WP(C) No. 1850/2023 Page 1 of 12 HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU Reserved on: 15.10.2025 Pronounced on: 18.10.2025 Uploaded on: 18.10.2025 Whether the operative part or full judgment is pronounced WP(C) No. 1850/2023 CM No. 4292/2023 Naresh Kumar Gupta …..Petitioner Through: Mr. Ajay Abrol, Advocate Vs Union of India & Ors. .….Respondents Through: Mr. Sumant Sudan, Advocate Mr. Naresh Kumar Yadav, Regional Provident Fund Commissioner- II, Jammu, is present in person. CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE JUDGMENT 1. The petitioner has filed the present writ petition challenging communication No. JK / RO / Jmu / Legal (109) / 2023-24 dated 16.06.2023 issued by respondent No. 3 whereby his case for release of interest on provident fund has been rejected. A further direction commanding Serial No. 07 WP(C) No. 1850/2023 the respondents to release the interest accrued on the provident fund of the petitioner w.e.f 01.02.2021 to 09.12.2022 amounting to Rs. 1,68,955/- has also been sought. 2. As per case of the petitioner, he was an employee of J&K State Forest Corporation and was a subscriber of C.P. Fund Account since 1983 holding UA No. 101532549342 with J&K Provident Fund Organization. Upon coming into force of J&K Re-organization Act, 2019, Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 was made applicable to the Union Territory of Jammu and Kashmir after repeal of Jammu and Kashmir Provident Funds Act, Svt. 1998. It has been submitted that thereafter all accounts of State Provident Fund Organization were transferred to the Central Provident Funds Organization i.e. Regional Provident Fund Commissioner (respondent No. 3 herein). It has been submitted that an amount of Rs. 10,24,207/- at the credit of PF account of the petitioner was transferred to respondent No. 3 in January 2021. It has been further submitted that the petitioner’s account upon its transfer remained operative till 19.12.2022 on which date the provident fund dues were released in his favour. WP(C) No. 1850/2023 3. The grievance of the petitioner is that interest that had accrued on the amount standing to the credit of his provident fund account w.e.f 01.02.2021 to 09.12.2022 has not been released by the respondents in his favour. It has been submitted that the petitioner served a legal notice dated 12.06.2023 upon the respondents demanding the release of interest component but his request has been rejected in terms of impugned communication dated 16.06.2023. It has been submitted that an interest of Rs. 1,68,955/- has accrued on the amount of Rs. 10,24,207/- which was transferred from the State Provident Funds Organization to respondent No. 3 and that the same is payable to the petitioner. 4. The respondents have contested the writ petition by filing their reply. In their reply, it has been submitted that the petitioner was an employee of Jammu and Kashmir State Forest Corporation and he was a subscriber of C.P. Fund account since 1983 holding UAN No. 101532549342 with the J&K Provident Fund Organization. It has been submitted that after coming into force of J&K Re- organization Act, the Central Act was enforced in UT of J&K and all account holders of State Provident Fund were transferred to the Central Provident Fund. WP(C) No. 1850/2023 5. It has been submitted that petitioner’s contribution from 01.11.2019 to 28.02.2021 alongwith interest was credited to his PF Account No. JKJMU2032525/10277 in accordance with the rules upon receipt of his claim Form No. 13 on 30.10.2021. It has been further submitted that the petitioner rejoined another establishment on 01.03.2021, whereafter his contributions were credited to PF Account No. JKJMU2252300/11983 in accordance with the rules. 6. The respondents have given details of the UAN accounts of the petitioner which are reproduced as under :- UAN 101532549342 PF No. JKJMU2032525/10179 DOJ 23.04.1983 DOE 01.11.2019 REASON OF EXIT Cessation Past Accumulations EE Share – Rs. 3,34,298/- Received ER Share – Rs. 6,89,909/- Credit Month 11/2021 Final settlement EE Share – Rs. 3,34,298/- EE Share – Rs. 6,89,909/- Settled under Para 69(2) on dated: 09.12.2022 UAN 101536370384 WP(C) No. 1850/2023 PF No. JKJMU2032525/10277 DOJ 01.11.2019 DOE 28.02.2021 REASON OF EXIT Cessation Final Settlement EE Share – Rs. 31,828/- EE Share – Rs. 31,828/- Transferred to JKJMU2252300/11983 on 30.10.2021 Para 57(2) with interest upto 10/2021 PF No. JKJMU2252300/11983 DOJ 01.03.2021 DOE 11.04.2022 REASONS OF EXIT Cessation Final Settlement EE Share – Rs. 61,995/- EE Share – Rs. 61,995/- Para 69(2) on 13.12.2022 7. It has been contended by the respondents that no interest has accrued upon the account of the petitioner since his account had been marked as inoperative w.e.f November 2021 as per para 72(6) (ii) of EPF Scheme 1952. It has been further submitted that J&K Provident Fund Organization cannot ask the respondents to release interest amount to the account holder contrary to the provisions of EPF Scheme 1952. It has been submitted that the account of petitioner has been marked as WP(C) No. 1850/2023 inoperative as per the said Scheme because account numbers UAN 101532549342 and JKJMU2032525/10179 did not receive any contributions w.e.f 01.11.2019 and the petitioner had attained 55 years as on 09.05.2017 hence the same were marked as inoperative. It has been also submitted that the petitioner was making contributions to another account bearing UAN No. 101536370384. 8. I have heard the learned counsel for the parties and perused the record of the case. 9. So far as the facts pleaded by the petitioner in the writ petition are concerned, the same are not in dispute. It is admitted by the respondents that petitioner has not been paid interest on amount of Rs. 10,24,207/- w.e.f 01.02.2021 to 09.12.2022. The reason assigned by the respondents for not crediting the PF account of the petitioner with interest is that on 01.03.2021 the petitioner joined another establishment and his contributions were credited to different PF account No. JKJMU2252300/11983. It has been further contended that upon transfer of Provident Fund of the employees from J&K Provident Fund Organization to Central WP(C) No. 1850/2023 Provident Fund Organization after coming into effect of J&K Re-organization Act, 2019, the petitioner’s contributions from 01.11.2019 to 28.02.2021 were credited to PF Account No. JKJMU2032525/10277 along with due interest accumulated thereon. It is the contention of the respondents that in terms of Provisions of para 72(6) (ii) of EPF Scheme 1952 because the account numbers UAN 101532549342 did not receive any contributions w.e.f 01.11.2019, hence the said account was marked as inoperative and no interest was credited to the said account. 10. In the above context, it is to be noted that initially the petitioner was employed in J&K State Forest Corporation and he was holding provident fund account No. 101532549342. Upon transfer of his account to Central Provident Fund Organization, an amount of Rs. 10,24,207/- was lying at his credit and the account which was assigned by Central Provident Fund Organization to the petitioner was bearing No. JKJMU2032525/10179. The J&K State Forest Corporation was converted into J&K Forest Development Corporation and, therefore, the constitution of the employer of the petitioner underwent a change. WP(C) No. 1850/2023 Thereafter, a new PF account No. JKJMU2252300/11983 was assigned to the petitioner on 01.03.2021. The respondents have marked the initial PF account of the petitioner i.e. account No. JKJMU2032525/10179 (UAN101532549342) as ‘inoperative’ because no contributions were made to the said account after 01.11.2019. 11. The change of constitution of the employer of the petitioner resulting in change of his PF account cannot be attributed to the petitioner as he had no role in the same. Once a new account was allotted to the petitioner because of the change in the constitution of its employer, it was the obligation of the respondent-Funds Organization to merge that two provident fund accounts of the petitioners. Instead of doing so, the respondents- Funds Organization proceeded to mark the initial PF account of the petitioner as ‘inoperative’ and applied provisions contained in para 72(6) (ii) of EPF Scheme on the basis of which the petitioner has been denied interest w.e.f 01.03.2021. This action of the respondents is absolutely irrational and arbitrary in nature. WP(C) No. 1850/2023 12. Learned counsel for the respondents has submitted that whole system of operating the provident fund accounts of the employees by the respondent-Funds Organization is computerized and unless updated data is fed with regard to the change of provident fund account number of a subscriber into the system, previous provident fund account of the subscriber would be shown as ‘inoperative’ by the computer system. It has been submitted that it was the duty of the petitioner to ensure that the data is updated. 13. I am afraid the logic and reasoning given by the learned counsel for the respondent cannot be accepted. We are still at a stage when computers are controlled by human beings. It was the duty of the respondents to register the change of PF account of the petitioner in the computer system once the constitution of J&K State Financial Corporation underwent a change whereafter it was named as J&K Forest Development Corporation. This change led to the change in PF account number of the petitioner. The same could have easily been updated by respondent No. 3 who was in control of the system in which the data was lying stored. The petitioner had no WP(C) No. 1850/2023 access to the said system as it was beyond his competence to update the data. 14. The petitioner cannot be penalized for the events over which he had no control. The transfer of his provident fund account from J&K Provident Fund Organization to Central Funds Organization was beyond his control, he had no role in constitutional and legal changes that took place after coming into the force of the J&K Re- organization Act. Similarly, the change in constitution of the employer of the petitioner was also beyond his control. Merely, because the data pertaining to the petitioner was not updated in the computer system maintained by the respondents, the petitioner cannot be denied the interest that has accrued on the amount that was standing at his credit in the provident fund account. 15. The respondents in order to defend their action have placed reliance upon para 72(6) (ii) of EPF Scheme 1952. The same reads as under:- "accumulation in respect of any member who has either (retired from service after attaining age fifty five years or migrated abroad permanently) or died, but no application for withdrawal under paragraph 69 or 70 has been preferred within a WP(C) No. 1850/2023 period of thirty six months from the date it become payable, or if any amount remitted to a person, is received back undelivered, and is not claimed again within a period of thirty six months from the date it becomes payable, shall be transferred to an account to be called the 'Inoperative Account’. 16. A plain reading of above quoted para would reveal that an account can be designated as inoperative in a situation when a subscriber has either retired or migrated abroad and no application for withdrawal has been made within a period of thirty six months from the date it becomes payable. An account can also be designated as inoperative when amount remitted to a person is received back undelivered and is not claimed within 36 months. None of these situations had arisen in the case of the petitioner. He has ceased to be in service in April 2022 and continued to subscribe to the fund till his retirement though in a different account, which was necessitated due to the events as narrated hereinbefore. Thus, the respondents cannot take resort to para 72(6) (ii) of EPF Scheme 1952 to declare his account as inoperative. The said action of the respondents is, therefore, unsustainable in law. WP(C) No. 1850/2023 17. For the foregoing reasons, the writ petition is allowed and the respondents are directed to release the interest at the stipulated rate that has accrued on the amount of Rs. 10,24,207/- w.e.f 01.02.2001 to 30.04.2022 the date when the petitioner ceased to be an employee of J&K Forest Development Corporation. Needful shall be done by the respondents within two months from the date of this judgment, failing which, penal interest @ 6 % per annum on the amount due shall be payable by the respondents to the petitioner. (SANJAY DHAR) JUDGE JAMMU 18.10.2025 SUNIL Whether the order is speaking ? : Yes Whether the order is reportable ? : Yes