Telangana High Court Orders EPFO To Pay 9 Percent Interest To Virtusa On Delayed Refund

The Telangana High Court in Hyderabad has ordered the Employees' Provident Fund Organisation (EPFO) to pay a nine percent annual interest to the IT firm Virtusa Consulting Services Pvt Ltd on a delayed refund of Rs 4.05 crore.

In the court order issued on June 15, Justice Nagesh Bheemapaka directed that the interest must be paid to the company within eight weeks. Crucially, the court ruled that the interest amount is to be recovered from the individual EPFO officials who were responsible for the delay in processing the refund.

Additionally, Justice Bheemapaka directed that the bank interest earned on the Rs 4.05 crore deposit during the relevant period must be donated to the Prime Minister's National Relief Fund.

The ruling was passed during the disposal of a petition filed by Virtusa Consulting Services. The IT firm approached the high court alleging that the EPFO had failed to return the Rs 4.05 crore sum, which the company had originally deposited in March 2020.

The original deposit was made pursuant to an EPFO order that raised provident fund dues against Virtusa for the period spanning November 2008 to June 2015. The EPFO had raised this demand after claiming that Virtusa had wrongly excluded several components, such as conveyance allowance, food coupons, and special allowance, while calculating its provident fund contributions. Furthermore, the EPFO alleged that the firm had incorrectly applied the wage ceiling for international workers.

However, an appellate authority subsequently set aside the EPFO's demand in May 2024. Virtusa argued before the High Court that the EPFO neither challenged the appellate authority's order for over 18 months nor refunded the deposited amount, despite the company making several representations.

Virtusa contended that the EPFO's continued retention of the Rs 4.05 crore was both illegal and arbitrary, prompting the High Court's intervention and the subsequent order for interest payment.