The High Court of Telangana has clarified that a retired employee cannot claim enhanced pension under the Employees' Pension Scheme, 1995 merely on the basis of eligibility criteria alone. The right to claim pension on higher wages must be actively exercised through a formal application within the time frame prescribed by the Supreme Court. The petitioner’s failure to avail of the extended opportunity granted under the Apex Court’s 2022 judgment rendered his subsequent challenge unsustainable.
The Verdict
The petitioner lost. The High Court of Telangana held that the reduction of pension was lawful because the petitioner had not exercised his option for higher wage pension within the extended window provided by the Supreme Court in Employees' Provident Fund Organisation v. Sunil Kumar B. (2022). The Court dismissed the writ petition but granted liberty to challenge the specific speaking order dated 09.08.2024 rejecting his application under EPS-95 through appropriate legal remedies.
Background & Facts
The petitioner, a retired senior accountant with the Andhra Pradesh Forest Development Corporation, had retired prior to 1 September 2014. He was initially receiving pension computed on the basis of his last drawn salary capped at Rs 15,000 per month under the Employees' Pension Scheme, 1995. In 2019, the Supreme Court in R.C. Gupta v. EPFO had affirmed that employees who were in service as on 1 September 2014 and had exercised the option under Para 11(3) of the Scheme were entitled to pension on higher wages. However, the Court also recognized that many employees, including those who had retired before the cutoff, were unaware of their rights due to legal uncertainty.
In response, the Supreme Court in Employees' Provident Fund Organisation v. Sunil Kumar B. (2022) issued specific directions under Article 142 of the Constitution. Para 50.5 of the judgment extended the time for employees who were eligible but had not exercised their option due to administrative ambiguity to file applications for higher wage pension within four months from the date of the judgment. The petitioner filed his application through the EPFO online portal on 22 July 2023, citing this extended window. The Regional Provident Fund Commissioner rejected his claim on 9 August 2024, holding that he had retired before 1 September 2014 and had not exercised any option under Para 11(3) of the pre-amendment Scheme.
The petitioner filed a writ petition under Article 226, alleging violation of Articles 14, 16, and 21, and breach of natural justice, arguing that he was entitled to the benefit of the Supreme Court’s directions. He claimed ignorance of the speaking order and the procedural requirements.
The Legal Issue
Can a retired employee who did not exercise the option under Para 11(3) of the EPS-95 prior to 1 September 2014 claim enhanced pension under the Scheme merely because the Supreme Court extended the time for filing applications in 2022? Is the rejection of such an application violative of constitutional rights or principles of natural justice?
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the Supreme Court’s judgment in Sunil Kumar B. (2022) created a substantive right for all eligible employees, including retirees, to claim higher pension. He contended that the petitioner’s application was filed within the extended four-month window and that the rejection without a speaking order or personal hearing violated principles of natural justice. He relied on the Court’s observation in Para 50.5 that employees who could not exercise the option due to administrative confusion must be given a fresh opportunity.
For the Respondent
The Standing Counsel for EPFO countered that Para 50.5 of the Supreme Court’s judgment applied only to employees who were in service as on 1 September 2014 and had not exercised the option due to legal uncertainty. The petitioner, having retired before that date, fell squarely within Para 50.7, which explicitly excludes those who retired without exercising any option under the pre-amendment Scheme. The Counsel emphasized that the rejection order was issued in strict compliance with the Apex Court’s directions and that the petitioner’s application was legally non-maintainable.
The Court's Analysis
The Court undertook a meticulous review of the Supreme Court’s judgment in Employees' Provident Fund Organisation v. Sunil Kumar B. (2022), particularly Para 50.5 and 50.7. It noted that the extension of time under Para 50.5 was expressly intended for employees who were still in service as on 1 September 2014 and had not exercised their option due to the legal ambiguity surrounding the validity of the 2014 amendment. The Court observed that the Supreme Court had deliberately carved out a separate category for pre-retirement retirees under Para 50.7, stating clearly that they "would not be entitled to the benefit of this judgment."
"The employees who had retired prior to 1-9-2014 without exercising any option under Para 11(3) of the pre-amendment Scheme have already exited from the membership thereof. They would not be entitled to the benefit of this judgment."
The Court held that the petitioner’s retirement in 2012 placed him squarely within this excluded category. His application, though filed within the extended window, was not legally cognizable because the entitlement itself did not arise for him under the Scheme as interpreted by the Apex Court. The Court further noted that the speaking order dated 09.08.2024 was issued in compliance with the Supreme Court’s directions and was not arbitrary or mala fide.
The Court rejected the argument that lack of notice violated natural justice, observing that the petitioner’s claim was not based on a procedural defect but on a substantive legal bar. The EPFO was under no obligation to grant a benefit that the Supreme Court had expressly withheld for his category of employees.
What This Means For Similar Cases
This judgment establishes a clear boundary for pension claims under EPS-95. Practitioners must now distinguish between two categories of retirees: those who retired before 1 September 2014 without exercising an option (ineligible) and those who were in service on that date and failed to apply due to legal confusion (eligible under extended window). The ruling reinforces that the Supreme Court’s directions under Article 142 are not blanket relief but are precisely calibrated to specific factual matrices.
Future litigants must carefully assess their eligibility under Para 50.7 before filing applications. Any challenge to rejection orders must focus on procedural compliance with the speaking order, not on the substantive right to enhanced pension. This judgment also underscores that administrative decisions made in strict conformity with binding Supreme Court directions are not open to challenge on grounds of arbitrariness or violation of Article 14, unless there is a clear misapplication of the judgment.
The decision does not affect employees who retired after 1 September 2014 or those who had already exercised the option prior to the amendment. It is confined to pre-2014 retirees who never opted for higher wage pension.
