HC Overturns PF Trust Rule Capping Pensionable Salary

Case Details: Sunil Kumar Mehrotra vs. Central Board of Trustee E.P.F.O. Ministry of Labour and Emp. New Delhi- [2026] 186 taxmann.com 585 (HC-Allahabad)

Judiciary and Counsel Details

Shree Prakash Singh, J.
Pradeep Kumar Singh Vats & Anshuman Singh Rathore for the Petitioner.
Akhilesh Pratap Singh & Prakash Kumar Sinha for the Respondent.

Facts of the Case

In the instant case, petitioners were retired employees of HAL, an exempted establishment under Section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF & MP Act), whose provident fund was managed by HAL Employees’ Provident Fund Trust, while the employer’s share to the Employees’ Pension Scheme, 1995 was remitted.

Both the employer and the employees had contributed towards a pension on actual salary, and the petitioners submitted joint option forms seeking a higher pension on that basis. The Regional Provident Fund Commissioner rejected petitioners’ joint options, citing Rule 20.1/20.2.1 of the HAL Trust Rules, which cap the pensionable salary at Rs. 6,500, and, relying on the Trust Deed provisions, declined a higher pension despite contributions on actual salary.

It was noted that the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Employees’ Pension Scheme, 1995, amended time to time, envisage beneficial provisions to employees of respondent department and other establishments and ceiling, which has been prescribed, under Rules of Trust, made under Act, if contrary to object of beneficial scheme, would be unsustainable to that extent as same is less beneficial.

High Court Held

The High Court held that, since in the instant case, the employer had no objection if the petitioners were paid a higher pension, on the actual deduction made from the salary of the petitioners, the impugned order passed by the Regional Provident Fund Commissioner was to be quashed, and the respondent was to be directed to take a fresh decision.