W.P(MD)No.6249 of 2012
BEFORE THE MADURAI BENGH OF MADRAS HIGH COURT
DATED: 02.08.2022
CORAM
THE HONOURABLE MR. JUSTICE G.CHANDRASEKHARAN
W.P(MD)No.6249 of 2012
and
M.P(MD)No.2 of 2012
The Assistant Provident Fund Commissioner,
Employees' Provident Fund Organisation,
Regional Office,
No.1, Lady Doak College Road,
Chokkikulam,
Madurai - 625 002. ... Petitioner
Vs
1.Presiding Officer,
Employees Provident Fund Appellate Tribunal,
New Delhi.
2.M/s.Parani Spinning Mills (P) Limited,
Door No.2/338, V.Pudukkottai Village,
Vedasandur,
Dindigul - 624 710. ... Respondents
PRAYER: Writ Petition filed under Article 226 of Constitution of
India, praying to issue a Writ of Certiorari, to call for the records
relating to the order, dated 08.02.2012 made in
A.T.A.No.77(13)2011 on the file of the first respondent and quash
the same.
For Petitioner : Mr.S.Anwar Sameem
For R - 2 : Mr.V.O.S.Kalaiselvam
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W.P(MD)No.6249 of 2012
ORDER
This Writ Petition is filed for issuance of a Writ of Certiorari, to quash the order, dated 08.02.2012 made in A.T.A.No.77(13)2011 on the file of the first respondent.
2. Learned counsel appearing for the petitioner/the Assistant Provident Fund Commissioner submitted that the second respondent Spinning Mill was inspected by the Enforcement Officer and he found from the records of the second respondent that certain categories of employees are classified as apprentices/trainees, but they were actually performing the work of regular employees and contributing to the production process. Based on the documents submitted by the second respondent and the report of the Enforcement Officer, the authority in TN/MDU/29195/Enf./Circle 33/33029/2010, dated 23.07.2010, under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, (hereinafter referred to as 'the Act, 1952) determined the dues payable by the second respondent on account of the Employees Provident Fund, Employees Pension Fund and Insurance Fund Contributions and Employees Provident Fund and Employees Deposit Linked Insurance administrative charges for the months from https://www.mhc.tn.gov.in/judis 2/10 W.P(MD)No.6249 of 2012 06.04.2006 to 09.12.2009, which works out to Rs.14,90,320/-. Aggrieved against the said order, the second respondent filed a Review No.15/TN/RO/MDU/29195/7B Review/2010 under Section 7B of the Act, 1952 and the same came to be dismissed on 11.11.2010 by confirming the order passed under Section 7A of the Act, 1952. The second respondent filed an appeal in ATA.No. 77(13)2011 before the Employees Provident Fund Appellate Tribunal, New Delhi. The Appellate Authority in a cryptic order, dated 08.02.2012, found that the orders passed under Sections 7A and 7B of the Act, 1952 are without any basis and no reasons are assigned to support the finding and further found that the apprentices are not employees under the Act and the second respondent is not bound to pay Provident Fund Contribution and allowed the Appeal. Challenging the order passed by the Appellate Authority, this Writ Petition is filed.
3. In reply, learned counsel appearing for the second respondent submitted that the second respondent Mill is entitled to have the services of apprentices as per the Certified Standing order. The order passed by the Authority under Section under 7A of the Act, 1952 is also without any reason. The Authority, based on the https://www.mhc.tn.gov.in/judis 3/10 W.P(MD)No.6249 of 2012 report of the Enforcement Officer and the documents alleged to have been submitted by the second respondent came to the conclusion that the second respondent is liable to pay Rs.14,90,320/-, which was dues under the Act. When a review application was filed, no opportunity was given to the second respondent and review order went beyond the scope of review. It discussed details which were not considered by the authority under Section 7A of the Act, 1952. Therefore, the Appellate Authority rightly set aside the order passed under Sections 7A and 7B of the Act, 1952 and prayed for dismissal of the Writ Petition.
4. Considered the rival submissions and perused the records.
5. Perusal of the order passed under Section 7A of the Act, 1952, shows that one Mr.K.Kalimuthu, Administer Manager of the second respondent appeared for the enquiry and seems to have produced certain documents. Apart from this document, there was also a compliance report of the Enforcement Officer. Based on these materials, it was found that "even though certain categories of employees were classified as apprentices/trainees, they were actually performing the work of regular employees and contributing https://www.mhc.tn.gov.in/judis 4/10 W.P(MD)No.6249 of 2012 to the production process". This order does not indicate or identify the number of apprentices/trainees performing the work of regular employees and contributing to the production process. Further, the order does not disclose the nature of documents produced by the second respondent. However, the review order, dated 11.11.2010, discusses elaborately on the basis of MO-I returns, number of spindles, number of employees engaged, number of apprentices engaged in the year 2006-07, 2007-08 and 2008-09. It is observed in the review order that "it is also noticed from the schedules attached to the balance sheet that attendance, bonus were paid to apprentices in addition to ex gratia in lieu of bonus, HRA and washing allowance. Hence, it is clear that on an average the establishment has not enrolled nearly 200 employees by classifying them under apprentices" and finally confirmed the order passed under Section 7A of the Act, 1952. Even in this order, there is nothing to indicate, except the perusal of documents, on what basis, the conclusion was arrived. Most importantly, in a review petition filed by the second respondent, the short fall in 7A of the Act, 1952 order, is sought to be corrected in 7B order.
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6. The Appeal order shows that it referred the Judgment of the Honourable Apex Court reported in 2006 LAB I.C page 958 [Regional PF Commissioner Vs. M/s. Central Aercanut & Coca Marketing and Processing Co-operation Limited, Mangalore]. It was observed as follows:-
“Section 2(f) of the EPF Act defines an employee to include an apprentice, but at the same time makes an exclusion in the case of an apprentice engaged under the Apprentices Act or under the Standing Orders. Under the Model Standing Orders an apprentice is described as a learner who is paid allowance during the period of training."
7. It is observed in the Appeal Order that "the enquiry officer in his order, dated 23.07.2010 passed under Section 7A of the Act, 1952 concluded that the Enforcement Officer has submitted the compliance report of the establishment. Even though certain categories of employees were classified as apprentices/trainees they were actually performing the work of regular employees and contributing to the production processes". The same enquiry officer, in his order passed under Section 7B of the Act, 1952, also found that the trainees were paid an ex gratia in lieu of Bonus, HRA and https://www.mhc.tn.gov.in/judis 6/10 W.P(MD)No.6249 of 2012 washing allowance. However, there is no basis or reasons assigned to support this finding. The consideration of the orders passed under Sections 7A and 7B of the Act, 1952, shows that relevant documents were not properly perused and conclusions are not properly discussed in the order. Without discussing what the documents are produced and on what basis second respondent was held liable to pay a sum of Rs.14,90,320/- towards EPF dues, order under Section 7A of the Act, 1952 was passed followed by order under Section 7B of the Act, 1952 and then the Appeal Order. This Court is of the considered view that the second respondent has to be given further opportunity to produce relevant documents, if not already produced. It is for the Authority to make informed decision. The Authority has to go through the records and the consideration of records must be reflected in the order. The Authority must supply a copy of the Enforcement Officers Report Part I and II to the second respondent.
8. In this view of the matter, the order of the Appellate Authority in A.T.A.No.77(13)2011 on the file of the first respondent and the order passed under Section 7A and 7B of the Act, 1952 are set aside. The matter is remitted back to the Assistant Commissioner, Madurai for fresh disposal on merits and in https://www.mhc.tn.gov.in/judis 7/10 W.P(MD)No.6249 of 2012 accordance with law. This exercise to be completed within a period of twelve weeks from the date of receipt of a copy of this order.
9. This Writ Petition is allowed with the above terms. There shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed.
02.08.2022
Internet :Yes
Index :Yes / No
ps
Note:-
In view of the present lock
down owing to COVID-19
pandemic, a web copy of
the order may be utilized
for official purposes, but,
ensuring that the copy of
the order that is presented
is the correct copy, shall
be the responsibility of the
advocate / litigant
concerned.
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W.P(MD)No.6249 of 2012
To
1.Presiding Officer,
Employees Provident Fund Appellate Tribunal, New Delhi.
2.M/s.Parani Spinning Mills (P) Limited, Door No.2/338, V.Pudukkottai Village, Vedasandur, Dindigul - 624 710.
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ps Order made in W.P(MD)No.6249 of 2012 02.08.2022 https://www.mhc.tn.gov.in/judis 10/10