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2018 Supreme(P&H) 3874
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Shekher Dhawan, J.
Chandigarh Sports Council - Appellant
Versus
Board Of Trustees, Employees` Provident Fund Organization - Respondent
CWP No. 14210 of 2013 [O&M]
Decided On : 25-07-2018
K.K. Gupta, Advocate, for the Petitioner; Manav Bajaj for Sumeet Goel, Advocates, for the Respondents
The central legal point established is that the employees of Lake Club were not covered under the EPF Act and were subject to the General Provident Fund.
Headnote:
Employees' Provident Funds and Miscellaneous Provisions Act - EPF Liability of Lake Club - The court quashed the orders for recovery of EPF liability from the bank account of Lake Sports Complex, holding that the employees of Lake Club were covered under the General Provident Fund and not the EPF Act.
Fact of the Case:
The petitioner, Lake Club, sought to quash orders for recovery of EPF liability, arguing that it was not covered under the EPF Act as its employees were subject to the General Provident Fund.
Finding of the Court:
The court found in favor of the petitioner, stating that the employees of Lake Club were not covered under the EPF Act and ordered the release of the amount already recovered with interest.
Issues: The main issue was whether the Lake Club was liable under the EPF Act for EPF contributions.
Ratio Decidendi: The court held that the employees of Lake Club were subject to the General Provident Fund and not the EPF Act, based on previous court decisions and the nature of their employment.
Final Decision: The court allowed the writ petition, set aside the impugned orders, and ordered the release of the amount already recovered with interest at the rate of 9% per annum.
JUDGMENT
Shekher Dhawan, J. - Present writ petition under Article 226/227 of the Constitution of India is for issuance of a writ in the nature of certiorari for quashing order dated 9.12.2011 (Annexure P/8) passed under Section 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short, "the Act"), order dated 25.03.2013 (Annexure P/14) passed under Section 7-B of the Act and order dated 10.05.2013 (Annexure P/15) passed under Sections 14-B and 7-Q of the Act, whereby the alleged liability of EPF of Lake Club has been recovered from the bank account of the Lake Sports Complex which is a unit of the Petitioner in a totally illegal and arbitrary manner.
2. The contention raised by learned counsel for the petitioner is that the Lake Club would not be covered under the provisions of the Act being a unit of the Sports Department and its employees being subject to General Provident Fund and as such, sought direction to the respondents to refund the amount illegally recovered without any notice or opportunity of hearing together with interest 18% per annum.
3. Learned counsel for the petitioner further contended that the petitioner is a Society registered under the Societies Registration Act, 1860. In the joint State of Punjab, Sports Department had set-up a Sports Centre at the Lake Complex in 1960. At the time of re-organization of the State of Punjab, the said Sports Centre was allocated to the Sports Department of Union Territory, Chandigarh and was renamed as Lake Club and the employees of the Club were also employees of the Sports Department, Union Territory, Chandigarh. In the complex, where Lake Club Chandigarh is situated, office of Chandigarh Sports Council i.e., the present petitioner, is also functioning. On 11.8.1997, Chandigarh Administration ordered to transfer the management and administration of the Lake Club, Chandigarh to the Chandigarh Sports Council on the ground that the staff of the Lake Club would remain the employees of the Sports Department, U.T. Chandigarh and draw their salaries from the Government head. That way, only the management and administration of the Club was put under the control of Chandigarh Sports Council. Copy of the said order dated 11.08.1997, issued on 20.08.1997, is at Annexure P/2 on the file.
4. Learned counsel for the petitioner also contended that the matter in controversy was before this Court in CWP-1598-2009, which was decided on 23.01.2012 (Annexure P/16) and the Hon'ble Co-ordinate Bench passed the following order :-
" In view of the fact that employees of Lake Club are the employees of UT Chandigarh, therefore, merely because the management was transferred to the petitioner, would not give any jurisdiction to respondents No.1 and 2 to recover the alleged ESI contribution from the petitioner. The impugned order cannot be sustained in the eyes of law and is accordingly set-aside. The petition is allowed. The amount already recovered, shall be released to the petitioner alongwith interest @ 10% per annum within 90 days."
5. The matter was before Hon'ble Division Bench of this Court in LPA No. 1178 of 2012 which was decided on 20.11.2013 and the Hon'ble Division Bench observed as under:-
"8. We put a query to learned counsel for the appellant as to whether the competent authority under the said Act was of the view that the employees of U.T. Administration, Chandigarh (sic) were not getting benefits equal or superior to the one under the said Act and that all such employees of U.T. Administration were entitled to the benefits of the provisions of the said Act. If it was not so how could there be a distinguishing feature qua some of the employees who just happen to be working at the Lake Club managed by respondent No.1 but maintaining the status as employees of U.T. Administration. There has been no satisfactory answer to this query.
9. The employees working at the Lake Club are thus getting all the benefits and privileges as are admissible to all the emplo
