Telangana High Court
Osmania University vs Employees Provident Fund Organization ... on 15 April, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P.No.23812 OF 2023
Between:
Osmania University
... Petitioner
And
Employees' Provident Fund Organization
(EPFO) & others
... Respondents
JUDGMENT PRONOUNCED ON: 15.04.2024
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
1. Whether Reporters of Local newspapers : Yes
may be allowed to see the Judgment?
2. Whether the copies of judgment may be : Yes
marked to Law Reporters/Journals?
3. Whether Their Lordships wish to : Yes
see the fair copy of the Judgment?
__________________
SUREPALLI NANDA, J
2
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THE HON'BLE MRS. JUSTICE SUREPALLI NANDA
W.P.No.23812 OF 2023
% 15.04.2024
Between:
# Osmania University
... Petitioner
And
$ Employees' Provident Fund Organization
(EPFO) & others
... Respondents
< Gist:
> Head Note:
! Counsel for the Petitioner : Mr. G.Vidyasagar, Ld.
Senior Designated Counsel,
representing Mr.S.
Lakshmikanth, Ld.counsel
on record.
^ Counsel for Respondents : Ms.Ande Vishala,
Ld Counsel for R1 to R3
Ms.T.Swetha, for R4
? Cases Referred:
(1) 2013 (16) SCC Page 1
3
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THE HON'BLE MRS. JUSTICE SUREPALLI NANDA
W.P. No.23812 OF 2023
ORDER:
Heard learned Senior Designated Counsel
Mr.G.Vidyasagar, representing Mr.S.Lakshmikanth,
learned Standing Counsel appearing on behalf of the
petitioner, Ms. Ande Vishala, learned counsel appearing
on behalf of respondent Nos.1 to 3 and Ms. T.Swetha,
learned counsel appearing on behalf of respondent No.4.
2. The Petitioner approached the Court seeking prayer
as under :
"To issue a writ, order or direction more particularly one in
the nature of Writ of Certioraris or any appropriate writ
after calling for the records, quash the Order dated
17.07.2023 in I.A.No.2 of 2023 in EPF Appeal No.23 of
2023 on the file of the Central Government Industrial
Tribunal cum Labour Court, Hyderabad in so far as
prescribing the Petitioner to remit 40% of the determined
amount within the six weeks and pass such other order."
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PERUSED THE RECORD.
3. The averments in the counter affidavit filed by the
Respondent No.4, in brief are as under:
a) The respondent is a retired employee at the Osmania
University. The petitioner university was established in 1917, but
even prior to 1982, except where the employees or workers are
entitled to the benefit of contributory provident fund or old age
pension in accordance with any scheme or rule framed by the
central government or state government governing such benefits
as Mentioned in Section 16 of the Employees Provident Fund and
Miscellaneous Provisions Act, 1952, the same reads as under:
16. Act not to apply to certain establishment. - 3[(1)
This Act shall not apply- (a) to any establishment
registered under the Co-operative Societies Act, 1912 (2 of
1912), or under any other law for the time being in force
in any State relating to cooperative societies employing
less than fifty persons and working without the aid of
power; or 4 [(b) to any other establishment belonging to
or under the control of the Central Government or a State
Government and whose employees are entitled to the
benefit of contributory provident fund or old age pension in
accordance with any Scheme or rule framed by the Central
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Government or the State Government governing such
benefits; or (c) To any other establishment set up under
any Central, Provincial or State Act and whose employees
are entitled to the benefits of contributory provident fund
or old age pension in accordance with any scheme or rule
framed under that Act governing such benefits;
Since the petitioner establishment never claimed that the
said employees are entitled to the benefit of the contributory
Provident fund or old-age pension Schemes, as mentioned above
Section 16 of EPF & MP Act, 1952, stand applied to the petitioner
university. Hence, petitioner's University comes under the
purview of the said Act, 1952 w.e.f. the month of February,
1982.
b) The workers working for or in connection with
petitioner University come under the definition of
"Employee" under provisions of EPF & MP Act, 1952 which
reads as under:
(f) "employee" means any person who is employed for
wages in any kind of work, manual or otherwise, in or in
connection with the work of an establishment and who
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gets his wages directly or indirectly from the employer,
[and includes any person,- (i) Employed by or through a
contractor in or in connection with the work of the
establishment, (ii) Engaged as an apprentice, not being an
apprentice engaged under the Apprentice Act, 1961 (52) of
1961 or under the standing orders of the establishment];
c) Despite aforementioned legal position, the petitioner
university has been evading the application of the said law from
March 1982 till date, denying the statutory benefits to hundreds
of its employees. Since the petitioner failed to start the
implementation of the Act, an enquiry under section 7A of the
Act, 1952 was instituted, for determining the due under the
provisions of the Act, 1952 and summons dated 20-09-2018
were issued to provide due opportunity of being heard by
appearance either in person of the employer or through
authorised representative on 18.10.2018. The EPF department
heard both sides and made an assessment which was amounting
to Rs.29,82,89,124/- vide order dated 28/5/2021. The
respondent organisation issued a prohibitory order as the
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petitioner establishment failed to comply with the said orders
passed. Aggrieved by the said Prohibitory order the petitioner
filed a Writ petition vide WP No. 16780 of 2021 which was
disposed of by this court vide Order dated 22/7/2021 , setting
aside the prohibitory order and granting liberty to the petitioner
to refer review as provided under Section 7B of the Act, 1952.
d) The review application was filed by the petitioner vide
application dated 09.08.2021 and the same was rejected
through reasonable speaking order passed vide order dated
31.03.2023 by assessing officer i.e., respondent No.2 herein.
Upon the speaking order, petitioner filed W.P.No.13389 of 2023
before this Court which was disposed vide orders dated
25.05.2023 by granting liberty to prefer appeal under Section
7-I of the Act before Central Government Industrial Tribunal-
cum-Labour Court along with a petition to condone delay.
e) Thereafter, the petitioner had appealed under Section 7-I
of the Act challenging the order dated 28.05.2021 passed by
Assessing Officer under Section 7A of Act and subsequent orders
passed under Section 7B of the Act dated 31.03.2023.
The Tribunal condoned the delay and disposed of the petition for
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waiver of the condition to pay 75% of the assessed amounts and
ordered the petitioner to deposit 40% of the assessed amounts
instead of 75% as stipulated in Section 7-O of the act. Yet, the
petitioner establishment claims that Tribunal is arbitrary and
violated the law. Hence, this Writ Petition is devoid of merits
and is liable to be dismissed.
4. The order dated 28.08.2023 passed by this Court in
W.P.No.23812 of 2023, reads as under:
"Notice before Admission.
Learned counsel for the petitioner is permitted to
take out personal notice to the respondents through RPAD
and file proof of service into the Registry.
Learned counsel for the respondents seeks time to
file counter.
List on 15.09.2023.
There shall be stay of the order dated 17.07.2023 in
I.A.No.2 to 2023 in E.P.F.Appeal No.23 of 2023 on the file
of the Central Government Industrial Tribunal cum Labour
Court, Hyderabad in so far as directing the petitioner to
remit 40% of the determined amount within six weeks."
The said order dated 28.08.2023 is in force as on date.
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5. The case of the Petitioner as per the averments
made by the petitioner in the affidavit filed by the
petitioner in support of the present Writ Petition in brief,
are as follows:
a) The petitioner is a Registrar at Osmania University. The
employees filed a complaint dated 20-1-2017 regarding non-
enrolment of employees of the university, the enforcing squad of
the Employees Provident Fund Organisation (EPFO) alleged to
have submitted report dated 18-6-2018. Based on the same, the
EPFO allotted PF Code No. AP/Hyd/1747094 with retrospective
effect from 06-03-1982.
b) The EPFO issued a notice dated 18-7-2018 to the petitioner
directing to comply with the provisions of EPF and MP act, 1952
in respect of all categories of employees/workers who are
eligible to become members of the fund. In the meanwhile, the
EPFO alleged to have received a letter dated 20-8-18 from
employees and workers union, detailing the salary drawn by the
employees on daily wage time scale workers for the period from
1988 to August 2018. The assistant Provident fund commissioner
issued summons to the Petitioner, alleging that the university
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has not complied with the act for all employees for the period
from March 1982 to July 2018.
c) Subsequently, the authority passed an order dated 28.5.2021
without furnishing the copy of the enforcement officer report
dated 7-4-2021. The order dated 28-5- 2021 does not refer to
the names of the beneficiaries. In the absence of the furnishing
of the names of the beneficiaries, passing orders for payment of
EPF contributions is contrary to the provisions of the employees
provident fund and miscellaneous provisions act, 1952. The
authority while issuing notice/summons dated 20-9-2018, failed
to furnish the report of the squad of the enforcement officer
dated 18-6-2018 and the complaint of the employees and
workers union dated 20-8-2018. Thus, initiation of proceedings
under section 7A of the act is in contravention of the circular
instruction dated 6-9-2017.
d) Aggrieved by the orders dated 28-5-2021 and 31-3- 2023,
the petitioner had filed an EPF appeal number 23 of 2023 before
the Tribunal. The I.A.No 2 of 2023 was filed seeking orders for
waiver of condition of pre-deposit of the amounts under Section
7-O of EPF & MP Act, 1952. The Tribunal heard the matter and
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proceeded to direct for remittance of 40% of the determined
amount within six weeks vide order dated 17-07-2023.
e) Aggrieved by the order dated 17-07-2023, the present writ
petition is filed.
DISCUSSION AND CONCLUSION:
6. On perusal of the record it is evident that the petitioner
has preferred an appeal under Section 7-I of the Employees'
Provident Funds and Miscellaneous Provisions Act, 1952 (EPF
Act) challenging the order dated 28.05.2021 passed by the
Assessing Officer under Section 7-A of the Act and subsequent
order passed under Section 7-B of the Act dated 31.03.2023.
The Tribunal condoned the delay and disposed of the petition for
waiver of the condition to pay 75% of the assessed amounts and
ordered petitioner to deposit 40% of the assessed amount
instead of 75% as stipulated in the Act.
Section 7-O of the Act, 1952 is extracted here under:
"7-O. Deposit of amount due, on filing appeal.--No
appeal by the employer shall be entertained by a Tribunal
unless he has deposited with it seventy-five per cent of the
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amount due from him as determined by an officer referred
to in section 7A:
Provided that the Tribunal may, for reasons to be
recorded in writing, waive or reduce the amount to be
deposited under this section."
7. This Court is of the firm opinion that as per the Section
7-O of the Act, 1952, 75% of the amount determined should be
deposited for admission of the appeal under Section 7-I of the
Act. However, the Tribunal was considerate to the petitioner -
establishment and ordered to pay only 40% of the assessed
amount without ascribing any reason.
8. Employees Provident Fund and Miscellaneous Provisions
Act, 1952 (for short 'EPM Act') is a social legislation for providing
the institution for social security to the employees and workers.
9. The Apex Court in the judgment dated 18.10.2013 in
Arcot Textile Mills Ltd., vs. Regional Provident Fund,
Commissioner & Others, reported in (2013) 16 SCC 1 and in
particular, at paras 15, 18, and 24 observed as under :
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"15. On a perusal of the aforesaid provision it is evident
that an appeal to the tribunal lies in respect of certain
action of the Central Government or order passed by the
Central Government or any authority on certain provisions
of the Act. We have scanned the anatomy of the said
provisions before. On a studied scrutiny, it is quite vivid
that though an appeal lies against recovery of damages
under Section 14B of the Act, no appeal is provided for
against imposition of interest as stipulated under Section
7Q. It is seemly to note here that Section 14B has been
enacted to penalize the defaulting employers as also to
provide reparation for the amount of loss suffered by the
employees. It is not only a warning to employers in
general not to commit a breach of the statutory
requirements but at the same time it is meant to provide
compensation or redress to the beneficiaries, i.e., to
recompense the employees for the loss sustained by them.
The entire amount of damages awarded under Section 14B
except for the amount relatable to administrative charges
is to be transferred to the Employees' Provident Fund.
18. At this stage, it is necessary to clarify the
position of law which do arise in certain situations.
The competent authority under the Act while
determining the moneys due from the employee
shall be required to conduct an inquiry and pass an
order. An order under Section 7A is an order that
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determines the liability of the employer under the
provisions of the Act and while determining the
liability the competent authority offers an
opportunity of hearing to the concerned
establishment. At that stage, the delay in payment of
the dues and component of interest are determined.
It is a composite order. To elaborate, it is an order
passed under Section 7A and 7Q together. Such an
order shall be amenable to appeal under Section 7I.
The same is true of any composite order a facet of
which is amenable to appeal and Section 7I of the
Act. But, if for some reason when the authority
chooses to pass an independent order under Section
7Q the same is not appealable.
24..... There is no cavil for the fact that it is social welfare
legislation to meet the constitutional requirement to
protect the employees. That is why the legislature has
provided for imposition of damages, levy of interest and
penalty.....
10. In the reply affidavit filed by the petitioner it is specifically
averred by the petitioner that prescribing the condition of
remittance of 40% of the determined amount by the Hon'ble EPF
Tribunal is misconceived and the main grievance of the writ
petitioner is unfair and illegal procedure being followed in
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determination of the amount for the period in question. This
Court opines that the pleas put forth in the affidavit filed by the
petitioner in support of the present writ petition and the reply
affidavit filed by the petitioner are issues which have to be
decided by the Competent Authority in the EPF Appeal No.23 of
2023 preferred by the petitioner under Section 7I of the EPF and
MP Act, 1952, aggrieved by the order dated 28.05.2021 and
31.03.2023 passed under Section 7(A) and (B) of the Employees
Provident Fund and Miscellaneous Provisions Act, 1952 which
had been infact admitted by the Tribunal vide its order dated
17.07.2023 on the file of Central Government Industrial Tribunal
cum Labour Court at Hyderabad, in I.A.No.2 of 2023 in EPF
Appeal No.23 of 2023.
11. This Court opines that Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 is a beneficial piece of
legislation enacted by the Act of Parliament for the welfare of
working class. This social security measure is a humane homage
the State pays to Articles 39 and 41 of the Constitution. The
viability of the fund depends on the employer duly deducting the
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worker's contribution from their wages, adding his own little and
promptly depositing the sum into the fund constituted by the
Act. The mechanics of the system will suffer paralysis if the
employer fails to perform his function. The dynamics of this
beneficial statute derives its locomotive power from the funds
regularly flowing into the statutory bill. The proper
implementation of various Schemes under the Act is solely
dependent upon the prompt compliance by the establishment.
Financial ups and downs are invariably an inherent part of any
business. The benefits envisaged and provided under the Act
cannot be held hostage to the vagaries of profit and loss of
establishments. Even if it is assumed that there was a loss as is
claimed, it does not justify the delay in deposit of Provident Fund
money which is an unqualified statutory obligation and cannot be
allowed to be linked with the financial position of the
establishment, over different points of time.
12. Taking into consideration the aforesaid facts and
circumstances of the case and duly taking into
consideration the view and the law laid down by the Apex
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Court in the Judgment reported in 2013 (16) SCC Page 1,
dated 18.10.2013 in Arcot Textile Mills Ltd. V. Regional
Provident Fund Commissioner and others, (referred to and
extracted above), and duly considering that the Tribunal
vide its order dated 17.07.2023 in I.A.No.2 of 2023 in EPF
Appeal No.23 of 2023 had condoned the delay and
granted the stay and passed an interim order reducing the
amount of pre-deposit in favour of the petitioner, this
Court opines that the petitioner is not entitled for grant of
relief as prayed for herein, since there is no breach of any
fundamental right of the petitioner, this Court is of the
firm opinion that when the Appeal is still pending
adjudication by the competent Court (Tribunal) as
stipulated under Law, this Court cannot entertain a writ
petition on the same subject under Article 226 of the
Constitution of India, and hence, the Writ Petition is
dismissed since the same is devoid of merits and the
interim order granted by this Court on 28.08.2023 in
favour of the petitioner stands vacated. The petitioner is
granted four weeks time from the date of receipt of the
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copy of the present order for deposit of the awarded
amount as per the order dated 17.07.2023 passed in
I.A.No.2 of 2023 in EPF Appeal No.23 of 2023. However
there shall be no order as to costs.
Miscellaneous petitions, if any pending, in this writ petition
shall stand closed.
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SUREPALLI NANDA, J
Date: 15.04.2024
Note : L.R. Copy to be marked.
B/o.Yvkr
