IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No.25847 of 2025

03^rd December, 2025 Between

1. Chiral Bio-Sciences Ltd., and another … Petitioners AND

1. Central Board of Trustees, and Others … Respondents

ORDER

The 1^stpetitioner-establishment is admittedly covered under the Employees Provident Fund Act with effect from 01.04.2004. The petitioner assails the order dated 04.09.2024 passed by the respondent- authority under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, determining alleged provident fund dues against the petitioner-establishment for the period from August, 2016 to November, 2021, based on financial statements and other material, and without identification of any specific unenrolled employee, and the consequential recovery proceedings initiated pursuant to the Section 7A order, including the issuance of Recovery Certificates / Revenue Recovery Certificates aggregating to approximately Rs.1,60,76,805/-, under Sections 8B to 8G of the EPF Act read with Schedule II and III of the Income Tax Act, 1961; and the Show Cause Notice issued before Warrant of Arrest under Section 8B of the EPF Act, proposing coercive action against the 2^nd petitioner, allegedly without exhausting the statutorily mandated modes of recovery against the property of the establishment.

2. Heard Ms. T. Swetha, learned counsel for the petitioners, and Mr. D.Raghavendar Rao, learned Standing Counsel appearing for the respondent-Employees Provident Fund Organization.

3. Learned counsel for the petitioner contended that the enquiry under Section 7A was initiated without furnishing the inspection report, that no unenrolled employee was identified, that the contractors engaged by the petitioner were independent establishments registered with EPFO, and that the prolonged enquiry and recovery proceedings violated statutory safeguards.

4. On the other hand, learned Standing Counsel for the respondent would contend that the matter was listed and called for almost 60 times, and the petitioner either not appeared and even if the petitioner appeared on a few occasions, he sought adjournments for production of records but no records were produced conclusively, and that the impugned proceedings do not suffer from any illegality.

5. Having considered the respective submissions and from a perusal of the original record, it is evident that the enquiry under Section 7A commenced on 18.05.2022 and continued till 04.09.2024. The case was called before the authority on nearly 60 occasions, a fact which is expressly recorded by the authority itself. On a majority of these dates, the enquiry stood adjourned either due to non-appearance of the employer or employer’s representative, or due to repeated requests for time for submission of records and reconciliation of salary statements with financials. Even when appearances were made, the records were either not produced, partially produced, or assurances were given which were not fulfilled. The record further discloses that several adjournments were also granted on administrative grounds, yet the authority consistently afforded further opportunities to the petitioners.

6. Further, it is a matter borne out by the record that the enquiry officer displayed indulgence by granting repeated adjournments spanning over two years. Further, with regard to the contention of the learned counsel for the petitioner that no inspection report was furnished, the record reveals that the final deposition/report of the Enforcement Officer was furnished to the employer’s representative on 14.08.2024 and time was granted for verification. Even thereafter, no effective rebuttal or reconciliation was placed on record. In any event, the jurisdiction under Section 7A is not confined only to an inspection report but extends to determination of dues based on evidence, including financial statements, when statutory records are withheld.Further, the authori