RTI Query Exposes PF Scam Worth Crores [Read Order]

The Public Information Officer of EPFO has told the CIC that the PF contribution of employers were getting credited in someone else’s account instead of their respective PF accounts.

A PF scam running into crores of rupees has come to light through an RTI appeal. The EPFO got into alert mode with the RTI request and alerted investigating agencies, besides initiating an internal inquiry.

Central Information Commissioner Prof M Sridhar Acharyulu directed the EPFO to give a report to the appellant about the status of his claim and explanation to his complaint for de-freezing of account within 21 days.

The commission took a serious note of the scandal, the quantum, width and depth of which is yet to be understood and observed that the respondent authority has a duty to secure the hard-earned money of the workers in PF accounts and inform them about their response to this PF misappropriation scandal by probing it and giving a report of action taken within two months.

This CIC order shows the potential of RTI in exposing small or medium frauds that are widespread in lakhs of public authorities all over the country.

The Public Information Officer (PIO) of EPFO told the Central Information Commission, in a second appeal by Mr Sandeep, that the PF contribution of employers were getting credited in someone else’s account instead of their respective PF account and consequently, the appellant alleged that his PF money was sent to some other account and someone else’s PF money has been received in his account. This indicates a huge scam that needs to be probed and the money of workers should be protected in their PF account.

The PIO explained that they have suspicion on two establishments, which are into habit of receiving the cheque of the member but the signature and amount on it will be of someone else. The PIO expressed shock that such a fabrication of the establishments giving different account numbers and other relevant details. The appellant was an employee of one of two establishments.

The officer claimed that the respondent authority is releasing the PF funds to the employers concerned only in two situations i.e., (1) when the amount has been withdrawn in an employer’s name himself, and (2) when there is no withdrawal is recorded, but if the amount is received in an employer’s account through a different name, then the respondent authority is withholding the release of PF fund and tag it as suspicious account.

Mr Sandeep filed RTI application seeking to know name of the EPFO official dealing with his PF a/c, date of transfer of his money, name of person in whose account his money has been transferred, his address and account number, action taken or inquiry report, if any, as his saving account with the CBI had been frozen without any notice to him. He was informed by the bank about some fraudulent preliminary enquiry being carried out by the EPFO. He complained that EPFO Vigilance department froze his account without giving him any notice. He also sought to know the time required to unfreeze his account due to financial difficulty.

The CPIO informed that the desired information/documents cannot be provided under section 8(1)(h) of the RTI Act, 2005, as the matter is under investigation and the revelation of the information would impede the process of investigation.

The PIO told the CIC that a fraud of more than Rs 3 crore has come to light and presently the matter is entrusted to the SHO, Ashok Vihar police station, under which the investigation is in process. The PIO submitted that the information sought by the appellant could not be given because his PF account number was frozen along with 190 other accounts in pursuant of an investigation initiated suo motu by the EPFO.

Mr Sandeep explained his difficulties as his amount was locked up because of freezing his account.

The officer expressed inability to copy the documents as those were handed over to police for investigation.  (Decision in Sandeep Tanwar v. PIO, EPFO, CIC/EPFOG/A/2017/111939, on 12.5.2017).

Read the Order here.