Stuck in a PF Dilemma: Who Should Cover the Interest on My Unprocessed Cheque?

Hello, I quit my previous company 4 years ago. There, I applied for a PF transfer, and they processed the transfer and sent a cheque to my current company at that time. However, my current company has misplaced the cheque and didn't deposit it with the PF commissioner. When I followed up with the previous company (theirs was a private trust), they informed me that the cheque was issued by them, but the amount was not deducted since no one deposited that cheque. Now, I have requested PF withdrawal (instead of transfer), and my previous company is ready to pay me the same principal amount (the same as 4 years ago). My question now is, who will pay the interest amount? My previous company (because the amount has accrued interest in their account) or my current company (because they misplaced and didn't deposit the cheque). My previous company argues that they processed their claim, settled, and moved the amount from their corporate account, so it's not their fault, and they will not pay me interest. Please help me.

Dear Ganesh, I need clarification here. You are saying that your PF cheque was given by your ex-company. To my knowledge, the amount is transferred by the PF office and not the company. Moreover, there is no physical cheque but a virtual transfer to your PF account in the new company. You only receive an intimation letter for the same. Please clarify what cheque you are referring to. In case of withdrawal, you also need to apply for PF through your employer's trust. Kindly verify this information.

Regards,
Viraj

Thank you for your prompt reply. My ex-company had their own PF trust. I believe that is the reason the check was issued by them and not by the PF commissioner. When I applied for a PF transfer, my previous company sent a check to my current company with the appropriate amount. At that time, I received an internal mail from my current company saying they received a check from my ex-company. They mentioned they would deposit it with the PF commissioner's office. However, they either delayed or misplaced the check.

Regards,

Dear Ganesh, even though the previous company/PF Trust has issued the cheque, you didn't utilize the cheque and withdraw the amount. As the amount is still pending with them, they have to issue the amount with interest. There will be an annual inspection by the EPFO for all PF Trusts. How can they show your accounts without accruing interest? If the PF Trust is not ready to grant interest, please contact the RPFC.

Regards,
Abbas.P.S

I would suggest that you obtain a certificate from your current company stating that the cheque was lost and then submit the same to your previous company. By doing so, you should be able to retrieve the amount.

Regarding the interest, Abbas is correct; the company in possession of the money is responsible for paying the interest.

Regards,
Viraj

Resolution for Date-Barred Check and Interest Payment

The check is now date-barred. It is an error, and as such, the amount is still lying in your old company's trust account. Usually, the trust invests the amount as per guidelines and earns interest as well. Hence, you can request a letter from your current employer stating they have misplaced the check and not deposited it in the bank, which your ex-employer can verify from their bank. You should ask for a fresh check. Interest will be paid as per trust rules for non-operating accounts.

The first thing is, you should try to get the check as early as possible, rather than dwelling too much on the interest. Anyway, you are losing interest now, and any delay will add to it.

Regards, Vijay

A few things are not clear:

1. PF is supposed to be deposited with the PF office, not with the company.
2. The old company's PF cannot be deposited by the new company into the PF office.
3. What is the amount involved?

Anyways, having seen the situation as you have given out, my conclusion is as follows:

A. Your ex-company was not giving government PF but just a localized version of savings.
B. Your ex-company/new company is not wrong by any count.
C. You will not get any interest from anyone.
D. Even when the PF office gives PF back, nobody pays any interest.

So be happy - nothing is going to come out of this.

The loss of the cheque is tantamount to the non-settlement of your account. Therefore, as it has been canceled before the issuance of a fresh cheque, your account is required to be settled again as if it was not settled earlier. The trust is liable to pay interest on the amount standing to your credit. If they do not agree, you should contact the concerned RPFC. If they do not respond, lodge a complaint with ACC CSD CPFC Office EPFO Bhikaji Cama Place, New Delhi.

Regards

Annual PF Statement Provision

There is a provision for employers to provide an Annual PF statement in June every year, regardless of whether it is an exempted or unexempted establishment. This statement clearly mentions the status of the carry-forward amount with interest and the accumulation of the last fiscal year's (March - February) account. Moreover, there is a provision for the P.F. accumulation transferred from the last organization.

It is unclear why you did not cross-check the transfer of your P.F. accumulation with interest to your present employer in the succeeding year of your joining with the present employer. Please clarify the above to provide further advice.

Thanks,
Gopal

@ Ganesh & dear all,

Key Considerations for PF Cheque Handling

Two things to note here:

A) It's a normal practice to send the PF cheque to the new employer. Typically, the employee requests the company consultant or concerned employees to deposit the same in the new PF account with the new organization.

B) Most of the Private PF trusts (as is the case here) have a rule that if you do not transfer or withdraw your PF within the specified period after you leave the organization, you shall not be eligible for any interest after the expiry of that period. You may note that government PF has started this w.e.f. 1/4/2011 for all dormant accounts over 3 years.

In view of point B, in my opinion, you need to:

1) Understand the period after which no interest was applicable from your previous employer trust.

2) Demand the interest for the specified period as the DD was not cashed and request a fresh D.D.

3) Since there is proof of receipt of the DD by your new employer (which they have misplaced), you should ask them to give you the interest for the remaining period until your previous employer issues a fresh DD.

I know it will be difficult to fight with your current employer, but at least you should demand the same in writing and follow up regularly to get the same or get alternate compensation, i.e., increment, etc.

All the best and

Regards:

I feel the chances of you getting interest are very bleak due to the following reasons.

Anybody or a trust will pay you interest only if they are earning interest/return on the amount they are holding. In your case, once the account is settled and a cheque is issued, that amount is not in an investable form and will not earn any interest. It will remain in a current bank account, and as you may know, a Current Bank Account hardly earns any interest.

Some other members have suggested that you should get interest since the PF Trust earns interest on amounts held by them. However, in your case, after the settlement of the account and the issuance of the cheque, that amount cannot be invested and will not earn interest.

You can probably pressurize your current employer to pay interest since the fault lies with them. They misplaced a cheque and also kept quiet.

Dear ganeshnewbi,

Your interest will be given by your previous employer until you work with them. After joining a new organization, all interest will be given by your new employer. So, it's your new employer's duty to give you interest because your last employer had given you the full and final cheque of your PF amount. It's your new employer's mistake not to have deposited your cheque. Additionally, it was also your mistake that you didn't check your PF status.

Regards,
Sandeep Kumar

When I clarified with our RPFC, the maximum time for the expiry of a cheque is 6 months. For that 6 months, the PF Trust will not receive interest. However, for the rest of the period, interest will be accrued to your account, for which you are entitled to receive.

Regards,
Abbas.P.S

From what I could make out, your previous company should have issued the cheque in the name of the regional PF commissioner of your new company location. Your transfer application would have also mentioned the same, including your new PF account number. If your transfer application is not as per the above, then it is your fault.

Moreover, you have mentioned that the previous company issued the cheque in the name of your existing company, which goes against the rules. They are supposed to transfer it only to the PF Trust or RPFC. They would have sent it by courier or by registered post, which is in accordance with the rules. You can demand proof of delivery. If they are unable to provide the proof of delivery, it implies that although they have prepared the cheque, they have not issued it, and the liability continues to rest on them.

I suggest that you may take up the case through the RPFC of the previous company location, with copies to the RPFC of the existing company and to both your company's managing directors. All the best.

You must have filled in Form 13 and submitted it to your ex/present employer for the transfer of accumulation to your new account. By using the online Employees Provident Fund Internet Grievance Management System (EPFiGMS), you can know about the present status:

However, still, one can take some measures to get the information:

01. First, you should directly ask your HR department to provide your PF Number and any other assistance you require concerning your PF-related issue.

02. However, if the employer neglects your request, just approach the Regional PF Office and consult the EDP section. (You have to be smart and humble while requesting the EDP section; just tell your company's name, your name, and your Account No. The person will verify your records through the computer and will let you know the exact status as of date.)

03. All of you seeking PF-related help may use the following link, which will take you to EPFO's newly launched "Employees Provident Fund Internet Grievance Management System (EPFiGMS) portal: EPFO <link updated to site home> or go to Home Page.

This is the new service started by EPFO for online redressal of grievances of the members of EPFO and covers the following types of queries:

1. Withdrawal/Final Settlement of PF (Form 19/20/31/10C)
2. Transfer of PF Accumulations (Form 13)
3. Scheme Certificate (Form 10 C)
4. Settlement of Pension (Form 10 D)
5. Issue of PF Slip/PF Balance
6. Payment of Insurance Benefit (Form 5 IF)
7. Cheque Returned/Misplaced
8. Other (Not covered above)

I HAVE USED THIS FACILITY MYSELF AND I GOT THE ONLINE REPLY WITHIN 9 DAYS.

Please tell us your experience with the above so that other members could benefit accordingly.

04. Also see my blog at:

EPFiGMS – EPF i-GRIEVIENCE MANAGEMENT SYSTEM - Blogs - RTI INDIA

EPFO has introduced the SMS-based communication platform - Blogs - RTI INDIA

PF accounts idle for 36 months or more months to fetch no interest - Blogs - RTI INDIA

In my opinion, since the amount has not been debited from the accounts of the P.F. Trust, the Trust will have to issue STOP PAYMENT ORDERS to the bank concerned after taking all the required actions as per banking rules in such cases. If the cheque is Time Barred, even then, the Trust can safely resettle the claim and issue a fresh cheque with up-to-date interest. The Trust may take an undertaking or an indemnity bond if still required.

I agree with the views of Mr. S. K. Bhargava to take up the matter with the Additional CPFC as all Trusts will have to follow the Model P.F. Rules, and the employer will have to bear any loss incurred.

With due regards,

A.K. Chandok, ex-RPFC

Hi, I had a similar experience where I transferred my PF from TATA PF Trust to EPFO after switching my job. There is an interest loss of 2 months in this case. Tata says they issued the cheque on 14 September 2017, so interest for September and onwards will be paid by EPFO. However, EPFO claims they received the cheque in October 2017 and will provide interest from November 2017 onwards. I raised this issue on EPFGIMS - SROVS/E/2019/01598 and PGPORTAL - MOLBR/E/2019/07977, but nothing has been done so far. Please suggest how I can get this interest.