On 20th September, a bench of D2016 amendment in the Employers Provident Fund Scheme of 1952, does not repeal Paragraph 60(6) but merely extends some benefit qua certain categories of persons who may seek transfers from covered to non-covered establishments, to those persons who may have left employment prior to attaining 55 years of age, as also those not at fault for non-delivery of claim amounts.

The court also held that in case of those persons who have retired from service after attaining 55 years of age, there would, in fact, be no difference between the position of law prior to the 2016 amendment and post-2016 amendment.

Facts of the case:

The present petition has been filed by the Petitioner 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by the EPF Authorities to pay interest for the period from 01 st December 2017 to 28th December, 2018, on the total withdrawn EPF amount of Rs. 1,41,62,650/-, upon his retirement. 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.

Contention of the petitioner:

Mr. Himanshu Gupta, ld. Counsel appearing for the Petitioner, submitted the following:

  1. Relying upon Paragraphs 72(1) and 72(6) of the EPF Scheme, 1952, the counsel for the petitioner submitted that 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 submits that the obligation is on the Commissioner, and not on the account holder, to make any application for receiving the said amount.
  2. He further submitted that under Paragraph 72(6), two categories of persons are covered. The Petitioner in the present case would be covered under the second category, i.e., persons retiring after attaining the age of 55 years.
  3. It was also 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.
  4. He submitted that owing to the obligation imposed under Paragraph 72(1), interest is liable to be paid for the entire period and not merely for the period of 36 months because the Commissioner delayed the payment of interest till 2018.

Contention of the respondent:

Mr. Avnish Singh, ld. Counsel appearing for the Respondent Authorities raises the following submissions:

  1. It was submitted that that this Court lacks the territorial jurisdiction as the entire record is available in Calcutta, and the account was maintained by Respondent No.4, which is the office of the Authority, Assistant Provident Fund Commissioner located in Calcutta.
  2. He also submitted that the mere fact that the amount may have been credited in a Central Provident Fund office, would not vest the territorial jurisdiction on this Court. Moreover, he submits that the communication from the Delhi office, which is relied upon by the Petitioner, is a system generated automated message and can also not confer any jurisdiction.
  3. It was also stated that Secondly, he submits 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.
  4. It was argued that since no claim was raised by the Petitioner, the interest is payable only for the period of 36 months, and not beyond the said period.

Observation and judgment of the court:

The following observation was made by the Hon’ble bench of the court:

  1. Insofar as the territorial jurisdiction is concerned, although there may be a regional office of the EPF authority in Kolkata the fact that the Central Provident Fund Commissioner is in Delhi and the Petitioner is a permanent resident of Delhi and The portal of the EPF Authority is centralized and maintained from Delhi vests in the court the jurisdiction to decide this case.
  2. Once an application seeking settlement of a claim, if the same is not settled within 30 days, interest would be liable to be paid. However, the amendment dated 15 th January, 2011 in effect meant that once an account becomes inoperative, the members would not receive any interest.
  3. As per Paragraph 72(2), even if any portion of the amount, which has become payable, is in dispute or doubt, the payment has to be prompt in respect of that portion of the amount in regard to which there is no dispute or doubt, the balance being adjusted as soon as may be possible.

Thus, after observing that as the interest in the present case was beyond 36 months, therefore the petitioner is not liable to be paid. However, costs of Rs.1 lakh were imposed on the Respondent Authorities and the same was to be paid within a period of 8 weeks.`

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