Case: R.C. Gupta &amp; Others Vs. Regional Provident Fund Commissioner Employees Provident Fund Organisation &amp; Others

3. The facts lie within a short compass.      Under the 1952 Act, 10% or 12% of the basic wages including dearness allowance etc. is required to be deposited in the Provident Fund Account of an employee being the employers share. The Act as enacted in the year 1952 did not contain any provision for pension.n 6A with which we are concerned, was inserted by an amendment w.e.f. 16.11.1995 providing for the Employees Pension Scheme to be framed for payment of pension to retiring employees. The corpus of the pension fund was to beinter aliaconstituted by deposit of 8.33% of the employers contribution under Section 6 of the Act. The Pension Scheme which was framed to give effect to the provisions of Section 6A containsinter aliaClause 11, which deals with determination of pensionable salary. Under Clause 11(3) of the Pension Scheme, the maximum pensionable salary was limited to, which was subsequently enhanced to Rs.6,500/per month w.e.f. 08.10.2001. A couple of months after the Pension Scheme was framed w.e.f. 16.11.1995, a proviso was added to Clause 11(3) w.e.f. 16.03.1996 permitting an option to the employer and an employee for contribution on salary exceeding Rs.5,000/(w.e.f. 08.10.2001) per month. 8.33% of such contribution on full salary was required to be remitted to the Pension Fund.      4. Thes on the eve of their retirement i.e. sometime in the year 2005 took the plea that the proviso brought in by the amendment of 1996 was not within their knowledge and, therefore, they may be given the benefit thereof, particularly, when the employers contribution under the Act has been on actual salary and not on the basis of ceiling limit of either Rs.5,000/per month, as the case may be. This plea was negatived by the Provident Fund Authority on the ground that the proviso visualized af date for exercise of option, namely, the date of commencement of Scheme or from the date the salary exceeded the ceiling amount of Rs.5,000/per month, as may be. As the request of thes was subsequent to either of the said dates, the same cannot be acceded to.      5. Aggrieved thes moved the High Court under Article 226 of the Constitution. The learned Single Judge decided the Writ petition in favour of thes making it clear that the decision would not serve as a precedent for the future. The Division Bench reversed the said decision upholding the view of the Provident Fund Authority that under the proviso to Clause 11 (3) of the Pension Scheme there was a

Court's reasoning:
8. Reading the proviso, we find that the reference to the date of commencement of the Scheme or the date on which the salary exceeds the ceiling limit are dates from which the option exercised are to be reckoned with for calculation of pensionable salary. The said dates are notf dates to determine the eligibility of thee to indicate their option under the proviso to Clause 11(3) of the Pension Scheme. A somewhat similar view that has been taken by this Court in a matter coming from the Kerala High Court, wherein the Special Leave Petition (C) No.7074 of 2014 filed by the Regional Provident Fund Commissioner was rejected by this Court by order dated 31.03.2016. A beneficial Scheme, in our considered view, ought not to be allowed to be defeated by reference to af date, particularly, in a situation where (as in the present case) the employer had deposited 12% of the actual salary and not 12% of the ceiling limit of Rs.5,000/per month, as the case may be10. We do not see how exercise of option under paragraph 26 of the Provident Fund Scheme can be construed to estop the employees from exercising a similar option under paragraph 11 (3). If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount, exercise of option under paragraph 26 of the Provident Scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of option under Clause 11(3). Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11 (3) of the Pension Scheme unless the circumstances warranting such foreclosure are clearly indicated.