"EPFO Accepted Contributions; Cannot Now Deny Benefit Of Higher Pension": Kerala High Court Grants Relief To Retired Employees
The Court was considering writ petitions filed by retired employees of a Central Society under the Kerala Co-operative Societies Act, 1969, challenging the rejection of their joint options for higher pension under the Employees’ Pension Scheme, 1995.
The Kerala High Court granted relief to retired employees of a co-operative society noting that once both employer and employee had contributed to the Employees’ Provident Fund on the basis of actual salary under Paragraph 26(6) of the EPF Scheme, 1952, and the Employees Provident Fund Organisation (EPFO) had accepted those contributions, the claim for higher pension could not be denied.
A Single Bench of Justice Murali Purushothaman observed, “…Admittedly, the Employees Provident Fund Organisation has received contributions from both employees and employer under Para 26(6) of the EPF Scheme, 1952, for the period 2004– 2005 to 2007–2008. Paragraph 26 (6) deals with instances where employees and employers opt to contribute to the Employees' Provident Fund on wages exceeding the statutory limit. The petitioners and the 4th respondent having complied with the requirements under the said paragraph, and the Employees Provident Fund Organisation accepted the contributions, the 2nd respondent cannot deny the petitioners the benefit of higher pension.”
The Court added, “The petitioners and the 4th respondent having complied with the requirements under the said paragraph, and the Employees Provident Fund Organisation accepted the contributions, the 2nd respondent cannot deny the petitioners the benefit of higher pension.”
The Petitioners were represented by Advocate P.N. Mohanan, while Standing Counsel for EPFO appeared for the Respondents.
Brief Facts
The Petitioners retired from Respondent No.4, a Central Society under the Kerala Co-operative Societies Act, 1969. During service, both they and the employer contributed to the provident fund based on actual salary. Upon the introduction of the Employees' Provident Fund Pension Scheme, 1995 (Scheme), effective from November 16, 1995, they enrolled in the scheme but were allowed to contribute only up to Rs.5,000/- or Rs.6,500/- due to an artificial cut-off date imposed by the EPFO from December 1, 2004. The Petitioners challenged the cut-off date by way of a writ before the High Court, in which a judgment was passed permitting the Petitioners to contribute to the pension fund on the basis of actual salary.
Contributions for the period from April 2004 to October 2006 and from September 2007 to January 2008 were made by Respondent No.4 based on actual salary, which was above the statutory wage ceiling, and these contributions were later remitted to the EPFO after obtaining due sanction from the Government. However, the EPFO rejected the Petitioners’ joint options for higher pension under the Scheme on the ground that the contributions for the aforesaid periods were not made on a monthly basis nor apportioned correctly to each wage month, as required under the Scheme.
The Petitioners contended that their contributions during the entire service period, including the disputed periods, were made on the basis of actual salary and were supported by records of remittance and contribution details made by Respondent No.4. It was contended that in view of the judgment of the Kerala High Court in Employees Provident Fund Organisation & Anr. v. Sunil Kumar B. & Ors. (2022), the rejection of their joint options by the EPFO was illegal and arbitrary.
The Respondents contended that the Petitioners’ claim was rejected as the contribution was not made in respect of each month and not during the currency of the period. They further submitted that Respondent No.4 remitted the contribution as a lump sum, not apportioned to each month and that there was no provision permitting such deposit for past periods. It was also contended that the Petitioners did not exercise the option under para 26(6) of the Scheme, 1952 and were not entitled to the benefit of the judgment of Sunil Kumar (Supra).
Reasoning of the Court
The Court noted that there existed no dispute regarding the fact that the Petitioners and the 4th Respondent had contributed towards the provident fund on the basis of the actual salary drawn by them. The Court noted, “…the 4th respondent had remitted the employer contribution based on the actual wages for the period April 2004 to September 2006.”
The Bench noted that the Regional Provident Fund Commissioner had rejected the claim for a higher pension stating that the employer’s contribution for 2004 to 2008 was made in bulk and not in respective months, and since the payment was not apportioned month-wise as per paragraph 26(6), the Petitioners were held ineligible.
The Court rejected this reasoning, holding that, “…the petitioners and the 4th respondent having complied with the requirements under the said paragraph, and the Employees Provident Fund Organisation accepted the contributions, the 2nd respondent cannot deny the petitioners the benefit of higher pension.”
The Court observed that once it was found that the contribution was made by the employer and employee on the basis of actual salary and the EPFO had accepted the same, the Petitioners were entitled to get higher pension based on such contribution.
Consequently, the Court disposed of the writ petitions and directed the Regional Provident Fund Commissioner steps to disburse higher pension to the petitioners based on the split-up data submitted by Respondent No.4 within a period of three months.
Cause Title: Gopinathan Pillai. M. & Ors. v. Union of India & Ors. (Neutral Citation; 2025:KER:15578)
Appearance:
Petitioners: Advocates P. N. Mohana, C. P. Sabari, Amrutha Suresh, Gilroy Rozario
Respondents: Standing Counsel (EPFO) Nikita N. S.; Standing Counsel Latha Anand; DSGI T.C. Krishna
