HC clears way for higher pension to HAL staffers

Lucknow: In a major setback to the Employees’ Provident Fund Organisation (EPFO), a Lucknow bench of the Allahabad High Court has cleared the way for higher pension benefits to retired employees of Hindustan Aeronautics Limited (HAL).The court quashed orders rejecting the employees’ joint option forms and held that salary ceilings fixed under trust rules cannot override the statutory rights of employees.The order was passed by Justice Shree Prakash Singh while deciding a batch of petitions led by Sunil Kumar Mehrotra. The judgment had been reserved on Feb 10, 2026, and was delivered on May 8.The court observed that where both employer and employees had contributed to the pension fund on actual salary, the employees would be entitled to higher pension on that basis. It held that EPFO could not deny higher pension merely by citing the Rs 6,500 ceiling prescribed under HAL Trust Rules. Allowing all the petitions, the court set aside the impugned orders and directed the regional provident fund commissioner to reconsider the employees’ joint options afresh in the light of Supreme Court rulings and observations made in the judgment.It was argued on behalf of the petitioners that though 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 argued that the apex court, in earlier judgments, had recognised the right of employees to exercise joint option for higher pension.EPFO, however, contended 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, on the other hand, informed the court that it had no objection to grant of higher pension and that contributions on actual salary had already been deducted from employees.Pronouncing the verdict, the court further held that any provision in trust rules which is less beneficial than statutory provisions or the Employees’ Pension Scheme, 1995, cannot prevail. It said beneficial schemes are intended to provide greater protection to employees and such rights cannot be curtailed through trust rules.