EPF: Supreme Court withdraws order approving pension in accordance to salary
New Delhi: The Supreme Court on Friday withdrew its order that upheld the Kerala High Court verdict approving pension in accordance to salary. The decision by the three member bench led by Justice U. U. Lalit comes after a review petition filed by the Employees Provident Fund Organisation (EPFO).
However, the apex court has not stayed the Kerala HC order which approved pension in accordance to salary. The preliminary hearing on appeals filed by the Union Ministry of Labour and Employment and EPFO against the HC order will take place on February 25.
The withdrawal of the SC order will disappoint lakhs of EPF pensioners. But at the same time, the apex court not staying the HC order is a relief.
The HC had pronounced the verdict approving pension in accordance to salary on 12 October 2018. Representing the central government, Attorney General K. K. Venugopal urged the Supreme Court to stay the HC order.
But, Justice Lalit clarified that the HC order cannot be stayed and that the appeals against it will be shifted for preliminary hearing. Otherwise, a notice will have to be issued over the review petition, the bench added.
The HC in its order had removed the Rs 15,000 ceiling to calculate the EPF contribution from employees. This in turn made it possible to avail pension in accordance with the total salary.
On April 1, 2019, the Supreme Court had approved this HC order. Now, the apex court has withdrawn the order issued by former Chief Justice Ranjan Gogoi.
Centre strongly objects pension in accordance to salary
The central government had demanded a stay on the Kerala HC order approving pension in accordance to salary. The Union Ministry of Labour & Employment clarified that pension in accordance to salary was not practical.
The ceiling of Rs 15,000 was fixed targeting the economically and socially backward class. If the ceiling is removed, the EPS will have a shortage of Rs 15,28,519.47. Since the HC order, the EPFO was handed over Rs 839.76 crore. If the appeal from the Ministry of Labour & Employment is approved, recovery of pension will not be possible.
Due to the court verdict, pension increased by up to 50 percent. Such significant increase cannot be recovered during the superannuation of a person, the Centre pointed out.