Employee Deemed To Have Switched From CPF To More Beneficial GPF-Cum-Pension If No Option Is Exercised By Cut-Off Date: Jharkhand HC

Background Facts

The employee was a Yoga Teacher at Kendriya Vidyalaya, appointed in 1981. He retired in March 2019. He had initially opted for the Contributory Provident Fund (CPF) scheme. However, in 1988, the Government and the Kendriya Vidyalaya Sangathan issued memoranda stating that employees in service before 1st January 1986 would be deemed to have switched over to the more beneficial General Provident Fund-cum-Pension Scheme unless they specifically opted to remain in CPF.

The employee sought conversion of his retirement benefits to the pension scheme. His request was declined by the authorities on the grounds that he had originally opted for CPF and that no re-option was permissible. He approached the Central Administrative Tribunal. The Tribunal ruled in his favour, directing the authorities to convert his account to the pension scheme.

Aggrieved by the Tribunal's order, the Kendriya Vidyalaya Sangathan (KVS) filed writ petitions before the High Court, challenging the direction for conversion.

KVS argued that the employee had been granted a one-time opportunity in 1988 to either remain in the existing Contributory Provident Fund (CPF) scheme or switch to the General Provident Fund-cum-Pension scheme. The employee had exercised the option to continue under the CPF scheme. It was proved by the CPF accounts maintained for employee throughout his service until retirement. Therefore, the employee after availing all CPF benefits, could not now demand a change to the more beneficial pension scheme.

It was further argued that Government of India had not issued any orders for allowing CPF optees to re-exercise the option for conversion from CPF Scheme to GPF-cum-Pension Scheme. KVS further cited a Letter from the MHRD which after consulting the Department of Expenditure, had rejected the proposal for a one-time permission for changing from CPF to GPF-cum-Pension Scheme.

On the other hand, the employee argued that the 1988 memorandum issued by KVS stated that if an employee did not submit an option to remain in the CPF scheme by the deadline, they would be automatically deemed to have switched over to the General Provident Fund-cum-Pension Scheme.

Findings of the Court

It was observed by the court that as per the KVS's memorandum dated September 1, 1988, if no positive option to continue in the CPF scheme was received from an employee by February 28, 1989, he shall be deemed to have switched over to the General Provident Fund-cum-Pension Scheme. The employee had never submitted such an option form.

The Supreme Court's judgment in University of Delhi vs. Shashi Kiran and Others was relied upon wherein it was held that a switch-over from CPF to the pension scheme is permissible in three situations,

• Wherein the employee had not exercised any option at all.
• Wherein the employees had not exercised the option by the cut off date.
• Wherein the employees had exercised the positive option by the cut-off date, but, eventually demanding a change in connection therewith.

It was held that employee's case was covered under first situation. The switch over from the CPF Scheme to GPF-cum-Pension Scheme should be permissible and the claims of employee shall not be barred by the delay and latches as the scheme was meant for the welfare of the employees.

Further it was observed that employees who initially opted for the CPF Scheme cannot be denied the benefit of a more beneficial pension scheme later. The denial of such beneficial pensionary benefits would be discriminatory, regardless of the earlier option exercised by the employee to remain in the CPF scheme.

With the aforesaid observations, the Tribunal's order was upheld by the Division Bench. Consequently, the writ petitions filed by the KVS were dismissed by the Division Bench.

Case Name : Kendriya Vidyalaya Sangathan vs. Sh. Bhrigu Nandan Sharma & Devendra Singh Rana

Case No. : W.P.(S) No. 6520 of 2025 with W.P.(S) No. 6552 of 2025

Counsel for the Petitioner : Md. Mokhtar Khan, Adv, Faisal Khan, Adv

Counsel for the Respondents : Md. Jalisur Rahman, Adv