Law Insider India

Legal News, Current Trends and Legal Insight | Supreme Court of India and High Courts

SC Judgment on EPFO Pension Case Likely to be Pronounced Next Week

2 min read
Gavel Law Insider

Sakina Tashrifwala

Published on: October 30, 2022 at 20:49 IST

The Supreme Court is expected to rule next week on the Employees Provident Fund Organization’s appeals challenging the Kerala, Rajasthan, and Delhi High Court verdicts that had annulled the Employees’ Pension (Amendment) Scheme, 2014.

After six days of hearing, a three-judge bench comprised of CJI Uday Umesh Lalit and Justices Aniruddha Bose, and Sudhanshu Dhulia reserved decision on August 11.

Because Chief Justice of India UU Lalit is retiring on November 8, 2022, the decision is expected in the coming days.

While setting aside the Employee’s Pension (Amendment) Scheme, 2014, the Kerala High Court authorised paying pension in proportion to salary beyond the Rs. 15,000 per month threshold limit in 2018.

The High Court also ruled that there cannot be a deadline for entering the pension programme.

The EPFO’s Special Leave Petition against the Kerala High Court verdict was denied by the Supreme Court in 2019.

Following a review requested by the EPFO and the Union Government, the dismissal of the SLP was reversed and the case was reopened for a merits hearing.

A two-judge bench of the Supreme Court referred the appeals to a three-judge bench in August 2021 to address the following issues:

1. Whether a cut-off date would be imposed under paragraph 11(3) of the Employees’ Pension Scheme, and

2. Whether the decision in R.C. Gupta v. Regional Provident Fund Commissioner (2016) would be the guiding principle under which all of these issues must be resolved.

The EPFO’s major argument is that the Pension Fund and the Provident Fund are separate entities, and participation in the latter does not inevitably imply membership in the former.

It was stated that the Pension Scheme is intended for low-age employees, and allowing people earning more than the cut-off point to draw pensions would create a large imbalance in the fund.

The modifications of 2014 were introduced to address the issue of cross-subsidization between pension and provident funds.

The pensioners contested the EPFO’s claim of financial strain. They claimed that the corpus money was still intact and that the payments were paid from the interest.

The pensioners further argued that the EPFO’s position that there must be a separate choice exercised during the cut-off time to join the pension programme is contrary to the statute.