HC Calcutta (2025.11.14) in Anuradha Roy & Ors.Vs. The Union of India & Ors. [WPA 15459 of 2025] held that;
Hon‟ble Supreme Court passed in Vijay Kumar vs. Central Bank of India dated 15th July, 2025 also mandates that right to pension can be denied only under the Authority of Law. Authority of Law is derived from EPF Act, EPF Scheme, EPS 1995 and mandates of the Apex Court which do not stipulate determination of PoHW based on internal Trust Rules. Appropriation of judicial powers by executive action of EPFO in rejecting the applications on Trust Rules grounds is, therefore, beyond the Authority of Law.
If both the employer and the employee opt for depositing against the actual salary and not the ceiling amount, exercise of option under para 26 of the EPF Scheme is ineligible. The deposit and acceptance of contributions on actual salary in the PF Scheme without any documentation of exercise of option has been construed to be a deemed exercise of option.
In para 35 of the same judgment it has been held that the Trust Rules framed under the EPF Scheme cannot be cited to deny the benefits under the EPS 1995, since the establishment has not been exempted under the EPS 1995 in terms of para 39 thereof the conditions while granting exemption to one Scheme cannot be kaleidoscoped into another for which no exemption had been granted under the statute.
Thus, the contention of the EPFO that without amendment of trust rules, the benefit is not applicable to the petitioners is not maintainable, in view of the fact that the Supreme Court did not observe or direct that the trust rules of an exempted establishment had to be amended in order to extend the benefit to its employee.
Excerpts of the order;:
I. WPA 15459 of 2025
# 1. The writ application has been preferred praying for setting aside of the impugned rejection order bearing No. EPFO/WB/RO/PRB/PoHW/9057/7471 dated 5th February 2025 in respect of the abovenamed petitioners and direction upon the respondent no. 3 to disburse higher pension on higher wages on the basis of the joint option exercised by the petitioners along with their employer as per Employees‟ Pension Scheme, 1995 and directing the respondents to immediately reverse the rejection of joint options submitted by the petitioners herein, issue demand letters for refund of the employer‟s share of EPF contributions on higher salary after netting off the arrears payable by EPFO and start disbursing higher pension based actual wages to each of the petitioners till the disposal of this application.
# 2. The petitioners‟ case is that the petitioners are all superannuated employees of a Maharatna PSU, Steel Authority of India Limited-Unit: Central Marketing Organisation (CMO) and all were in service on 01.09.2014.
# 3. The establishment SAIL-CMO (to whom the petitioners belonged at the time of their retirement from the EPF Scheme at age 58) enjoys exemption under section 17(1) of the said PF Act of 1952 from the operation of Employees‟ Provident Funds Scheme, 1952.
# 4. It is stated by the petitioners herein that there are about 1300 exempted establishments in India, including 16 in SAIL. The establishment SAIL-CMO (to whom the petitioners belonged at the time of their retirement from the EPF Scheme) enjoys exemption under Section 17(1) of the said PF Act of 1952 from the operation of Employees‟ Provident Funds Scheme, 1952.
# 5. The said exemption had been granted by the appropriate Government in compliance of the applicable conditions and rules under the PF Act, 1952 and EPF Scheme, 1952, that all rules must be approved by RPFC, and that in the case of beneficial schemes there will be automatic application, irrespective of Trust Rules and subject to the condition that the benefits are not less than the benefits given by EPFO to unexempted establishments.
# 6. SAIL CMO PF Trust rules were duly approved by EPFO.
# 7. In respect of un-exempted establishments, the EPFO manages all aspects of both Provident Fund and Pension Fund. Based on the said Act and its amendments approved by parliament, “Model PF Trust Rules” have been prescribed by the EPFO authorities as a template for adoption by the exempted establishment. Every exempted establishment customizes the „Model Trust Rules‟ as per their specific circumstances. The PF Trust rules applicable to SAIL-CMO were accordingly adopted from the „MODEL TRUST RULES of EPFO by its PF Trust, namely, Hindustan Steel Limited, Central Purchase Organization, Sales & Transport Calcutta Provident Fund Trust and duly submitted to EPFO for its approval, along with revisions in the said rules, if any, from time to time. In full compliance with the statutory provisions, the internal trust rules of SAIL-CMO also incorporated the same ceiling wages as mandated by the EPS.
# 8. All employees of both exempted and unexempted establishments are considered to be the same as far as pension under EPS, 1995 is concerned and EPFO directly deals with pension matters for both classes of establishments. For the purpose of contribution to Pension fund, employers only forward the requisite contribution every month to EPFO and they have no further role as employer under the EPS, 1995.
# 9. Mr. Majumder argues that after pronouncement of the judgment of the Hon‟ble Supreme Court in the matter of higher pension based on actual wages instead of ceiling wages (EPFO & Anr. Vs. Sunil Kumar B. & Ors., (2023) 12 SCC 701), joint options as submitted by the eligible member were duly vetted and uploaded by the employer on the EPFO site along with wage details through online system, for approval by EPFO.
# 10. While scrutinizing the joint applications, the Regional EPFO pointed out on 24th May 2024, the contradiction between the declaration of the employer while approving the joint option forms and the PF Trust rules where contribution was limited to ceiling wages. They further stated in the said letter that the Board of Trustees of the SAIL-CMO PF Trust has not submitted any revised rule, in light of the Hon‟ble Supreme Court judgment dated 04.11.2022 in SLP 8658-8659.
# 11. In accordance with this, SAIL-CMO PF Trust submitted the modified rules for approval by EPFO on 04.10.2024.
# 12. After sitting on the issue for more than three months, they declined to approve the revision and stated in their letter dated 21.01.2025 that any modification in trust rule after date of Supreme Court judgment dated 04.11.2022 cannot be allowed.
# 13. From mid January 2025, the EPFO circulars took on a hostile tenor when they started quoting Trust rules for rejecting joint options for pension on actual wages and stating that this was in keeping with the Hon‟ble Supreme Court judgment of 04.11.2022, EPFO & Anr. Vs. Sunil Kumar B. & Ors., (2023) 12 SCC 701, while the fact is that there is not a single word in the said judgment about internal trust rules of the establishment.
# 14. Mr. Majumder further argues that the petitioners‟ joint applications have been rejected by an order dated 05.02.2025 passed by the respondent no. 5, by referring to Rule 11(b) of the Provident Fund Trust Rules of the Employer/Establishment (SAIL-CMO).
# 15. It is stated that the Provident Fund Trust Rules in this case of an exempted establishment, also contain an overriding safeguard at clause 31(A) which provides as follows:-
“Statutory provisions to have overriding effect:
(1) In the absence of any specific provision in these rules, if any provision of these rules is less beneficial than the corresponding provision of the Employees‟ Provident Funds & Miscellaneous Provisions Act, 1952 and the Employees‟ Provident Fund Scheme, 1952 framed there under, the latter provision shall prevail, mutatis mutandis.
(2) Where any provisions of rules conflicts with any provisions of the E.P.F. Scheme, 1952, the latter shall always be deemed to prevail.
# 16. It is stated that the respondent authorities have chosen to ignore the overriding safeguard clause at 31(A) while rejecting the joint applications for pension on actual wages based on Rule 11(b) alone.
# 17. On 28th April 2025, the rejection order of 5th February 2025 was uploaded.
II. WPA 10854 of 2025
# 30. As the issue in the present writ application is similar to the issue in WPA 15459 of 2025, the writ applications have been taken up for consideration together.
III. WPA 21136 of 2025
# 40. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
IV. WPA 15534 of 2025
# 53. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
V. WPA 11574 of 2025
# 60. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
VI. WPA 16097 of 2025
# 75. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
VII. WPA 18723 of 2025
# 83. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
VIII. WPA 11151 of 2025
# 92. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
IX. WPA 11226 of 2025
# 101. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
X. WPA 7700 of 2025
# 110. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
XI. WPA 11349 of 2025
# 118. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
XII. WPA 11092 of 2025
# 126. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
XIII. WPA 11596 of 2025
# 132. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
XIV. WPA 11352 of 2025
# 140. The issue in this case being similar to the issue in WPA 15459/2025, the writ applications have been taken up for consideration together.
XV. WPA 11599 of 2025 with CPAN 1238 of 2025
# 141. The petitioners have challenged an order dated 17.03.2025 and clarification dated 18.01.2025 and pray for direction upon the respondents to extend the benefits of higher pension to the petitioners and other similarly situated persons, in accordance with binding judicial precedents, including the Hon‟ble Supreme Court‟s decision in Employees‟ Provident Fund Organization & Anr. vs. Sunil Kumar B. & Ors. and to refrain from imposing any arbitrary restrictions on such entitlement.
# 142. The petitioners‟ case is that they are retired employees of M/s IISCO Steel Plant under the Steel Authority of India Limited (SAIL). M/s IISCO Steel Plant and SAIL are exempted organization in terms of the Employees Provident Fund Act, 1952 inasmuch as they have their own provident fund trust. Petitioners are entitled to higher pension from the Employees Pension Scheme, 1995 in terms of the law laid down by the Hon‟ble Supreme Court. However, their joint option for higher pension has been rejected on arbitrary ground that the provident fund trust rules of the company does not permit contribution more than the ceiling limit.
# 143. All the petitioners were in service on 01.09.2025.
# 144. Petitioners state that all the petitioners and other similarly situated persons filled up and submitted joint option forms for higher pension. One Nitya Gopal Sarkar filled up joint option form on April 9, 2023. However, the respondent Provident Fund Authorities sat upon the said option form and neither accepted nor rejected the same.
# 145. By an order dated March 17, 2025, the Assistant Provident Fund Commissioner, EPFO, Regional Office, Durgapur, issued the impugned order rejecting the joint option applications of 54 applicants from M/s IISCO Steel Plant, citing ineligibility for pension on higher wages on the ground that the Trust Rules of the Provident Fund Trust contained a limiting clause under Rule 11, which restricted the employer‟s contribution to the Employees‟ Pension Scheme to the statutory wage ceiling.
# 146. Affidavit-in-opposition filed by the respondents/EPFO is on record along with the written notes filed by the respondent /Establishment.
# 147. Vide the order dated 17.03.2025 the authority held as follows:-
“……..In this regard the following are observed:-
(a) The provision laid down in rule 11(b) categorically states that where they pay of the member exceeded Rs.6500/- per month, the contribution payable by the employer to the Pension Fund be limited to the amount of existing pay of Rs.6500/- only. The balance of employer‟s contribution after remittance of contribution to the Employees‟ Pension Fund shall be credited to the member‟s individual account. Therefore, this provision is applicable to all in general.
(b) With respect to Rule 31A of the Trust Rule, it is stated that main provision in trust rule as reflected in rule 11(b) will prevail. Wherever Trust Rule contravene statutory Act and Scheme, statutory provision will prevail. But here it is not the case of contravention, rather it relates to the issue of exercising option, where the Trust Rule clearly debarred employees to contribute on actual salary to Pension Fund. Hence, the justification given by the employer is not acceptable.
(c) Therefore, in the light of the above, the Joint Option applications received from M/s IISCO Steel Plant, Burnpur (WBDGP0000161000) in respect of its employees/former employees have been determined to be ineligible for Pension on Higher Wages.
(d) Now, therefore, I, Assistant Provident Fund Commissioner, EPFO, Regional Office, Durgapur for the reasons stated above reject the application submitted by applicants/pensioners listed in the enclosed annexure (Containing list of fifty four applicants), holding them ineligible for Pension on actual/higher wages under Employees‟ Pension Scheme 1995. Accordingly, the demand notice which already been issued in favour of them is stand revoked.
As a consequences of the above, the revised PPO on higher wages is being cancelled and restoration of original pension is under process.
Sd/-
Assistant P.F. Commissioner (POHW)”
Respondent’s EPFO’s Case:-
# 148. The case of the respondent/establishment (EPFO), vide their affidavit-in-opposition, is that the diversion from Provident Fund to the Pension Fund is straightforward in respect of mandatory members. An amount representing 8.33% is transferred monthly to the Pension Fund, leaving an amount equal to 15.67% of their basic wages in the Provident Fund. In contrast, the option members who opt to enroll in their Provident Fund Scheme under paragraph 26(6) of the Provident Fund Scheme, are required to exercise a second option between either contributing an amount equal to 8.33% of their entire basic wages to the Pension Fund, or contributing an amount equal to 8.33% of their basic wages only up to the threshold. This second option was offered under the proviso to paragraph 11(3) of the Employees Pension Scheme, 1995 until the proviso was omitted by an amendment to the Employees Pension Scheme, 1995 with effect from 1st September, 2014. This amendment was challenged by option members who had during their membership of the Provident Fund Scheme and Employees Pension Scheme, 1995 exercised their option under paragraph 26(6) of the Provident Fund Scheme, but did not exercise the second option under the proviso to the unamended paragraph 11(3) of the Employees Pension Scheme, 1995. The consequence of not exercising the second option was that they had contributed to a larger Provident Fund instead of a larger pension. Hence they were disentitled to claim pension computed on their entire basic wages. They, however argued that exercising the second option contained in the proviso to the unamended paragraph 11(3) of the Employees Pension Scheme, 1995 had no legal value and thus they were entitled to claim a larger pension without exercising the second option. They contended that once they had exercised the first option and contributed an amount equal to 24% of their entire basic wages, it was immaterial if that contribution was made to the Provident Fund Scheme or the Employees Pension Scheme, 1995. They contended that both the Schemes were managed by Employees Provident Fund Organisation which could internally adjust the amounts between the two Schemes and pay either the Provident Fund or Pension by the employees. Consequently they contended that:-
a. Those who had retired from the Employees Pension Scheme, 1995 without exercising the option under the proviso to Paragraph 11(3) and had withdrawn their Provident Fund accumulations could still claim a larger pension if they refunded their Provident Fund withdrawals.
b. Those who were still members of the Employees Pension Scheme, 1995 would remain unaffected by the omission of the proviso to Paragraph 11(3) of the Employees Pension Scheme, 1995 if they had exercised the option under paragraph 26(6) of the Provident Fund Scheme.
# 149. It is further stated that the Provident Fund Scheme merely accumulates the contributions with the return earned on them and pays the resulting accretion as a one-time lump sum on retirement from the Provident Fund Scheme. In contrast, paragraph 12(2) of the Employees Pension Scheme requires monthly contributions. The Employees Pension Scheme is predicted on the formula contained in paragraph 12(2), which states thus:-
Monthly Pension = (pensionable salary/70) x pensionable service.
In this formula, pensionable salary is defined under paragraph 11 of the Employees Pension Scheme, 1995 as the average basic wages in the last 60 months and pensionable service is defined in paragraphs 2(xv) and 10 as the service period for which monthly contributions are received or receivable in the Pension Fund. Thus, under the formula monthly pension is the pensionable salary that accrues at the rate of 1/70 per month throughout the member‟s pensionable service.
# 150. Thus, the Employees Pension Scheme, 1995 plans the amount received during an employee‟s membership for the payment of pension for their entire life post membership. In contrast, the Provident Fund Scheme pays the entire amount as a lump sum, resulting in the completion of the liabilities under the Provident Fund Scheme.
# 151. This fundamental difference between the two Schemes makes the second option contained in the proviso to the unamended paragraph 11(3) of the Employees Pension Scheme, 1995 significant. The contributions of the employees who exercised the second option were actuarially planned annually under paragraph 32 of the Employees Pension Scheme, 1995 to sustain their Pension post retirement under the Employees Pension Scheme, 1995. Those who did not exercise this second option clearly preferred a larger Provident Fund instead of a larger Pension and hence their contributions were not considered while planning the Pension Fund. The necessity of exercising the second option under the proviso to the unamended paragraph 11(3) of the Employees Pension Scheme, 1995 has been upheld by the Hon‟ble Supreme Court in R.C. Gupta vs. Regional Provident Fund Commissioner reported in 2018 (14) SCC 809 and in Employees Provident Fund Organization vs. Sunil Kumar B. reported in 2022(11) SCR 959.
# 152. In the instant case, the petitioners are the employees of the establishment, M/s Steel Authority of India Limited, which is an exempted establishment under Section 17(1) of the Act, permitted to set up a Provident Fund Trust under the Act, which is exempted from the provisions of the Provident Fund Scheme except those provisions that pertain to the exempted Provident Fund Trusts.
# 153. It is further stated that the Trust Rule of the establishment, M/s Steel Authority of India Limited itself has restricted the employer to contribute its share by limiting to Rs.15,000/- only. The Rule 11(b) of the Trust Rule provides that:–
“Provided that where the pay of the member exceeds Rs.15,000/- per month the contribution payable by the employer be limited to the amount on his pay of Rs.15,000/- only.”
So from the Trust Rule it is clear that the Pension Fund is contributed only up to the maximum of ceiling and there is no provision to contribute on higher wages in the Employees‟ Pension Scheme, 1995. Furthermore Clause 11(3) of Employee‟s Pension Scheme 1995 was also included with effect from 16th March 1996 permitting an option to the employer and employee to contribution towards Pension Fund, per month, on salary exceeding the statutory wage ceiling. The Trust Rules of the establishment, M/s Steel Authority of India Limited was never amended incorporating the Clause under 11(3) of the Employees‟ Pension Scheme, 1995, mentioned above.
# 154. The petitioners in the present case have framed and opted to be governed by Rules that circumscribe the rates of contribution to the Pension Scheme to ensure larger contribution to the Provident Fund Scheme. Hence the petitioners cannot exercise the second option contained in the proviso to the unamended paragraph 11(3) of the Employees Pension Scheme, 1995.
# 155. The respondents further state that the Hon‟ble Supreme Court in R.C. Gupta’s case held that a member of the Pension Scheme ought to exercise both the options distinctly and affirmatively to be eligible for the larger pension, which is as follows:-
“9. We do not see how the exercise of the option under paragraph 26 of the Provident Fund Scheme can be construed to stop 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 Fund Scheme is inevitable. Exercise of 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.”
# 156. In the present cases, the circumstances foreclosing the exercise of the second option referred to in above quoted para of R.C. Gupta are clearly indicated in Rules of exempted Provident Fund Trust Rules framed with the consent of the employees themselves.
# 157. Hence, it is stated by respondent/EPFO that the petitioners are estopped from exercising the second option. Further, in the case of Sunil Kumar B and Ors. (Supra), it is held in paragraph 44(iii) that those who had exercised the second option, either in favour of a larger Provident Fund or a larger Pension, were bound by that option under the Post Amendment Scheme, which is as follows:-
“44. We accordingly hold and direct:-
……………………………………………
(iii) The employees who had exercised the option under the proviso to para 11(3) of the 1995 scheme and continued to be in service as on 1st September 2014 will be guided by amended provisions of paragraph 11(4) of the Pension Scheme”.
# 158. The respondents argue that the employees like the petitioners who opted in favour of larger Provident Fund over larger pension, remain bound by that choice post amendment. They cannot now alter their commitment retrospectively either by amending exempted Provident Fund Trust Rules or exercising fresh options inconsistent with the existing Provident Fund Trust Rules.
# 159. It is also stated that in Paragraph 44(iv) of Sunil Kumar B. & Ors. case permitted under the extraordinary powers of Article 142 of the Constitution of India, a one time opportunity to those who were members of the Employees Pension Scheme, 1995 on 1st September, 2014.
# 160. It is further stated by the EPFO that in paragraph 44(iv) would not apply to the petitioners in the instant case because they were disentitled to opt for larger pension in view of the prohibition contained in their Provident Fund Trust Rules. It is important to note that the options for a higher pension have been rejected only where the exempted Provident Fund Trust Rules prohibit the exercise of the second option in favour of the larger pension. In all other exempted Provident Fund Trusts where such a prohibition does not exist higher pension has been sanctioned. Hence the allegation that Employees Provident Fund Organisation has disobeyed paragraph 44(iv) of Sunil Kumar B.‟s case is not correct.
# 161. The respondent no. 3 issued show cause notice being no. A/WB/PRB/9057/Pension on Higher Wages/7445 dated 31st January, 2025 to the establishment, M/s. Steel Authority of India Limited before issuing the order of rejection. The establishment, M/s. Steel Authority of India Limited after receiving the said show cause notice dated 31st January, 2025 from the respondent no. 3 gave a reply to the said show cause notice dated 4th February, 2025. The respondent no. 3 after considering the reply of the establishment, M/s Steel Authority of India has issued the order of rejection dated 5th February, 2025.
# 162. As per guideline from Employees Provident Fund Organisation Head Quarter vide file no. Pension/VI/PoHW/2024-25/e-file 951977 dated 18th January 2025-“the eligibility for PoHW cases should be determined on the basis of the extent Trust Rule of the exempted establishment”, which is in consonance with the judgment of the Hon‟ble Supreme Court in Sunil Kumar B‟ case. In case the Trust Rules are amended after the judgment delivered by the Hon‟ble Supreme Court on 4th November, 2022 in Sunil Kumar B‟s case, the applications of members of such trust may not be considered.
# 163. Report in the form of affidavit has also been filed by the respondent nos. 2 & 3 (EPFO), contents of which are part of their opposition as discussed above.
# 164. Exception to the report has been filed by the petitioners reiterating their case in the writ petition and denying the case of the EPFO and it has been specifically stated that in all the cases of rejections, no such opportunity has ever been given to the pensioners/members and accordingly, action of rejection is without authority and beyond the procedures as laid down in the EPFO Circular No. 405 dated 23rd April, 2023.
# 165. The EPFO Circular dated 18th January, 2025 clarifies that the cases of the exempted establishments are to be processed based on the extent Trust Rules. The said Circular never prescribed that the cases are to be rejected based on the ceiling wages in the Trust Rules. In fact, the Trust Rules contain safeguard provisions for supremacy of the EPF Act and Schemes thereunder over the internal Trust Rules to decide the beneficial schemes for the members. Accordingly, rejection of the applications for PoHW based on ceiling wages in the internal Trust Rules while overlooking the safeguard provisions about supremacy of EPF Act and Schemes, are beyond the Authority of Law and also goes against the clarifications as per EPFO Circular dated 18th January, 2025.
# 166. The latest judgment of the Hon‟ble Supreme Court passed in Vijay Kumar vs. Central Bank of India dated 15th July, 2025 also mandates that right to pension can be denied only under the Authority of Law. Authority of Law is derived from EPF Act, EPF Scheme, EPS 1995 and mandates of the Apex Court which do not stipulate determination of PoHW based on internal Trust Rules. Appropriation of judicial powers by executive action of EPFO in rejecting the applications on Trust Rules grounds is, therefore, beyond the Authority of Law.
# 167. The Apex Court also mandated that if the employees of the exempted establishments are not considered for PoHW, it will amount to artificial classification between the employees of exempted and unexempted establishments.
# 168. Grant of PoHW to a class of exempted establishments (without any reference to the ceiling wages in their internal Trust Rules) and rejection of application for PoHW to another class of exempted establishments (those with occasional reference of ceiling wages in the internal Trust Rules) amounts to sub-classification between exempted establishments. This treatment is in utter disregard to the mandate of the Apex Court, violating Article 14 of the Constitution of India.
# 169. Written notes filed by all the parties are on record.
Findings:-
# 170. The petitioners other than their case as made out herein have stated that the Provident Fund authorities have used an affidavit-in-opposition depicting that the Joint Option Forms for exercise of higher pension on higher wages were rejected after giving opportunity of hearing to the employer. The persons affected are the employees, and they were not heard.
# 171. The Hon‟ble Supreme Court in the case of R.C. Gupta reported in (2018) 14 SCC 809, clearly held in para 9 that exercise of option under para 26(6) of the EPF Scheme could not be construed to estop the employee from exercising a similar option under para 11(3) of the EPS. If both the employer and the employee opt for depositing against the actual salary and not the ceiling amount, exercise of option under para 26 of the EPF Scheme is ineligible. The deposit and acceptance of contributions on actual salary in the PF Scheme without any documentation of exercise of option has been construed to be a deemed exercise of option.
# 172. Contributions on higher salary had already been deposited by the petitioners and employer in the Trust Fund, and on exercise of option, the said higher amount is only to be remitted/transferred from the Trust Fund or by the superannuated petitioners to the pension fund.
# 173. It is further argued by the petitioners that the Hon‟ble Madras High Court Madurai Bench, on 02.09.2025, in W.P.(MD) Nos. 29573 to 29578 of 2024 and others (BHEL, NLC, MADURA COATS Vs. UOI and Ors.), in the judgment pronounced on 2nd September, 2025 has held in para 34 that remittance of lesser amount to the Pension Scheme by the employer was attributable to non-exercise of Joint Option and it is not traceable to the bar in the Trust Rules.
# 174. In para 35 of the same judgment it has been held that the Trust Rules framed under the EPF Scheme cannot be cited to deny the benefits under the EPS 1995, since the establishment has not been exempted under the EPS 1995 in terms of para 39 thereof the conditions while granting exemption to one Scheme cannot be kaleideoscoped into another for which no exemption had been granted under the statute.
# 175. EPS 1995 having provided for a beneficial Scheme, the same cannot be taken away from the employees unless there is a statutory bar for claiming the same.
# 176. The petitioners thus pray for higher pension on higher wages on permitting them to refund the higher portion of PF with interest to be deposited in the Pension Fund.
# 177. The respondents (EPFO) have once again reiterated their stand in their written notes as taken in their report and objection.
# 178. The EPFO has justified their orders of rejection claiming that they have been issued as per Guideline from Employees Provident Fund Organization, Head Quarter vide file no. Pension/VI/PoHW/2024-25/e-file 951977 dated 18th January 2025 "the eligibility for PoHW cases should be determined on the basis of the extent Trust Rule of the exempted establishment", which is in consonance with the Judgment of the Hon'ble Supreme Court in Sunil Kumar B. (Supra). In case the Trust Rules are amended after the Judgment delivered by the Hon'ble Supreme Court on 4th November, 2022 in Sunil Kumar B. (Supra), the applications of members of such trust may not be considered.
# 179. Mr. S. Agarwal learned counsel for the EPFO has relied upon the judgment of Kerala High Court in The Employees Provident Fund Organisation & Ors. vs A. Chandrakumaran Nair & Ors., WPA 852 of 2022 dated 28.03.2022, which is prior to the judgment in Sunil Kumar B. (Supra).
180. Para 9 of the said judgment is as follows:- “9. We have heard the counsel for both sides in detail and have considered the contentions put forth. The primary question to be considered is whether, sans the determination of money due from the employer as envisaged under Section 7A of the Act, the learned Single Judge could have directed CIAL to produce a DD towards the purported deficiency and arrears and then proceed to direct the EFPO to encash the same and undertake a computation as envisaged under Sections 7Q and 14B of the Act. It is not in dispute that CIAL had limited the contribution to both the provident fund and the pension fund to the statutory limit till 06.06.2003. Even as per the EPFO, there was no deficiency or shortfall in the remittance of the contribution towards the provident fund by CIAL. Further, respondents 1 to 67 have already superannuated and have received the emoluments that follow without demur. It is the specific contention of the EPFO that the EPF scheme stipulates that, if so desired, the employer and the employee could jointly opt for making contributions on the actual salary, which is higher than the ceiling limit of the salary in terms of para 26.6 of the EPF Scheme, 1952. It would be relevant to reproduce paragraph 26.6 of the EPF Scheme, 1952, as it stands now. It reads as follows: "Notwithstanding anything contained in this paragraph, an officer not below the rank of an Assistant Provident Fund Commissioner may, on the joint request and writing of any employee of a factory or other establishment to which the scheme applies and his employer, enroll such employee as a member or allow him to contribute on more than Rs.15,000/- of his pay per month if he is already a member of the fund and thereupon such employee shall be entitled to the benefits and shall be subject to the conditions of the fund provided that the employer gives an undertaking in writing that he shall pay the administrative charges payable and shall comply with all statutory provisions in respect of such employees." Thus, the provision envisages a joint request for contributing more than the stipulated amount, as well as an undertaking in writing from the employer for opting to make contributions on the actual salary, which is higher than the ceiling limit of the salary. As regards respondents 1 to 67, there had been no joint request with CIAL for payment of contributions on higher wages by complying with the procedure as stipulated under para 26.6 of the EPF Scheme, 1952. The respondents never exercised the option to pay, nor actually paid the higher contribution on their actual salary exceeding the wage ceiling. They, who are no longer members of the pension fund, and have already superannuated and as of now are termed by EPFO as not to be „employees‟ as envisaged in the Pension Scheme, had all along been aware of the fact that the employer's share of contribution, is restricted to the statutory ceiling and had accepted the EPF and the pension fund benefits as per their entitlement without protest. Neither respondents 1 to 67 nor the CIAL has produced any evidence to prove the contrary.”
# 181. It appears that the Court in The Employees Provident Fund Organisation & Ors. vs A. Chandrakumaran Nair & Ors. (Supra) held that to get such benefits there has to be a joint request (option), which in the present writ petitions have been duly preferred.
# 182. On hearing the parties at length the following is evident:-
i) All the petitioners in the writ petitions have exited from the scheme and also retired after 01.09.2014 and as such were in service on 01.09.2014.
ii) The employer and employee have exercised their joint option for higher pension which has been rejected en masse by the EPFO relying upon guidelines from Employees Provident Fund Organization, Head Quarter vide file no. Pension/VI/PoHW/2024-25/e-file 951977 dated 18th January 2025.
“On holding that the eligibility for PoHW cases should be determined on the basis of the extent Trust Rule of the exempted establishments, which is in consonance with the judgment of the Hon‟ble Supreme Court in Sunil Kumar B‟ case. In case the Trust Rules are amended after the judgment delivered by the Hon‟ble Supreme Court on 4th November, 2022 in Sunil Kumar B‟s case, the applications of members of such trust may not be considered.”
iii) The provident fund authorities have used an affidavit-in-opposition depicting that that Joint Option Forms for exercise of higher pension on higher wages were rejected after giving opportunity of hearing to the employer. The persons affected are the employees, and they were not heard.
iv) Contributions on higher salary had already been deposited by the petitioners and employer in the Trust Fund, and on exercise of option, the said higher amount is only to be remitted/transferred from the Trust Fund or by the superannuated petitioners to the pension fund.
# 183. Vide an order dated 18.01.2025, the EPFO issued the following clarification in respect of exempted establishments:-
# 184. The order of rejection dated 05.02.2025, under challenge is as follows:-
# 185. The following paragraphs of the said order being relevant are reproduced herein:-
“A reply has been received from the establishment vide letter dated 04.02.2025 wherein the establishment has cited several provisions including certain provisions of the Trust Rules concluding that "where any provision of Trust Rules conflicts with any provisions of the EPF Scheme 1952 which is more beneficial the later shall always deem to prevail".
The said submission can't be considered as which provision is beneficial is subjective consideration. The fact is that the Trust Rules were never amended and any proviso corresponding to the Proviso Para 11(3) of EPS 1995 was never introduced in the said Trust Rules. Therefore such submission cannot be considered.”
# 186. Rule 31A of the Trust Rules is as follows:-
Rule 31A Statutory provisions to have overriding effect:-
In the absence of any specific provision in these rules of if any provision of these rules is less beneficial than the corresponding provision of the Employees‟ Provident Funds Scheme, 1952 framed there under the latter provision shall prevail, mutatis mutandis.
Where any provisions of rules conflicts with any provisions of the E.P.F. Scheme, 1952, the latter shall always be deemed to prevail.
Question whether a particular rule is beneficial or not shall be decided by the Regional Provident Fund Commissioner whose decision shall be final.
In case of any change of legal status of the establishment, which has been granted exemption, as a result of merger, demerger, acquisition, sale, amalgamation, formation of a subsidiary, whether wholly owned or not, etc., the exemption granted shall stand revoked and the establishment should promptly report the matter to the RPFC concerned for grant of fresh exemption.
In case, there are more than one unit/establishment participating in the common.
# 187. The Regional Provident Fund Commissioner exercising his power provided under Rule 31A(3) of the Trust Rules, decided the same by holding “The said submission can‟t be considered as which provision is beneficial is subjective consideration. The fact is that the Trust Rules were never amended and any proviso corresponding to the Proviso Para 11(3) of EPS 1995 was never introduced in the said Trust Rules. Therefore such submission cannot be considered.”
# 188. The parties (both) have relied upon the judgments in:-
(a) R.C. Gupta & Ors. vs. Regional Provident Fund Commissioner, Employees Provident Fund Organisation & Ors. (2018) 14 SCC 809;
(b) Employees Provident Fund Organisation & Anr. vs. Sunil Kumar B. & Ors., (2023) 12 SCC 701;
(c) Madurai Bench of Madras High Court dated 02.09.2025, in W.P.(MD) Nos. 29573 to 29578 of 2024 and others (BHEL, NLC, MADURA COATS Vs. UOI and Ors.).
# 189. The grounds of rejection by the respondent/EPFO in the order dated 05.02.2025 are decided as follows:-
A) EPFO’s stand : The establishments in these cases enjoy exemption and internal trust rules do not permit contribution beyond ceiling limit. No amendment of the rules were made, which permitted an option to the employer and employee to contribute toward pension fund beyond statutory wage ceiling/actual salary.
(i) The Supreme Court in EPFO vs. Sunil Kumar B. (Supra) held as follows:-
“42. We shall now address the question as to whether the members from an exempted establishment under the 1952 Act would be entitled to the benefits of enrolling in the Scheme beyond the ceiling limit. We would point out here that before us no argument has been advanced as regards members of the Pension Scheme of exempted establishments in terms of Para 39 of the said Scheme. Thus, in this judgment, we are not addressing the cases of that category of members. We find from Section 17(A) of the Act that the investment of the provident fund for the trust fund are also to be as per the directions of the Central Government. In quashing the Circular dated 31-5-2017, the Delhi High Court has held that the employees of unexempted establishments and exempted establishments form a homogeneous group. Section 6-A of the Act also envisages coverage of employees of exempted establishments under Section 17(6) of the Act within the Pension Scheme.”
43. Section 17(6) of the Act stipulates :
“17.(6) Subject to the provisions of sub-section [(1-C)] the employer of an exempted establishment or of an exempted employee of an establishment to which the provisions of the [Pension] Scheme apply, shall, notwithstanding any exemption granted under sub-section (1) or sub-section (2), pay to the [Pension] Fund such portion of the employer‟s contribution to its provident fund within such time and in such manner as may be specified in the [Pension] Scheme.”
44. Further, 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 we are of the opinion that 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.
45. One of the arguments against their inclusion into the Scheme by exercising option is that the corpus of the contribution for exempted establishments has 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, we are of the view that in order to be entitled to the benefits of the pension fund, the employer and the employees, 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, immediately after exercise of such option, within such period as may be directed by the administrators of the pension fund.”
(ii) It is clear that the Hon’ble Supreme Court considered the status of an employee of an exempted Establishments and clarified that “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”.
(iii) The Supreme Court while considering (if any) the provisions excluding such employees, was of the view that it would lead to artificial classification of otherwise, same categories of employees and thus directed that the pension scheme ought to apply similarly to both exempted and unexempted/regular Establishment.
(iv) It further appears that the EPFO completely overlooked the trust Rules of the Establishments, which clearly provide that the more beneficial corresponding provisions of the Act and Scheme shall prevail.
(v) Thus, the contention of the EPFO that without amendment of trust rules, the benefit is not applicable to the petitioners is not maintainable, in view of the fact that the Supreme Court did not observe or direct that the trust rules of an exempted establishment had to be amended in order to extend the benefit to its employee.
(vi) The EPFO has also in a very unjust manner rejected any prayer for amendments of trust rules after the judgment in Sunil Kumar B. (Supra) thus putting in all efforts to deprive the employees of an exempted establishment the benefits of Sunil Kumar B. (Supra).
(vii) The only requirement in such cases is the due compliance of directions in para 45 Sunil Kumar B. (Supra) regarding transfer of funds.
B) EPFO further contends that while enforcing their power under Rule 31A(3) of the trust Rules, the authority rightly held:-
“The said submission can’t be considered as which provision is beneficial is subjective consideration. The fact is that the Trust Rules were never amended and any proviso corresponding to the Proviso Para 11(3) of EPS 1995 was never introduced in the said Trust Rules. Therefore such submission cannot be considered.”
(i) This Court finds that the said consideration by the authority is clearly not in accordance with law and also against the principles of natural justice considering that:- A subjective consideration is a judgment or assessment that is based on an individual’s personal feelings, experiences, and beliefs rather than on objective facts or evidence. This type of consideration is influenced by a person‟s unique perspective, biases, and emotional state, making it open to personal interpretation.
(ii) Such exclusive power to consider as to which of the provisions is beneficial is to be applied with great responsibility, considering facts and on proper application of mind and under no circumstances can it be said to be “a subjective consideration” and such observation is clearly beyond the scope of law. Taking the plea of trust rules being not amended has already been discussed earlier.
(iii) The authority is given the power under Rule 31A(3) of the trust Rules, to decide only as to which provisions is more beneficial. No power has been given to the authority to decide as to why the benefit shall be given or not given.
(iv) Thus the authority in the order under challenge dated 04.02.2025 has also travelled beyond his power. The said observations also being not in accordance with law is set aside.
190. Further observations in the order dated 04.02.2025 is as follows:-
“…………In view of the above, it is found that the applicant‟s request for Pension on Higher wages does not fulfil the conditions laid down by Hon‟ble Supreme Court in its judgment dated 04-11-2022 in the matter of Special Leave Petition (C) Nos. 8658-8659 of 2019 read with EPFO, HO Circular No. Pension/VI/PoHW/2024-25/efile-951977 dated 18-01-2025, Trust Rules, EPFO, H.O. Circular No. Pension/2022/54877/15149 dated 29-12-2022, EPFO Head Office Circular No. Pension/2022/54877/15238 dated 05-01-2023 and EPFO Head Office Circular No. Pension/2022/55893/15785 dated 25-01-2023.
Now, therefore, I, T.K. Mukherjee, Regional Provident Fund Commissioner-I, EPFO, Regional Office, Park Street, for the reasons stated above, reject the representations and applications (Joint Options) submitted by the applicants/pensioners as at Annexure-I as being not eligible for Pension on actual/higher wage under Employees‟ Pension Scheme, 1995.
Sd/-
Regional P.F. Commissioner I
Regional Office, Park Street.”
# 191. This order dated 04.02.2025 also being not in accordance with law is also set aside.
3 192. The cut-off date as extended by the Supreme Court in Sunil Kumar B. (Supra) has been extended from time to time, the last being till 31.01.2025, (BHEL MCL (Supra)).
# 193. The clarification in its (EPFO) order dated 18.01.2025, relating to exempted Establishment relying on the judgment in Sunil Kumar B. (Supra) is totally against the directions of the Supreme Court.
# 194. The authority has given its own interpretation, which is in complete contradiction/violation of the judgment in Sunil Kumar B. (Supra). There are no such directions/observations of the Court in the said judgment. Vide the said clarification, the EPFO has also closed all avenues for getting the benefits by directing that the trust rules if amended after the judgment in Sunil Kumar B. (Supra) on 04.11.2022, the applications of such members would not be considered.
# 195. Such clarifications/directions is not only in complete violation of the directions of the Supreme Court in Sunil Kumar B. (Supra) but also against the principles of natural justice considering that the EPFO has not only denied the benefit to the members of the Exempted Establishment, citing trust rules not permitting the same but has gone all out to deny the benefit by issuing the clarification dated 18.01.2025 stating that even if trust rules are amended, after the judgment, granting benefit, the same would not be available to members of exempted Establishment.
# 196. As to how is EPFO aggrieved, if an employer agrees (by filing joint Section form, there being no burden on the authorities (EPFO). In denying the same the PF authorities are acting against the purpose of a beneficial legislation.
# 197. Such thought process and conduct of the authorities who are to implement these beneficial legislations, is not acceptable by this Court, as the same is not only against the principle of natural justice, but is clearly an abuse of the process of law, being not in accordance with law.
# 198. Accordingly, the order dated 18.01.2025 and the order dated 05.02.2025 are hereby quashed and set aside.
# 199. a) Any joint option application presented on or before 31.01.2025, or before any other further extension of time by the authority considered, if any shall be accepted by the respondents.
b) On remittance of the differential contribution amount to the pension scheme, to the Employees’ Provident Fund Organisation, by the employees, along with applicable interest, higher pension shall be disbursed to them from the succeeding month of their remittance.
# 200. The writ petitions are allowed.
# 201. There will be no order as to costs.
# 202. Connected application, if any, stands disposed of.
# 203. Interim order, if any, stands vacated.
# 204. Urgent Photostat certified copy of this judgment, if applied for, be supplied to the parties expeditiously after due compliance.
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