P.Somarajan vs Regional Provident Commissioner
2023 Latest Caselaw 11408 Ker

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
     THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
 WEDNESDAY, THE 8TH DAY OF NOVEMBER 2023 / 17TH KARTHIKA,
                                 1945
                     WP(C) NO. 7837 OF 2015
PETITIONER/S:

         THE CENTRAL BOARD OF TRUSTEES
         EMPLOYEES' PROVIDENT FUND ORGANISATION,
         REPRESENTED BY THE ASSISTANT PROVIDENT FUND
         COMMISSIONER, SUB REGIONAL OFFICE, CHINNAKKADA,
         KOLLAM.

         BY ADV SRI.PIRAPPANCODE V.S.SUDHIR



RESPONDENT/S:

            KAILAS CASHEW EXPORTS
            PEZHUKONAM, CHEERANKAVU, EZHUKONE, KOLLAM-
            691505, REPRESENTED BY THE PROPRIETOR, P.
            SOMARAJAN.

         BY ADVS.
         SRI.T.M.CHANDRAN
         SRI.S.SUJITH



     THIS     WRIT   PETITION     (CIVIL)   HAVING   COME   UP   FOR
HEARING ON 21.08.2023, ALONG WITH WP(C).9934/2014, THE
COURT ON 08.11.2023 DELIVERED THE FOLLOWING:
 WP(C) Nos.7837/2015 & 9934/2014

                                    ..2..



           IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                   PRESENT
        THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
 WEDNESDAY, THE 8TH DAY OF NOVEMBER 2023 / 17TH KARTHIKA,
                                    1945
                        WP(C) NO. 9934 OF 2014
PETITIONER/S:

               P.SOMARAJAN
               PROPRIETOR, KAILAS CASHEW EXPORTS, PEZHOOKONAM,
               CHEERANKAVU, KOLLAM-691 505.

           BY ADVS.
           SRI.T.M.CHANDRAN
           SRI.S.SUJITH



RESPONDENT/S:

    1      REGIONAL PROVIDENT COMMISSIONER
           EMPLOYEES PROVIDENT FUND SUB REGIONAL OFFICE,
           KOLLAM-691 001.

    2      ASSISTANT PROVIDENT FUND COMMISSIONER
           THIRUVANANTHAPURAM-695 001.

           BY ADV SRI.PIRAPPANCODE V.S.SUDHIR




        THIS     WRIT   PETITION     (CIVIL)   HAVING   COME   UP   FOR
HEARING ON 21.08.2023, ALONG WITH WP(C).7837/2015, THE
COURT ON 08.11.2023 DELIVERED THE FOLLOWING:
 WP(C) Nos.7837/2015 & 9934/2014

                                  ..3..




                                JUDGMENT

WP(C) No.7837 of 2015 has been filed by the

Central Board of Trustees of the Employees'

Provident Fund Organisation, represented by the

Assistant Provident Fund Commissioner,

Thiruvananthapuram, aggrieved by Ext.P4 order

dated 09.10.2013 passed by the Employees'

Provident Fund Appellate Tribunal, New Delhi (for

short, "the Tribunal") in ATA No.673(7)2008,

which was filed by M/s Kailas Cashew Exports

challenging the order of the Assistant Provident

Fund Commissioner, Thiruvananthapuram.

2. WP(C) No.9934 of 2014 has been filed by

the proprietor of Kailas Cashew Exports seeking

for a direction to the Regional Provident Fund

Commissioner, Employees Provident Fund Sub

Regional Office, Kollam to refund an amount of

Rs.15,00,000/- deposited by them in ATA WP(C) Nos.7837/2015 & 9934/2014

..4..

No.673(7)2008 before the Tribunal, during

pendency of the appeal.

3. Since cause of action and the parties are

same, both these writ petitions are heard and

being disposed of together. For convenience,

WP(C) No.7837 of 2015 is taken as the leading

case and the parties are referred to, as they are

arrayed in WP(C) No.7837 of 2015.

4. The petitioner is a corporate body

constituted under Section 5A of the Employees'

Provident Fund & Miscellaneous Provisions Act,

1952 (for short, "the Act"), which consists of

representatives from the Central Government,

State Government, the employers and the

employees. They alleged that the respondent, a

factory covered under the Act with EPF Code

No.KR/1294-A, failed to remit Provident Fund (for

short, "PF"), Pension Fund, Insurance Fund

contribution and administrative charges as

envisaged under the Act for the period from WP(C) Nos.7837/2015 & 9934/2014

..5..

September, 2002 to August, 2006. After conducting

an inquiry under Section 7A of the Act, Ext.P1

order was passed on 22.11.2007, challenging

which, the respondent filed Ext.P2 appeal before

the Tribunal. The main argument raised by the

respondent was that 1036 employees in the

establishment are "excluded employees" and hence,

the establishment need not remit PF for such

employees. The Tribunal, after considering the

issue, as per Ext.P4 order, set aside Ext.P1

order, finding that the respondent is not liable

to pay any amount. Aggrieved by Ext.P4 order, the

petitioner has approached this Court with WP(C)

No.7837 of 2015.

5. The respondent filed a counter affidavit,

contending that the Assistant Provident Fund

Commissioner is not competent or authorized

personnel to represent the EPF organization in

order to file the writ petition. It is further

contended that under Section 7A of the Act, the WP(C) Nos.7837/2015 & 9934/2014

..6..

assessing authorities are not entitled to

challenge the appellate order. According to the

respondent, they have remitted all contributions

in full on actual wages for the relevant period

in respect of the employees, who are legally and

factually entitled to. They had produced all the

documents including declarations in Form No.11

showing the details furnished by the "excluded

employees" themselves before the department, to

which, according to them, no objection had been

raised by the department. It is further contended

that they were not served with copy of the report

of the Enforcement Officer alleged to have been

prepared. According to them, they are not liable

to maintain a register showing the details of the

"excluded employees" as no contribution need be

paid as far as the "excluded employees" are

concerned. It is further contended that in case

of any doubt regarding the declarations submitted

by the employees, the Enquiring Authority ought WP(C) Nos.7837/2015 & 9934/2014

..7..

to have examined the concerned employees in

exercise of the power under paragraph 26-B of the

Employees' Provident Fund Scheme, 1952 (for

short, "the Scheme"). It is pointed out that the

authority has not made any attempt to find out

facts on enquiry as to whether those retired

employees had worked earlier in the factories of

the Kerala State Cashew Development Corporation,

CAPEX or other establishments and whether they

have withdrawn PF, rather, only a general

statement was given to render a decision that the

details in the declaration are false. According

to the respondent, the "excluded employees" were

served with the Pension Payment Order by the

department after satisfying that the accumulation

under the Act was withdrawn by them. It is

further pointed out that the 1036 "excluded

employees" were working in all the five factories

of the respondent and the petitioner has not even

stated that those employees had not withdrawn WP(C) Nos.7837/2015 & 9934/2014

..8..

full amount. Hence, according to them, Ext.P4

order passed by the Tribunal does not warrant any

interference and the writ petition is only to be

dismissed.

6. Heard the learned Standing Counsel for

the petitioner and the learned counsel for the

respondent.

7. The first issue that arise for

consideration is whether the Assistant Provident

Fund Commissioner is competent to file this writ

petition on behalf of the Central Board of

trustees. The learned Standing Counsel for the

petitioner, handing over a copy of circular dated

15.09.2014 issued by the Additional Central

Provident Fund Commissioner-I (Compliance),

submitted that the Central Board of trustees is

the competent authority to file cases; and the

concerned official signing the petition derives

his authority to represent the Board of Trustees.

On a perusal of the circular dated 15.09.2014, it WP(C) Nos.7837/2015 & 9934/2014

..9..

is seen that as per resolution dated 04.04.1989,

the concerned official signing the petition

derives his authority to represent the Board of

Trustees. Therefore, according to the learned

counsel, the Assistant Provident Commissioner,

who has filed the writ petition, is the competent

officer to represent the Central Board of

Trustees. Per contra, the learned counsel for the

respondent further submits that assessing

authorities under Section 7A of the EPF & MP Act

are not aggrieved persons and not entitled to

challenge the order of the Appellate Tribunal.

8. The learned counsel for the petitioner

relied on a judgment in Central Board of Trustees

v. The Registrar, EPF Appellate Tribunal

[MANU/WB/0690/2022] of the High Court of Kolkata,

wherein the very same issue regarding the

question of maintainability was considered. On a

perusal of the afore judgment, it is seen that it

was held therein that writ petition can be filed WP(C) Nos.7837/2015 & 9934/2014

..10..

in the name of the Central Board of Trustees, EPF

through the Regional Provident Fund Commissioner

(RPFC) or the Assistant Provident Fund

Commissioner (APFC) or the law officers. In

paragraphs 40 and 41 of the judgment in Central

Board of Trustees (supra), it was held thus:

"40. The Learned Writ Court in the impugned order had commented upon the use of the word "organisation" while describing the appellant. The dictionary meaning of "organization" would state that it is an organized group of people with a particular purpose such as business or the Government department. As a structure, organization as a network of internal authority and responsibility and relationships. It is a framework of relationships of persons operating at various levels to accomplish common objectives. An organizational structure is a systematic combination of people, functions and physical facilities. The four common elements of organization include common purpose, coordinated effort, division of labour and hierarchy of authority. Therefore, we have no hesitation to hold that the appellant is undoubtedly an "organization" and to describe themselves as the Employees Provident Fund Organisation cannot be faulted, MAT NO. 1141 OF 2017 & MAT NO. 350 OF 2018 as it is an organized structured formed with an object. Therefore, the observations made by the Learned Single Bench in this regard needs to be completely eschewed.

41. In the light of the above, we hold that the writ petitions filed at the instance of the Central Board of Trustees of the Employees Provident Fund Organisation represented by the RPFC/APFC to be maintainable. That apart, had the writ petitioners been filed by the RPFC/APFC WP(C) Nos.7837/2015 & 9934/2014

..11..

as a delegate of the Central Board is also held to be maintainable. The settled legal principle being form over substance should be preferred and reckoned."

9. Earlier writ petition, WP(C) No.17673 of

2014, filed by the Employees Provident Fund

Organisation represented by its Assistant

Provident Fund Commissioner challenging the very

same order, was withdrawn and liberty was granted

by this Court as per judgment dated 13.03.2015.

Thereafter, the present writ petition was filed

by the Central Board of Trustees represented by

the Assistant Provident Commissioner. Following

the judgment in Central Board of Trustees

(supra), I am of the opinion that this writ

petition filed by the Central Board of Trustees

represented by the Assistant Provident Fund

Commissioner is maintainable.

10. As regards the issue as to whether the

1036 employees said to have been employed in the

respondent establishment are "excluded employees" WP(C) Nos.7837/2015 & 9934/2014

..12..

or not, the learned Standing Counsel for the

petitioner submitted that the Tribunal has

arrived at the conclusion that those employees

are "excluded employees" only taking note of the

fact that they are pensioners. As far as the

definition of "excluded employee" is concerned,

an "excluded employee" should be a member of PF

before joining the establishment and should have

withdrawn his/her PF accumulation from the

previous PF on superannuation attaining the age

of 55 years. Here, the Tribunal failed to

consider the issue whether the 1036 employees

have withdrawn their PF accumulation at the time

of superannuation.

11. Learned counsel for the respondent, on

the other hand, submitted that the 1036 employees

in the establishment were pensioners, who had

already withdrawn PF from the establishments,

where they had worked with, and it is not

necessary for them to get enrolled in the PF WP(C) Nos.7837/2015 & 9934/2014

..13..

since they are all "excluded employees". Learned

counsel for the respondent further submitted that

though declarations in Form No.11 were produced

before the authorities concerned to prove that

the 1036 employees were "excluded employees", the

officer concerned had rejected the same without

proper investigation and enquiry, stating that

they are false/fake declarations and have been

fabricated by the employer.

12. On a perusal of Ext.P4 order, it is seen

that the Tribunal has not gone into those details

and has considered only the issue that the

respondent had employed retired personnel from

the Kerala State Cashew Development Corporation,

CAPEX and other similar establishments, which was

not disputed by the petitioner. It was also found

therein that once such persons retired on

attaining the age of superannuation, which is

higher than 55 years, they shall be treated as

"excluded employees". The finding of the Tribunal WP(C) Nos.7837/2015 & 9934/2014

..14..

that the persons who retired on attaining the age

of superannuation, which is higher than 55 years,

have to be treated as "excluded employees", is

factually incorrect. In this context, it is

relevant to extract paragraph 2(f) of the Scheme,

which defines "excluded employee" as follows;

"2. Definition

xxxxxx

(f)"excluded employee" means-- (i) an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the Fund under clause (a) or (c) of sub-paragraph (1) of paragraph 69;

(ii) an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds fifteen thousand rupees per month;

(iii) omitted;

(iv) an apprentice."

On a reading of clause (i) of paragraph 2(f) of

the Scheme, it is clear that, to become "excluded

employee", an employee should be a member of the

PF and should have withdrawn the full amount of

his accumulation in PF on retirement from service

after attaining the age of 55 years or WP(C) Nos.7837/2015 & 9934/2014

..15..

immediately before migration from India for

permanent settlement abroad or for taking

employment abroad. However, the Tribunal, while

considering the appeal, failed to consider the

relevant aspect as to whether the 1036 employees,

though retired from service, have withdrawn their

PF accumulation, if any, from the previous

establishment on attaining the age of

superannuation. Hence, I am of the opinion that

the matter has to be remanded to the Tribunal for

adjudication of the relevant issue, which was

left unconsidered.

Accordingly, the writ petitions are disposed

of, as follows;

a)The order dated 09.10.2013 [Ext.P4 in WP(C)

Nos.7837/2015 & 9934/2014] passed by the

Tribunal in ATA No.673(7)2008 is set aside.

b)The Tribunal is directed to reconsider the

issue as to whether the 1036 employees said

to have been employed with the respondent WP(C) Nos.7837/2015 & 9934/2014

..16..

establishment are "excluded employees" as

defined in paragraph 2(f) of the Scheme.

c)Since Ext.P4 order dated 09.10.2013 is set

aside and the matter is remanded to the

Tribunal for consideration afresh, the refund

of the amount of Rs.15,00,000/- deposited by

the respondent establishment in ATA

No.673(7)2008 before the Tribunal, as sought

for in WP(C) No.9934 of 2014, shall be

subject to the orders passed by the Tribunal,

as aforementioned.

Sd/-

SHOBA ANNAMMA EAPEN

JUDGE bka/-

WP(C) Nos.7837/2015 & 9934/2014

..17..

APPENDIX OF WP(C) 9934/2014

PETITIONER EXHIBITS

P1 : COPY OF THE CHALLAN DTD.16.10.2009 ISSUED BY THE STATE BANK OF INDIA.

P2 : COPY OF THE COVERING LETTER ALONG WITH THE DEMAND DRAFT.

P3 : COPY OF THE ORDER DTD.9.10.2013 IN ATA 673(7)/2008.

P4 : COPY OF THE LETTER DTD.16.1.2014. WP(C) Nos.7837/2015 & 9934/2014

..18..

APPENDIX OF WP(C) 7837/2015

PETITIONER EXHIBITS

EXHIBIT P1: TRUE COPY OF THE ORDER NO.KR/1294A/ENF.I(8)/2007/7248 DATED 22.11.2007.

EXHIBIT P2: TRUE COPY OF THE MEMORANDUM OF APPEAL NO.ATA 673(7)/2008 FILED BEFORE THE HON'BLE EPF APPELLATE TRIBUNAL WITHOUT ANNEXURE A1.

EXHIBIT P3: TRUE COPY OF THE COUNTER AFFIDAVIT FLED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER KOLLAM IN EXT.P2 APPEAL.

EXHIBIT P4: TRUE COPY OF THE ORDER DATED 9.10.2013 IN ATA NO.673(7)/2008.