CHANDIGARH, April 8: – In a ruling expected to impact thousands of retired employees, the Punjab and Haryana High Court has set aside the Employees’ Provident Fund Organisation’s (EPFO) rejection of higher pension claims on the ground that retirees failed to exercise a joint option before September 1, 2014.
A division bench of Justice Sureshwar Thakur and Justice HS Grewal found the EPFO’s position untenable, stating the requirement for a joint option did not exist under the scheme at the time these employees retired.
“The rejection of the claim on the ground that no joint option was exercised, when the governing provision imposed no such requirement, cannot be justified,” the bench noted while allowing 119 petitions filed by retired employees.
The petitions challenged three EPFO circulars issued after the Supreme Court’s 2022 ruling in EPFO vs Sunil Kumar B, which directed pensioners to submit fresh joint options—even in cases where contributions had already been made on actual salaries exceeding the wage ceiling.
Senior advocate DS Patwalia, appearing in one of the lead petitions, argued that the petitioners had consistently contributed on actual wages and were arbitrarily denied higher pension benefits. “There was no legal basis for insisting on a joint option when contributions were already being made above the threshold,” Patwalia submitted.
The dispute stems from a 2014 amendment to the Employees’ Pension Scheme, which raised the pensionable wage ceiling from Rs 6,500 to Rs 15,000 and removed the clause permitting employees to opt for higher contributions along with their employer.
The court referred to the 2016 R.C. Gupta vs Regional Provident Fund Commissioner judgment, in which the Supreme Court ruled that a separate joint option was unnecessary if actual salary-based contributions were already being made.
While EPFO’s 2017 circulars had aligned with that judgment, the post-Sunil Kumar circulars reversed course, reintroducing a compliance hurdle for retirees.
Striking down the EPFO’s rejection orders, the bench directed the organisation to reconsider each case in light of the ruling. “Pensioners cannot be denied benefits for failing to meet a condition that was neither applicable nor in existence at the time of their retirement,” the court observed.
The verdict is expected to have nationwide ramifications for EPS subscribers who retired before the 2014 amendments.
