SC holds revisions as legal, reads down certain rules

NEW DELHI: The Supreme Court on Friday declared as legal and valid the provisions contained in the Employees’ Pension Amendment (Scheme), 2014, which capped the maximum pensionable salary (basic pay plus dearness allowance) at ₹15,000 per month.

The court, however, read down certain provisions of the scheme.

A bench of Chief Justice UU Lalit and justices Aniruddha Bose and Sudhanshu Dhulia was listening to the appeals of Employees’ Provident Fund Organisation (EPFO) and the Union government challenging the judgments of high courts of Kerala, Rajasthan and Delhi, quashing the 2014 amendments, when it made the remarks.

Paragraphs 11(3) and 11(4) of the Employee Pension Scheme were amended via a government notification on August 22, 2014. It came into force on September 1 that year.

While 11(3) enhanced the maximum pensionable salary limit from ₹6,500 to ₹15,000, 11(4) allowed employees to enhance their pensionable salary beyond ₹15,000.

Paragraph 11(4), however, was made available to employees only if they exercised their choice by September 1, 2014 (extendable by another six months), and made an additional contribution that was calculated at 1.16% of their salary.

“We accordingly hold and direct: The provisions contained in the notification no .... dated August 22, 2014 are legal and valid. So far as present members of the fund are concerned, we have read down certain provisions of the scheme as applicable in their cases…,” the top court said.

The bench noted that after the amendment, the maximum pensionable salary was to be kept at ₹15,000 per month, from the earlier ceiling of ₹6,500 per month.

The existing employees, as on September 1, 2014, who did not exercise the second option under paragraph 11(4) (pensionable salary beyond ₹15,000) must do so within four months, the court said. Eligible employees who were not able to join the scheme as per the cut-off date will be given an additional chance as the court exercised its extraordinary Constitutional power under Article 142.

This option will not be available to those who retired before the cut-off date.

The bench held as invalid the condition that required employees to make an additional contribution of 1.16% on salary exceeding ₹15,000.

While it suspended the provision for six months, as a “stop gap measure”, it held that employees opting for an enhanced pensionable salary will pay the 1.16% contribution.

“The said sum shall be adjustable on the basis of the alteration to the scheme that may be made,” the bench said on the “stop-gap measure”.

The top court was listening to pleas against judgments of high courts of Rajasthan, Kerala and Delhi, quashing the 2014 amendments.