Jharkhand High Court Orders CBI Probe into ₹727.67-Crore Loss of Coal Workers’ PF Funds
Court questions officials’ handling of the massive loss and the attempt to give them a clean chit before departmental proceedings concluded
The Jharkhand High Court has ordered a Central Bureau of Investigation (CBI) probe into the loss of ₹727.67 crore from the Coal Mines Provident Fund Organisation (CMPFO), raising serious questions over the protection of retirement savings belonging to coal sector employees. The case concerns funds linked to nearly 2.5 lakh coal workers and CMPFO’s investment in Dewan Housing Finance Corporation Limited (DHFL), which subsequently became insolvent.
A division bench headed by Chief Justice M.S. Sonak passed the direction on October 8, 2026, while hearing a public interest litigation filed by the Coal Employees Welfare Association. The court’s intervention follows concerns over delayed action despite warnings about DHFL’s deteriorating financial condition and the handling of the subsequent loss.
₹1,300 Crore Investment, ₹727.67 Crore Loss
CMPFO had invested approximately ₹1,300 crore in DHFL. Following the company’s financial collapse and insolvency proceedings, ₹727.67 crore of the investment was reported lost.
The case has drawn particular attention because CMPFO’s fund managers, the State Bank of India (SBI) and UTI, had reportedly issued a red alert on June 24, 2019, warning of DHFL’s deteriorating financial position. They advised CMPFO to withdraw the investment.
However, the withdrawal proposal was reportedly passed only on December 20, 2019, after a significant delay. The failure to act promptly on the warnings is now a central issue requiring investigation.
High Court Questions Premature Clean Chit
The High Court expressed serious concern over the manner in which CMPFO officials handled the matter. It questioned how officials could effectively absolve those under scrutiny before the departmental proceedings and internal vigilance inquiry had been completed.
The court also noted that the loss ran into hundreds of crores and that the authorities’ description of the matter as merely a commercial loss was not sufficient to settle questions about possible criminal responsibility.
In its September 10 order, the bench questioned whether the inquiry was being pursued seriously or whether the process risked protecting officials. The court subsequently directed a CBI investigation.
Attempt to Write Off the Loss Faced Opposition
The controversy deepened when a CMPFO investment sub-committee considered a proposal on November 22, 2021, to write off the ₹727.67 crore loss. Employees opposed the proposal, raising concerns over attempts to remove the loss from the organisation’s accounts without adequately resolving questions of responsibility.
Coal India had also proposed a levy of ₹10 per tonne of coal production to compensate for the loss. The proposal highlighted the potential implications for the wider coal industry and the question of who should ultimately bear the financial burden.
Accountability for Workers’ Retirement Savings
The CBI investigation is expected to examine the investment decision, the handling of warnings from fund managers, the delay in attempting to recover the money and the conduct of officials responsible for overseeing the provident fund.
The case also raises broader questions about investment risk management, institutional accountability and the safeguards governing workers’ retirement savings. Provident fund contributions represent deferred earnings built up over years of service; their protection requires timely decisions, transparent oversight and clear accountability when large losses occur.
The investigation will now have to establish the facts, identify any lapses or wrongdoing and determine whether criminal liability arises. The High Court’s intervention has brought the case into sharper focus, but responsibility for the loss must ultimately be established through the investigation and due process.
