Not holder’s fault if EPFO portal shows no error : Delhi High Court

The Act is a beneficial social legislation to ensure better future of the employee concern on his retirement and for the benefit of the department in case of his death. If the very instrument of the Act shows no error in the online status then the fault cannot be placed on the holder. This was held in the judgment passed by a single judge bench Justice Prathiba M. Singh, in the matter of Alok Kumar Agarwal V. Union Of India & Ors. [W.P.(C) 2759/2021 & CM APPL.8306/2021], dealt with an issue where the petitioner filed a petition challenging the refusal by the EPF Authorities to pay interest for the period from 01 st December 2017 to 28th December, 2018, on the total withdrawn EPF amount of Rs. 1,41,62,650/- upon his retirement.

The denial to pay interest was on the ground that the Petitioner’s EPF Account has become an Inoperative Account in terms of Para. 72(6) of the Employees’ Provident Fund Scheme, 1952. As per the Respondent Authorities, interest is not liable to be paid on the said Inoperative Account, in view of the bar contained in Para 60(6) of the EPF Scheme, 1952. Hence, the Petitioner has preferred the present petition seeking payment of interest on the ground that the provisions of Paragraph 72(6) of the EPF Scheme, 1952, are not attracted to the facts of the present case. Accordingly, interest is sought at 8.55% per annum.

Counsel appearing for the Petitioner, relied upon Paragraphs 72(1) and 72(6) of the EPF Scheme, 1952. His submission on the basis of Paragraph 72(1) is that the Commissioner under the Act is under an obligation to make prompt payment in terms of the EPF Scheme, 1952. Therefore, he submitted that the obligation is on the Commissioner, and not on the account holder, to make any application for receiving the said amount.

He submitted that before an account can be declared as inoperative, an intimation would have to be given to the account holder concerned. However, the Petitioner never received any intimation as to his account becoming inoperative.

Counsel for the respondent submitted that the counter affidavit filed by the Respondent does have some discrepancies in terms of date of birth and other details of the Petitioner, however, the last instalment of the Petitioner was paid in November, 2014. Thereafter, no claim was raised by the Petitioner.

After hearing both the parties The Hon’ble Delhi High Court allowed the petition and held that there was a duty on the part of the EPFO to update the portal on the date when the account was being declared inoperative which would have enabled the Petitioner to withdraw the amount and invest it, in the manner he deems fit. The Petitioner remained under the impression that the amount in his EPF account would continue to earn interest. This, coupled with the Press Release dated 29th March, 2016 which gave an incorrect impression to the members of the public, may have led the Petitioner to litigate the present case. Thus, costs of Rs.1 lakh are imposed on the Respondent Authorities and asked that the same shall be paid within a period of 8 weeks.

Click here to view judgement

Judgement reviewed by – Vaishnavi Raman

Leave a Reply

Your email address will not be published. Required fields are marked *