The Lucknow bench of the Allahabad High Court has delivered a significant verdict in favour of retired employees of Hindustan Aeronautics Limited (HAL), clearing the path for enhanced pension benefits. The court quashed orders rejecting the joint option forms submitted by the employees, asserting that salary ceilings prescribed under trust rules cannot override the statutory rights of employees under the Employees' Pension Scheme, 1995.
Court Orders Reconsideration of Pension Claims
Justice Shree Prakash Singh, while adjudicating a batch of petitions led by Sunil Kumar Mehrotra, directed the regional provident fund commissioner to reconsider the employees' joint options afresh. The judgment, reserved on February 10, 2026, was delivered on May 8. The court observed that where both employer and employee had contributed to the pension fund on actual salary, the employees are entitled to higher pension on that basis. EPFO cannot deny higher pension merely by citing the Rs 6,500 ceiling prescribed under HAL Trust Rules.
Arguments Presented Before the Court
Counsel for the petitioners argued that although HAL is an exempted establishment, the Employees' Pension Scheme, 1995, fully applies to it. Since both employees and employer had contributed 8.33% on actual salary, the retirees were entitled to higher pension. It was also contended that the Supreme Court, in earlier judgments, had recognized the right of employees to exercise a joint option for higher pension.
EPFO, however, maintained that HAL trust rules fixed a ceiling on pensionable salary, and since no amendment had been made to those rules, higher pension on actual salary could not be granted. HAL management informed the court that it had no objection to the grant of higher pension and that contributions on actual salary had already been deducted from employees.
Legal Precedents and Implications
Pronouncing the verdict, the court held that any provision in trust rules which is less beneficial than statutory provisions or the Employees' Pension Scheme, 1995, cannot prevail. Beneficial schemes are intended to provide greater protection to employees, and such rights cannot be curtailed through trust rules. The court set aside the impugned orders and allowed all petitions, directing reconsideration in light of Supreme Court rulings and observations made in the judgment.
This ruling is expected to benefit thousands of HAL retirees who have been seeking higher pension based on actual salary contributions. It reinforces the principle that statutory pension rights cannot be undermined by internal trust rules, setting a precedent for other exempted establishments.
