Point of Law : An Establishment to which PF Act applies shall continue to be governed by the PF Act, notwithstanding that number of persons employed therein at any time falls below 20.

JUDGMENT :

1. By invoking the extra-ordinary jurisdiction under Article 226 of the Constitution of India, the writ petition has been preferred challenging three orders, that is, [i] Order dated 21.07.2009; [ii] Order dated 08.09.2010; & [iii] Order dated 03.07.2012 passed by the respondent authorities in the Employees Provident Fund Organization [EPFO].

2. The Order dated 21.07.2009 was an Order passed after conclusion of an inquiry proceeding under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 whereby the respondent EPFO authority empowered thereunder, had found an amount of Rs. 8,00,265/- due from the petitioner no. 1, M/s DIMS Hospital as dues under the Employees Provident Funds & Miscellaneous Provisions Act, 1952 for the period from May, 2004 to February, 2009. By the Order dated 08.09.2010, a direction was given to the respondent no. 3 to recover an amount of Rs. 7,61,796/-from the petitioner no. 1. The said Order was in the nature of a Prohibitory Order passed by the Recovery Officer, EPFO purportedly under Section 7Q of the Employees Provident Funds & Miscellaneous Provisions Act, 1952. By the Order dated 03.07.2012, the petitioner no. 2, who is the Managing Director of the petitioner no. 1 establishment, was directed to remit an amount of Rs. 6,14,527/-in favour of the respondent no. 3 within 10 [ten] days from the date of receipt of the said Order, failing which, necessary actions under the provisions of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 would be initiated for realization of the same without further information.

3. The petitioners have averred that the petitioner no. 1 is a unit of M/s May Flower Health Care Private Limited and it runs a hospital named Ms/ DIMS [Dharanidhar Memorial Institute of Medical Sciences and Research] Hospital [‘the Hospital’, for short]. As the Hospital was an establishment under provisions of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 [‘the Act’ and/or ‘the PF Act’, for short], the same was brought under the purview of the PF Act with effect from 01.04.2004 and it was assigned a code number being PF Code no-AS/5614. As per the Proforma for Coverage submitted by the petitioner no. 1, the total nos. of employees in the establishment at the time it was brought under the purview of the PF Act was 28.

4. I have heard Mr. A. Dhar, learned counsel for the petitioners and Mr. P.K. Roy, learned Senior Counsel assisted by Ms. N. Dutta, learned counsel for the respondent nos. 2 & 3.

5. Mr. Dhar, learned counsel for the petitioners has submitted that though the Hospital/Establishment started its functioning in the right earnest, an untoward incident took place on 19.05.2003 and the said incident had ultimately resulted into an Order dated 30.05.2003 from the State Health Establishment Authority, Assam whereby the said authority directed closure of the Hospital/Establishment. The events thereafter, resulted into arrest of the petitioner no. 2 who is the Managing Director of the Hospital/Establishment. As a result, the functioning of the Hospital/ Establishment was severely affected and there was exodus of employees from the Hospital/Establishment for engagements elsewhere. As the employees in significant numbers had left the Hospital/Establishment, the number of employees in the Hospital/Establishment came down below 20. Despite all such odds, the Management of the Hospital/Establishment with the hope that the things would turn around, continued to retain the Provident Fund account with the EPFO authorities and did not formally close down the Hospital/Establishment despite the Order of closure from the State Health Establishment Authority, Assam on 30.05.2003. Mr. Dhar has submitted that the petitioner no. 2 being a doctor by profession, had utilized the premises of the Hospital/Establishment for consultation. As it faced severe financial crisis, the Hospital/Establishment made defaults in depositing the dues u