The Hindu : New Delhi News : DTC made excess payment to PF: CAG

Online edition of India's National Newspaper
Wednesday, Apr 06, 2005

New Delhi

New Delhi

DTC made excess payment to PF: CAG

By Our Staff Reporter

NEW DELHI, APRIL 5. A major fraud involving Government money in the Delhi Transport Corporation has come to light in the report of the Comptroller and Auditor General for the year ended March 2004 which has found that the Corporation made excess contribution of employer's share towards the Provident Fund resulting in undue benefit of Rs 3.15 crores to the employees.

The report said that Section 29 of the Employees' Provident Fund Scheme 1952 provides that contribution payable by the employer under the scheme shall be at the rate of 12 per cent of the pay (basic wages, dearness allowance and retaining allowance) payable to each employee.

And it said the contribution payable by the employee under the scheme shall be equal to the contribution payable by the employer in respect of such employee subject to the condition that though the employee can contribute an amount exceeding 12 per cent of the wages, the employer shall not be under any obligation to pay any contribution over and above his contribution payable under the Act.

Further, the CAG report said that under Section 26A, where the monthly pay of an employee exceeds Rs 6,500, the contribution payable by the employer shall be limited to the amount payable on a monthly pay of Rs 6,500.

However, an audit of the accounts of DTC revealed that the Corporation contributed employer's share at the rate of 12 per cent between June 2001 and January 2004 without limiting the amount payable on monthly pay up to the prescribed limit of Rs 6,500. This resulted in payment of excess contribution amounting to Rs 3.15 crores.

Moreover, the report stated that when the matter was reported to the DTC Management and the Delhi Government in May 2004, the Delhi Government stated in August 2004 that Clause 29(2) of EPFS stipulates that the contribution payable by the employer shall be equal to the contribution payable by the employee and that there was no ceiling of Rs 6,500 as cited by the audit and hence the contribution has been correctly made.

Responding to the Delhi Government's contention, which rather than undoing the wrong sought to justify it, the CAG said "the reply of the Government is not tenable because Section 26 A of the EPFS clearly states that the employer is under no obligation to pay any contribution over and above that payable under the Act and that this contribution should be equivalent to the share of the employee limited to the amount payable on a monthly pay of Rs 6,500."

The non-observance of this limit, the CAG report said, resulted in excess contribution of Rs 3.15 crores into the Provident Fund account of the employees at the cost of the Corporation -- which incidentally has been running at a huge loss.

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