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2019 Supreme(Del) 1260
IN THE HIGH COURT OF DELHI AT NEW DELHI
REKHA PALLI, J.
Central Board of Trustees – Appellant
Versus
Standing Conference of Public Enterprises (SCOPE) – Respondent
Writ Petition (Civil) No. 1663 of 2017, Civil Miscellaneous No. 7447 of 2017
Decided On : 14-02-2019
Advocate Appeared:
Keshav Mohan, K.K. Rai, V.P. Singh, Tarkeshwar Nath.
The central legal point established in the judgment is that the statutory authority must exercise its powers to collect relevant evidence before determining the payable amount, and failure to do so can result in the dismissal of the petition.
Headnote:
Employees Provident Fund - Assessment of Provident Fund Dues - Sections 7-A and 7-B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 - Summary of Acts and Sections: Sections 2(f), 7-A(1)-(3), 8A(1) of the EPF Act, and para 30 of the Employees Provident Fund Scheme, 1952 - The court discussed the liability of the principal employer to ensure compliance with the Act in respect of employees engaged through contractors, the powers of the Provident Fund Commissioner to conduct inquiries, and the duty to collect relevant evidence before determining the payable amount.
Fact of the Case:
The petitioner initiated proceedings under Section 7-A of the Act against the respondent for determination of provident fund dues payable by the respondent towards employees engaged through its contractors during the period 1988-89 to November 1994. The petitioner passed an order holding the respondent liable to pay a sum along with interest. The respondent filed a review petition, and after fresh inspections, the amount payable was reduced. The review petition was dismissed, and the respondent appealed, contending that the petitioner failed to take appropriate steps to ensure that all the contractors appear before the petitioner's officers to provide necessary details of the amounts deposited by them.
Finding of the Court:
The court found that the petitioner failed to make a proper assessment of the dues payable by the respondent towards the employees engaged through contractors. The court held that the petitioner did not make adequate efforts to summon all the contractors and that the assessment order was made on the basis of ad hoc calculations. The court dismissed the petition, upholding the tribunal's order directing the petitioner to summon all the contractors and carry out the requisite assessment.
Issues: The issues revolved around the petitioner's duty to ensure compliance with the Act in respect of employees engaged through contractors, the powers of the Provident Fund Commissioner to conduct inquiries, and the duty to collect relevant evidence before determining the payable amount.
Ratio Decidendi: The court held that the petitioner, as the statutory authority, failed to exercise its powers to collect relevant evidence before determining the payable amount. The court emphasized the duty of the Commissioner to enforce attendance of witnesses and collect all evidence before coming to a proper conclusion.
Final Decision: The petition was dismissed, and the court upheld the tribunal's order directing the petitioner to summon all the contractors and carry out the requisite assessment.
REKHA PALLI, J.
1. Vide the present petition under Article 226 of the Constitution of India, the petitioner/ Central Board of Trustees, Employees Provident Fund Organization, impugns the order dated 19th October, 2016 passed by the Employees Provident Fund Appellate Tribunal in ATA No. 870(4) 2009 whereunder the respondent/establishment's appeal has been allowed. Resultantly, the orders dated 23rd July, 2003 and 30th October, 2009 passed by the petitioner under Sections 7-A and 7-B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Act") have been set aside and the matter has been remanded back to the petitioner for conducting a fresh inquiry.
2. The facts as emerge from the records are that on 1st December, 1999, the petitioner initiated proceedings under Section 7-A of the Act against the respondent for determination of the provident fund dues payable by the respondent towards the employees engaged through by its contractors during the period 1988-89 to November, 1994. On 19th March, 2002, the Enforcement Officer of the petitioner visited the respondent/ establishment and sought information regarding compliance in respect of provident dues of the respondents employees engaged through contractors dues of the contractor's employees. As the Enforcement Officer was not able to get the requisite information, the respondent was informed that it being the principal employer, it was the duty and responsibility of the respondent alone to deduct and deposit the provident fund dues in respect of all its employees. The respondent was, therefore vide the letter dated 19 march 2002 asked to submit a detailed list of contractors and wages of their employees in respect of each year.
As directed, the respondent vide its letter dated 24th December, 2002, furnished the details of all the sixteen contractors who had been engaged by it during the period in question. It was pointed out therein that five of the contractors did not have any separate sub codes while the remaining eleven contractors had been allotted sub codes in accordance with the provisions of the Act. Upon receipt of the aforesaid information, the petitioner directed the respondent to provide the dates of allotment of sub code numbers to the eleven contractors as referred to in the respondent's letter dated 24th December, 2002. The respondent is stated to have responded to the petitioner's above letter by giving further information regarding the contractors wherein the names of those contractors who were directly depositing the provident fund in respect of their workers, were specifically mentioned. The said letter also stated that some of the contractors were no longer working with the respondent and therefore, despite efforts, the respondent was unable to get the requisite replies from them and a request was, therefore, made to the petitioner to summon those contractors.
3. In the light of the above reply furnished by the respondent, a team of the petitioner's Enforcement Officers visited the respondent's premises on 27th February, 2003 and based on the information provided by the respondent in respect of the contract labour for the period 1988/89-1994, the petitioner made some ad hoc calculations and worked out the provident fund dues payable in respect of the employees engaged through the contractors. The said amount was calculated as being Rs. 15,44,905/- based on which calculations, an order under Section 7-A of the Act was passed on 23rd July, 2003 wherein the respondent was held liable to pay the aforesaid sum of Rs. 15,44,905/- along with interest at the rate of 12% per annum from the due date till the date of payment.
4. Aggrieved by the aforesaid order which was passed under Section 7A of the Act, the respondent preferred a review petition under Section 7-B(1) of the Act contending therein that the liability of Rs. 15,44,905/- had been assessed not only without identifying the employees but also by ignoring the fa
