Supreme Court refers the appeal to the larger bench challenging the judgments of Kerala, Delhi and Rajasthan High Courts which quashed the Employee's Pension (Amendment) Scheme, 2014

The Supreme Court in the Employees Provident Fund Organisation & etc. vs. Sunil Kumar B. & etc. has referred the appeal to the larger bench challenging the judgments of Kerala, Delhi and Rajasthan High Courts which quashed the Employee's Pension (Amendment) Scheme, 2014. The principal question that arises for consideration are- 1. Whether there would be a cut-off date under paragraph 11(3) of the Employees' Pension Scheme and 2. Whether the decision in R.C. Gupta v. Regional Provident Fund Commissioner (2016) would be the governing principle on the basis of which all these mat The Employees Provident Fund Organisation (EPFO) argued before the Supreme Court that if no cut-off date is made applicable under clause 11(3) of the Employees Pension Scheme for making uncapped pension contributions, it would create a great imbalance. According to EPFO, if the option under paragraph 11(3) of the Pension Scheme was to be afforded well after the cut- off date, it would amount to cross-subsidisation by those who were regularly contributing to the Pension Scheme in favour of those who come at a later point in time and walk away with all the advantages. EPFO counsel referred to the Supreme Court's judgment in Krishena Kumar vs. Union of India (1990) where it was observed that the Rules governing the Provident Fund Scheme were entirely different from the Rules governing Pension Scheme. Therefore, Pension Retirees and Provident Fund Retirees did not form a homogeneous class. It was argued that it would not be a mere adjustment of amount to transfer from one fund to another as stated in R.C. Gupta and the decision in R.C. Gupta is required to be re-visited, the EPFO urged. According to EPFO, under the Provident Fund scheme, the contributions made by the employer and the employees during the employment of the employee would be made over to the employee along with interest accrued thereon at the time of his retirement. Thus, the obligation on the part of the operators of the Provident Fund Scheme would come to an end, after the retirement of the employee. However, the obligation under the Pension Scheme would begin when the employee retired. Under the Provident fund scheme, the liability was only to pay interest on the amount deposited and to make over the entire amount at the time of his retirement. On the contrary, in the pension scheme, it would be for the operators of the Pension Scheme to invest amount deposited in such a way that after the retirement the invested amount would keep on giving sufficient returns so that the pension would be paid to the employee not only during his life time but even to his family members after his death. The Supreme Court observed that these, and the other submissions touching upon the applicability of the principle laid down in the decision in R.C. Gupta goes to the very root of the matter. Sitting in a Bench of 2 Judges it would not be appropriate for us to deal with said submissions. The logical course would be to refer all these matters to a Bench of at least three Judges so that an appropriate decision can be arrived at.