368, 393, 395, 371, 374, 385, 367, 369, 411, 466 of 2018, 269 of
2019, 327 of 2019, 352 of 2019, 69 of 2018, 804 of 2018, 594 of 2018,
884 of 2018, 778 of 2018, 874 of 2018, 1149 of 2018, 1167 of 2018, 1430
of 2018, 1433 of 2018, 1428 of 2018, 380 of 2018, 498 of 2022, Contempt
Petition (C) Nos.1917-1918 of 2018 in Civil Appeal Nos.10013-10014 of
2016 and Contempt Petition (C) Nos.619-620 of 2019 in Civil Appeal
Nos.10013-10014 of 2016
K.K Venugopal, AG, Vikramjit Banerjee, Sanjay Jain, ASGs, R.
Balasubramanian, C.A. Sundaram, Dr. K.P. Kylasanatha Pillay, V.
Chitambaresh, P.N. Ravindran, Venkatramani, J.P. Cama, Soumya
Chakraborty, Ms. Meenakshi Arora, Siddharth Bhatnagar, R. Basant,
A.N.S. Nadkarni, R. Venkatramani, Gopal Sankaranarayanan, Jayanth
Muthraj, Ms. V.P. Seemanthini, Vikas Singh, Sanjay Parikh, Dr. Manish
Singhvi, Sr. Advs., Ankur Talwar, Ms. Chinmayee Chandra, Ms. Ruchi
Kohli, Siddhartha Sinha, Prashant Rawat, Ms. Janhvi Prakash, Tathagat
Sharma, Shubhendu Anand, Kartik Dev, Ms. Sujatha Bagadhi, Raj
Bahadur Yadav, Amrish Kumar, Siddharth, Raman Yadav, Nring
Chamwibo Zeliang, Ms. Rohini Musa, Abhishek Gupta, Zafar Inayat,
Amit Kumar Agrawal, C.U. Singh, Ms. Nandini Gore, Ms. Sonia Nigam,
Ms. Tahira Karanjawala, Ms. Shreyas Maheshwari, M/s. Karanjawala
& Co., A. Venayagam Balan, C.M. Sundaram Iyer, Ms. Rashmi
Singhania, Roy Abraham, Ms. Reena Roy, Akhil Abraham, Audhinder
Lal, Himinder Lal, Bahar U. Barqui, Aftab Ali Khan, Benny P. Thomas,
Prakash Ranjan Nayak, Udayaditya Banerjee, Ms. Pracheta Kar, Aditya
A
B
C
D
E
F
G
H
969
Sidhra, Nadeem Afroz, Raghenth Basant, Ms. Liz Mathew, Vishnu
Pazhanganat, Akshay Sahay, Ms. Roopali Lakhotia, P. S. Sudheer, Rishi
Maheshwari, Ms. Anne Mathew, Ms. Shruti Jose, Bharat Sood,
Purushottam Sharma Tripathi, Ravi Chandra Prakash, Mukesh Kumar
Singh, Narendra Kumar Goyal, Ms. Kajal Rani, Neeraj Chaudhri, Ms.
Rashmi Verma, Ms. Pooja Dhar, Pratul Pratap Singh, Mantavya Sharma,
Ms. Tanya Srivastava, Ms. Vani Vyas, Abhishek Tripathi, Amit, Rajiv
Kumar, Nishe Rajen Shonker, Abraham C. Mathews, Ms. Anu K. Joy,
Alim Anvar, Ms. Sushma Singh, Trilok Nath Saxena, L. Nidhiram Sharma,
Ms. Srishti Agnihotri, Satwik Parikh, Ms. Sanjana Grace Thomas, Deepak
Goel, Chaman Rana, Ms. Urvashi Sharma, R. Anand Padmanabhan,
Shashi Bhushan Kumar, Neeleshwar Pavani, Vedavalli Kumar, Vipin
Kumar Saxena, Vipin Sundu, Yatish Yadav, Maneesh Saxena, Ms. Kajal
Rani, Pawan Kumar, Ikshit Singhal, Sagar Kumar, Ranvir Singh Chhillar,
Mukesh Kumar, Shantanu Jugtewat, Mohit Paul, Kartik Nayar, Rishab
Kumar, Rohan Thawani, Ramjee Pandey, Sujit Kumar Jha, Grijesh
Pandey, Raghvendra Shukla, Uday Prakas, Girijesh Pandey, Kafeel
Ahmad, Ms. Alapana Pandey, Ajay Tiwari, Akash Kakade, Somanath
Padhan, Neelmani Pant, Ms. Sukhada Kakade, Swetab Kumar, Anand
Varma, Ms. Apoorva Pandey, Ms. Adyasha Nanda, Jagjit Singh Chhabra,
Saksham Maheshwari, Ms. Binisa Mohanty, Mritunjay Kumar Sinha, Y.
Raja Gopala Rao, Korada Pramod Kumar, Dhuli Gopi Krishna, Himanshu
Gupta, Manoj C. Mishra, Ashwin Kumar DS, Ms. Aditi Dani,
Rangasharan Mohan, Ms. Surbhi Mehta, Pranesh, S. S. Bandyopadhyay,
Rajiv Shukla, Md. Shahid Anwar, Dr. Shakeelazama Ansari, Syed Rehan,
Aryan P. Nanda, Nikhil Goyal, Rishabh Sancheti, Anchit Bhandari, Suyash
Jain, K. Paarivendhan, V.N. Koura, Mrs. Paramjeet Benipal, Avneesh
Arputham, Praveen Kr. Singh, M/s. Arputham Aruna and Co, Gunnam
Venkateswara Rao, Dishant Bhati, Ms. Anushka Sharda, Rohit Ghosh,
M/s. Khaitan & Co., Rakesh Sinha, MG Akbar, Jeemon Raju K, Arvind
Gupta, Ms. Laxmi Kumari, Amit Kumar, Puneet Taneja, Ms. Priti,
Manmohan Singh Narula, Ms. Anupriya, Sameer Parekh, D.P. Mohanty,
Aditya Sharma, Ishan Nagar, Abhiram Naik, M/s. Parekh & Co., Tabrez
Malawat, Sourajit Sarkar, Syed Hamza, N D Kaushik, Abhaya Nath
Das, V K Shukla, Rahul Gupta, Shashank Sharma, Ms Riya Soni, Satish
Kumar, Punit Dutt Tyagi, Abhijeet Kumar Pandey, Ashish Bhan, Mohit
Rohatgi, Rajendra Dangwal, Kaustub Narendran, Syed Jafar Alam, K.C.
Kaushik, Rahul Kaushik, Bhuvneshwari Pathak, Ms. Shilpi Satyapriya
Satyam, Ms. Sangeeta Bharti, Ashish Kumar, Malvi Balyan, Sushil Kumar
Singh, Ajit Pudussery, Vijayan K., R.K. Kapoor, Rajat Kapoor, Ms.
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC.
A
B
C
D
E
F
G
H
970
SUPREME COURT REPORTS
[2022] 11 S.C.R.
Kheyali Singh, Karunakar Mahalik, B. Paramesh, Sarbendra Kumar,
Onkar Singh, Vimal Johnson Kerketta, Ms. Neha Tripathi, Ms. Monika,
C. K. Sasi, Abdulla Naseeh V.J., Ms. Meena K. Poulose, Ms. Neetica
Sharma, Rishabh Dua, M/s M.V.Kini & Associates, M. Gireesh Kumar,
Ankur S. Kulkarni, Ms. Puspita Basak, Sunil Kumar, Rakesh Mishra,
Sandeep Kumar Dwivedi, Umesh Dubey, Pradeep Kumar Dwivedi,
Raghuvendra Upadhyay, Kisalaya Shukla, Ms. Purnima Jain, Vaibhav
Tripathi, Awadhesh Kumar, Thampan Thomas, K.V. Mohan, Ms. Tessy
Varghese, K.V. Balakrishnan, Rahul Kumar Sharma, K. Parameshara,
Anand Dilip Landge, Ms. A. Sregurupriya, P. S. Sudheer, Rahul Jain,
Ms. Lalit Mohini Bhat, Hetu Arora Sethi, Sriram P., Santhosh Krishnan,
Mohammed Sadique T.A., Devashish Bharuka, Kunal Rawat, Ms.
Radhika Maharwal, Ms. Pratiksha Sharma, Mueed Shah, Ankit Acharya,
S. Rajappa, Ms. Shilpa Liza George, Shashank Shekhar, Chander Shekhar
Ashri, Aditya Dhawan, Ms. Kiran Dhawan, Ms. Madhvi S. Sawant,
Hitesh Kumar Sharma, Akhileshwar Jha, Ms. Deepti S. Rane, Subhash
S. Kadam, Naresh Kumar, Dr. Ashwani Bhardwaj, Ms. Vinay Bhardwaj,
Manoj Pandey, Sibo Sankar Mishra, Debabrata Dash, Niranjan Sahu,
Rajesh Kumar Nayak, Ms. Kanika Chug, Satish Bhargawa, Lakshmeesh
S. Kamath, Ms. Samriti Ahuja, Mohan Lal Sharma, Ms. Shikha Sharma,
Rajesh Gupta, Harpreet Singh, Ajay Chandra, Sumit R. Sharma, Preet
Pal Singh, Prasenjit Keswani, Rohan Thawani, Upmanyu Tewari, Ms.
Sonia Dube, Shatadru Chakraborty, Ms. Kanchan Yadav, Ms. Surbhi
Anand, M/s. Legal Options, Mrs. Lalita Kaushik, Ms. Madhumita
Bhattacharjee, Ms. Manjula Gupta, Mrs. Rani Chhabra, Rahul Pratap,
Anil Nag, S.D. Singh, Harsh Nandwana, Ram Kripal Singh, Siddharth
Singh, Ms. Bharti Tyagi, Varinder Kumar Sharma, Siddharth Mittal, Ankit
Goel, Ashish Rana, S. K. Bhattacharya, L.K. Paonam, Ms. Tomthinnganbi
Koijam, Niraj Bobby Paonam, Santosh Kumar - I, P. A. Noor Muhamed,
Ms. Vandana Sehgal, Advs. for the appearing parties.
The Judgment of the Court was delivered by
ANIRUDDHA BOSE, J.
Leave granted.
2. In this judgment, we shall deal with the legality of certain
amendments and modifications made by the Central Government to the
Employees' Pension Scheme, 1995 ("1995 Scheme"). Such scheme has
been made in pursuance of, inter-alia, Section 6A of the Employees'
Provident Funds and Miscellaneous Provisions Act, 1952 ("the Act").
Such changes, inter-alia, are sought be effected in paragraphs 3, 6, 11,
A
B
C
D
E
F
G
H
971
12 and 14 of the 1995 scheme. The Act originally did not provide for any
pension scheme and Section 6A was introduced to the said Act by way
of an amendment made in 1995. The amendment of 1995 contemplated
formulation of a scheme for employees' pension and the pension fund
was to comprise of deposit of 8.33 per cent of the employers' contribution
made towards provident fund corpus as per the prevailing Statue.
Paragraph 11 of the scheme dealt with determination of pensionable
salary. At that point of time, maximum pensionable salary was Rs.5000/
- and this sum had been enhanced subsequently to Rs.6500/-. Pensionable
salary was raised to Rs.15000/- by a notification dated 22nd August 2014
[numbered G.S.R. 609 (E)], which was to be effective from 1st
September 2014. This notification brought certain other modifications in
the scheme mainly restricting its coverage and we shall discuss these
modifications later in this judgment.
3. In the appeals before us, judgments of the High Courts of Kerala,
Rajasthan and Delhi are assailed. In the case of P. Sasikumar & Others
vs. Union of India (UOI) Represented by the Secretary to Govt.
of India Ministry of Labour & Department of Employment and
Others [in Writ Petition (C) No. 13120 of 2015], a Division Bench of
the Kerala High Court in its judgment delivered on 12th October 2018
set aside the Employees' Pension Amendment (Scheme), 2014 conceived
in G.S.R. 609 (E). The Delhi High Court in its judgment delivered on
22nd May 2019 in the case of Bhartiya Khadya Nigam Karamchari
Sangh and Anr. vs. Union of India and Ors. [in Writ Petition (C) No.
5678 of 2018] followed the view expressed by the Kerala High Court
and quashed a circular issued by the provident fund authorities on 31st
May 2017 precluding exempted establishments from the benefits of higher
pension. In a decision delivered on 28th August 2019 in the case of Union
of India and Others vs. Jale Singh and Others [in D.B. Special
Appeal Writ No. 436 of 2019] a Division Bench of the Rajasthan High
Court also expressed the same opinion. Appeals arising out of SLP (C)
No. 3289 of 2021, SLP (C) No. 3290 of 2021, SLP (C) No. 2465 of 2021
and SLP (C) No. 3287 of 2021 are directed against the aforesaid judgment
of the Rajasthan High Court and a subsequent decision of a Bench of
equal strength delivered on 24th September 2019 in the same line. The
appeals originating from SLP (C) Nos. 15063-15064 of 2022 are against
the judgment of the Delhi High Court delivered on 22nd May 2019,
whereas in appeals having their roots in SLP (C) No. 1366 of 2021, SLP
(C) No. 1738 of 2021, judgments of the Delhi High Court delivered
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC. [ANIRUDDHA BOSE, J.]
A
B
C
D
E
F
G
H
972
SUPREME COURT REPORTS
[2022] 11 S.C.R.
following the case of Bhartiya Khadya Nigam Karamchari Sangh
(supra) have been assailed. In another judgment delivered by the same
Bench of the Kerala High Court in the case of Sunil Kumar and Ors.
vs. Union of India & Ors. [in Writ Petition (C) No. 602 of 2015] on
the same day, i.e. 12th October 2018, the aforesaid notification of 22nd
August 2014 was invalidated. That judgment is under challenge in the
appeals in connection with SLP (C) Nos. 16721-16722 of 2019. In a
contempt action brought before the Kerala High Court by aspiring
beneficiaries of the pension scheme for implementation of the directions
issued in the judgment dated 12th October 2018, certain directions have
been issued by the Kerala High Court. The judgment to that effect
delivered on 6th November 2020 is impugned in SLP (C) No. 8547 of
2021.
4. Fifty-four writ petitions have been filed by the employees
themselves or on their behalf under Article 32 of the Constitution of
India seeking invalidation of the notification dated 22nd August 2014.
The writ petitioners are members of both exempted and unexempted
establishments. We shall address these writ petitions as well in this
judgment, as they involve the same questions of law. We find that notices
are yet to be issued in W.P. (C) No. 1356 of 2021, W.P. (C) No. 1379 of
2021, W.P. (C) No. 767 of 2021 and W.P. (C) No. 477 of 2021 but these
petitions also involve the same questions of law and the main respondents
have participated in addressing us on these points. As such, these writ
petitions shall also be dealt with in this judgment. We have also heard the
intervenors, most of whom support the employees. In addition, there are
contempt petitions (Contempt Petition (C) Nos. 1917-1918 of 2018 and
Contempt Petition (C) No. 619-620 of 2019) in which implementation of
a judgment of this Court in the case of R.C. Gupta and Others vs.
Regional Provident Fund Commissioner, Employees Provident
Fund Organisation and Other [(2018) 14 SCC 809] delivered on 4th
October 2016 has been asked for. This judgment dealt with the question
of entitlement of members of the pension scheme, whose pensionable
salary exceeded Rs.6500/- per month to exercise option in terms of
proviso to paragraph 11 (3) of the scheme. In this judgment, a Division
Bench of this Court repelled the contention of the provident fund authorities
that the said proviso contemplated exercise of option within a specified
time. The said proviso has been omitted by the amendment of 2014.
Rs.6500/- was the maximum pensionable salary prior to 1st September
2014. We shall discuss this judgment in greater detail later.
A
B
C
D
E
F
G
H
973
5. With effect from 16th March 1996, the proviso was added to
paragraph 11(3) of the scheme giving an option to the employer and
employee for contribution on salary exceeding the aforesaid ceiling of
Rs.6500/-, (which was Rs.5000/- per month prior to 8th October 2001)
to retain the right to pension as per the scheme. 8.33 per cent of
employer's contribution of salary of an employee out of the deductible
amount towards provident fund had to be remitted to the pension fund.
Stand of the authorities was that there were certain restrictions as regards
the time for exercising such option. A set of employees had approached
the provident fund authorities much beyond such perceived specified
date, mostly on the eve of their retirement, seeking to be included in the
pension scheme. The point urged by them was that the amendment of
1996 was not within their knowledge, the same not having been widely
publicised. The provident fund authorities had rejected their plea. One
set of employees successfully brought action before a Single Judge of
the High Court of Himachal Pradesh. Their right to exercise such option
beyond the time of their salary exceeding the pensionable limit was in
question. According to the authorities, that was the cut-off limit. The
Division Bench of the High Court, however, accepted the stand of the
provident fund authorities holding that paragraph 11(3) of the pension
scheme, as it prevailed then, stipulated a cut-off limit. The matter
ultimately came to this Court and in the case of R.C. Gupta (supra), a
Division Bench of this Court accepted the employees' stand and, interalia, held:-
"7. Reading the proviso, we find that the reference to the date
of commencement of the Scheme or the date on which the
salary exceeds the ceiling limit are dates from which the option
exercised are to be reckoned with for calculation of
pensionable salary. The said dates are not cut-off dates to
determine the eligibility of the employer-employee to indicate
their option under the proviso to Clause 11(3) of the Pension
Scheme. A somewhat similar view that has been taken by this
Court in a matter coming from the Kerala High Court [Union
of India v. A. Majeed Kunju, Writ Appeal No. 1135 of 2012,
order dated 5-3-2013 (Ker)] , wherein Special Leave Petition
(C) No. 7074 of 2014 filed by the Regional Provident Fund
Commissioner was rejected by this Court by order dated 313-2016 [Regl. Provident Fund Commr. v. A. Majeed Kunju,
2016 SCC OnLine SC 1744, wherein it was directed: "SLPs
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR.
ETC. v. SUNIL KUMAR B. & ORS. ETC. [ANIRUDDHA BOSE, J.]
A
B
C
D
E
F
G
H
974
SUPREME COURT REPORTS
[2022] 11 S.C.R.
(C) Nos. 7074-76, 7107-108, 7224 of 2014 and 697 of 2016
Heard the learned counsel for the parties and perused the
relevant material. We do not find any legal and valid ground
for interference. The special leave petitions are dismissed SLPs
(C) Nos. 19954 and 33032-33 of 2015 List these special leave
petitions on 26-4-2016. As prayed for, liberty is granted to
file additional documents."]. A beneficial scheme, in our
considered view, ought not to be allowed to be defeated by
reference to a cut-off date, particularly, in a situation where
(as in the present case) the employer had deposited 12% of
the actual salary and not 12% of the ceiling limit of Rs 5000
or Rs 6500 per month, as the case may be.
8. xxx xxx xxx
9. We do not see how exercise of option under Para 26 of the
Provident Fund Scheme can be construed to estop the
employees from exercising a similar option under Para 11(3).
If both the employer and the employee opt for deposit against
the actual salary and not the ceiling amount, exercise of option
under Para 26 of the Provident Scheme is inevitable. Exercise
of the option under Para 26(6) is a necessary precursor to
the exercise of option under Clause 11(3). Exercise of such
option, therefore, would not foreclose the exercise of a further
option under Clause 11(3) of the Pension Scheme unless the
circumstances warranting such foreclosure are clearly
indicated.
10. The above apart in a situation where the deposit of the
employer's share at 12% has been on the actual salary and
not the ceiling amount, we do not see how the Provident Fund
Commissioner could have been aggrieved to file the LPA before
the Division Bench of the High Court. All that the Provident
Fund Commissioner is required to do in the case is an
adjustment of accounts which in turn would have benefited
some of the employees. At best what the Provident
Commissioner could do and which we permit him to do under
the present order is to seek a return of all such amounts that
the employees concerned may have taken or withdrawn from
their provident fund account before granting them the benefit
of the proviso to Clause 11(3) of the Pension Scheme. Once
such a return is made in whichever cases such return is due,
A
B
C
D
E
F
G
H
975
consequential benefits in terms of this order will be granted
to the said employees."
6. Further modification to the scheme, as we have already
indicated, came on 22nd August 2014 to be effective from 1st September
2014. Paragraph 11 of the scheme, before such modification by G.S.R.
No.