SHAMSHUDDIN ALI MULLAJI V. THE ASSISTANT COMMISSIONER OF EMPLOYEES PROVIDENT FUND COMMISSIONER (PENSION) & ORS 2026:BHC-AS:11568-DB:

DATE: 05.03.2026

COURT: High Court of Bombay

BENCH: Justice Ravindra V. Ghuge and Justice Abhay Mantri

FACTS:

The petitioner was employed with Poyasha Pvt. Ltd., Kalwa, Thane from 1978 to 1994, until the company closed down. He then joined A.S. Moloobhoy and Sons, Mazgaon, Mumbai on 1 February 1997 and superannuated on 3 June 2009. While still in the second employment, he applied for and started receiving early pension under the Employees’ Pension Scheme, 1995 in respect of his first employment. After retirement from the second employment, he submitted another Form 10-D but deliberately left blank Clause 16 which required disclosure of any earlier pension being drawn. As a result, he began receiving dual pensions, one from the first employment (commenced while he was still in service with the second employer) and another from the second employment.

The Provident Fund Department discovered the suppression when it cross-checked records. It halted further pension payments and sought recovery of the excess amount paid (Rs.88,727/- as of 2019). Arrears due to the petitioner (after stoppage) accumulated to Rs.1,66,432/-. Aggrieved, the petitioner filed Writ Petition No.910 of 2023 before the Bombay High Court seeking release of the arrears and restraint on recovery. The Department filed a detailed affidavit exposing the non-disclosure and misrepresentation. The Court appointed Shri Rohit Sakhadeo as Amicus Curiae, whose note dated 4 March 2026 was considered by the Bench.

ISSUES:

The core issues were whether the petitioner, who had deliberately suppressed the fact of receiving early pension from his first employment while filing Form 10-D for the second employment and thereby obtained dual pensions under the Employees’ Pension Scheme, 1995, was entitled to release of arrears and waiver of recovery, or whether the Provident Fund Department was justified in adjusting the excess amount recovered and recalculating a single pension by clubbing both spells of service, particularly when the petitioner had confessed his mistake and sought mercy.

JUDGEMENT WITH REASONING:

The Bombay High Court partly allowed the writ petition. It directed the Provident Fund Department to deduct the excess amount of Rs.88,727/- from the arrears of Rs.1,66,432/-, pay the balance to the petitioner within 30 days, recalculate the pension by clubbing both employments, and commence the single recalculated pension from April 2026 onwards along with arrears from June 2024 to March 2026 payable by 15 April 2026. No interest was levied on the excess paid or on the arrears payable, to balance equities. Rule was discharged with no order as to costs.

The Court first held that the petitioner had committed a clear act of misrepresentation and fraud on the State Exchequer. Under Clause 12 of the EPS, 1995, early pension is available only when an employee ceases employment before age 58 and does not join fresh covered employment; otherwise, the employee must obtain a Scheme Certificate after the first employment so that both spells of service are clubbed and pension is drawn only after superannuation from the second employment. The petitioner deliberately applied for and obtained early pension from the first employment while drawing full salary from the second employer and, after retirement, filed a second Form 10-D without disclosing the existing pension, thereby securing dual payments. This was not a bona fide error but a systematic suppression, as confirmed by the blank Clause 16 and the Department’s affidavit. The Court endorsed the Amicus Curiae’s note that the petitioner ought to have sought the Scheme Certificate after the first employment closed in 1994 instead of claiming early pension while in fresh service.

In the second layer of reasoning, the Court took a merciful view considering the petitioner’s confession, remorse, advanced age (around 70 years) and hand-to-mouth condition. While it could have taken a strict view under precedents such as Kishore Samrite and Bhaskar Laxman Jadhav (denying all relief to a litigant who approaches with unclean hands), it accepted the petitioner’s offer to adjust the excess from arrears and to have the pension recalculated by clubbing both services. Relying on the Madras High Court’s equitable approach in A. Jagadeeswaran, the Court waived interest on the recoverable excess and also declined interest on the arrears payable, thereby balancing equities. The adjustment was expressly recorded as being made because of the petitioner’s consent and the fraud played on the system, but mercy was shown by not imposing any penal interest. The Provident Fund Department was directed to implement the clubbing and payments within the stipulated timelines.

ANALYSIS:

This Bombay High Court judgment in Writ Petition No. 910 of 2023 (decided in March 2026) powerfully illustrates the judiciary's firm stance against deliberate fraud on public funds under the Employees’ Pension Scheme, 1995, while simultaneously exercising calibrated mercy when the petitioner shows genuine remorse. The Court unequivocally condemned the petitioner’s systematic misrepresentation, applying for and drawing early pension from the first employment while still gainfully employed in the second, then filing a second Form 10-D with Clause 16 deliberately left blank to conceal the existing pension, thereby securing dual pensions for years. By extracting Clause 12 of the EPS, 1995 and explaining the correct pathway (obtaining a Scheme Certificate after the first employment to club service periods), the ruling reinforces that early pension is an exception for those who genuinely cease covered employment before age 58, not a loophole to be exploited during continued service. The decision serves as a deterrent against similar attempts to defraud the State Exchequer, making clear that non-disclosure of material facts in statutory forms constitutes fraud rather than innocent error, and that pension benefits are not an entitlement immune from scrutiny when obtained through suppression.

At the same time, the judgment demonstrates equitable balancing in the twilight years of a litigant who confesses wrongdoing. Despite precedents like Kishore Samrite and Bhaskar Laxman Jadhav that would ordinarily disentitle relief to a party approaching with unclean hands, the Court chose not to impose the full rigour of law, waiving interest on the recoverable excess (Rs.88,727/-) and on the arrears payable, accepting adjustment against accumulated arrears (Rs.1,66,432/-), and directing clubbing of both service periods for a single recalculated pension commencing April 2026. This leniency was explicitly grounded in the petitioner’s advanced age (around 70), hand-to-mouth existence, voluntary confession, and offer to adjust the excess, echoing the compassionate approach of the Madras High Court in A. Jagadeeswaran. The order thus strikes a middle path: it upholds the integrity of the pension system by ensuring no unjust enrichment, yet avoids disproportionate hardship on an elderly pensioner who has shown contrition, reinforcing that courts retain discretion to do complete justice even in cases of proven misconduct when equities so demand.