Pension cannot be denied because of incorrect deductions: Supreme Court

According to a recent Supreme Court decision, an individual cannot be denied pension benefits just because their employer made incorrect deductions. Calcutta State Transport Corporation and others’ appeal was denied by the bench of Justices Abhay S. Oka and Rajesh Bindal.

The appeal was filed in opposition to the High Court’s March 5, 2021 division bench judgement ordering the employer to release Ashit Chakraborty and others’ pension benefits. The company asserted in its appeal that the employee got notifications concerning typical withdrawals from his pay for the contributory provident fund.

The employee did not object to these deductions at the time though. Only after his retirement did the problem come up. The company felt that he should not be qualified to receive benefits from the pension scheme in light of these facts.

The employee responded to the appeal by stating that since he had decided to enrol in a pension scheme, it was the employer’s duty to correctly calculate his pay and make the necessary deductions for the various categories. Employee shouldn’t be punished or made to suffer as a result of a mistake the company made in this process.

In agreement with the employee’s claim, the court rejected the corporation’s defence that other employees in same situations would also be eligible for similar treatment. The court reasoned that this would not preclude it from providing the employee the remedy he is entitled to.

The judgement further noted that his rightful claim for a pension cannot be denied because certain improper deductions from his pay were made and he was classified as a member in the CPF scheme.