Beneficial Pension Scheme Cannot Be Defeated By Cut-Off Dates: Andhra Pradesh High Court Directs EPFO To Follow Sunil Kumar B. Guidelines On Higher Pension Claims

“Exercise of Option Under Para 26(6) Is a Necessary Precursor, Not a Bar”, Andhra Pradesh High Court delivered a significant ruling concerning the claim for higher pension under the Employees’ Pension Scheme, 1995 (EPS-1995). Justice Maheswara Rao Kuncheam disposed of the writ petition by directing the authorities to adhere strictly to the binding directions issued by the Supreme Court in The Employees Provident Fund Organisation v. Sunil Kumar B. (2022) 4 SCC 516.

The Court held that in light of the authoritative pronouncement of the Apex Court laying down comprehensive guidelines under Paragraph 44 of Sunil Kumar B., no independent adjudication was required. The matter was accordingly disposed of in terms of the Supreme Court’s directions.

The ruling reinforces the principle that beneficial social welfare schemes like the Employees’ Pension Scheme cannot be frustrated by technical interpretations or artificial cut-off dates.

Higher Pension On Actual Salary – Binding Nature of Supreme Court Guidelines

The writ petition was filed under Article 226 of the Constitution of India seeking a writ of mandamus to declare the inaction of the EPFO authorities in not considering the petitioner’s representation dated 02.12.2017 for refixation of pension on actual salary exceeding the statutory ceiling of Rs.5,000/- and later Rs.6,500/-.

The petitioner alleged violation of Articles 14, 19 and 21 of the Constitution of India and non-compliance with Paragraph 11(3) of the Employees’ Pension Scheme, 1995.

The High Court, while relying on the Supreme Court’s decisions in R.C. Gupta v. Regional Provident Fund Commissioner (2018) 14 SCC 809 and Sunil Kumar B. (2022) 4 SCC 516, held that the issue now stands governed by the directions issued by the Apex Court under Article 142 of the Constitution.

The petitioner, Aluri Nageswara Rao, was appointed as Assistant Depot Clerk in APSRTC on 20.07.1991 and retired on 30.06.2012. At the time of retirement, his basic salary was Rs.16,400/- per month.

He was a member of the Employees’ Pension Scheme, 1995, administered by the EPFO. According to him:

“12% of the total salary was deducted as employees’ contribution and 12% paid by the employer was remitted to the EPFO. However, the EPFO restricted the pensionable contribution to 8.33% of Rs.6,500/- instead of actual salary, retaining the excess contribution in the provident fund account.”

The petitioner contended that he had exercised option under Paragraph 26(6) and was entitled to pension refixation under Paragraph 11(3) read with Rule 10(2) and Rule 12(4) of the Scheme. He also claimed entitlement to two years’ weightage for completing 20 years of service.

Despite submitting a representation dated 02.12.2017 seeking refixation and arrears, no action was taken, prompting the writ petition.

Option Under Para 11(3), Impact of 2014 Amendment and Applicability of Supreme Court Rulings

The central legal issues before the Court were:

“Whether an employee who contributed on actual salary exceeding the ceiling limit is entitled to refixation of pension on actual salary?”

“Whether exercise of option under Paragraph 26(6) of the Provident Fund Scheme bars the employee from exercising option under Paragraph 11(3) of the Pension Scheme?”

“Whether employees retired prior to 01.09.2014 are entitled to benefit of higher pension in light of the 2014 amendment and Supreme Court rulings?”

The petitioner relied heavily on R.C. Gupta, wherein the Supreme Court had clarified:

“A beneficial Scheme, in our considered view, ought not to be allowed to be defeated by reference to a cut-off date.”

The Apex Court had further held: “Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of option under Clause 11(3)… Exercise of such option would not foreclose the exercise of a further option under Clause 11(3) of the Pension Scheme.”

The EPFO, on the other hand, placed reliance on the Constitution Bench judgment in Sunil Kumar B., particularly Paragraph 44, which laid down detailed directions regarding different categories of employees and the validity of Notification No. G.S.R. 609(E) dated 22.08.2014.

Application of Sunil Kumar B.

Justice Maheswara Rao Kuncheam noted that the Supreme Court in Sunil Kumar B. had comprehensively addressed the controversy surrounding higher pension, validity of the 2014 amendment, and rights of employees under pre- and post-amendment provisions.

The High Court extracted Paragraph 44 of the Supreme Court judgment, which inter alia held:

“The provisions contained in the notification No. G.S.R. 609(E) dated 22nd August 2014 are legal and valid.”

Further, the Apex Court clarified:

“The employees who had retired prior to 1st September 2014 without exercising any option under paragraph 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.”

At the same time, the Supreme Court extended opportunity to eligible employees to exercise option under Paragraph 11(4), invoking its power under Article 142.

The High Court observed that in view of these binding directions:

“The Hon'ble Apex Court… after detailed discussion, has issued guidelines to be followed by the EPFO regarding the grant of pension as per their actual salary.”

Since similar matters had already been disposed of following Sunil Kumar B., the Court held that the present writ petition also deserved to be disposed of in the same terms.

The writ petition was disposed of by directing adherence to the directions contained in Paragraph 44 of The Employees Provident Fund Organisation v. Sunil Kumar B.

No independent adjudication on merits was undertaken.

The Court ordered: “Following the directions issued in paragraph No.44 of the judgment of the Hon’ble Apex Court in The Employees Provident Fund Organisation and Ors. Vs. Sunil Kumar B. and Ors., the present writ petition is disposed of.”

There was no order as to costs, and all pending miscellaneous petitions stood closed.

The judgment reaffirms that High Courts, while exercising jurisdiction under Article 226, must align with authoritative pronouncements of the Supreme Court, especially where comprehensive guidelines have been issued under Article 142 concerning social welfare legislation.

For retirees and serving employees seeking higher pension on actual salary, the roadmap now squarely rests on the framework structured in Sunil Kumar B..

Date of Decision: 12.02.2026