EPFO Liable For Deficiency In Service For Arbitrarily Rounding Down Employee's Service Period: Kangra Consumer Commission

The District Consumer Disputes Redressal Commission, Kangra at Dharamshala (Himachal Pradesh), comprising President Hemanshu Mishra and Members Arti Sood and Narayan Thakur, held the Employees' Provident Fund Organisation (EPFO) liable for deficiency in service. It found that the EPFO had arbitrarily rounded down the complainant's service period without evidence while calculating his pension withdrawal benefit, resulting in a short payment. Facts The complainant, Abhinay Katoch, was employed as a clerk at DAV Public School through an outsourcing agency from April 4, 2024, to March 15, 2025. During this period, statutory provident fund and pension contributions were regularly deducted from his salary and deposited with the Employees' Provident Fund Organisation (EPFO). According to his EPF passbook, the total pension contribution stood at ₹14,230. However, when he applied for pension withdrawal benefits, the EPFO credited only ₹12,750 to his bank account. Alleging that the short payment remained unresolved despite repeated representations, the complainant approached the Consumer Commission seeking the balance amount along with interest, compensation and litigation costs. Arguments by EPFO EPFO submitted that it had calculated the withdrawal benefit strictly as per the Employee's Pension Scheme, 1995. It contended that excluding a 16-day non-contributory period, the complainant's pensionable service period was 10 months 11 days, which was rounded down to 10 months. As per this period, they argued that they calculated the withdrawal benefit correctly and had also explained the same to the complainant. Observations by the Commission The Commission observed that the EPFO had failed to show any evidence regarding the 16 days non-contributory period of the complainant. The Commission found that the complainant had regularly worked for a period of 11 months 12 days, making the EPFO's decision to arbitrarily round off the service period down to 10 months, legally unsustainable. The Consumer Commission also clarified that under Table D of the Employees' Pension Scheme, 1995, the withdrawal benefit is not a simple direct refund of the total cash contributions visible in the passbook, but is a factor-based computation. The bench acknowledged that EPFO calculated correctly using the maximum statutory wage ceiling of 15,000 rupees per month. However, the Commission held that EPFO committed a clear error by applying the factor of 0.85 applicable to ten months' service instead of the factor of 0.94 applicable to 11 months and 12 days' service, resulting in a short payment to the complainant. As a result, the Consumer Commission directed the EPFO to pay the shortfall amount of ₹1,350 to the complainant, along with interest at 9% per annum from the date of the short payment until realization. It also directed the EPFO to pay ₹1,000 as compensation for mental agony and harassment and ₹2,500 towards litigation expenses. Case Title: Abhinay Katoch vs. EPFOCase Number: DC/18/CC/297/2025 Click here to read/download the order

EPFO Liable For Deficiency In Service For Arbitrarily Rounding Down Employee's Service Period: Kangra Consumer Commission

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Apoorva Pandita

EPFO Liable For Deficiency In Service For Arbitrarily Rounding Down Employee's Service Period: Kangra Consumer Commission

Apoorva Pandita

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Apoorva Pandita

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