Bombay HC: EPFO can’t reject higher EPS pension citing PF trust rules of exempted firms
Justice Sandeep V. Marne set aside EPFO's rejection of joint options filed by retirees of Abbott India, BEST, Raymond Steel and Tata Communications, and ordered the claims processed within eight weeks.
The Bombay High Court has ruled that the Employees’ Provident Fund Organisation (EPFO) cannot turn down higher-pension applications from employees of exempted establishments simply because the private provident fund trust rules of their employer cap contributions at the statutory wage ceiling.
The judgment, delivered on Monday, 19 October 2026, by Justice Sandeep V. Marne, set aside EPFO orders rejecting the joint options of retired employees and directed the retirement fund body to process and allow their applications within eight weeks. The ruling has since drawn wide attention among private-sector pensioners, with reports on it circulating through the week.
The case before the court
The lead matter, Amit Gunvantrai Mehta vs Employees’ Provident Fund Organisation (Writ Petition No. 13752 of 2026), was heard along with connected petitions. According to Law Trend, six writ petitions were filed by retired employees of Abbott India Limited (formerly Knoll Pharmaceuticals), the Brihanmumbai Electric Supply and Transport (BEST) Undertaking, Raymond Steel Limited and Tata Communications Limited. Business Today put the number of employees involved at more than 40.
All of them had sought pension on actual (higher) wages under paragraphs 11(3) and 11(4) of the Employees’ Pension Scheme, 1995 (EPS-95), by submitting joint options with their employers. EPFO rejected the applications mainly on two grounds: the trust rules of these exempted establishments limited the employer’s pension contribution to the wage ceiling, and in several cases the employers had not produced the required records. The rejections relied on an EPFO head office circular dated 18 January 2025, which links eligibility to the existing trust rules of an exempted establishment.
The employees argued that the Supreme Court’s ruling in EPFO vs Sunil Kumar B. puts exempted and unexempted establishments on the same footing, and that trust rules govern only the provident fund, not pension entitlement. They also pointed to similar decisions of the Madras, Karnataka, Calcutta and Allahabad High Courts. EPFO countered that it had challenged the Madras High Court Division Bench ruling before the Supreme Court, and that a Calcutta High Court single-judge ruling had been stayed in appeal.
What the court held
Justice Marne found that the question was no longer open, since several High Courts had consistently held that denying the joint option on the basis of trust rules is not permissible. The court declined to wait for the Supreme Court to decide EPFO’s pending appeal, observing that the petitioners were retirees and that “pendency of SLP cannot be a ground” for keeping the cases pending indefinitely.
The court held that a joint option cannot be rejected merely because the trust rules cap the employer’s contribution, or because they do not expressly provide for a higher-pension option. Where an employer fails to furnish records, EPFO must use alternative ways to verify the claim, including giving the employee a hearing. In the Tata Communications matter, the court found that contributions above the ceiling had in fact been made on basic pay.
What it means for employees
For employees of exempted establishments, whose provident funds are run by in-house trusts, the ruling adds a fresh precedent against a common ground of rejection. Earlier this year, the same High Court had also said that higher-pension claims should not be refused only because an employer failed to submit documents such as Form 6A, according to Navbharat Live, which reported that EPFO should seek such records from the employer itself.
The relief, however, is not automatic. Business Today noted that employees must still meet the scheme’s eligibility conditions, including contribution and documentation requirements. The direct benefit of the 19 October order goes to the petitioners, and the larger question may finally be settled by the Supreme Court, where EPFO’s challenge to the Madras High Court verdict is pending. Pensioners whose applications were rejected on similar grounds may now cite this judgment when seeking a review or approaching the courts.
Sources
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