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Sounder Rajan V (Advocate)     18 February 2011


Dear All

What are the penal provisions in the EPF Act for non compliance of the provisions of Contribution both Employer and Employee ?

The rate of penal damages for belated payment of EPF dues is as follows:

If the period of default less than 2 months -5 %
If the period of default is 2 months above but less than 4 months – 10 %
If the period of default is 4 months above but less than 6 months – 15 %
If the period of default is 6 months above–25 %

The above is in addition to 12 % simple interest .

Apart from the above the further consequences for default are:

Attachment of Bank Accounts

Realization of dues from Debtors[ Garnishee Order]

Attachment of moveable and immovable properties.

Arrest and detention in Prison..

Action under section 406/409 of the Indian Penal Code[ Criminal Law] and Section 110 of Cr .P.C

Prosecution.Prosecution for Non payment of contributions normally end in favour of the Department.Mandatory punishment of detention in Prison is provided .

Thanks & Regards

V.Sounder Rajan -VS Rajan Associates,
Advocates & Notaries -Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile :9025792684-9025792634


 1 Replies

Kumar Doab (FIN)     20 February 2011

Please accept hearfelt thanks for your posts and information and education you are providing.

kindly clarify:

- If the Ex. employee has supplied duly filled forms to employer by courier which is delivered within 3 days from dispatch.

_ and if the employer does not take any action on this for months.

- and if after months company arranges one phone call from a person who claims to be Consul;tant to the company for PF/EPF matters and that the forms need to be sent back to the emplyee but is not able to establish a good reason.

- and if the forms are submitted by the employer to the office of PF commissioner and employee receives an acknowledgment by courier , which is on plain paper with a seal.

- and if the employee does not receive the disbursment cheque for months and sends emails to company MD/Chairman/HR Head and they do ot reply.

-and if employee forwards email trail and files online complaint to EPF authorities and TAT is one month but even for months the reply is " matter is under examination.-

and the emplyee does not receive the payment.

what should  be done.

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