Impugned EPF order quashed for violating Paragraph 26B's mandatory hearing requirement before rejecting exemption claims.

ORDER

The petitioner, who is an employer, assails the order dated

03.09.2025 passed by the second respondent under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. By the said order, the petitioner was called upon to pay a sum of Rs.

30,72,131/- towards Employees’ Provident Fund contribution.

2.The second respondent conducted an inspection in the petitioner’s establishment on 05.04.2023 and found that the establishment was covered under the Act, but had failed to remit Employees’ Provident Fund, Employees’ Pension Fund, and Employees’ Deposit-Linked Insurance contributions, along with the administrative charges for EPF and EDLI, for the period from April 2016 to March 2023. For the purpose of determining the amount due from the petitioner under the Act and the Schemes framed thereunder, an enquiry under Section 7A(1)(b) of the Act was initiated, and the petitioner was issued notice to appear before the competent authority.

3.The petitioner filed an application under Paragraph 26B of the Employees’ Provident Fund Scheme, 1952, stating that eight drivers working in the petitioner’s establishment were drawing wages in excess of the ceiling limit of Rs.15,000/- and had filed declarations to that effect, seeking exemption from the applicability of the Act. However, the first respondent, by the impugned order, dismissed the petition filed under Paragraph 26B and directed the petitioner to pay the said amount.

4.Learned counsel for the petitioner submitted that, as per Paragraph 26B of the Employees’ Provident Fund Scheme, 1952, the first respondent ought to have referred the petition to the Regional Provident Fund Commissioner. It was further submitted that the authority was required to conduct an enquiry and pass appropriate orders only after providing an opportunity of hearing to both the petitioner and the employees concerned. In the present case, without conducting any enquiry and without affording an opportunity of hearing to either the petitioner or the employees, the impugned order came to be passed. Such action is in contravention of Paragraph 26B of the Scheme and, therefore, the impugned order is liable to be set aside. It was also contended that the writ petition is maintainable, as the order has been passed in gross violation of the principles of natural justice.

5.Per contra, learned counsel appearing for respondents 1 and 2 submitted that the eight employees do not fall within the definition of “excluded employees” under Section 2(f) of the Scheme, 1952, and that the first respondent, after considering the matter in the proper perspective, rightly passed the impugned order, which does not warrant interference.

6.The submissions of the learned counsel on either side have been duly considered.

7.Paragraph 26B of the Employees’ Provident Fund Scheme, 1952, deals with resolution of doubts and provides that if any question arises as to whether an employee is entitled to become, is required to become, or continues as a member, or as to the date from which such entitlement or requirement arises, the same shall be referred to the Regional Provident Fund Commissioner, who shall decide the matter. The proviso specifically mandates that both the employer and the employee shall be heard before passing any order.

8.In the present case, the petitioner had filed a petition under Paragraph 26B stating that the eight drivers working in the establishment were drawing wages in excess of the ceiling limit of Rs. 15,000/- and, therefore, were not entitled to the benefits under the Act.

9.Paragraph 26B clearly stipul