The EPFO delayed the settlement of a PF claim by 35 days. The matter subsequently reached the court, which ordered the EPFO to pay 6% interest for the delay in settling the retired employee's PF claim.
The EPFO (Employees' Provident Fund Organisation) delayed a PF claim settlement by 35 days, resulting in the court imposing a penalty. This case originated in Mumbai, where the consumer court took action against the EPFO and ordered it to pay interest for the delay in settling a retired employee's PF claim.
The retired employee's PF claim amounted to over ₹14.06 lakh. The EPFO took 35 days to settle it. Consequently, the court directed the EPFO to pay 6% annual interest for the period of the delay.
Who filed the complaint?
The complaint was filed by a former employee of Fleet Maritime Services India Private Limited. He stated that he had submitted his complete PF claim to the EPFO on October 19, 2016. According to the rules, the EPFO was required to settle the claim within 20 days, but this did not happen. The complainant then approached the court.
EPFO's explanation
However, the EPFO contested the claim, stating that the employee had not submitted the necessary joint declaration along with the original application. Therefore, the application was returned on November 7, 2016. According to the organization, it received the complete documents on December 2, 2016, and the PF claim was paid on December 14.
Commission rejected the argument
The consumer commission did not accept this argument put forward by the EPFO. The Commission stated that the EPFO failed to produce any documentary evidence proving that the application submitted on October 19 was incomplete. Furthermore, the EPFO could not demonstrate that it had provided the employee with any written notification regarding deficiencies in the application. Consequently, the Commission ruled that the EPFO should have settled the claim within the stipulated timeframe; failure to do so constitutes a deficiency in service.
Commission's Order
Following the hearing, the Commission ordered the EPFO to pay interest at a rate of 6% per annum on the PF claim amount of ₹14,06,272 for the 35-day delay that occurred between November 9, 2016, and December 13, 2016. The EPFO has been granted 45 days to comply with this order. The Commission also observed that post-retirement savings, such as the PF, are crucial for individuals, and delays in their disbursement can cause financial hardship to retired employees.
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