The legal principle established is that a Principal Employer may not be liable for a Contractor's PF contributions if the Contractor is deemed an independent employer with a separate PF Code.

1. The petitioner Company has filed the above writ petition to issue a Writ of Certiorarified Mandamus to call for the records connected with impugned order ref No.TN/VLR/38789/SDC/2013 dated 26.12.2013 on the file of the respondent and quash the same and direct that the respondent shall not have a right to proceed against the petitioner under section 14B of the PF Act.

2. The brief case of the petitioner is as follows:

(a) According to the petitioner Company, in the course of its business, it engages various Contractors to carry out non-perennial work, who, in turn, employed various persons to carry out the work. The petitioner Company is a Principal Employer and the Contractors, wherever required, have obtained licences and are Licensed Contractors under the Contract Labour (Regulation and Abolition) Act, 1970. The petitioner Company is registered with the Provident Fund Authorities and has a separate "exempted trust" under P.F. Code No.TN/4725.

(b) One A. Govindaraj, a Licenced Contractor has been doing certain contract work for the petitioner Company, as and when required since 1995. Insofar as the Petitioner Company is concerned, the Contractor would supply labour, as was required by the Petitioner Company. The Contractor was given certain civil works to be done inside the Factory. The said Contractor employed 15 to 20 contract workmen inside the petitioner's factory and the Petitioner Company never employed the Contractor continuously.

(c) The contractor applied for a separate P.F. Code number under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and the same was allotted to him on 10.1.2003 with the Code No.TN/VL/38789 with retrospective coverage from 25.9.1995.

(d) The Contractor had been deducting the employees share from December 2002 onwards and has been remitting it along with employer's share of contribution to the P.F authorities.

(e) The Petitioner Company learnt that based on the report of the Enforcement Squad, Regional Assistant Provident Fund Commissioner, the Sub Regional Office, Vellore, initiated proceedings under Sec.7-A against the Contractor and the Contractor was directed to produce all the records pertaining to wage payment relating to workmen from April 1995 to November 2002 and the petitioner Company was informed that the said Contractor had given a statement that an amount of Rs.9,66,333/- was payable as contributions and that an amount of Rs.1,00,000/- was also deposited by the said Contractor during March 2004 and the balance of Rs.8,66,333/- on 22nd July 2004.

(f) The petitioner Company also learnt that a letter dated 16.8.2004 was received by the Contractor from the P.F. Authorities, wherein, it has been stated that the coverage for the establishment of the Contractor was advanced from 25.9.1995 to 1.6.1994 and a Show Cause Notice dated 30.8.2004 was issued under Sec.14 of the Act for prosecuting the Contractor. Further, the PF Authorities granted 15 days time to the contractor to pay the amount or on his default, had directed the petitioner Company to pay the amount.

(g) On 31.8.2004 the petitioner Company received a letter calling upon them to pay the amount within three days as against the period of 15 days granted under the letter dated 30.8.2004. As no amount was payable by the Petitioner Company to the contractor, a letter was also sent to the Authorities dated 6.9.2004, informing them that there was no dues payable by the petitioner Company to the Contractor as per the books of the petitioner. Subsequently, the contract with that Contractor, came to an end in October 2004 and was not renewed thereafter.

(h) The petitioner Company was never a party to the proceedings nor was aware of the same. The respondent had thereafter assessed the amount payable under Section 14B and Section 7-Q at Rs.28,61,326/-. In none of the proceedings, the petitioner Company was made as a party and it was not aware of the proceedings except when the Contractor had approached the Petitione