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Report No. 137

6.2. The Commission hereby recommends-


Creation of Ombudsman as Outlined in Chapter III

By enacting a statute, a high powered office of Provident Fund Ombudsman invested with powers-

(a) inter alia to seek information from all employers/establishments having Provident Fund Schemes regarding claims for payment of provident fund accumulations etc. pending with them for more than three months and to issue appropriate directions for settlement of the pending claims and to enforce compliance therewith should be created.

(b) Such employers/establishments shall be under a statutory duty to submit returns regarding pending claims within the prescribed time.

(c) He should be armed with jurisdiction to monitor delays in disbursements of provident funds dues etc. in establishments (exempted as well as unexempted) covered by the Act and the Schemes as well as public sector undertakings and other establishments having Provident Fund Schemes not covered by the Act.

(d) The essential obligation of the Ombudsman will be to identify cases of delay in all aforesaid areas and spheres on the basis of the scrutiny of returns or otherwise and to ensure prompt disbursements by suo motu issuing appropriate directions and taking follow up action to secure compliance,

coupled with

the obligation to invite complaints regarding delay in disbursements to the rightful claimants by recourse to public media and to redress their grievances by issuing appropriate directions and taking follow-up action to secure compliance with his directions.

and also with

the obligation to issue appropriate directions to obviate delays in regard to all other cases in general based on his experience or otherwise considered expedient by him.


The Ombudsman may be required to submit an annual report of the working of his office, indicating problems faced by him and making such recommendations as may be deemed necessary by him for streaming the administration. His report may be placed before the Parliament within six months.


The Ombudsman may direct the holding of a Provident Fund 'Lok-Adalat' for settlement of the pending cases periodically or as and when considered appropriate, necessary or expedient by him in respect of any particular establishment or class of establishments and the concerned officers shall be obliged to comply with his directions at the peril of penal consequences. The Ombudsman himself or his delegate may remain present for the purpose of supervision at such 'Lok-Adalat.' (See Elaborate Recommendations as Mentioned in Chapter IV)


The relevant provisions of the Act and the E.P.F. Scheme should be amended as set out in Chapter IV by inter alia providing in substance to the following effect:-

(1) Disbursement of provident fund and similar benefits should not be withheld on the ground that-

(a) the concerned employee has not vacated quarters allotted to him (see 4.1.3);

(b) the concerned employee has not produced no demand certificates (see 2.5.8 and 4.1.3);

(c) the concerned employee has not produced succession certificate except in the cases covered by clause (iii) of paragraph 70 (see 4.6.2);

(d) someone has objected to the payment to the nominee or the beneficiaries as defined by the Schemes to whom the authorities are bound to make payment unless prohibited by a court of law from doing so (see 4.2);

(e) a disciplinary proceeding is pending (see 4.3);

(f) employer has failed to deposit the deductions made from the employee's wages and or his own contribution (see 4.5.2).

(2) The Department shall not reject any claim without close scrutiny informed with sympathy and without passing a reasoned order after hearing the claimant (see 4.12).

(3) Gross negligence or callous indifference shown by any officer resulting in unwarranted delay in making payment to a claimant should be treated as serious misconduct liable to entail dismissal or removal of the concerned official from service.

(4) The Department shall pay all outstanding Past Claims withheld on the Ground of Default of Employer to Deposit his own or Employees' Contributions from its Special Reserve fund as indicated in Para 4.5.2 of Chapter IV.

And also adopt other measures indicated in Chapter IV.


To make a statutory provision enabling an employee to dearly state in writing in the very application making nomination, either that he wants that "the nominee shall take the amount absolutely in his or her own right", OR that the "nominee shall collect it and pay to my family members entitled thereto under para 70 (ii) read with para. 2(g) of the E.P.F. Scheme."1 And to amend the relevant provisions as suggested in para. 5.11 so as to make the nominee an absolute owner or a collecting agent as per the desire of the nominator.

1. Paras. 70(ii) and 2 (g) of the Employees Provident Fund Scheme.


Regulation 14 of Central Warehousing Corporation Employees Provident Fund Regulation, 1962 regarding denial of interest from due date till actual payment should be 'deleted' Whereas provision requiring payment of interest till the end of the month preceding the date on which the final payment is authorised should be 'inserted.' So also Regulations 15(2) and (3) regarding 'forfeiture' should be 'deleted' and all similar Schemes that may be existing in statutory corporations and other exempted or uncovered establishments should be similarly modified. (See 4.13).

Need for creating Office of Ombudsman and for Evolving Legislative - Administrative measures Inter alia to relieve hardships caused by Inordinate Delays in settling Provident Fund claims of Beneficiaries Back

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