IMPORTANT POINT
The court established that proceedings under the EPF Act must adhere to natural justice, requiring identification of employees and contractors before imposing liabilities.

ORDER :

1. Heard Sri C.V.Mohan Reddy, learned counsel appearing on behalf of the petitioner and Sri B.Jithender Reddy, learned counsel appearing on behalf of the respondents.

2. The petitioner approached the court seeking prayer as under:

“To issue an order direction or writ particularly one in the nature of mandamus declaring the action of the Respondent Authority in passing Order dated 31.10.2023 under Sec 7-B of Employees’ Provident Funds and Miscellaneous Provisions Act 1952 and the Proceedings No. 7A Order No. TS/RO/ HYD-I(BKP)/59713/Compliance I1/ T-1/2021/2019 dated 16.09.2021 passed by the 1st Respondent Authority as illegal perverse arbitrary and violative of principles of natural justice and being violative of Employees Provident Funds and Miscellaneous Provisions Act 1952 and consequently set aside the same and pass.”

3. The case of the Petitioner as per the averments made by the petitioner in the affidavit filed by the petitioner in support of the present Writ Petition in brief, is as follows:

(a) It is the case of the Petitioner, that the Petitioner is a company registered under the Indian Companies Act, 1956 having its registered office at Mumbai and branches at various places across India, one of such Branch offices is M/s. ATC Telecom Infrastructure Pvt. Ltd, located at 6-3-1186 and 6-3-1186/A, 6-3-1186/A/B, 4th Floor, Flat No. 404 & 405, Somajiguda, Raj Bhavan Road, Begumpet, Hyderabad. The Petitioner unit at Hyderabad is covered under the EPF Act with EPF Code number AP/59713, and the petitioner had been remitting the EPF Contributions regularly without any default.

(b) Subsequently, on 18.05.2016 an inspection was conducted by the then Enforcement Officer and the Petitioner was directed to produce some of the records of their establishment, accordingly, the petitioner produced the relevant records along with a letter dated 20.05.2016. Thereafter, the Respondent initiated Section 7-A proceedings and summons were issued to the petitioner to appear on 20.06.2016 as per the summons dated 01.06.2016. In continuance to the same, several hearings were held thereafter and, in the hearing, held on 18.07.2016, the petitioner submitted a list of 11(O & M) Service Contracts along with their P.F. Codes along with salary statement of inquiry period in the form of a CD. Thereafter, the petitioner submitted all the relevant documents as and when directed by the Enforcement Officer.

(c) However, the Enforcement Officer, without considering the objections of the petitioner, submitted his deposition on 25.07.2018 claiming contributions on two counts i.e. non-enrollment of the employees engaged through contractors the Rs.101.96 Cr (approx.) and on wages prescribed Section 2 (b) of the EPF Act of Rs 1.88Cr approx. and thereby claimed an amount total amount of Rs.103.84 Cr (approx.) crores on the said two counts. The enforcement officer surprisingly has mentioned that the said amount pertains to 1723 contractors but failed to provide their names, their nature of contract etc. Though the new Enforcement Officer sought time to submit the list of the 1723 contractors in the hearings held on 14.11.2018, 11.12.2018, 22.01.2019, 22.02.2019, 23.03.2019 and also on 24.04.2019 but avoided to furnish the said details on all these dates and finally the said details were never provided. Therefore, the petitioner without prejudice to its rights in absence of said details, submitted the objections to the Enforcement Officer (EO) deposition on 23.10.2019 and a detailed reply was submitted by the Petitioner.

(d) It is further the case of the petitioner that, on 18.12.2019 and 02.01.2020, the petitioner received an e-mail from the EO with a list of contactors sorted out from the annexures A, B,C. & D to seek relevant documents on sample basis vide its letters dated 22.01.2020 and on 12.02.2020, the petitioner submitted all the documents including invoices and agreements as requested by the EO. In addition to the above, earlier the petitioner also submitt