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2022 Supreme(Telangana) 570
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K. LAKSHMAN, J.
The Director, Centre for DNA Fingerprinting And Diagnostics - Petitioner
Versus
The Asst. Provident Fund Commissioner-II Compliance, Hyderabad & Others. - Respondents
Writ Petition No.31702 Of 2022
Decided On : 12-09-2022
For the Petitioner: Dr. K.K.H.M. Syam Sundar.
For the Respondents: Mr. S. Surender Reddy, Mr. Srinivasa Rao Madiraju.
Headnote:(A) Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Section 7A - Writ Petitioner challenging inquiry initiated by Provident Fund authorities over coverage applicability to petitioner establishment. Reliefs sought include quashing of code allocation and directives for fair inquiry process. (Paras 2-4, 5-6, 4(a), 5(a), 5(b))
(B) Quasi-judicial process - Authority conducting inquiry under Section 7A must adhere to procedural fairness and adhere to established guidelines for conducting inquiries, ensuring parties receive proper documentation and opportunities to present their case. (Paras 4(b), 5(d), 5(f))
(C) Judicial scrutiny over administrative actions - The court highlighted that decisions leading to inquiries without adequate foundation, or without conforming to guidelines, undermine the principles of natural justice and fair procedure. (Paras 5(d), 5(e), 5(g))
Facts of the case:
The petitioner, a society governed by various laws, faces allegations from contract employees regarding non-inclusion for provident fund benefits. Following a complaint, inquiries were initiated, resulting in disputes over procedural adherence and applicability of the Act.
Findings of Court:
The court determined the ongoing inquiry by the Assistant Provident Fund Commissioner was flawed due to non-compliance with procedural requirements and ordered reassignment of inquiry to a higher authority to ensure fairness.
Issues: The core questions included the applicability of the Act to the petitioner’s establishment, execution of proper procedures in inquiries, and the alleged bias in the ongoing inquiry by a lower authority.
Ratio Decidendi: The court ruled that the procedure adopted by the respondent authority was insufficient and mandated strict adherence to fair inquiry principles as enshrined in relevant guidelines and statutory provisions.
Result: Writ petition disposed of, and directions issued for fresh inquiry under Section 7A by an authorized officer.
| Table of Content |
|---|
| 1. petitioner seeks relief against unfair procedures (Para 2 , 3) |
| 2. legal grounds for not applying epf act (Para 4 , 5 , 6 , 7) |
ORDER :
1. Heard Dr. K.K.H.M. Syam Sundar, learned counsel for the petitioner, Mr. S. Surender Reddy, learned counsel for respondent Nos.1 to 5 and learned Central Government Standing Counsel appearing for respondent No.6 and also Mr. Srinivasa Rao Madiraju, learned counsel for respondent Nos.7 to 13.
2. This Writ Petition is filed by the petitioner seeking the following relief:
“……to quash the Establishment Code Number unilaterally allotted by the Regional PF Commissioner I, Respondent No.2, APHYD2659645 in the website of EPFO showing the date of coverage as 26th March 1996 uploaded on 17-5-2022. It is hereby prayed to direct the Respondent No.2 to delete all the data uploaded about the Petitioner in the EPFO Website till the passing of an final order after the inquiry under Sec. 7A of the EPF & MP Act 1952. In view of the irregularities unfair procedures adopted by the APFC II Hyderabad - Respondent No.1 the impugned summons in file No. vide Letter No.TS/RO-I HYD (BKP)/2659645/CII/ T-2/2022-23/54 dated 23-5-2022 may be quashed and necessary direction may kindly be given to the CPFC New Delhi Respondent No.4 to entrust the matter of enquiry if any to the Addl. CPFC Hyderabad Respondent No.5 so that the applicability of the Act to the Petitioners Institute and date of applicability of the Act if any etc can be decided in an impartial manner by the Addl. CPFC Hyderabad (Respondent No.5) b) To Quash the Inspection /investigation/ enquiry reports submitted by the Enforcement Officer and Asst. Public Prosecutor - Respondent No.3 dated 31-12-2021 and 4-3-2022 (Ex P23) and to declare them as illegal/unfair since the Asst. Public Prosecutor should not involve himself in the investigation/inquiry process. c) The Circular No.CI/ 3(28) 2016/7A & 14B /1161 dated 1-10-2020 of the Respondent No.4 has to be quashed in line with the physical hearings taking place in all Civil Courts/Criminal Courts in the State of Telangana. All the inquiry Authorities under Sec.7A of EPF & MP Act 1952 should be directed to conduct inquiry proceedings by way of physical hearings if requested by the parties and to pass such other or further orders….”
3. FACTS OF THE CASE:
i) The petitioner herein is a Society registered under the Andhra Pradesh (Telangana Areas) Public Societies Registration Act 1350 Fasli (Act 1 of 1350F) by the Registrar of Societies, Hyderabad, with registration No.1604 of 1996. Now, it is governed by the Telangana Societies Registration Act, 2001. It is a Research Institute and an Autonomous Body. According to the petitioner, it is a nonprofit motive organization.
ii) A complaint has been received from the employees engaged on contract basis against the petitioner establishment stating that the provisions of the EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT , 1952 (for short ‘the Act’) have not been extended to them and that the petitioner is not extending any social security benefits.
iii) A letter dated 16.12.2021 was received from the Zonal Office regarding Non-enrollment of Contract Employees of the petitioner establishment. Therefore, on 20.12.2021, Enforcement Officer was directed to visit the establishment and to submit a detailed report on Non-enrolment of contract employees. The said fact was intimated to the complainants (employees) vide letter dated 20.12.2021. The Enforcement Officer had submitted his report on 31.12.2021 along with letter dated 29.12.2021 of the petitioner establishment pointing out the following deficiencies on the part of the petitioner establishment:
a) At present about 152 employees have been engaged on outsourcing basis through contract Agencies.
b) About 78 employees are directly engaged by the petitioner on direct contract between 2000 and 2014 for its operational requirements; Contract allotted for six (06) months and there is a break of three (03)
