Provident Fund Department JCT Mills
The Provident Fund (PF) Department recently conducted JCTs at Phagwara and Hoshiarpur. It has initiated significant proceedings to secure an amount of Rs 100 crore belonging to around 15,000 ex-employees of the mills. The move comes in response to numerous complaints from these ex-employees, who raised concerns about possible irregularities in the handling of their Employees’ Provident Fund (EPF) contributions.
The process began after a series of allegations by former employees of JCT Mills, who alleged irregularities in EPF contributions made by the company. The complaints triggered an investigation by the Employees’ Provident Fund Organization (EPFO), headed by regional commissioner Pankaj Kumar. He confirmed that a show-cause notice was issued to JCT Mills, marking the initial step towards potentially revoking the company’s exemption from standard EPF requirements.
This exemption, usually given to firms that manage their own provident funds, is now under scrutiny. The audit teams of the PF department found that the funds are currently safe, held in banks in the form of demat accounts as per regulatory norms. However, to prevent any unauthorized transactions, banks have been directed not to sell any bonds or securities of the EPF Trust without the express approval of the Regional PF Commissioner.
In an effort to restore confidence among the affected employees, the PF Department has decided to secure an amount of Rs.100 crore under their control and process the claims as per the requests received. Already, claims of Rs 45 crore have been submitted by JCT employees to withdraw their EPF savings. Although the process of settling these claims is expected to be lengthy, the PF department has committed to expedite the process, which is likely to be completed within a year if the JCT mills fully cooperate.
JCT The mills, once a thriving textile enterprise, are currently facing serious financial difficulties. With the Hoshiarpur mill completely closed and the Phagwara mill almost non-functional, the company now has only 100 employees. This financial downturn has added to the challenges associated with managing EPF contributions for its ex-employees.
During the audit for the financial year 2022-23, JCT Limited was found in default for not depositing the EPF contributions in the EPF Trust Account. This finding has led the PF department to initiate an inquiry under Section 7A of the EPF and MP Act, 1952 to ascertain the amount owed by the company. Additionally, compliance audits for the years 2023-24 have begun, with teams conducting inspections to ensure full compliance.
JCT Ltd’s failure to comply with para 27AA of the EPF Scheme, 1952 has prompted an investigation. The process to revoke the company’s exemption has begun, including a third-party audit following internal assessments. The results of these investigations will be forwarded to the EPFO headquarters in New Delhi for further review, which may result in the cancellation of JCT’s EPF exemption. If the company fails to meet regulatory requirements, it may face legal action.
The intervention of the Provident Fund Department is an important step to protect the hard-earned savings of the ex-employees of JCT Mills. With the Rs 100-crore corpus now under greater protection, it is hoped that despite the challenges faced by the company’s current financial position, these ex-employees will soon receive the EPF benefits they are entitled to. This ongoing situation underscores the importance of strict oversight in managing employee benefits, ensuring that organizations meet their obligations to their employees.
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