HC Overturns PF Trust Rule Capping Pensionable Salary

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  • Last Updated on 3 June, 2026

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Pensionable Salary Under EPS Scheme

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.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied