Calcutta High Court Quashes EPFO Order Denying Higher Pension to SAIL Staff, Calls It ‘Abuse of Law’
Court Says EPFO Acted Arbitrarily despite Supreme Court’s Clear Directions
Relief for Hundreds of Employees as High Pension Entitlement Restored
By Our Legal Correspondent
New Delhi: November 20, 2025:
In an important decision affecting employees of major public sector companies, the Calcutta High Court has struck down an order issued by the Employees’ Provident Fund Organisation (EPFO) that denied higher pension benefits to several employees of Steel Authority of India Limited (SAIL). The Court observed that the EPFO’s refusal was arbitrary, illegal, and an abuse of law, especially when the Supreme Court had already clarified the rules regarding higher pension eligibility.
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The High Court’s ruling brings major relief to SAIL employees who have been fighting for their rightful pension under the Employees’ Pension Scheme (EPS). Many of them had applied for higher pension by choosing to contribute to the EPS on their actual salary instead of the statutory limit.
This judgment is expected to influence similar disputes across India and may directly affect thousands of employees from various industries who have been denied higher pension benefits on unclear grounds.
What the Case Was About
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Employees of SAIL had applied for higher pension benefits as allowed under the EPS. The scheme permits employees to receive a pension based on their actual pay, provided both employer and employee agree and contribute accordingly.
However, EPFO issued orders rejecting the applications of these SAIL employees, claiming that they had:
- Not exercised the joint option within the required time
- Not contributed as per the pensionable salary
- Failed to meet the formal conditions set by the authorities
The employees argued that they had indeed opted earlier and had been contributing based on their actual salary. They said that the EPFO was ignoring previous circulars, court orders, and employer records.
They moved the Calcutta High Court seeking justice.
### What the Calcutta High Court Held
The High Court strongly criticized the EPFO’s conduct. In its decision, the Court noted:
- The EPFO cannot deny higher pension on technical grounds when employees have already exercised their option.
- The refusal is contrary to the Supreme Court’s ruling delivered in November 2022, which upheld the right of eligible employees to claim higher pension.
- The EPFO’s denial amounted to abuse of law and violated principles of fairness.
- Government authorities cannot act in a manner that deprives employees of rightful benefits that were promised under the scheme.
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The Court quashed the EPFO rejection orders and directed the authorities to process the employees’ applications without delay.
### Why This Judgment Matters
The ruling is significant because it addresses a widespread problem: EPFO has rejected thousands of higher-pension applications across India despite the Supreme Court providing clear guidelines.
Key reasons why the ruling is important:
1. Brings Clarity After Months of Confusion
Many employees have faced rejection due to alleged missing forms or deadlines. The Court has now clarified that eligible employees cannot be denied their rightful pension on weak or technical grounds.
Reinforces the Supreme Court’s 2022 Ruling
The Calcutta High Court reminded EPFO that the country’s highest court has already defined the rules. Authorities must follow those directions strictly.
Provides Relief to Employees
Higher pension can significantly improve the financial security of retired employees who spent decades in service. This ruling helps restore their legitimate entitlement.
4. Sets a Precedent
Employees from other PSUs and private sector companies may rely on this judgment to challenge wrongful rejections from the EPFO.
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What Higher Pension Means for Employees
Under the EPS, pension is calculated using a formula that includes pensionable salary. Most employees are capped at a salary limit (historically Rs 5,000 or Rs 6,500, later increased). But the law also allows employees to contribute based on their actual full salary, not just the capped limit.
If the option is exercised, employees receive a much higher monthly pension after retirement. Many SAIL employees had opted for these years ago. Their employer had forwarded the option, and contributions were made accordingly.
The EPFO’s rejection of such applications therefore put their retirement plans at risk.
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### Court’s Remarks on Administrative Conduct
The Calcutta High Court did not stop at quashing the orders — it also criticized EPFO’s approach.
It said:
- Authorities cannot “invent excuses” to deny benefits.
- Public bodies must act transparently and fairly.
- Denying lawful claims creates mistrust among workers who depend on social security schemes.
The Court emphasized that bodies like EPFO must act in the spirit of welfare and not push workers into unnecessary litigation.
### Impact on Other Employees across India
This ruling is likely to influence similar cases in states such as Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh, Jharkhand, and Odisha, where many employees from PSUs and private companies like:
- NTPC
- BHEL
- Coal India
- ONGC
- Banks
- Major private manufacturers
have been fighting lengthy battles for their higher pension rights.
Legal experts say that other High Courts may follow a similar reasoning now that a clear finding has been recorded that EPFO’s blanket rejections are unlawful.
### Possible Next Steps
Following the High Court’s ruling:
- EPFO may need to re-examine all rejection orders issued on similar grounds.
- SAIL employees covered under the case will be entitled to higher pension calculations.
- More employees may approach courts if their pending cases remain unresolved.
The Central Government and EPFO are also expected to issue clearer guidelines to ensure uniform implementation of higher pension rules.
### Conclusion
The Calcutta High Court’s decision is a powerful reminder that social security bodies must work for the welfare of employees, not against them. By calling the EPFO’s rejection an abuse of law, the Court has protected the rights of hardworking employees who depend on pensions for their post-retirement stability.
This ruling sets the path for greater transparency, fairness, and accountability within the pension system. It also strengthens workers’ confidence that the judiciary will protect their rights when administrative authorities fail to do so.
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