Monday, September 26, 2022

Supreme Court reserves verdict on pleas by EPFO against quashing of pension schemes by 3 High Courts

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The Supreme Court reserved it’s verdict on Thursday on a batch of petitions filed by the Employees Provident Fund Organisation, challenging the judgements of Kerala, Rajasthan and Delhi High Courts, quashing the Employee’s Pension (Amendment) Scheme, 2014. 
The Bench comprising Justice Uday Umesh Lalit, Justice Aniruddha Bose and Justice Sudhanshu Dhulia reserved judgement, after conducting hearing for six days.

The Kerala High Court, in its 2018 order,  had set aside the Employee’s Pension (Amendment) Scheme, 2014.
The High Court had also allowed paying pension in proportion to the salary above the threshold limit of Rs 15000 per month. 
It ruled that there can be no cut-off date for joining the pension scheme. The Supreme Court had dismissed the Special Leave Petition filed by the EPFO against the Kerala High Court judgement in 2019. 
The SLP was later recalled and the matter was re-opened for hearing on merits, after a review was sought by the EPFO and the Union Government.

A two-Judge bench of the Supreme Court had, in August 2021, referred the appeals to a three-Judge Bench to consider the following issues: 
1. Whether there would be a cut-off date under paragraph 11(3) of the Employees’ Pension Scheme 

2. Whether the decision in R.C. Gupta vs Regional Provident Fund Commissioner (2016) would be the governing principle on the basis of which all these matters must be disposed.
The EPFO had contended that the Pension Fund and the Provident Fund were distinct and the membership in the latter will not automatically translate into a membership of the former.
The organisation further claimed that Pension Scheme was intended for low-age employees and if the persons drawing salaries above the cut-off limit were allowed to draw pension as well, it will create huge imbalance within the fund. 

The 2014 amendments were brought in to address the issue of cross-subsidisation between the pension and provident funds, it added. 

The argument of financial burden raised by the EPFO was disputed by the pensioners, contending that the corpus fund remained intact and the payments have been made from the interest. The pensioners also disputed the EPFO  argument that there has to be a separate option exercised within the cut-off period to join the pension scheme and contended that the stand of the EPFO was contrary to the statute.

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