The High Court of Delhi has dismissed three intra-court appeals filed by the Export Inspection Council (EIC), affirming that employees who did not expressly opt to continue under the Contributory Provident Fund (CPF) scheme by the prescribed deadline are “deemed to have come over” to the Pension and General Provident Fund (GPF) scheme.
A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia upheld a 2021 Single Judge verdict, ruling that the coverage of the Pension Scheme was automatic under a 1987 circular.
Background of the Case
The dispute originated from a circular dated July 2, 1987, issued by the Export Inspection Council, established under the Export (Quality Control and Inspection) Act, 1963. The circular implemented Government of India decisions following the Fourth Central Pay Commission, giving CPF-governed employees an option to remain in the CPF scheme or be automatically converted to the Pension and GPF Rules, 1981.
The circular stipulated that employees in service as of January 1, 1986, who remained in service on the date of the circular, would be deemed to have switched to the Pension Scheme unless they conveyed a specific option to continue under CPF by October 31, 1987.
The Respondents—Deepak Shekhar, Rajiv Raizada, and Anand Kishore—were denied pension benefits by the Council on various grounds, including prior options exercised before 1987 or a failure to “opt-in” to the GPF scheme.
Arguments of the Parties
The Export Inspection Council (Appellant) contended that:
- Certain employees had previously opted for the CPF scheme in 1983 and 1986, which should remain binding.
- A subsequent circular dated February 8, 1989, required employees to specifically opt for the pension scheme by March 31, 1989, and the respondents had failed to do so.
- Reliance was placed on the Supreme Court’s decision in KVS & Ors v. Jaspal Kaur & Ors. (2007) to argue that conduct and attendant circumstances showed the employees intended to remain under CPF.
The Respondents (Employees) argued that:
- Under the clear terms of the 1987 circular, no positive action was required to switch to the Pension Scheme; only those wishing to stay in CPF had to act.
- Since they did not submit an option to remain in CPF by the October 31, 1987, deadline, the “deeming clause” applied automatically.
Court’s Analysis and Observations
The Court scrutinized Clauses 2(a) and 2(b) of the 1987 circular, noting that the language was “unambiguously clear.”
The Bench observed:
“In view of the clear and explicit stipulation… the coverage of the Pension and GPF Scheme was automatic which was dependent only on the employee giving an option to continue to be covered under the CPF Scheme.”
The Court rejected the Council’s reliance on options exercised prior to 1987, stating:
“Any option, given prior to the issuance of the circular dated 02.07.1987, would lose its significance and meaning for the reason that the circular dated 02.07.1987 covered all those employees who were in service on 01.01.1986… The circular dated 02.07.1987, in fact, does not differentiate between employees who had earlier given option to be covered by the CPF Scheme and those who had not.”
Regarding the 1989 circular, the Court held it did not supersede the 1987 circular but likely applied to those who had expressly opted for CPF in 1987 and later wished to change their minds.
The Court distinguished the Jaspal Kaur case cited by the appellant, noting that in the present instance, there was no evidence that the employees had ever opted to continue in the CPF scheme pursuant to the 1987 circular. The Bench expressed “complete agreement” with the precedent set in Dr. R.N. Virmani and Ors. v. University of Delhi (2014), which dealt with a nearly identical Office Memorandum from the Central Government.
The Decision
The Division Bench dismissed the appeals and upheld the Single Judge’s directions. Consequently:
- The employees are deemed to have switched to the Pension Scheme on the date of their retirement.
- The employees must refund the employer’s contribution to the CPF they received, with 8% interest per annum.
- The Export Inspection Council must compute the pension and arrears after making these adjustments and pay the same to the employees without further interest.
No order as to costs was made.
Case Details:
- Case Title: Export Inspection Council v. Deepak Shekhar & Anr. (LPA 391/2021 & connected matters)
- Bench: Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia
- Date of Judgment: April 07, 2026
