In the RC Gupta case, the issue before the Court was whether there was a cut-off date for employees to avail benefit of the option under the Employees Pension Scheme (EPS), which permits the employer and employee to make uncapped pension contribution.
Initially, when the EPS was introduced in 1995, clause 11(3) of the scheme mandated that the maximum pensionable salary was limited to ₹5,000, which was subsequently enhanced to ₹6,500 per month in 2001.
However, a couple of months after the EPS was framed, a proviso was added to Clause 11(3) with effect from March 16, 1996 permitting an option to the employer and an employee for contribution on salary exceeding ₹5,000 or ₹6,500 per month. 8.33 per cent of such contribution on full salary was required to be remitted to the Pension Fund.
The appellant-employees in the RC Gupta case had, on the eve of their retirement i.e. sometime in the year 2005, taken 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 of the same, particularly, when the employer’s contribution under the Act has been on actual salary and not on the basis of ceiling limit of either ₹5,000 or ₹6,500 per month.
This contention was negatived by the Provident Fund Authority on the ground that the proviso visualized a cut-off date for exercise of option, namely, the date of commencement of scheme or from the date the salary exceeded the ceiling amount of ₹5,000 or ₹6,500 per month. As the request of the appellant-employees was subsequent to either of the said dates, the same cannot be acceded to, it was argued.
The Supreme Court in RC Gupta had, however, turned down this argument holding that 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 not cut-off dates to determine the eligibility of the employer-employee to indicate their option under the proviso to Clause 11(3) of the Pension Scheme,” the top court had said in RC Gupta verdict.
Pertinently, the top court in that judgment had held that exercise of option under para 26 of the Provident Fund Scheme cannot be construed to estop the employees from exercising a similar option under para 11(3) of the pension scheme.
Source: Barandbench
