The court allowed provisional deposit of funds without Aadhaar verification, asserting mandatory seeding legality requires careful examination per Section 142 and K.S. Puttaswamy judgments.

JUDGMENT

Prathiba M. Singh, J. (Oral)--This hearing has been done through video conferencing.

Brief Facts

2. The Petitioner is an association of various entities and persons stated to be owning and running industrial/commercial establishments, factories, institutions, etc. The Petitioner-Association has filed the present petition challenging the circular dated 1st June, 2021 issued by the EPFO, by which the seeding of Aadhaar number along with the Universal Account Number (hereinafter `UAN'), generated under the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (hereinafter, `EPF Act'), in respect of employees, has been made mandatory.

3. On the last date i.e., 14th September, 2021, Mr. Gupta, ld. Counsel for the Petitioner, sought time to file a list of its members and also file an amended memo of parties, impleading some of its members who are affected by the impugned order of the EPFO dated 1st June, 2021. Parties were also directed to place on record the circulars being relied upon by them. Further to the last order dated 14th September, 2021, an amended memo of parties has been filed by the Petitioner, impleading three companies who are members of the Petitioner-Association, namely, M/s T C Global India Private Ltd., M/s Jindal ITF Limited and M/s Lifting Equipment Engineer. The said amended memo of parties is taken on record.

4. In August/September, 2020, the Central Government enacted four labour codes, namely:

(a) Code on Wages, 2019;

(b) Code on Social Security, 2020;

(c) Code on Industrial Relations, 2020; and

(d) Code on Occupational Safety, Health and Working Condition, 2020.

5. The abovementioned Codes were notified but are stated to have not yet come into effect. The Rules etc. under the said Codes are yet to be framed and notified. The only provision in the Code on Social Security, 2020, which has been notified is Section 142 .

6. Pursuant to the notification of Section 142 of the Code on Social Security, 2020 on 30th April, 2021, the impugned circular was issued by the EPFO on 1st June, 2021. As per the said circular, the EPFO has made it mandatory that the Aadhaar number of each employee be seeded and verified with the UAN, with effect from 1st June, 2021.

7. It is pertinent to note that under the EPF Act, whenever deposits are made in respect of any employees, an Electronic Challan-cum-Receipt (hereinafter "ECR") is generated. The said ECR acts as the proof of deposit of the provident fund (hereinafter, "PF"). It is the case of the Petitioners that if the ECR is not generated, the employer would be liable to pay various penalties and suffer consequences of non-deposit of dues. The impugned circular dated 1st June, 2021 mandated that no PF deposit would be made or accepted without Aadhaar numbers being seeded with the UAN. Thus, in effect, seeding of Aadhaar numbers was made mandatory to obtain an ECR.

8. Pursuant to the impugned notification, the Petitioner-Association made a representation to the Ministry of Labour & Employment, Govt. of India, in view of the various difficulties being faced by employers due to mandatory seeding. It informed the Ministry that though both the employers and employees intend to effectuate the seeding, there are various technical issues being faced due to which, the same is not becoming possible in respect of a large number of people. According to the Petitioner, the EPFO portal rejects the ECR for two reasons:

(a) Error- Aadhaar being not verified against UAN; and

(b) Error - Aadhaar not seeded against the UAN.

Submissions

(a) Issues with Aadhaar verification against UAN

9. In the representation made to the Ministry, it was highlighted by the Petitioner-Association that in case of various employees, there is a mismatch between the Aadhaar database and the EPFO database. The mismatch could be in respect of the name/spelling of a person, date of birth, etc. and for getting the same rectified, various documents are demanded by the authorities, which resul