EPFO- PF Not Credited for 10 Years, Authorities Order Rs 50,000 Compensation

EPFO: Big news for EPFO members. Can anyone really hold onto PF funds for a decade, claiming software issues? This case originates from Chandigarh. Back in September 2010, an employee sought to transfer funds from his old PF account to a new one, but the transfer never happened. Frustrated, he turned to the Consumer Protection Commission for help.

The Commission then fined the EPFO Rs 50,000 and ordered them to cover the litigation costs. In a landmark ruling, the Chandigarh District Consumer Disputes Redressal Commission stated that the Employees Provident Fund Organisation (EPFO) cannot justify a nearly ten-year delay by blaming software glitches.

What was the issue?

Mr. Garg was employed at Tech Mahindra, a company based in Pune. He left Tech Mahindra in February 2009 and started working at Infosys in July 2010. In September 2010, he requested to transfer the balance from his old PF account at Tech Mahindra to his new account. However, he received no response from the EPFO. Mr. Garg even filed a Right to Information (RTI) request. Eventually, in April 2020, the EPFO transferred only Rs 6.21 lakh, while Garg claimed he should have received Rs 11.07 lakh. The EPFO attributed the delay in interest payments to the account being inactive and software glitches.

EPFO cannot use software issues as an excuse

The Consumer Commission dismissed the EPFO’s defense. The Commission pointed out that mere verbal assertions, lacking solid evidence and based on software problems, cannot justify a nearly ten-year delay. Such an extensive delay is a clear indication of service deficiency and unfair trade practices. Although the EPFO transferred an additional Rs 3.67 lakh and Rs 64,841 to Garg’s account during the case hearing, the Commission still imposed a Rs 50,000 penalty and litigation costs on the EPFO.

The Commission clarified that the EPFO ​​should have provided sufficient documentation to justify the delay, citing technical difficulties, which it failed to do. This decision is a relief for millions of employees who face long delays in PF transfers when changing jobs. The Commission has ordered the EPFO ​​to disburse the amount within 60 days, otherwise it will have to pay 9 percent annual interest.

No action taken for 10 years

Despite Garg’s application, no action was taken for years. He even filed an RTI in 2011, but the matter remained pending. Finally, nearly 10 years later, on April 16, 2020, the EPFO ​​transferred Rs 6.21 lakh. However, according to Garg’s calculations, this amount should have been Rs 11.07 lakh. EPFO said that interest was not paid since the account was inoperative since 2011.

EPFO’s confession in court

Garg filed a complaint with the consumer forum in July 2021. Following this, the EPFO ​​admitted its mistake. EPFO admitted that the interest was not credited due to technical glitch. While the case was going on, EPFO ​​deposited Rs 64,841 and then Rs 3.67 lakh as additional interest in Garg’s account.