JUDGMENT :

The order dated 31.05.2010 passed under Section 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “the EPF & MP Act”) and the subsequent order of review dated 23.09.2013 are under challenge in the present writ petition.

2. The petitioner, a company registered under the provisions of the Companies Act, 1956, had established a factory at Uravaiyary Village, Mangalam Road, Pondicherry. The petitioner company is engaged in the manufacture of shoe uppers. The company was covered under the EPF & MP Act from the year 1992. The petitioner claims that they are regularly paying contributions for the employees' share as well as employer share. On account of certain genuine reasons, the company was unable to pay the contribution, since the company has incurred losses. A reference has also been made to the Board of Industrial and Financial Reconstruction (BIFR) and a case has been registered in Case No. 359/2000. The company was declared as a Sick Industrial Company and IDBI was appointed as the operating agency under Section 17(3).

3. Learned Senior Counsel for the writ petitioner made a submission that on 17.09.2002, the Assistant Commissioner of Provident Fund issued an order under Section 7-A of the EPF & MP Act wherein, he directed the petitioner company to remit the contributions of Employees Provident Fund, Pension Fund and the Employees Deposit Linked Insurance in respect of trainees enrolled from the date of engagement. Aggrieved by the said order, the petitioner company filed an application for review under Section 7-B of the EPF & MP Act on the ground that the order has been passed without hearing the petitioner and the order is not a speaking one. The review petition was taken on file by the 1st respondent on 06.10.2003 and after a hearing fixed by him, the Enforcement Officer filed a report stating as follows:-

“(i) the Establishment is not having certified standing order. The establishment has filed the draft standing order for certification by the Regional Labour Commissioner, Pondicherry on 28.08.2002 and is yet to be certified by the Labour Department. However, during the pendency of certification, the establishment is following model standing order;

(ii) the trainees are given appointment order specifying the terms of appointment;

(iii) during the period of training, the trainees are paid stipend ranging from Rs.600/- to Rs.800/-. The trainees will cease on completion of the prescribed training period of 2½ years and there is no guarantee of employment in the organization on completion of the training;

(iv) the trainees are not liable to contribute to ESI;

(v) the difference in the monthly stipendiary allowance is mainly due to the cut in the stipend for the days of their absence. Though the appointment order states that consolidated stipend will be paid during the period of training, there is no mention of increment in the stipend during the subsequent days of training;

(vi) the period of training is for 2½ years for all cadres of trainees;

(vii) the trainees are not paid bonus or attendance incentives; and

(viii) the list of trainees who are enrolled in September, 2002 shows that no trainees are engaged for more than 2½ years.”

4. In view of the report, the petitioner wanted some time to file counter and accordingly, the enquiry was adjourned. On 23.02.2004, the petitioner made a request to the 1st respondent to furnish a copy of the report so as to participate in the enquiry. Earlier, on 09.01.2004, the Assistant Commissioner had inspected the factory and conducted an enquiry with few trainees and other employees and also verified certain records. Accordingly, the Assistant Commissioner had also submitted a report.

5. The contentions of the writ petitioners are that remuneration was being paid to the trainees in the form of stipend based on actual attendance and that the person would be receiving a certificate of proficiency which would enable him to secure employme