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University of Delhi vs. Smt. Shashi Kiran & Ors. Etc. Etc.

Diary No. · 2022 INSC 543Decided 10 May 2022
Diary No. 13901 of 2017

Background

Following a 1987 Central Government scheme, employees of the University of Delhi who were in service on 1 January 1986 were deemed to have shifted from the Contributory Provident Fund (CPF) to the pension-linked General Provident Fund (GPF) scheme unless they opted, by a cut-off date, to stay under CPF. The University itself later granted 11 further rounds of extensions allowing about 2,469 employees who had earlier opted for CPF to switch over to GPF. A separate, much smaller group of about 75 employees (the "Shashi Kiran batch"), who were deemed to have moved to GPF but wanted to remain governed by the more favourable terms available to CPF employees at the time, argued they were unfairly denied a similar late-switchover option that was given to the larger group. The Delhi High Court (Single Judge and Division Bench) ruled in their favour, prompting the University's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court upheld the High Court's finding of discrimination, holding that once the University had allowed thousands of similarly-placed employees the benefit of extended switchover options between CPF and GPF, it could not rationally deny the same opportunity to the smaller Shashi Kiran group without any justifiable reason: such differential treatment violated the principle of equal treatment among employees of the same category. The Court reasoned that granting relief to only about 75 persons at this stage would not meaningfully disturb the financial character of the fund. It therefore affirmed the High Court's judgment but modified the relief slightly, directing that these employees' CPF contributions be recouped with 8% simple interest per annum, while leaving it to them to exercise a fresh option regarding switchover to GPF.

Lesson Learnt

When an employer voluntarily extends a benefit or option to one large group of employees, it cannot arbitrarily withhold the same benefit from a similarly situated smaller group without a rational justification, doing so amounts to unconstitutional discrimination, even in matters of internal financial/retirement scheme administration.

Official source (sci.gov.in)View Judgment (PDF)

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