Hyderabad: The Telangana High Court has pulled up the Employees’ Provident Fund Organisation (EPFO) for failing to refund Rs 4.05 crore to a company despite an appellate authority setting aside the demand against it.
Justice Nagesh Bheemapaka directed the EPFO to refund the amount along with 9 percent annual interest, holding that retaining the money without any stay order from a higher court was unlawful.
The dispute arose after EPFO authorities issued a demand notice to Virtusa Consulting Services Limited, alleging that the company had underpaid provident fund contributions by excluding components such as special allowance, conveyance allowance and food coupons from basic wages while calculating PF contributions.
Following the demand, Virtusa deposited Rs 4.05 crore with the EPFO in March 2020 while simultaneously challenging the order before the EPF Appellate Tribunal.
In May 2024, the tribunal ruled in favour of Virtusa and set aside the EPFO’s demand order. However, despite the appellate ruling, the EPFO did not refund the amount to the company.
Aggrieved by the inaction, Virtusa approached the Telangana High Court seeking directions for the refund.
During the hearing, Justice Nagesh Bheemapaka observed that once an appellate authority passes an order, government authorities are expected to implement it immediately unless they obtain a stay order from a higher judicial forum or challenge the decision through appropriate legal remedies.
The court held that retaining the company’s money for nearly 18 months after the appellate order, without any stay operating against it, was not legally sustainable.
HC directs EPFO to pay interest
Accordingly, the High Court directed the EPFO to pay interest at the rate of 9 percent per annum on the amount for the period from May 2024 to November 2025 and ordered that the payment be made within eight weeks.
The court further directed that the interest amount paid to the company should be recovered from the officials responsible for the delay during the relevant period.
