[Employees Pension Amendment Scheme 2014] Supreme Court to re-examine RC Gupta decision; refers EPFO appeals to 3-judge Bench

25th Aug,2021

[Employees Pension Amendment Scheme 2014] Supreme Court to re-examine RC Gupta decision; refers EPFO appeals to 3-judge Bench



The Supreme Court on Tuesday referred to bench of three Judges, regarding the question of effectiveness of the 2014 employee pension plan (revised).
Judges UU Lalit and Ajay Rastogi stated that in view of the 2016 Supreme Court ruling in the RC Gupta case.
Since the RC Gupta order was issued by a judge, the court found that it was not appropriate for another court judge to consider the issue.
"We refer this matter to 3 judge Bench. The two main issues to consider are whether RC Gupta needs to be reconsidered and whether there will be a deadline for options under Article 11 (3) of the EPF pension plan," the court said. .
The order was approved in a series of appeals against the judgments of various superior courts to overturn the 2014 amendment.
The Employees Provident Fund Group challenged the Superior Court decision in Supreme Court.
In the RC Gupta case, the question facing the court is whether employees have a deadline to take advantage of the Employee Pension Plan (EPS) options, which allows employers and employees to make unlimited contributions to pensions.
Initially, when EPS was launched in 1995, Section 11 (3) of the plan stipulated that the maximum pensionable salary was limited to Rs. 5,000, then increased to Rs 6,500 per month in 2001.
However, a few months after the enactment of EPS, Article 11 (3) added an additional condition, which came into effect on March 16, 1996, allowing employers and selected employees pay more than Rs. 5,000 or Rs. 6,500 per month. 8.33% of the above full salary contributions must be remitted to the pension fund. The employees who appealed in the
RC Gupta case, on the eve of retirement, that is, at some point in 2005, invoked the reason why they did not know the exception introduced by the 1996 amendment. Therefore, they could give the same benefits, especially when the employer based When the bill pays fees based on actual wages instead of the monthly maximum of 5,000 or 6,500 rupees.
The statement was rejected by the Provident Fund Management Bureau on the grounds that the conditions visualized the deadline for exercising the option, which is the start date of the plan or from the date when the salary exceeds the maximum amount of 5,000 rupees or 6,500 per person. moon. Since the employee’s request was appealed after any of the above dates, access is not possible.
However, the Supreme Court of RC Gupta rejected this argument, holding that mentioning the start date of the plan or the date when the salary exceeds the maximum limit is the date on which the option must be exercised to calculate the pensionable salary. The High Court stated in the RC Gupta ruling, “According to Article 11(3) of the pension plan, the above date is not the deadline for determining whether an employee-employee is eligible to indicate his or her right to choose.” The EPS plan in 2014 Modifications have been made to increase the maximum pensionable salary to Rs. 15,000 rupees. 6,500.
However, it excludes new members whose income exceeds Rs. 15,000 people, and they were completely added from the program after September 2014. Existing members must decide within six months after September 2014 whether to exercise the option of unlimited donations. The
amendment was subsequently challenged in several higher courts, leading to the current batch of appeals to the higher courts.
A three-judge court will now consider whether this batch of appeals is also subject to the RC Gupta decision.