Central

Section 6A of The Provident Funds Act, 1925

Withholding or recovery of Government contributions in case of Central Government officers taking up, without prior permission, commercial employment within two years of their retirement.

1[6A. Withholding or recovery of Government contributions in case of Central Government officers taking up, without prior permission, commercial employment within two years of their retirement.--(1) In this section, unless the context otherwise requires,--

(a)"Central Government officer" means a subscriber to, or depositor in, a contributory provident fund constituted by the Central Government, who, immediately before his retirement, is a member of a Central Service Class I, but does not include an officer appointed under a contract of service for a specified term;
(b)"commercial employment" means employment in any capacity (including that of an agent) under any company, co-operative society, firm or individual engaged in trading, commercial, industrial, financial or professional business and includes also--
1. (i)a directorship of a company;
2. (ii)the holding of any office, whether elective or otherwise, such as that of president, chairman, manager, secretary, treasurer, by whatever name called in a co - operative society; and
3. (iii)the setting up of practice, either independently or as partner of a firm, as adviser or consultant in matters in respect of which the Central Government officer,--
(A)has no prefessional qualifications and the matters in respect of which the practice is to be set up or is carried on are relatable to his official knowledge or experience, or
(B)has professional qualification, but the matters in respect of which such practice is to be set up are such as are likely to give his clients an unfair advantage by reason of the posts held by him under the Central Government, or
(C)has to undertake work involving liaison or contact with the offices or officers of Central Government, but does not include employment in or under a corporation or company wholly or substantially owned or controlled by Government or employment in or under a body controlled_ or financed wholly or substantially by Government;
(c)"Government contributions" means contributions made after the commencement of the Provident Funds (Amendment) Act, 1975 (46 of 1975), in respect of any period after such commencement, by the Central Government or by a State Government or by a local authority within the meaning of the Local Authorities Loans Act, 1914 (9 of 1914);
(d)"prescribed" means prescribed by rules made by the Central Government by notification in the Official Gazette.

(2)No Central Government officer shall have any right to the Government contributions made to his credit in a contributory provident fund in any case where he takes up commercial employment at any time before the expiry of two years from the date of his retirement without the prior permission of the Central Government. Explanation 1.--For the purposes of this sub-section and sub-section (7), "date of retirement" in relation to a Central Government officer re-employed after retirement without any break either in the same or any other Class I post under the Central Government or any other equivalent post under a State Government, shall mean the date on which such Central Government officer finally ceases to be reemployed in Government service. Explanation 2.--A Central Government officer permitted by the Central Government to take up a particular commercial employment during his leave preparatory to retirement shall be deemed, for the purposes of this sub-section, to have obtained prior permission of the Central Government for his continuance in such employment after retirement.
(3)Subject to the provisions of sub-section (4), the Central Government may, by order in writing, on an application made in the prescribed form by a Central Government officer, grant, subject to such conditions, if any, as it may deem necessary, permission, or refuse, for rea sons to be recorded in the order, permission, to such officer to take up the commercial employment specified in the application.
(4)In granting or refusing permission under this section to a Central Government officer for taking up any commercial employment, the Central Government shall have regard to the following factors, namely:--
1. (a)the nature of the employment proposed to be taken up and the antecedents of the employer;
2. (b)whether his duties in the employment which he proposes to take up might be such as to bring him into conflict with Government;
3. (c)whether the officer while in service had any such dealing with the employer under whom lie proposes to seek employment as might afford a reasonable basis for the suspicion that such officer had shown favours to such employer;
4. (d)any other relevant factors which may be prescribed.
(5)Where within a period of sixty days of the date of receipt of an application under sub-section (3), the Central Government does not refuse to grant the permission applied for or does not communicate the refusal to the applicant, the Central Government shall be deemed to have granted the permission applied for.
(6)Where the Central Government grants the permission applied for subject to any conditions or refuses such permission, the applicant may, within thirty days of the receipt of the order of the Central Government to that effect, make a representation against any such condition or refusal and the Central Government may make such orders thereon as it deems fit: Provided that no order other than an order cancelling such condition or granting such permission without any conditions shall be made under this sub -section without giving the person making the representation an opportunity to show cause against the order proposed to be made.
(7)if any Central Government officer takes up any commercial employment at any time before the expiry of two years from the date of his retirement without the prior permission of the Central Government or commits a breach of any condition Subject to which permission to take up any commercial employment has been granted to him under this section, it shall be competent for the Central Government to declare by order in writing and for reasons to be recorded therein that he shall not be entitled to such part of the Government contributions made in relation to such officer as may be specified in the order and if he has received payment thereof, to direct that he shall refund to the Central Government an amount equivalent to such part of the Government contributions: Provided that no such order shall be made without giving the officer concerned an opportunity of showing cause against such declaration or direction: Provided further that in making any order under this sub-section, the Central Government shall have regard to the following factors, namely:--
1. (i)the financial circumstances of the officer concerned; (ii). the nature of, and the emoluments from, the commercial employment taken up by the officer concerned;
2. (iii)such other relevant factors as may be prescribed.
(8)Any amount required to be refunded by an order under sub -section (7) may, if it is not refunded within the prescribed period, be recovered as arrears of land revenue.
(9)Every order passed by the Central Government under this section shall be communicated to the officer concerned.
(10)The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act or the rules applicable to any contributory provident fund.
(11)Every rule made by the Central Government under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

Summary

Retired Class I officers of the Central Government (excluding those on temporary service contracts) cannot take up private business or commercial work within two years of retirement without getting permission first.
If an officer takes up commercial work (such as joining a firm, becoming a company director, or setting up a consulting practice related to their official experience) without permission, the government can withhold or recover their provident fund contributions.
When an officer applies for permission, if the government does not refuse it or communicate a decision within sixty days, the permission is automatically considered granted.
If an officer is unhappy with a refusal or a condition, they can make an appeal (a formal complaint) within thirty days of receiving the order.
Before withholding or demanding a refund of any money, the government must give the officer a chance to explain their side (show cause), and the government must look at their financial circumstances and the nature of their new job.

Practical examples

1Ramesh retired as a Class I officer from the Central Customs department on November 15, 2024. On January 10, 2025, without asking the government, he joined a private shipping firm as a manager. Since this was within two years of retirement, the government issued a notice to recover 40,000 rupees of the government's provident fund contributions.

2Sunita, a retired Class I officer, applied for permission on March 1, 2025, to join a trading firm. The government did not reply to her application by April 30, 2025, which marks sixty days. Since sixty days passed without a response, she was legally allowed to join the firm on May 1, 2025.

3Alok, a retired Class I officer, was granted permission to join a private company on the condition that he would not handle cases related to his old department. He breached this condition. After giving him a notice to explain his side, the government ordered him to refund 50,000 rupees.

FAQ

1. Who qualifies as a Central Government officer under this specific section?

It means any retired member of a Central Service Class I who subscribed to a contributory provident fund, but it excludes anyone appointed under a service contract for a fixed term.

2. What happens if the government fails to reply to an officer's application for permission?

If the government does not refuse or communicate its decision within sixty days from receiving the application, permission is legally considered to have been granted.

3. How much time does an officer have to complain against a government refusal or condition?

The applicant can make an appeal (a representation) against a refusal or a condition within thirty days of receiving the government's order.

4. How can the government recover the money if a retired officer refuses to refund the contributions?

If the retired officer does not refund the money within the prescribed time, the government can recover it as arrears of land revenue (a process where property can be seized to collect debts).

Test yourself

1.Within how many years of retirement must a Class I Central Government officer obtain permission before taking up commercial employment?

2.What is the default outcome if the Central Government does not respond to an officer's permission application within sixty days?

3.Within how many days can an applicant make a representation against a refusal or condition set by the Central Government?

4.Which of the following is excluded from the definition of a Central Government officer in Section 6A?

5.Under what category can the government recover unreturned provident fund contributions if they are not paid back on time?

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Central

Section 6A of The Provident Funds Act, 1925

Withholding or recovery of Government contributions in case of Central Government officers taking up, without prior permission, commercial employment within two years of their retirement.

(a)"Central Government officer" means a subscriber to, or depositor in, a contributory provident fund constituted by the Central Government, who, immediately before his retirement, is a member of a Central Service Class I, but does not include an officer appointed under a contract of service for a specified term;
(b)"commercial employment" means employment in any capacity (including that of an agent) under any company, co-operative society, firm or individual engaged in trading, commercial, industrial, financial or professional business and includes also--
1. (i)a directorship of a company;
2. (ii)the holding of any office, whether elective or otherwise, such as that of president, chairman, manager, secretary, treasurer, by whatever name called in a co - operative society; and
3. (iii)the setting up of practice, either independently or as partner of a firm, as adviser or consultant in matters in respect of which the Central Government officer,--
(A)has no prefessional qualifications and the matters in respect of which the practice is to be set up or is carried on are relatable to his official knowledge or experience, or
(B)has professional qualification, but the matters in respect of which such practice is to be set up are such as are likely to give his clients an unfair advantage by reason of the posts held by him under the Central Government, or
(C)has to undertake work involving liaison or contact with the offices or officers of Central Government, but does not include employment in or under a corporation or company wholly or substantially owned or controlled by Government or employment in or under a body controlled_ or financed wholly or substantially by Government;
(c)"Government contributions" means contributions made after the commencement of the Provident Funds (Amendment) Act, 1975 (46 of 1975), in respect of any period after such commencement, by the Central Government or by a State Government or by a local authority within the meaning of the Local Authorities Loans Act, 1914 (9 of 1914);
(d)"prescribed" means prescribed by rules made by the Central Government by notification in the Official Gazette.

(2)No Central Government officer shall have any right to the Government contributions made to his credit in a contributory provident fund in any case where he takes up commercial employment at any time before the expiry of two years from the date of his retirement without the prior permission of the Central Government. Explanation 1.--For the purposes of this sub-section and sub-section (7), "date of retirement" in relation to a Central Government officer re-employed after retirement without any break either in the same or any other Class I post under the Central Government or any other equivalent post under a State Government, shall mean the date on which such Central Government officer finally ceases to be reemployed in Government service. Explanation 2.--A Central Government officer permitted by the Central Government to take up a particular commercial employment during his leave preparatory to retirement shall be deemed, for the purposes of this sub-section, to have obtained prior permission of the Central Government for his continuance in such employment after retirement.
(3)Subject to the provisions of sub-section (4), the Central Government may, by order in writing, on an application made in the prescribed form by a Central Government officer, grant, subject to such conditions, if any, as it may deem necessary, permission, or refuse, for rea sons to be recorded in the order, permission, to such officer to take up the commercial employment specified in the application.
(4)In granting or refusing permission under this section to a Central Government officer for taking up any commercial employment, the Central Government shall have regard to the following factors, namely:--
1. (a)the nature of the employment proposed to be taken up and the antecedents of the employer;
2. (b)whether his duties in the employment which he proposes to take up might be such as to bring him into conflict with Government;
3. (c)whether the officer while in service had any such dealing with the employer under whom lie proposes to seek employment as might afford a reasonable basis for the suspicion that such officer had shown favours to such employer;
4. (d)any other relevant factors which may be prescribed.
(5)Where within a period of sixty days of the date of receipt of an application under sub-section (3), the Central Government does not refuse to grant the permission applied for or does not communicate the refusal to the applicant, the Central Government shall be deemed to have granted the permission applied for.
(6)Where the Central Government grants the permission applied for subject to any conditions or refuses such permission, the applicant may, within thirty days of the receipt of the order of the Central Government to that effect, make a representation against any such condition or refusal and the Central Government may make such orders thereon as it deems fit: Provided that no order other than an order cancelling such condition or granting such permission without any conditions shall be made under this sub -section without giving the person making the representation an opportunity to show cause against the order proposed to be made.
(7)if any Central Government officer takes up any commercial employment at any time before the expiry of two years from the date of his retirement without the prior permission of the Central Government or commits a breach of any condition Subject to which permission to take up any commercial employment has been granted to him under this section, it shall be competent for the Central Government to declare by order in writing and for reasons to be recorded therein that he shall not be entitled to such part of the Government contributions made in relation to such officer as may be specified in the order and if he has received payment thereof, to direct that he shall refund to the Central Government an amount equivalent to such part of the Government contributions: Provided that no such order shall be made without giving the officer concerned an opportunity of showing cause against such declaration or direction: Provided further that in making any order under this sub-section, the Central Government shall have regard to the following factors, namely:--
1. (i)the financial circumstances of the officer concerned; (ii). the nature of, and the emoluments from, the commercial employment taken up by the officer concerned;
2. (iii)such other relevant factors as may be prescribed.
(8)Any amount required to be refunded by an order under sub -section (7) may, if it is not refunded within the prescribed period, be recovered as arrears of land revenue.
(9)Every order passed by the Central Government under this section shall be communicated to the officer concerned.
(10)The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act or the rules applicable to any contributory provident fund.
(11)Every rule made by the Central Government under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

Summary

Retired Class I officers of the Central Government (excluding those on temporary service contracts) cannot take up private business or commercial work within two years of retirement without getting permission first.
If an officer takes up commercial work (such as joining a firm, becoming a company director, or setting up a consulting practice related to their official experience) without permission, the government can withhold or recover their provident fund contributions.
When an officer applies for permission, if the government does not refuse it or communicate a decision within sixty days, the permission is automatically considered granted.
If an officer is unhappy with a refusal or a condition, they can make an appeal (a formal complaint) within thirty days of receiving the order.
Before withholding or demanding a refund of any money, the government must give the officer a chance to explain their side (show cause), and the government must look at their financial circumstances and the nature of their new job.