Kerala HC: Higher Pension Cannot Be Denied for Procedural Lapses if Contributions Made on Actual Wages

The petitioners were retired employees of a co-operative milk union who had contributed to the fund established under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, on their actual salaries, which was beyond the statutory wage ceiling. However, due to prior litigation and directions from the court, the employer deposited bulk contributions covering several months rather than making monthly remittances. The EPFO rejected the petitioners’ applications for higher pension, citing non-compliance with paragraph 26(6) of the EPF Scheme, 1952, due to the lump-sum nature of the remittances.

The Court rejected the reasoning of EPFO, and emphasized on the substantive compliance with statutory requirements over rigid procedural formalism. While relying on the binding precedent of Employees Provident Fund Organisation v. Sunil Kumar B. and Mohanan K.S. v. Regional Provident Fund Commissioner, the Court reaffirmed that if the employee and employer have in fact contributed on actual wages, and the contributions have been duly accepted by the EPFO, eligibility for higher pension cannot be denied merely because the payment was not allocated month-wise at the time.

The Kerala High Court in this W.P.(C) No. 1932 of 2025, sets aside the impugned orders of the EPFO and declared the petitioners eligible for higher pension based on actual wages, and directed the authorities to process and disburse the revised pension within three months. It also clarified that the decision would not preclude EPFO from taking independent action, if warranted, against the employer for any procedural lapses.