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2014 Supreme(Tri) 298
IN THE HIGH COURT OF TRIPURA
S. Talapatra, J.
Swapan Kumar Paul - Appellant
Versus
Oil & Natural Gas Corporation Ltd. - Respondent
W.P. (C) No. 221 of 2008Decided On : 31-07-2014
For the Appellant/Petitioner/Plaintiff:A.K. Bhowmik, Sr. Advocate and A. Banik, Advocate
For the Respondents/Defendant:P.B. Dhar, Advocate and A. Lodh, CGSC
The primary liability for provident fund contributions lies with the contractor, but the principal employer has the duty to ensure compliance by the contractor. The Regional Provident Fund Commissioner has the authority to recover the entire amount from the principal employer in case of default by the contractor.
Headnote:
EPF & MP Act - Recovery of Provident Fund - Section 7A, Section 8A - The court discussed the provisions of the EPF & MP Act, 1952, particularly Section 7A and Section 8A, and their implications on the liability of the principal employer and the contractor for provident fund contributions. The court highlighted the duty of the principal employer to ensure compliance by the contractor and the authority of the Regional Provident Fund Commissioner to recover the entire amount from the principal employer in case of default by the contractor.
Fact of the Case:
The petitioner challenged a memorandum directing recovery of a sum from unpaid dues or bills, issued under Section 7A of the EPF & MP Act, 1952, by the Regional Provident Fund Commissioner against the unpaid dues of the petitioner with the respondent-Oil & Natural Gas Corporation Ltd. (ONGC).
Finding of the Court:
The court found that the liability of the principal employer, ONGC, to pay the provident fund contribution in respect of employees engaged under the contractors was not vitiated by law, and the impugned order directing recovery from ONGC was upheld.
Issues: The issues included the liability of the principal employer and the contractor for provident fund contributions, the authority of the Regional Provident Fund Commissioner to recover the amount from the principal employer, and the contractual indemnity of the principal employer.
Ratio Decidendi: The court held that the primary liability for provident fund contributions lies with the contractor, but the principal employer has the duty to ensure compliance by the contractor. The Regional Provident Fund Commissioner has the authority to recover the entire amount from the principal employer in case of default by the contractor. The contractual indemnity clause keeps the principal employer indemnified from the liability of payment of EPF deposit for the employees.
Final Decision: The writ petition was dismissed, and the court reserved the liberty for the petitioner to raise other questions emanating from the performance, part-performance, or non-performance of any provision of the contract in the competent forum.
JUDGMENT
S. Talapatra, J.:--1. By means of this petition, the petitioner has challenged the Memorandum No. AGT/Legal/EPF-RPFC/2008-09, dated 19.06.2008, Annexure-3 to the writ petition, whereby a sum of ` 4,27,623 (rupees four lac. twenty seven thousand six hundred and twenty three) has been directed to be recovered from the unpaid dues or bills, whatever, of the petitioner, lying with the respondent-Oil & Natural Gas Corporation Ltd. (for short ‘ONGC’).
2. It appears from the Memorandum dated 19.06.2008 that a proceeding was drawn up under Section 7A of the Employees Provident Fund & Miscellaneous Provisions Act, 1952, for short ‘EPF & MP Act, 1952’, against the petitioner for not complying with the provisions of the said Act by depositing the statutory dues and on submitting the report/returns in compliance of the provisions of the EPF & MP Act, 1952. The petitioner was summoned in the said proceeding by the notice dated 06.01.2000, Annexure-’C’ to the counter-affidavit filed by the respondents No. 3 and 4. In sequel, the an advisory dated 28.05.2001, Annexure-’B’ to the counter-affidavit filed by the respondents No. 3 and 4, had been issued asking him to appear in person under Section 7A of the EPF & MP Act, 1962. Thereafter, the petitioner appeared through an authorised person and filed the reply to the Regional Provident Fund Commissioner, Employees Provident Fund Organization, Annexure-’D’ to the counter-affidavit filed by the respondents No. 3 and 4, denying the liability on his part.
3. By the final order dated 31.07.2000, Annexure-’D’ to the counter-affidavit filed by the respondents No. 3 and 4, the Regional Provident Fund Commissioner held inter alia that “even if one employee is employed, by or through contractors, the contractor would be under statutory obligation to report compliance through the principal employer. As the complete records were not before the Regional P.F. Commissioner, they were advised to produce the records in complete shape before the area E.O. But thereafter though the proceedings were adjourned from time to time none of the contractors appeared nor submitted the records for the purpose of verification for eventual assessment of the dues for the case period. Though it appeared from the circular letter dated 02.02.2000 that the contractors were directed by M/S. ONGC Tripura Project, Agartala to arrange production of records before the area E.O., yet it was not complied with, for the reasons known to them.”
4. It has been further recorded in the final order dated 31.07.2000 that “as per the provisions of the EPF & MP Act, 1952 and the schemes framed thereunder, a duty has been cast on the principal employer to report compliance in respect of employees engaged by or through a contractor vide Section 2(f), 8A, para 30 & 32 of the EPF Scheme, 1952. A duty has also been cast on the contractor under para 36-B of the EPF Scheme, 1952 to submit to the principal employer a statement showing the recoveries of contribution in respect of employees employed by or through him within 7 days of the close of every month as the principal employer is required to furnish such information to the Provident Fund Commissioner”. Thereafter, it has been also held that “accordingly, I hold the principal employer M/S. ONGC Tripura Project, Agartala responsible for reporting compliance in respect of the employees employed by or through the contractors for the case period”. Finally, it has been order as under:
As a result this office had no other alternative than to work out the Provident Fund liabilities in respect of drivers engaged by M/S. Swapan Kr. Paul presuming that he had engaged minimum of 60 drivers for 60 vehicles supplied to M/S. ONGC, Tripura Project taking into consideration minimum wages payable to such drivers under payment of minimum wages Act.
Accordingly, Shri K. Bhattacharjee, E.O. appointed u/s. 13(1) of the EPF & MP Act, 1952 has deposed before me and confirmed that an amount of Rs. 7,20,824/- (Rupees seven
