Employee wins Rs. 50,000/- compensation from EPFO for 10-year delay in processing EPF transfer claim

Employee gets Rs. 50,000/- compensation as EPFO delayed his PF transfer from old company to new company citing technical computer delay for nearly a decade.

 

Synopsis of the Case

 

The Chandigarh Consumer Commission ruled that the EPFO cannot use software issues as an excuse for a decade-long delay in transferring an employee's PF funds. Despite the EPFO's claims of technical difficulties, the commission found an inordinate and unexplained delay, amounting to deficiency in service. The EPFO was directed to pay Rs. 50,000/- as compensation and litigation costs.

 

The District Consumer Disputes Redressal Commission, Chandigarh recently ruled that the Employees' Provident Fund Organisation (EPFO) cannot use software-related issues as an excuse for nearly a decade's delay in transferring money from an employee's old provident fund (PF) account to his new PF account,

 

To tell you in a brief about the issue, Mr Garg was employed with Tech Mahindra in Pune on February 27, 2009 his office had opened a provident fund (PF) account for him. He left Tech Mahindra on February 27, 2009, and remained unemployed for sometime and then joined Infosys on July 19, 2010, where another PF account was opened by the HR department. This resulted into him having two PF accounts with EPFO.

 

To solve this issue, Garg applied through his current employer (Infosys) in September 2010 to transfer the accumulated funds from his previous PF account with Tech Mahindra to his current PF account.

 

Despite repeated efforts, there was no response from the EPFO regarding his PF transfer, Garg said. He then filed an RTI application on September 9, 2011, seeking details on the status of his transfer application.

 

The EPFO replied on November 9, 2011, to his RTI, initiating a prolonged exchange of correspondence between the two parties. Finally, on April 16, 2020, the EPFO transferred Rs. 6.21 lakh to Garg's new PF account. However, Garg argued that, based on his calculations, he should receive Rs. 11.07 lakh.

 

In response to his objection, EPFO stated that interest payments were stopped because the account was classified as inoperative starting April 1, 2011. Therefore, interest income for the period from 2012-13 to 2015-16 was not credited to Garg's account.

 

On May 23, 2021, Garg filed another RTI appeal with the competent authority. However, the EPFO ignored it and did not pay the balance amount/interest to him.

 

Alleging deficiency in service and unfair trade practices by the EPFO, Garg filed a consumer complaint before the Chandigarh district commission seeking transfer of the balance amount along with interest, compensation, and litigation costs. This consumer case was filed by Mr Garg on July 22, 2021.

 

After the consumer case was filed, the EPFO acknowledged that while Garg had informed them regarding the delay in PF transfer, they could not process it due to some ongoing technical difficulties with the claim processing. The EPFO also said that this type of technical issue is general for all such types of claims, which is why his claim could not be processed.

 

The EPFO categorically stated that Garg's claim was settled on February 24, 2020, and that Rs 6.21 lakh was transferred to his current PF account at Infosys. However, the system's software application did not credit the interest for the financial year 2010-11 due to a technical error. Hence, the interest amount of 64,841 for that financial year (2010-11) was transferred to Garg's current PF account.

 

The EPFO said that after Garg's concerns regarding the incorrect amount, they re-examined the records and subsequently credited the account with an updated interest amount of Rs. 3.67 lakh, including the UCD (unclaimed credit) period.

 

On March 16, 2026, Garg partly won the case in the consumer commission. Advocate Omesh Garg and Advocate Devinder Kumar represented him.

 

Chandigarh consumer commission order

 

The District Consumer Disputes Redressal Commission, Chandigarh, said that both parties admit that, during the pendency of the current consumer complaint, the EPFO had transferred another amount of Rs 3.67 lakh on April 3, 2022, and Rs 64,841 on June 7, 2022, to his (Garg's) new PF account (Infosys) after re-examining the case.

 

However, Garg argued that the EPFO is still liable to pay an amount of Rs. 1.62 lakh to him, but the EPFO said that the calculation relied upon by him is wrong and nothing is due to him.

 

The consumer commission said that Garg, in his support, has relied upon a calculation sheet, but the same appears to be prepared by the complainant/his counsel only and not by a Chartered Accountant (CA) or some expert. 

 

On the other hand, the EPFO has contradicted the same by filing their calculation sheet (and stated that the complainant's case was re-examined and up-to-date interest (including the UCO period) was credited to his account and nothing is due to him.

 

The Chandigarh district Consumer Commission said: "In such circumstances, it is unsafe to hold that any amount is due to be transferred by the EPFO in the account of the complainant or that there is any deficiency in service or unfair trade practice on the part of the EPFO to that extent."

 

The Chandigarh district Consumer Commission next decided on the issue about deficiency of service by the EPFO. The consumer commission said that it isn't without a doubt that the EPFO, with a view to avoid liability, has taken the plea that the said delay occurred due to technical error/difficulties in processing the claim, but the same does not appear to be plausible and valid ground.

 

Moreover, except for the self-serving bald averments in its defence, the EPFO has not produced any cogent documentary evidence to explain such a long delay.

 

The Chandigarh district consumer commission said: "Hence, it is safe to hold that there is definitely an inordinate and unexplained delay of nearly a decade on the part of OP (EPFO) in transferring the provident fund accumulations of the complainant, which in itself amounts to deficiency in service and unfair trade practice on its part, and the consumer complaint deserves to succeed to that extent."

 

In view of the above discussion, the consumer commission said that the present consumer complaint succeeds, and the same is accordingly partly allowed, and the EPFO is directed to pay a lump sum amount of Rs 50,000 to the complainant as compensation for the harassment caused as well as litigation expenses.

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This order shall be complied with by the EPFO within 60 days from the date of receipt of its certified copy, failing to the aforesaid amount shall carry interest@ 9% per annum from the date of this order, till it's actual realization.