EPFO Penalised For 10-Year Delay In Fund Transfer, Asked To Pay Rs 50,000 To Subscriber

The District Consumer Disputes Redressal Commission-II (DCDRC-II), Chandigarh, has ordered the Employees’ Provident Fund Organisation (EPFO) to pay a penalty of Rs 50,000 to an EPF subscriber. The order came in response to the inexplicable 10-year delay in transferring the subscriber’s fund from the old to the new employer. The EPF scheme that is aimed at providing a financial safety net to the subscriber has proved to be a long-drawn grievance.

The Commission’s decision, led by president Amrinder Singh Sindhu, highlights how the inordinate delays in claim processing reflect a deficiency in service. By awarding the compensation to the complainant (subscriber), the Commission has clarified that the government agency must upgrade itself to match the digital age and ensure that individuals are not forced to get into legal battles. 

Case Background

The dispute started when the complainant (Omesh Garg) switched jobs during 2009-10. He left his job in Tech Mahindra, Pune, in February 2009, and joined Infosys Limited in September 2010. During this period, he held his EPF account with the Pune Regional Office. After getting the Job in 2010, he submitted a formal application through his employer to transfer his accumulations to the EPF account with the new employer.

However, the funds were not transferred. Garg filed multiple RTI applications and further correspondence starting in 2011 to find out the whereabouts of his EPF funds. But it was only after 10 years, in 2020, when EPFO transferred the funds, but according to the complainant, it was not the full amount. The EPFO transferred only Rs 6.21 lakh (Rs 6,21,826).

Arguments

Garg argued that the delay by the EPFO in transferring funds shows gross deficiency, and even though the fund has been transferred, it is only partial, as the full amount he is entitled to stands at Rs 11.07 lakh (Rs 11,07,498). He contended that EPFO had wrongly stopped crediting interest in his EPF account from 2011, despite his pending transfer request.

The EPFO admitted to the delay before the Commission but defended the same, attributing it to technical difficulties and the error in system software that created issues in claim processing. It further argued that after re-examining the case during the litigation, they had credited the interest up-to-date to the subscriber's account. The Commission noted that the “interest amount of 64,841/- for the financial year 2010-11 was transferred to the current PF account of the complainant. Again, the case was re-examined and up-to-date interest (including UCD period) was credited with the amount of 3,67,052/- to the said account.” 

EPFO added that now there is no amount due for payment. However, the complainant argued that there was still an amount (Rs 1,62,296) that he is entitled to receive from EPFO.

Commission’s Observation

The Commission observed that EPFO had failed to provide any “cogent documentary evidence” to explain the decade-long timeline. The Bench also dismissed the arguments of technical errors, saying that such an excuse “does not appear to be a plausible and valid ground” for such an inordinate delay.

While the bench, due to a lack of expert financial certification, could not verify the complainant’s claim of a shortfall of Rs 1,62,296  in payment, it focused on the administrative failure. The Commission noted that the inordinate delay in transferring the funds brings it under the unfair trade practice.

The Order

In its order dated March 16, 2026, the Commission partly allowed the complaint. It directed EPFO to pay a lump sum of Rs 50,000 as compensation to the complainant for the mental agony and harassment, along with the legal expenses. It also directed EPFO to pay the amount within 60 days, failing which an interest at the rate of 9 per cent per annum will be added to the compensation from the date of the order until the funds are realised.

FAQs