EPFO must release provident fund dues from Special Reserve Fund upon substantiation of fraudulent third-party withdrawal.

The Petitioner sought a direction to the Employees’ Provident Fund Organization (EPFO) to release his provident fund and pension dues, which were fraudulently withdrawn by an unknown person in April 2017

The Petitioner had previously approached the Court in 2019, resulting in a direction to the EPFO to consider his representation

On 19.12.2019, the EPFO issued an order stating that re-authorization of funds could only occur through the Special Reserve Fund (SRF) after an investigation confirmed the fraud

Consequently, an FIR was registered in 2020, and the Central Bureau of Investigation (CBI) filed a charge-sheet on 23.08.2024

The CBI investigation established that the Petitioner was abroad at the time of the withdrawal, his signatures were forged on a second application, and a private individual (an employee of the establishment) committed the fraud, facilitated by the "gross negligence" of EPFO officials

Whether the EPFO is liable to reimburse the Petitioner’s fraudulently withdrawn provident fund and pension dues from the Special Reserve Fund (SRF) following the substantiation of fraud by the CBI

The Court relied on the internal regulatory framework of the EPFO concerning the Special Reserve Fund (SRF), which is specifically designated for the re-settlement of claims in exceptional cases involving fraudulent payments where the member's account balance is zero

The court also considered the provisions of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952, regarding the organization's responsibility to maintain and settle member accounts

The Court observed that the primary obstacle to the Petitioner's relief—the requirement for a formal conclusion of the fraud investigation—had been resolved by the filing of the CBI charge-sheet

The investigation definitively established that the Petitioner was a victim of fraud, as evidenced by forged documents and the fact that he was out of the country during the alleged transaction

The Court noted that the EPFO’s own counter-affidavit admitted that the SRF is intended for cases where "life savings have been fraudulently withdrawn"

Since the CBI report confirmed that the second application was processed despite being forged and that EPFO officials acted with gross negligence, the Court found that the "procedural compulsions" previously cited by the respondent no longer applied

Consequently, the conditions for utilizing the SRF were fully satisfied.

The EPFO was ordered to take recourse to the Special Reserve Fund (SRF) to fulfill these payments within a period of 12 weeks from the date of the order

The petition was disposed of accordingly