Dilip B. Bhosale J.

1. These writ appeals are directed against the common order dated 7.3.2012 passed by learned Single Judge in a group of 12 writ petitions, filed by the Regional Provident Fund Commissioner, whereby all the petitions were allowed and the orders dated 25.8.2011 passed by the Employees’ Provident Fund Appellate Tribunal (for short ‘Tribunal’) came to be set aside.

2. The Tribunal, vide orders dated 25.8.2011 had set aside the order passed by the Provident Fund Authority (for short ‘P.F. Authority’) under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (for short ‘the Act’) whereby, the appellants-Employers were directed to remit the dues of their contribution towards the provident fund of their employees.

3. The background facts, in brief, leading to these appeals are as follows: The appellant-establishments are covered under the Act w.e.f. 26.4.1997. The addressed a letter dated 22.7.2008 to the P.F. Authority stating that in the light of the Judgment of the Supreme Court in MANIPAL ACADEMY OF HIGHER EDUCATION v. PROVIDENT FUND COMMISSIONER – (2008) 5 SCC 428 the basic wages do not include the amounts paid for leave encashment, and therefore, requested to adjust their contribution made, during the period from 2005 to 2008, taking into account the amounts paid for leave encashment, towards future liability. In reply to the said letter the P.F. Authority vide their letter dated 6.8.2008 informed the appellants that to adjust the contribution made, taking into account leave encashment, was possible only in case of those employees whose accounts are not finally settled and who are still in the employment against their future dues. The P.F. Authority also asked them to file revised monthly/annual returns for the relevant period of such employees. Thereafter, the Enforcement Officer during his visit to the establishment found that the employees share of contribution for the month of June and July, 2008 had been adjusted towards leave encashment already remitted by the appellants, contrary to the direction issued by the P.F. Authority vide letter dated 6.8.2008. Since the appellants failed to follow the instructions, an enquiry under section 7A of the Act was initiated.

4. In view of the Judgment of the Supreme Court in MANIPAL the appellants on their own had started adjusting the payments/contributions made by them taking into consideration the leave encashment as a part of basic wages for future liability. Before initiating the inquiry, a show cause notices to the appellants were issued on 17.2.2010. The appellants in response to the show cause notice forwarded demand draft of Rs.5,000/- as penalty. The matter was thereafter heard by the P.F. Authority. The P.F. Authority vide its Judgment and Order dated 30.11.2010 held that in view of the Judgment of the Supreme Court in MANIPAL, the adjustment of the contribution received for leave encashment is permissible only in case of the employees whose accounts are still running or who are still in service. The operative portion of the order dated 30.11.2010 reads thus:

“I, THULASI RAJA, Regional Provident Fund Commissioner-1, RO, PEENYA, Bangalore 560 058, in exercise of the owner, conferred on me under Section 7A of the Act assess the dues in respect of M/s. J.D. CLOTHING COMPANY, NO.9, RAJAJINAGAR INDUSTRIAL ESTATE, BANGALORE 560010 (KN/19920) for the period from June 08 & Jul 08 as in the statement above. (TABLE III). I hereby direct the employer of the establishment in respect of the above said establishment to remit the amount of Rs.7,69,616/- (Rupees Seven Lakhs Sixty Nine Thousand Six Hundred Sixteen only) to the respective heads of accounts in the State Bank of India within 15 days of receipt of this proceedings and forward the challans in support thereof along with the respective statutory returns, if not already sent. Any failure to comply as aforesaid will entail recover of this amount as arrears in the manner s