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PF denial costs bank Rs 3 lakh

The state consumer commission recently ordered the Bank of Baroda to pay compensation of Rs 3 lakh to a former employee for refusing to pay its contribution towards his provident fund. The commission also directed the bank to pay P Unnikrishnan Rs 1.33 lakh of the provident fund amount due to him.

Unnikrishnan filed the appeal in the Maharashtra State Consumer Disputes Redressal Commission in 2005 after a district forum, while directing the bank to pay interest on the provident fund, rejected his plea with respect to the contribution of the bank towards the provident fund.

In his appeal, the complainant said that he was an employee of the bank and his services were terminated. His provident fund as far as his contribution was concerned was given by the bank, but it was delayed. The officials refused to disburse the contribution of the bank towards his provident fund.

Unnikrishnan filed a complaint for interest on the amount which was given late by the bank. He also sought the contribution of the bank towards the provident fund.

The bank cited the forfeiture clause covered by the Bank of Baroda Provident Fund Rules that says an employee's contribution can be forfeited if it is established that the employee committed financial misconduct and caused large financial losses.

Unnikrishnan's lawyer pointed out that the final order of removal passed by the assistant general manager, disciplinary authority, was to the effect that his removal should not be a disqualification for future employment. The lawyer said there was no observation about financial loss.

"We find that forfeiture clause in the Bank of Baroda Provident Fund Rules cannot be invoked in the present case, which was wrongly invoked by the district forum," the commission said.

It held that Unnikrishnan was entitled to the contribution and the interest amount.

 Article referred: http://webcache.googleusercontent.com/search?q=cache:http://timesofindia.indiatimes.com/city/mumbai/PF-denial-costs-bank-Rs-3-lakh/articleshow/35032231.cms

 Comment:

This a perfect example of a case in favour of taking utmost care while dealing in any legal matters. In this case from the final order of the AGM, it would appear that the Bank is sympathetic to the problem of the disqualified employee and does not really appear to be blaming him for the loss. Under the circumstances, the stand taken by the State Commission is absolutely correct and if the Bank intended to codemn the employee, then it was botched up.

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