Amit Gunvantrai Mehta vs The Employees’ Provident Fund Organisation (EPFO)

The common issue of law which is involved in these Petitions is whether private trust rules of a provident fund trust of an exempted establishment under the Employees’ Provided Fund and Miscellaneous Provisions Act, 1952 (EPF Act) can govern the contribution to the Employees’ Pension Fund of employers or restrict the exercise of Joint Option under paragraph 11(3) /11 (4) of Employees Pension Scheme,1995 (EPS, 1995). To paraphrase whether Respondent-Employees Provident Fund Organisation (EPFO) can reject the application for Joint Option for pension on higher wages on the ground that the applicable Trust Rules of the establishment did not provide for contribution to the pension fund or where the applicable Trust Rules restrict employer’s pension side contribution to a particular limit.

Writ Petition Nos. 13752 of 2026 and 13955 of 2026 are filed by two employees of Abbott India Limited which was formerly known as ‘The Boots Company (India) Limited’, thereafter as ‘Boots Pharmaceuticals Limited’ and thereafter as ‘Knoll Pharmaceuticals Limited’. In the year 2002, name of the employer was changed to Abbott India Limited. The Boots Company India Limited was an exempted establishment until the year 2005. The Petitioners are members of the Employees’ Pension Scheme, 1995. Pursuant to the judgment of the Apex Court in Employees Provident Fund Organisation& Ors. Vs. Sunil Kumar B. & Ors.^{11.2022 INSC 1171} the Petitioners applied for exercise of joint option for pension on higher wages. The Applications were rejected by orders dated 8 April 2025 on the ground of non-submission of certain records, forms challans, etc. The Petitioners approached this Court by filing Writ Petitions and by order dated 18 April 2026, this Court remanded the proceedings for fresh consideration by examining all the available material. The Petitioners’ employer resubmitted all the supporting documents of the Petitioners to the Respondent. The Respondent also sought various documents from the employer including copy of the Trust Rules/Deeds during the exemption period. The employer by its reply dated 22 June 2026 clarified inter-alia that there was only change in name from Knoll Pharmaceuticals Ltd. to Abbott India Limited, that the employers were exempted under paragraph 27 of the Employees’ Provident Fund Scheme, 1952, that exemption was surrendered w.e.f. 1 April 2005 and that past accumulations alongwith statement thereof were submitted to the Respondent. It was further communicated that the Provident Fund Trust was no longer in existence. Thereafter hearing was conducted, during which the Respondent once again enquired of Trust Rules. By letter dated 17 July 2026, the employer once again informed the Respondent that Trust Rules are more than 20 years old and will not readily available. By order dated 11 September 2026 the Respondent has rejected the application for pension on higher wages submitted by the Petitioners. It is held that though Petitioners are not held ineligible on the ground stated in paragraph 44(v) of the judgment in Sunil Kumar B. (supra), they are not entitled to pension on higher wages on account of express limits put on employer’s pension side contribution as per Trust Deed/Rules.

Writ Petition No.12869 of 2026 is filed by 39 retired employees of Brihanmumbai Electric Supply & Transport (BEST) Undertaking challenging order dated 29 January 2025 rejecting prayer of the Petitioners for exercise of option under paragraph 11(3) /11(4) of the EPF Scheme, 1995 on the ground that the Trust Rules of the establishment restricted EPF contribution on wage ceiling.

Writ Petition No.13962 of 2026 is filed by a retired employee of Raymond Steel Limited, who was working with it during the period from 1994 to 2000. The establishment where the Petitioner worked has been a part of restructuring and at the time of Petitioner’s retirement on 23 October 2022, the same was known as Thyssenkrupp Electrical Steel India Pvt. Ltd., which has been later taken over by JSW JFE Electrial Steel Private Limited w.e.f. 30 January 2025. The Petitioner was member of the EPS, 1995. The Petitioner is presently drawing pension computed on the ceiling wages vide PPO dated 10 February 2023. During initial period of his service from 1 February 1995 to 31 March 2000, his provident fund contributions were made to the provident fund trust of Raymond Limited at Thane, which was an exempted establishment under Section 17 of the EPF Act from the operation of the Employees Provident Funds Scheme, 1952. After judgment of the Apex Court in Sunil Kumar B. (supra) the Petitioner exercised joint option for payment of pension on higher wages, which was approved by the employer. However, by impugned order dated 11 August 2025 the Assistant Provident Fund Commissioner, RO, Nashik has rejected Petitioner’s application on the ground that the extant Trust Rules of Raymond Limited Employees Provident Fund Trust restrict the employer’s contribution to the pension fund upto statutory wage ceiling.

Writ Petition No.12957 of 2026 is filed by the two employees of Tata Communications Ltd. Their applications for pension under paragraph 11(3) /11(4) of the EPS, 1995 for availing pension on higher wages is rejected by the Assistant Provident Fund Commissioner, on the ground that the establishment had restricted the pension contribution on wage ceiling.

Writ Petition No.12873 of 2026 is filed by the two Petitioners, who were initially employed with Tata Communications Ltd. and thereafter were employed by Tata Communication Transformation Service Ltd. Their applications for payment of pension on higher wages have been rejected inter-alia on the ground that the Trust Rules of M/s. Tata Communications Ltd. did not make Petitioners eligible for pension on higher wages. Additional grounds of non-production of 6A form, Challans, 3A form, etc. are also recorded in the impugned order dated 31 March 2025.

Since the central issue involved in all the six Petitions is with regard to entitlement of the Petitioners to draw pension on higher wages despite existence of ceiling limit for contributions under the Trust Deed/Rules, the same are taken up for analogous hearing and decision.

I have heard Mr. Surana, the learned counsel appearing for the Petitioners, who submits that the issue is conclusively answered by the judgment of the Apex Court in Sunil Kumar B. (supra), which holds that an exempted and unexempted establishments stand on par. He submits that the Trust Rules operate only in the field of provident fund and that the same has no bearing on employee’s entitlement for pension on higher wages. He further submits that the issue is no longer res integra and covered by the judgment of the Madras High Court in D. Chandirasegar and Ors. Vs. Union of India and Ors. ^{22.WP(MD) No.29573 of 2024 decided on 2 September 2025} in which it is held that Trust Rules cannot be cited to deny benefits under the EPS. That the Karnataka High Court in Bharath Earth Movers & Ors. Vs. Union of India and Ors. ^{33.WP 19985 of 2025 decided on 30 April 2026} has also held that it is impermissible to reject application for pension on higher wages on the ground that applicable Trust Rules of the establishment did not provide for contribution to the pension fund. He also relies on judgments of Calcutta High Court in Anuradha Roy & Ors. Vs. The Union of India and Ors.^{44.WPA No.15459 of 2025 decided on 14 November 2025.} and of Allahabad High Court in Sunil Kumar Mehrotra and 24 others Vs. Central Board of Trustees, EPFO ^{55.Writ A No.504 of 2026 decided on 8 May 2026.}. He submits that Trust Rules cannot apply once exemption is ceased.

So far as the ground of rejection of non-production of relevant forms/records is concerned, he relies on orders passed by this Court in Kiran Rajaram Jadhav Vs. The Employees Provident Fund Organisation (EPFO) THR the ASST PF Commissioner and Anr.^{66.Writ Petition No.632 of 2026 decided on 26 March 2026.} and Durga Srinivas Kallakuri Vs. The Employees Provident Fund Organisation (EPFO) THR the ASST PF Commissioner. He accordingly prays for setting aside the impugned orders.

Per contra, Ms. Gandhi, the learned counsel appearing for the Respondent-EPFO submits that the Applications of the Petitioners are rightly rejected by the Competent Authority after duly applying its mind to the entire material on record. She submits that in many cases, Petitioners/employers have failed to produce either the rules of the Trust or the relevant form /records for the purpose of deciding the entitlements of the Petitioners.

Ms. Gandhi submits that the issue involved in Writ Petition No.12957 of 2026 (Purushottam Kulkarni) is entirely different. She submits that in that case, the employer- Tata Communication Ltd has not deposited PF contribution on all eligible heads of salary. She relies on Gazette Notification dated 3 May 2023 in support of her contention that in respect of eligible higher pension optees, their employer needs to contribute 9.49% of the basic wages, dearness allowance and retaining allowance of each member to the pension fund w.e.f. 1 September 2014. She also relies on Circular dated 14 June 2023 issued by Head Office of the Respondent in support of her contention that the regional offices of the EPFO need to verify whether employer’s share towards PF contribution is remitted on employee’s pay exceeding the prevalent statutory wage ceiling from the day the pay exceeded the wage ceiling or 16 November 1995, whichever is later till the date of retirement.

In respect of other Petitions, Ms. Gandhi submits that the Division Bench judgment of Madras High Court in Central Provident Fund Commissioner and 2 ors. Vs. M. Tamil Nambi ^{77.WA.(MD)Nos.3129,decided on 9 July 2026WA.(MD)Nos.3129,} is challenged by the EPFO in SLP (C) No.31613 of 2026 and by order dated 8 September 2026, contempt proceedings have been stayed. She further submits that judgment of Single Judge of this Court in Anuradha Roy (supra) has been stayed by the Division Bench of Calcutta High Court by orders dated 13 February 2026 and 9 March 2026. She accordingly prays for dismissal of the Petitions.

Rival contentions urged on behalf of the parties now fall for my consideration.

The Employees’ Pension Scheme came into effect in the year 1995 pursuant to an amendment and inclusion under Section 6A of the EPF Act. Rule 11 of the EPS originally provide for a ceiling limit of Rs.5,000/-for contributions to the pension fund. Thereafter by way of statutory amendments the limit was increased to Rs.6,500/- and thereafter to Rs.15,000/-. In the year 2014 an option/provision was introduced under Rule 11 of the Pension Scheme, which allows employers and employees to exercise joint option to avail pension on their higher wages /actual wages by making appropriate contributions as specified. The amendment was later applied with retrospective effect. The same was challenged before various High Courts and the issue got finally settled by the judgment of the Apex Court in Sunil Kumar B. (supra). The salient features of judgment in Sunil Kumar B. are that the Apex Court has upheld the validity of the amendments made to the Employees' Pension Scheme vide Notification dated August 22, 2014 (effective September 1, 2014), including the enhancement of the maximum pensionable salary ceiling to 15,000/- per month. It is further held that an employee who contributed to the Provident Fund on actual wages exceeding the statutory ceiling (under Paragraph 26(6) of the EPF Scheme) cannot be debarred from exercising the option to contribute on actual higher wages toward the pension fund under Paragraph 11(3) of the EPS. It is further held that the proviso to Paragraph 11(3) (as it stood prior to the 2014 amendment) did not stipulate any cut-off date. Insisting on a rigid cut-off date to reject joint options for higher pension is held to be unjustified, applying the principles established in R.C. Gupta v. Regional Provident Fund Commissioner.^{88.(2018) 14 SCC 809} It is further held that the requirement under the 2014 amendment for employees who opt to contribute on salaries exceeding Rs. 15,000 to make an additional contribution of 1.16% on salary exceeding the ceiling is ultra vires the parent Act. Employees who have retired prior to September 1, 2014 who had exercised the option or were refused the option improperly were granted a fresh window to validate joint options.

In the present cases, it appears that a common ground for rejection of joint options made by the Petitioners is non-availment of Trust Rules of exempted establishment at par with the pension scheme. The Respondents have relied upon EPFO Head Office Circular dated 18 January 2025, paragraph 2 whereof directed that the eligibility for pension on higher wages should be determined on the basis of extant Trust Rules of the exempted establishments. The Circular further suggested that in case the Trust Rules are amended post the decision of the Apex Court in Sunil Kumar B. (supra) application of members of such Trust may not be considered. Paragraph 2 of the Circular dated 18 January 2025 reads thus:-

The issue involved in the Petitions appear to be no more res integra. In D. Chandirasegar (supra) the Madras High Court has decided a batch of Petitions filed by 86 former employees of B.H.E.L. challenging order of the EPFO by which joint option request submitted by employees to avail benefits of higher pension were rejected primarily relying on Trust Rules applicable to the exempted organizations of B.H.E.L. The Petitioners had also challenged EPFO Circular dated 18 January 2025 not permitting exempted establishment to amend the Trust Rules with retrospective effect so as to bring the same in consonance with the judgment of the Apex Court in Sunil Kumar B. (supra). Madras High Court has held that it was impermissible for EPFO to rely on Trust Rules providing for ceiling for contribution of employer. It is further held that Trust Rules are applicable only to PF scheme and that when the statute provides for beneficial scheme of receiving higher pension based on remittance of actual wages, the same cannot be taken away from the employees unless there is statutory bar from claiming the same. It is further held that even if there is prohibition in the Trust Rules for making higher contribution (based on actual wages) to the Pension Scheme, the same could only be construed to be a contract in violation of statutory provision which would be void in the eyes of law. Madras High Court accordingly set aside the Circular dated 18 January 2025 treating the same as in violation of order passed by the Apex Court. The Madras High Court held in paragraphs 30, 31, 33, 34, 35, 36, 37 and 42 as under:

In Bharath Earth Movers Employees Association (supra) the issue before the learned Single Judge of the Karnataka High Court was whether EPFO can deny exercise of joint option to contribute to actual fund on the premise that Trust Rules do not enable contribution of pension fund on higher wages. Answering the issue, the Karnataka High Court held in paragraphs 52, 53, 54, 55 and 61.4 of the judgment as under:

Again in Anuradha Roy (supra), the learned Single Judge of the Calcutta High Court has decided the same issue. The Calcutta High Court has held that internal provident fund trust rules of exempted establishments cannot override or restrict the statutory provisions of the EPF Act and the EPS, 1995. It is held in paragraphs 189(ii) to (v) and 198 as under:

Ms. Gandhi has placed on record Order of Division Bench of Calcutta High Court in EPFO Vs. Pradip Kumar Ghosh & Ors.^{99.M.A.T. 128 of 2026 dated 13 February 2026} submitting that the implementation of judgement of the Single Judge in Anuradha Roy is stayed by the Division Bench.

Allahabad High Court in Sunil Kumar Mehrotra (supra) has held that the internal rules of the PF trust cannot curtail beneficial statutory provisions and has reaffirmed eligibility for higher pensions based on actual salary contributions. It is held in paragraphs 25 to 29 of the judgment as under:-

Thus, various High Courts across the country have consistently held that it is impermissible to deny the benefit of exercising joint option to contribute to the pension fund in actual wages by citing the Trust Rules. In the present case, the EPFO has rejected applications of Petitioners by citing the Trust Rules and by relying on the Circular dated 18 January 2025, which is already set aside by the various High Courts as observed above. In my view, therefore impugned orders passed by the EPFO are clearly unsustainable and liable to be set aside.

Ms. Gandhi, submits that judgment of Division Bench of Madras High Court in Central Provident Fund Commissioner and 2 ors. Vs. M. Tamil Nambi (supra) is challenged by the EPFO in SLP (C) No.31613 of 2026 and by order dated 8 September 2026, contempt proceedings have been stayed. Mr. Surana submits that what is challenged in the pending SLP is not judgment dated 2 September 2025 and EPFO has challenged order passed in Contempt Petition filed by the employees for non-implementation of judgment dated 2 September 2025. Be that as it may. Pendency of SLP cannot be a ground for keeping the present Petitions pending indefinitely. It must be borne in mind that all the Petitioners before this Court are retired employees and therefore, it would not otherwise be appropriate to keep their Petitions pending when several other High Courts across the country have already decided the issue involved in the Petitions.

Ms. Gandhi submits that the applications of the Petitioners in Writ Petition No.12873 of 2026 (Narayana Billa and Anr.) and Writ Petition No.12957 of 2026 (Purushottam Jagannath Kulkarni and Anr.) are not rejected only on account of ceiling limit prescribed in Trust Rules. She submits that even basic documents are not supplied by Petitioners’ employers in those cases. However, this Court in Kiran Rajaram Jadhav and Durga Srinivas Kallakuri (supra) has held that if employer fails to produce record or where records are otherwise not available, alternative means of verification, including giving an opportunity to the employees to be heard should be adopted. In my view, therefore, even this ground of rejection is clearly unsustainable.

According to Ms. Gandhi, in Writ Petition No.12957 of 2026 (Purushottam Kulkarni & anr) the employer- Tata Communication Ltd has not deposited PF contribution on all eligible heads of salary. She has relied on Gazette Notification dated 3 May 2023 in support of her contention that in respect of eligible higher pension optees, their employer needs to contribute 9.49% of the basic wages, dearness allowance and retaining allowance of each member to the pension fund w.e.f. 1 September 2014. However, even in the case of those Petitioners, their employee deducted PF contributions on the basic pay, which were higher than the statutory ceiling wage. Therefore, non-deduction of PF contributions on other elements of pay such as DA, residual special allowance, other allowances, etc. does not make any difference. The fact of the matter is that PF contributions exceeding the ceiling wage limit is made by the employer of these Petitioners as well. Ms. Gandhi has relied on Circular dated 14 June 2023 issued by Head Office of the Respondent in support of her contention that it needs to be verified whether employer’s share towards PF contribution is remitted on employee’s pay exceeding the prevalent statutory wage ceiling from the day the pay exceeded the wage ceiling or 16 November 1995, whichever is later till the date of retirement. However beyond quoting the Circular, she has not demonstrated as to how the said Circular comes in the way of these Petitioners in claiming the pension on higher wages. In my view there is no reason to draw any distinction in Writ Petition No.12957 of 2026 (Purushottam Kulkarni & anr) as the central reason for rejection is that the Trust Rules did not permit PF contribution on actual wages.

In my view therefore all the Petitions deserve to be allowed. As consistently held by various High Courts, the rules/deeds of provident fund trusts of an exempted establishment operate only in respect of the provident fund, unless an exemption under Section 17(1)(c) of the EPF Act read with paragraph 39 of the EPS, 1995, including joint option, applies to the employees in same manner as the employees of unexempted establishments. Therefore, a joint option cannot be rejected on the ground that the Trust Rules either envisage a cap /ceiling or employer’s contribution or that Trust Rules did not provide for joint option on higher pension on the ground that employer did not remit pension contribution on the wages exceeding the ceiling.

In view of the above discussion, in my view the impugned orders passed by the EPFO in these Petitions are clearly unsustainable and liable to be set aside.

The Petitions accordingly succeed and I proceed to pass the following order:-

With the above directions, Petitions are allowed and disposed of. There shall be no order as to costs.