Observations/interpretation regarding the directions given in the Judgement dt. 04.11.

2022
11.11.2022

Dear friends,

This is in continuation of my 29-page post dt. 10.11.2022 shared [ Link: https://bit.ly/3ULwzSg ] hurriedly
after simply going through the judgement dt. 04.11.2022. I had also shared the same with some of the Senior
Advocates/AORs who had pleaded our cases in the Supreme Court.

In reply to my post, I got following reply (being re-produced) direct from one of the Ld. Legal Lumiere & Senior
Advocates (name intentionally not being mentioned here for “obvious reasons” without his concurrence) who had
argued our cases forcefully and maximum time had been given to him for the purpose by the Bench hearing the
cases in the Hon’ble Supreme Court:

“Please ensure no modifications or reviews are filed. If rejected, all of you are finished. Best to wait
for EPFO to reject on a tenuous reading and then challenge that”

After careful reading the above pro-bono expert advice, my inner conscience forced me to re-look the directions
critically (word by word) as contained in Para 44 (i) to 44(x) afresh with an open/cool mind at a stretch after
switching off the mobile and have now re-interpreted the directions as under:

Since I am NOT a legal man, my interpretation of the directions may or may not be correct and as such you
must consult some legal authorities before reaching any conclusion for the next action, if proposed or not
proposed to be taken by the affected beneficiaries.

Brief Background:

Pre-01.09.2014 retirees from exempted as well as unexempted estts. couldn’t exercise the joint option prior to
01.09.2014 due to an arbitrary cut-off date (01.12.2004) adopted by EPFO for exercising option under Para
11(3) which had been set-aside by the Kerala High Court & HP High Court and upheld by the Supreme Court on
31.03.2016, 12.07.2016 and 04.10.2016 by dismissing 8 SLPs filed by EPFO and allowing 2 SLPs filed by RC Gupta
& another. In one of these SLPs, all the petitioners were the retired employees. Pension of all the petitioners
in r/o all these 8 cases tagged (against the bunch matters decided by the Kerala High Court) & decided as above
was also revised and such number goes to several thousands. The judgement in RC Gupta case was
implemented vide a circular dt. 23.03.2017 issued by EPFO after due approvals from CBT (19.12.2016) &
MoL&E (16.03.2017). Accordingly, in compliance of circular dt. 23.03.2017, upon exercising option under Para
11(3) in 2017/2018, pension of 24,672 retirees (including RC Gupta & other petitioners) had also been revised.
Although all the retirees/employees were covered in circular dt. 23.03.2017 but vide another circular dt.
31.05.2017 without any approval from CBT & MoL&E, Pension Division of EPFO restricted the benefit of Higher
Pension only for pensioners from unexempted estt., which prompted litigation by the pensioners/employees of
exempted estts. RC Gupta judgement has been upheld repeatedly in the present judgement too and EPFO
has been directed to implement the same within 8 weeks (See sub-para 44.ix). It has also been directed that
the employees from exempted as well as unexempted estts are on equal footing for EPS’95. Pre-01.09.2014
retirees are to be benefitted by RC Gupta Judgment dt. 04.10.2016 whereas the Judgement dt. 04.11.2022 is
meant for post-01.09.2014 retirees & serving employees as they were adversely affected by GSR 609.

Para 41 (Extracts) “………………………………….. our opinion is that the eligibility for enhancement cannot
be restricted to those employees only who had exercised the option to remain in the scheme once their

INTERPRETATION OF SC JUDGEMENT BY PARVEEN KOHLI 9810306699 1

 salary went beyond the capping of Rs. 6500/- per month. As we have already discussed, in case of R.C.
Gupta (supra), it has been specifically held that there was no cut-off date in proviso to paragraph
11(3) as it stood before the 2014 amendment. In our opinion, the interpretation given to the proviso
to paragraph 11(3) prior to 2014 amendment does not require any reconsideration. We agree with
the reasoning of the two-judge Bench of this Court on this point, as expressed in the said judgment. As
there was no cut-off date to be contemplated prior to the 2014 amendment, limiting the entitlement
of enhanced pension coverage to those employees only who had already exercised an option under
Clause 11(3) of the unamended scheme would be contrary to the ratio of the decision of this Court
held in the case of R.C. Gupta (supra). We are not holding that no option was required to be exercised
as per proviso to paragraph 11(3) of the scheme, as it stood prior to 2014 amendment. As held in the
case of R.C. Gupta (supra), there was no time-limit for exercising such option.”
Post-01.09.2014 retirees/employees from exempted & unexempted establishments couldn’t exercise option
under Para 11(4) due to stipulation of cut-off date (01.09.2015) i.e., 6 months + 6 months after 01.09.2014 as
contained in the GSR 609 dt 22.08.2014 which prompted the affected beneficiaries to approach High Courts/
Supreme Court. This cut-off date has been set-aside by the Supreme Court in the present judgement dt.
04.11.2022 and the beneficiaries have been allowed to exercise option under Para 11(3) as well as 11(4) within
a period of 4 months from 04.11.2022 making them eligible for higher pension on actual salary after returning/
depositing the differential amount as per the provisions contained in RC Gupta case and the directions contained
in the present judgement. Only those persons will be eligible who had been contributing towards PF on their
actual salary. It has also been directed that the employees from exempted as well as unexempted estts are on
equal footing for EPS’95. Post-01.09.2014 retirees/serving employees will be benefitted by RC Gupta
Judgment dt. 04.10.2016 and also the directions contained in Judgement dt. 04.11.2022.

Subject to legal interpretation by Learned Advocates/Sr. Advocates/Legal Lumiere/Legal experts, I am now

of the considered view that the judgement dt. 04.11.2022 is very good and it has granted due relief to all the
affected pensioners/ employees i.e., the pre-01.09.2014 retirees, post-01.09.2014 retirees, serving
employees i.e., all employees/ retirees belonging to exempted as well as unexempted establishments subject
to their fulfilling eligibility after exercising the related option(s) under Para 11(3) &/or Para 11(4) and
returning/ transferring the differential amount as per RC Gupta judgement dt. 04.10.2016 (implemented vide
circular dt. 23.03.2017).

Let us hope, EPFO issues a detailed circular after due deliberations/approvals in compliance of judgement dt.
04.11.2022 in clear terms without any ifs & buts at the earliest.

Para 44.
We accordingly hold and direct: -

Sub
Directions given in the Judgement dt. 04.11.2022 My interpretation in brief
para
(i) The provisions contained in the notification no. G.S.R. Relates to serving employees
609(E) dated 22nd August 2014 are legal and valid. and post-01.09.2014 retirees
So far as present members of the fund are concerned, GSR affecting post-
we have read down certain provisions of the scheme as 01.09.2014 retirees and
applicable in their cases and we shall give our findings

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 Sub
Directions given in the Judgement dt. 04.11.2022 My interpretation in brief
para
and directions on these provisions in the subsequent present employees, has been
subparagraphs. held legal & valid

Certain directions have been

given in subsequent paras for
present members

(Present members in view of

restrictive/disputed GSR 609
dt. 22.08.2014 seems to be
including post-01.09.2014
retirees too)
(ii) Amendment to the pension scheme brought about by Relates to Post 01.09.2014
the notification no. G.S.R. 609(E) dated 22nd August retirees and serving
2014 shall apply to the employees of the exempted employees of Exempted
establishments in the same manner as the employees of Establishments
the regular establishments. No distinction between
employees of exempted &
Transfer of funds from the exempted establishments unexempted establishments.
shall be in the manner as we have already directed. Transfer of differential
amount from exempted
establishments to EPFO in EPS
permitted
(iii) The employees who had exercised option under the Relates to Post 01.09.2014
proviso to paragraph 11(3) of the 1995 scheme and retirees & serving employees
continued to be in service as on 1st September 2014, will who joined the EPS prior to
be guided by the amended provisions of paragraph 11(4) 01.09.2014 and had
of the pension scheme. exercised option under Para
11(3)
Option under Para 11(4) can
be exercised now
(iv) The members of the scheme, who did not exercise Relates to Post 01.09.2014
option, as contemplated in the proviso to paragraph retirees & serving employees
11(3) of the pension scheme (as it was before the 2014 who joined the EPS prior to
Amendment) would be entitled to exercise option under 01.09.2014 and had NOT
paragraph 11(4) of the post amendment scheme. Their exercised option under Para
right to exercise option before 1st September 2014 11(3)
stands crystalised in the judgment of this Court in the Option under Para 11(3) &
case of R.C. Gupta (supra). The scheme as it stood before Para 11(4) can be exercised
1st September 2014 did not provide for any cutoff date now within 4 months from
and thus those members shall be entitled to exercise the date of judgement
option in terms of paragraph11(4) of the scheme, as it

INTERPRETATION OF SC JUDGEMENT BY PARVEEN KOHLI 9810306699 3

 Sub
Directions given in the Judgement dt. 04.11.2022 My interpretation in brief
para
stands at present. Their exercise of option shall be in the
nature of joint options covering pre amended paragraph
11(3) as also the amended paragraph 11(4) of the
pension scheme.

There was uncertainty as regards validity of the post

amendment scheme, which was quashed by the
aforesaid judgments of the three High Courts. Thus, all
the employees who did not exercise option but were
entitled to do so but could not due to the interpretation
on cutoff date by the authorities, ought to be given a
further chance to exercise their option. Time to exercise
option under paragraph 11(4) of the scheme, under
these circumstances, shall stand extended by a further
period of four months. We are giving this direction in
exercise of our jurisdiction under Article 142 of the
Constitution of India.

Rest of the requirements as per the amended provision

shall be complied with.
(v) The employees who had retired prior to 1st September Relates to Pre-01.09.2014
2014 without exercising any option under paragraph Retirees of Exempted &
11(3) of the pre amendment scheme have already exited Unexempted estts. who had
from the membership thereof. They would not be NOT exercised option under
entitled to the benefit of this judgment. Para 11(3)
Since they have exited from
membership, they would not
be entitled to the benefit of
this judgment as the issues
under dispute in this
litigation were for provisions
contained in GSR 609 and
discriminatory treatment
with the employees/retirees
of exempted estts.
Remedy for the Pre-
01.09.2014 retirees have
been given in the sub-para (vi)
whereby upon exercising
option under Para 11(3), the
eligible beneficiaries will be

INTERPRETATION OF SC JUDGEMENT BY PARVEEN KOHLI 9810306699 4

 Sub
Directions given in the Judgement dt. 04.11.2022 My interpretation in brief
para
covered by the related
provisions

(vi) The employees who have retired before 1st September Relates to Pre-01.09.2014
2014 upon exercising option under paragraph 11(3) of Retirees of Exempted &
the 1995 scheme shall be covered by the provisions of Unexempted estts
the paragraph 11(3) of the pension scheme as it stood
prior to the amendment of 2014. These retirees will be eligible
upon exercising option under
Para 11(3) as allowed in RC
Gupta judgement duly
implemented by EPFO
whereby upon exercising
option under deleted Para
11(3), pension of 24,672
pensioners had been revised
in accordance with EPFO’s
circular dt 23.03.2017
(vii) The requirement of the members to contribute at the Relates to Post 01.09.2014
rate of 1.16 per cent of their salary to the extent suchretirees and serving
salary exceeds Rs.15000/- per month as an additional employees
contribution under the amended scheme is held to be Required to contribute
ultra vires the provisions of the 1952 Act. But for the amount @1.16% on the
reasons already explained above, we suspend operation wages exceeding Rs. 15,000
of this part of our order for a period of six months. Wepm as a stop gap measure for
do so to enable the authorities to make adjustments in 6 months and by that time
the scheme so that the additional contribution can be Government will take a
generated from some other legitimate source within the suitable decision for revenue
scope of the Act, which could include enhancing the rategeneration or for the
of contribution of the employers. We are not speculatingamendment of the Act.
on what steps the authorities will take as it would be for
the legislature or the framers of the scheme to make
necessary amendment. For the aforesaid period of six
months or till such time any amendment is made,
whichever is earlier, the employees’ contribution shall
be as stop gap measure. The said sum shall be adjustable
on the basis of alteration to the scheme that may be
made.
(viii) We do not find any flaw in altering the basis for Relates to Post 01.09.2014
computation of pensionable salary. retirees and serving
employees

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 Sub
Directions given in the Judgement dt. 04.11.2022 My interpretation in brief
para
(ix) We agree with the view taken by the Division Bench in Relates to Pre-01.09.2014,
the case of R.C. Gupta (supra) so far as interpretation of post-01.09.2014 retirees
the proviso to paragraph 11(3) (pre amendment) from exempted as well as
pension scheme is concerned. The fund authorities shall unexempted estts.
implement the directives contained in the said EPFO has been directed to
judgment within a period of eight weeks, subject to our implement RC Gupta
directions contained earlier in this paragraph. Judgement within 8 weeks
subject to Courts directions
contained in earlier
paragraphs

(x) The Contempt Petition (C) Nos.1917-1918 of 2018 and Relates to Post 01.09.2014
Contempt Petition (C) Nos. 619-620 of 2019 in Civil retirees and serving
Appeal Nos. 10013-10014 of 2016 are disposed of in the employees
above terms.

In view of above, it can be safely interpreted, subject to legal interpretation by Learned Advocates/ Sr.
Advocates/ Legal Lumiere/ Legal experts that the Court has basically directed EPFO to implement RC Gupta
Judgement for Pre-01.09.2014 as well as post-01.09.2014 retirees and also for serving employees belonging to
exempted as well as unexempted establishments by now obtaining joint options under Para 11(3) & Para 11(4)
as applicable as there was no cut-off date for pre-01.09.2014 retirees as well as the post-01.09.2014 retirees
and serving employees have also been permitted to do so (within 4 months) in r/o option under Para 11(4) by
exercising Court’s jurisdiction under Article 142 of the Constitution of India.

Let us hope, wisdom prevails in the concerned authorities of EPFO and they may implement circular dt.
23.03.2017 in r/o all pre-01.09.2014 retirees (exempted as well as unexempted) and issue a circular for the grant
of same benefit to Post 01.09.2014 retirees & serving employees belonging to exempted & unexempted estts.
without any loss of further time keeping in view the old age of the pensioners.

Parveen Kohli
9810306699

INTERPRETATION OF SC JUDGEMENT BY PARVEEN KOHLI 9810306699 6