Key Takeaways
- • The Bombay High Court held that trust rules of exempted provident fund establishments cannot defeat the right to pension on higher wages under the Employees' Pension Scheme, 1995, as reported by SCC Online on October 28, 2026.
- • Justice Sandeep V. Marne set aside EPFO's rejection orders and directed EPFO to process and allow the petitioners' joint option applications for higher pension within 8 weeks.
- • The Court relied on the Supreme Court's decision in EPFO v. Sunil Kumar B., (2023) 12 SCC 701, which held that exempted and unexempted establishments stand on a par for pension on higher wages.
- • The Court declared that EPFO's reliance on its Circular dated 18 January 2025 was unsustainable, noting that several High Courts had already set that circular aside.
- • The Court held that records non-availability alone cannot justify rejection and that alternative verification, including a hearing for employees, must be adopted.
Summary
The Bombay High Court, in a batch of writ petitions decided on 19 October 2026 (Amit Gunvantrai Mehta v. EPFO, Writ Petition No. 13752 of 2026), held that employees of exempted establishments are entitled to the same higher pension benefits under the Employees' Pension Scheme, 1995 (EPS 1995) as employees of unexempted establishments. According to SCC Online, a Single Judge Bench of Sandeep V. Marne, J. ruled that provident fund trust rules cannot override statutory rights under Paras 11(3) and 11(4) of the scheme. The Court set aside EPFO's impugned orders and directed it to process the petitioners' joint option applications within eight weeks.
The petitioners, employees and retired employees of establishments that had enjoyed exemption under the EPF Act, 1952, had their joint option applications rejected by EPFO. EPFO had cited trust deeds or rules that restricted employer contributions to the statutory wage ceiling or did not provide for contributions on actual wages, along with missing records such as Forms 3A and 6A and challans. EPFO relied on its Circular dated 14 June 2023 and argued that some employers had not remitted contributions on all eligible salary components. The petitioners relied on Sunil Kumar B., arguing that trust rules operate only within the provident fund and have no bearing on pension entitlement.
The Court traced the statutory history of the EPS 1995, including ceiling increases and the 2014 amendments that introduced a joint option for higher wages. It relied on Sunil Kumar B. for the proposition that an employee cannot be debarred from exercising the option under Para 11(3) merely because of contributions on actual wages, and that a rigid cut-off date is unjustified. The Court also cited a series of High Court decisions, including D. Chandirasegar v. Union of India (Madras), Bharath Earth Movers Employees Assn. v. Union of India (Karnataka), Anuradha Roy v. Union of India (Calcutta), and Sunil Kumar Mehrotra v. CBT EPFO (Allahabad), all of which held that trust rules cannot defeat the statutory right. It rejected EPFO's argument that pending Supreme Court proceedings justified withholding relief, observing that the petitioners were retired and their claims could not remain pending indefinitely.
On record-related objections, the Court followed Kiran Rajaram Jadhav v. EPFO and Durga Srinivas Kallakuri v. EPFO, holding that where records are unavailable, alternative verification and an opportunity to be heard should be provided, so rejection solely for missing records is unsustainable. The Court also found no merit in EPFO's non-remittance argument, noting that contributions above the wage ceiling had been deducted and remitted on basic pay. The decision establishes that trust rules of exempted establishments operate only in respect of the provident fund unless the joint option applies in the same manner as for unexempted establishments under Section 17(1)(c) of the EPF Act and Para 39 of the EPS 1995.
The petitioners, employees and retired employees of establishments that had enjoyed exemption under the EPF Act, 1952, had their joint option applications rejected by EPFO. EPFO had cited trust deeds or rules that restricted employer contributions to the statutory wage ceiling or did not provide for contributions on actual wages, along with missing records such as Forms 3A and 6A and challans. EPFO relied on its Circular dated 14 June 2023 and argued that some employers had not remitted contributions on all eligible salary components. The petitioners relied on Sunil Kumar B., arguing that trust rules operate only within the provident fund and have no bearing on pension entitlement.
The Court traced the statutory history of the EPS 1995, including ceiling increases and the 2014 amendments that introduced a joint option for higher wages. It relied on Sunil Kumar B. for the proposition that an employee cannot be debarred from exercising the option under Para 11(3) merely because of contributions on actual wages, and that a rigid cut-off date is unjustified. The Court also cited a series of High Court decisions, including D. Chandirasegar v. Union of India (Madras), Bharath Earth Movers Employees Assn. v. Union of India (Karnataka), Anuradha Roy v. Union of India (Calcutta), and Sunil Kumar Mehrotra v. CBT EPFO (Allahabad), all of which held that trust rules cannot defeat the statutory right. It rejected EPFO's argument that pending Supreme Court proceedings justified withholding relief, observing that the petitioners were retired and their claims could not remain pending indefinitely.
On record-related objections, the Court followed Kiran Rajaram Jadhav v. EPFO and Durga Srinivas Kallakuri v. EPFO, holding that where records are unavailable, alternative verification and an opportunity to be heard should be provided, so rejection solely for missing records is unsustainable. The Court also found no merit in EPFO's non-remittance argument, noting that contributions above the wage ceiling had been deducted and remitted on basic pay. The decision establishes that trust rules of exempted establishments operate only in respect of the provident fund unless the joint option applies in the same manner as for unexempted establishments under Section 17(1)(c) of the EPF Act and Para 39 of the EPS 1995.
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