Madras High Court
The Assistant Provident Fund ... vs Presiding Officer on 2 August, 2022
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
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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
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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
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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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W.P(MD)No.6249 of 2012
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
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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
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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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W.P(MD)No.6249 of 2012
G.CHANDRASEKHARAN, J.
ps
Order made in
W.P(MD)No.6249 of 2012
02.08.2022
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