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High Court Of Calcutta
Jyotirmay Bhattacharya
GURBIR KAUR - Appellant
Versus
REGIONAL PROVIDENT FUND COMMISSIONER, Employees PROVIDENT FUND ORGANISATION - Respondent
W. P. 2049 Of 2005
Decided On : 12/21/2005
EPF ACT - SECTION 7A, 7Q, 2A - LIABILITY OF BRANCH ESTABLISHMENT - LIABILITY OF PRINCIPAL EMPLOYER - INDEPENDENT ASSESSMENT OF BRANCH - VALIDITY - Held, liability of a branch of the principal cannot be assessed independently under section 2a of the said Act. In case a principal has several branches, the principal can be assessed under the said Act by clubbing the employees of the principal with the employees of its branch offices.
Fact of the Case:
The petitioner, a security detective agency owner, challenged the determination of her liability under section 7a of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, for non-payment of provident fund dues and the computation of interest thereon under section 7q of the Act. The petitioner claimed that her business was independent from her husband's security detective agency, which had been in operation for a longer period. The petitioner had applied for registration under the Act and had been allotted a code number by the provident fund authority. However, a proceeding under section 7a was initiated, and the petitioner's liability was assessed at Rs. 1,16,20,023/-. The petitioner challenged the order, arguing that it was passed without following the court's directions, was non-speaking, and was passed in disregard of the relevant provisions of the Act.
Finding of the Court:
The court held that the impugned order was a non-speaking order as it did not disclose the basis of computation under section 7a of the Act. The court also held that the concerned authority exceeded its jurisdiction by assessing the liability of the petitioner independently of its principal, in violation of section 2a of the Act. The court further held that the finding of the concerned authority that the petitioner's establishment was an extension of her husband's establishment was not valid as the husband was not heard before arriving at such a conclusion.
Issues: 1. Whether the impugned order was a non-speaking order? 2. Whether the concerned authority exceeded its jurisdiction by assessing the liability of the petitioner independently of its principal? 3. Whether the finding of the concerned authority that the petitioner's establishment was an extension of her husband's establishment was valid?
Ratio Decidendi: 1. An administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision. (S. N. Mukherjee vs. Union of India, AIR 1990 SC 1984) 2. Section 2a of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 does not authorize the concerned authority to assess the individual liability of the branches independent of the principal. 3. No one can be punished unheard.
Final Decision: The court quashed the impugned order and held that the liability of the employer who is actually liable to pay the provident fund benefits to the employees of the petitioner should be assessed in accordance with the provision of law.
( 1 ) THE determination of the petitioner's liability under section 7a of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for non-payment of the provident fund dues on account of employer as well as employees' share of contribution and the computation of interest thereon under section 7q of the Act made by the Assistant Provident Fund Commission (CC)being Annexure 'p-16' to this writ petition at page 192, are under challenge in this writ petition.
( 2 ) BOTH the husband and the wife carry on business as security detective agency from the same premises. The wife is the petitioner in this writ petition. The wife claims that they are carrying on their respective businesses independently having different identity. The husband carries on business under the name and style of Orient Security and Detective Agency. Wife carries on business under the name and style of M/s. Oxford Security and Detective Agency. Husband started his business long back. Wife commenced her business with effect from 1st August, 1994.
( 3 ) AFTER expiry of the infancy period of the wife's business, the wife (the writ petitioner herein) by a letter being Annexure P-4' to this writ petition, requested the Regional Commissioner, Employees' Provident Fund, Calcutta. to register the wife's firm under the said Act for giving the benefits of the said Act to her employees.
( 4 ) IN reply thereto, the provident fund authority, by its letter dated 24th november, 1999 intimated the petitioner that since it is the responsibility of the principal employer to ensure compliance for payment of provident fund contribution in respect of the employees engaged by the petitioner directly or indirectly through the contractor, the petitioner was advised to remit the provident fund contribution of the employees engaged by her through the principal employer.
( 5 ) AFTER coming to know that the provident fund authority started allotting code numbers to the contractors, the petitioner sometimes in 2002 applied before the respondent for coverage by filing prescribed forms and also paid the entire employees' as well employer's contribution for the month of August, 1997 by way of demand draft.
( 6 ) THEREAFTER, provident fund authority by its letter dated 24th July, 2002 allotted the code number to the petitioner with effect from 1st June, 1996 and directed the petitioner to remit the provident fund dues from July, 1996 to july, 2002.
( 7 ) THE money which was deposited by the petitioner by way of demand draft on account of the employers' as well as employees' share of contribution for the month of August, 1997 was wrongly appropriated by the provident fund authorities towards the alleged dues of the petitioner for the month of June, 1996.
( 8 ) THEREAFTER, a proceeding under section 7a of the said Act was initiated by the provident fund authorities for determination of the petitioner's dues from july, 1996 to July, 2002. Ultimately by an order dated 27th May, 2004, a sum of rupees 1,16,20,023 /- was levied upon the petitioner towards the provident fund dues of the petitioner. Several bank accounts of the petitioner were seized by the provident fund authorities for non-payment of the said dues of the petitioner.
( 9 ) THE petitioner preferred an appeal against the said order before the appellate authority. For expediting the hearing of the said appeal the petitioner moved a writ petition being W. P. No. 1099 of 2004 before this Court. The said writ petition was disposed of on 25th June, 2004 by directing the appellate authority to dispose of the said appeal within two months. The operation of the impugned determination of the petitioner's liability under section 7a of the said Act which was made on 27th May, 2004, was stayed.
( 10 ) IN spite of such direction, the hearing of the appeal could not be expedited, as the appellate authority was not functioning at the relevant time. Accordingly, the petitioner again approached this Court
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