IMPORTANT POINT
Employers cannot evade liability for delayed contributions under the Employees Provident Funds Act, even after the establishment of a Board of Trustees.

JUDGMENT :

PARTHA SARATHI SEN, J.

1. In this writ petition as filed under Article 226 of the Constitution of India the writ petitioner while challenging a proceeding and order dated June 25, 2015 under Section 14B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ( hereinafter referred to as the ‘said Act’) as passed by Regional Provident Fund Commissioner, Sub-Regional office, Durgapur/respondent no.2 herein has prayed for declaring Section 14 B of the said Act ultravires or inconsistent with Section 17(1-A) (d) (iv) of the said Act vis-a-vis with Article 14 of the Constitution of India with a further prayer to read down Section 14B of the said Act along with other ancillary relief or reliefs by issuing necessary writs.

2. For effective adjudication of the instant writ petition the facts leading to filing of the instant writ petition is required to be discussed in a nutshell.

3. Originally one Mayurakshi Gramin Bank was independently existing as a regional rural bank and at that time it was an exempted establishment within the meaning of Section 17 (1-A) of the said Act and with the implementation of the Employees’ Pension Scheme, 1995 the said Mayurakshi Gramin Bank started depositing contributions in the pension fund with the concerned regional provident fund commissioner.

4. The Ministry of Finance, Government of India by a notification dated February 26, 2007 amalgamated various regional rural banks including Mayurakshi Gramin Bank into Paschim Banga Gramin Bank, the writ petitioner herein.

5. By an order dated 07.09.2007/10.09.2007 the exemption under Section 17 (1-A) of the said Act of Mayurakshi Gramin Bank was cancelled. The Provident Fund Authority duly communicated such revocation order of exemption to the Board of Trustees of the said Mayurakshi Gramin Bank. The Provident Fund Authorities in course of time noticed that the writ petitioner had failed to remit the contributions along with administrative charges within the period from 23.07.1998 to 22.06.2010 and 15.09.2010 to 31.10.2013. The Provident Fund Authorities also noticed that the past accumulations have also not been transferred in relation to Pension Funds, Provident Fund, Employees Deposit Link Insurance Scheme Contributions, etc. Accordingly, on 31.12.2013 and 12.03.2014 two notices have been sent to the writ petitioner by the respondent no.2/Provident Fund authority. Upon hearing the respondent no.2/authority by its order dated June 25, 2015 passed the aforementioned order under Section 14B of the said Act and thereby imposed damages to the tune of Rs.30,26,32,302/-along with interest of Rs.8,06,37,304/-which has been impugned in this writ petition.

6. In course of hearing Mr. Majumder, learned advocate for the writ petitioner at the very outset draws attention of this Court to Section 17 of the said Act. It is submitted by Mr. Majumder that under the law when an establishment is granted an exemption under Section 17(1-A) of the said Act the employer of the said establishment shall have to establish a Board of Trustees for the administration of the Provident Fund as per the Employees’ Provident Fund Scheme, 1952 (hereinafter referred to as the said Scheme) vide Section 17 (1-A)(b) of the said Act and after establishment of the said Board of Trustees (hereinafter referred to as ‘BOT’ in short) the said BOT is duty bound to maintain the detailed accounts of the contributions credited and withdrawals, submit returns to the Provident Fund Authority and invest the Provident Fund money in accordance with the directions issued by the Central Government from time to time and so on as mentioned in Section 17 (1-A) of the said Act.

7. It is further submitted by Mr. Majumder, learned advocate for the writ petitioner that from the spirit of the said Act it would thus reveal that as soon as BOT is created, the establishment lost its control over the Provident Fund as maintained by the BOT and therefore no damages and/or interest can be levied on accoun