The court affirmed that a principal employer is entitled to implead sub-contractors in proceedings under Section 7A of the Act 1952 for proper adjudication of provident fund contributions.

ORDER :

Mummineni Sudheer Kumar, J.

Respondent No.1 initiated proceedings against the petitioner by issuing a notice under Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “the Act 1952”) and accordingly, the petitioner participated in the proceedings and because of certain disputes that arose during the course of enquiry, the petitioner approached this Court on an early occasion by filing W.P.(MD) No. 13950 of 2022 and the proceedings under Section 7A of the Act 1952 remain stayed during the pendency of the said writ petition. The said writ petition was finally disposed of by order dated 26.04.2023 and thereafter, the proceedings under Section 7A of the Act 1952 again commenced. While so, the petitioner herein submitted an application seeking to implead some of the sub-contractors to whom the petitioner has entrusted a part of the work on sub-contract basis and who had executed the work on the ground that the Provident Fund contribution payable in respect of the said employees worked under the said sub-contractors is sought to be imposed on the petitioner and therefore, seeking to implead those sub-contractors to bring the relevant material before Respondent No.1 for proper adjudication of the matter. It is the said application that was rejected by Respondent No.1 by passing the impugned order dated 15.10.2024 on the ground that the petitioner herein, being the Principal employer, who has the responsibility to identify all such employees, is already a party to the proceedings and no useful purpose would be served by including the sub-contractors as parties to the case. It is aggrieved by the said order, the petitioner approached this Court by filing the present writ petition.

2. A Co-ordinate Bench of this Court, while entertaining the writ petition, by order dated 10.01.2025, passed the following order:

“4.Considering the submissions made on either side, this Court is not inclined to defer the enquiry, however, the petitioner shall participate in the enquiry and provide all the informations with regard to the details of the sub-contractors, so as to enable the respondent to send notice to the sub-contractors and after receiving notice, they can also very well participate in the enquiry. Till then, the respondent is directed not to pass any final orders. After hearing the sub-contractors and completion of the enquiry, if the respondent comes to a conclusion that the petitioner is no way responsible for EPF contribution for the workers worked under the sub- contractors, appropriate orders can be passed.”

3. In spite of the above said order, no further proceedings had taken place and the respondents preferred to file counter affidavit by contesting the relief sought for in the writ petition. Accordingly, with the consent of the parties, the main writ petition is taken up for consideration and accordingly, the same is being disposed of by this order.

4. Heard Mr.M.Kannan, learned counsel for the petitioner and Mr.John Xavier, learned counsel for the first respondent.

5. The scope of enquiry under Section 7A of the Act 1952 is wide enough and Respondent No.1 is conferred with powers of a civil Court under the Code of Civil Procedure, 1908 for trying a suit in the matters of enforcing the attendance of any person or examining any person on oath, requiring the discovery and production of documents, receiving evidence on affidavit and issuing commissions for the examination of witnesses and any such enquiry shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purpose of Section 196 of the Indian Penal Code. It is in the light of the wide scope of Section 7A of the Act 1952, the petitioner filed an application to implead the sub-contractors on the ground that the petitioner is totally unaware of the employees that were engaged by the sub- contractors and the petitioner is having no particulars of all such employees and also