The judgment emphasizes the importance of proper evidence and inquiry under Section 7A of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 to determine the amount due from an employer.

SURESH KAIT, J.

1. The present petition is directed against the original order dated 28.03.2005 passed by the Assistant Provident Fund Commissioner and the appellate order dated 28.01.2011, whereby an amount of Rs. 56,086/- has been determined on account of provident fund dues for the period from September, 1999 to April, 2003, in respect of respondent No.2.

2. Vide the aforesaid original order, the petitioner was directed that the amount shall be paid in respective accounts within a period of 15 days from the date of receipt of the order.

3. Also granted liberty to the respondent No.1 to initiate a fresh inquiry under Section 7A of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 (for short the Act). In case of concealment of any fact by the petitioner/Establishment for the period under inquiry, the petitioner will be liable to pay liability as determined by the Department. It was further directed that the Establishment is liable to pay an amount of interest at the rate of 12% per annum, as provided under Section 7Q of the Act from the date of due till the date of payment. The assessment under Section 7A of the Act shall be without prejudice to any demand raised under Section 14B of the Act.

4. Mr. Navin Chawla, learned counsel appearing on behalf of the petitioner/Establishment submits that the respondent No.2 was the Visiting Consultant/Advisor of the petitioner/ Establishment for a period from September, 1999 to April, 2003, on the mutually agreed terms and conditions that the respondent No.2 was to be paid a consolidated sum of Rs. 8,000/- per month for the consultation/assistance/advice on issues relating to taxation/ finance/accounts of the petitioner/Establishment. However, he was not entitled to any other benefits, much less any conveyance allowance/provident fund/bonus/gratuity/ children education etc.

5. Mr. Chawla further submits that during the aforesaid period, the respondent No.2 never raised any dispute in respect of relationship between him and the petitioner Establishment. He was allowed to take up work for other clients besides doing independent practice.

6. Mr. Chawla submits that the learned Tribunal has wrongly considered the respondent No.2 as the employee of the petitioner/Establishment, whereas the respondent No.2 was engaged just as a Visiting Consultant/Accountant by the petitioner/Establishment and he was not the employee of the petitioner at any point of time.

7. Also submits that the learned Tribunal committed an error apparent on the record by holding that the receipts show different amounts were paid on different dates, however, it is correct on the face of the record as the receipts itself shows that a uniform amount of Rs. 8,000/- was being paid to the respondent No.2 and that too only as rent.

8. On a specific query put by this Court that at one place, the petitioner/Establishment has mentioned that the respondent No.2 was a Consultant or Retainer and at other place, it is mentioned that an amount of Rs. 8,000/- was being paid to him as rent. Learned counsel explained that sum of Rs. 8,000/- was paid to respondent no. 2 as Retainer or Consultant by the petitioner/Establishment, however, for his own tax benefit, he used to take receipt of rent in lieu of Rs. 8,000/-.

9. In support of his case, learned counsel for the petitioner has relied upon a case of The Regional Director, E.S.I. Corporation vs. P.K. Mohammed Pvt. Ltd. 1985 (2) KLJ 515, wherein held as under:-

“2. The short facts relevant for consideration of the above question are as follows:

Ultimately, it came to the question whether Krishna Menon and Sadasivan Pillai whose services are engaged as consultants on contract basis by the Respondent could be treated as its employees and their names should find a place in the register. It was contended by the Respondent that Krishna Menon retired from the service of the Respondent in the year 1976 and he was aged 73 at the time of inspection. He was engaged as cons