Anilkumar S. v. Assistant Provident Fund Commissioner, Employees Provident Fund Organization, and Regional Provident Fund Commissioner, Employees Provident Fund Organization, Pattom, Trivandrum

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE B.P.RAY THURSDAY, THE 10TH DAY OF JANUARY 2013/20TH POUSHA 1934 WP(C).No. 13573 of 2007 (N) --------------------------- PETITIONER: - --------------- ANILKUMAR.S., DIRECTOR, M/S.KERALA HYDEL TOURISM CENTRE, 808,VYDYUTHI BHAVAN PATTOM,TRIVANDRUM. BY ADVS.SRI.GOPAKUMAR R.THALIYAL SRI.M.S.VIJAYACHANDRAN BABU RESPONDENTS: ----------------- 1. THE ASSISTANT PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANIZATION, PATTOM,TRIVANDRUM. 2. THE REGIONAL PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANIZATION,PATTOM TRIVANDRUM. BY ADV. SRI.N.SUGUNAPALAN(SR.),SC FOR P.F. BY ADV. SMT.T.N.GIRIJA, SC,EPF ORGANISATION R1 BY ADV. SRI.S.GOPAKUMARAN NAIR (SR.) R1 BY ADV. SRI.S.GOWTHAM THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10-01-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 13573 of 2007 (N) : 2 : ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1 : TRUE COPY OF THE NOTICE ISSUED TO THE PETITIONER DATED 25.03.2004. EXT.P2 : TRUE COPY OF THE LETTER ISSUED BY THE 1ST RESPONDENT DATED 26.04.2004. EXT.P3 : TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER DATED 27.09.2004. EXT.P4 : TRUE COPY OF THE SUMMONS ISSUED BY THE 1ST RESPONDENT DATED 25.08.2006. EXT.P5 : TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 01.12.2006. EXT.P6 : TRUE COPY OF THE REVIEW PETITION FILED BY THE PETITIONER DATED 19.12.2006. EXT.P7 :** TRUE COPY OF THE AFFIDAVIT AND PETITION FILED BY THE PETITIONER DATED 24.03.2007. **EXT.P8 : TRUE COPY OF THE PETITION FILED BY THE PETITIONER DATED 04.04.2007. EXT.P8(a) : TRUE COPY OF THE ORDER DATED 10.05.2007 PASSED BY THE 1ST RESPONDENT. EXT.P9 : TRUE COPY OF THE REMITTANCE SLIP ISSUED BY THE EMPLOYEES PROVIDENT FUND ORGANISATION DATED 04.06.2003.** ## **RESPONDENTS' EXHIBITS: NIL** ## **//TRUE COPY//** ## **P.A. TO JUDGE** rv ## **B.P. RAY, J.** **- - - - - - - - - - - - - - - - - W.P.(C) No.13573 of 2007** **- - - - - - - - - - - - - - - -** ## **Dated this the 10[th] day of January, 2013.** ## **JUDGMENT** Heard both sides. 2. The case of the petitioner is as follows: The petitioner is an establishment covered under the Employees Provident Fund and Miscellaneous Provisions Act with effect from 01.03.2001 with Code No. KR/16908. The petitioner is required to comply with the provisions of the Act from 01.03.2001 as per Ext.P1 notice. The petitioner complied with the directions contained in Ext.P1 notice and implemented the provisions of the Act by remitting the amount regularly from March, 2004 onwards. Since the employees' share of contribution has not been deducted for the pre-discovery period of three years from March, 2001 to February, 2004, the petitioner requested for waiver of employees' share of contribution in respect of the above period. In response to the same, the 1[st] respondent directed the petitioner to remit employer's share for the pre-discovery period and forward a joint request of employer and employees for considering the waiver of W.P.(C) No.13573/2007 -:2:- employees' share of contribution for the aforesaid period. Pursuant to the same, the petitioner remitted the employer's share of contribution for the pre-discovery period and submitted the remittance details with a request for waiver of employees' share. Thereafter, the petitioner was served with Ext.P4 summons issued by the 1[st] respondent under Section 7A(1)(b) of the EPF Act directing the petitioner to appear before the 1[st] respondent. The petitioner appeared before the 1[st] respondent and produced the records and the details required by the first respondent. But, the first respondent without considering the material points passed Ext.P5 order fixing an amount of `6,17,946.65 as arrears of dues. Aggrieved by the same, the petitioner filed Ext.P6 review petition under Section 7B of the EPF Act before the 1[st] respondent. Ext.P7 petition filed by the petitioner before the 1[st] respondent requesting for a copy of the report of the Enforcement Officer has been rejected by the 1[st] respondent. Thereafter, the first respondent by Ext.P8(a) order dismissed Ext.P6 review petition. Hence this writ petition seeking the following reliefs: 1. To declare that the 7A Authority under the EPF Act should be an authority without any function such as Compliance Officer, Recovery Officer etc. and without any powers like W.P.(C) No.13573/2007 -:3:- issuing warrant of arrest etc. 2. To issue a writ of mandamus or any other appropriate writ, direction or order directing the 1[st] respondent to serve a copy of the report of the Enforcement Officer, which has been relied upon by the 1[st] respondent for passing Ext.P5 order. 3. To issue a writ of mandamus or any other appropriate writ, direction or order directing the 1[st] respondent to give sufficient opportunity to the petitioner for the production of the relevant documents as sought for in Exts.P7 and P8 for the purpose of enquiry under the EPF Act. 4. To issue a writ of certiorari or any other appropriate writ, direction or order quashing Ext.P8(a) as arbitrary, illegal unreasonable and unjust. 3. The learned counsel for the petitioner placed reliance upon the decision reported in (1991) 3 SCC 119 - **District Exhibitors Association v. Union of India.** Paragraphs 20, 21 and 22 of the said decision read as follows: **“** _**20. The question however, is whether by making the Scheme with retrospective operation, the employer could be saddled with the liability to pay employees' contribution w.e.f. October 1, 1984 and if not from what other date? The answer to the question turns upon the implementation of the Scheme and in particular the giving effect to paras 30 and 32 of the Scheme. Para 30 provides that the employer shall, in the first instance, pay both the contributions payable by himself and also the contribution payable by the employees. It shall be the responsibility of the principal employer to pay both the contributions payable by himself and also in respect of the employees directly employed by him and also in respect of the employees employed by him or through a contractor. Para 32 confers upon the employer the right to recover the employees contribution that has been paid by him under para 30. That could be recovered by the employer by means of deduction from the wage of the employees who are liable to pay. First proviso to para 32(1) however, limits that liability in expressly stating that no such deduction may be made from any wage other than that which is paid in respect of the period of which the contribution is payable. It is obvious from paras 30 and 32 that the employer has to pay the contribution of the employee's share but he has a right to recover that payment by deducting the same from the wages due and payable**_ W.P.(C) No.13573/2007 -:4:- _**to the employees. It is significant to note that the deduction is not from the wages payable for any period, but only from the wages for the period in respect of which the contribution is payable and no deduction could be made from any other wages payable to the employees. In other words, the payment of employees' contribution by the employer with the corresponding right to deduct the same from the wages of the employees could be only for the current period during which the employer has also to pay his contribution.**_ 21. In the instant case, for the period from October 1, 1984 up to the date of the impugned notification the employer has paid the full wages to the employees since during that period, there was no scheme applicable to his establishment. By retrospectively applying the scheme, could he be asked to pay the employees' contribution for the period antecedent to the impugned notification. We think not. The Act and the Scheme neither permit any such payment nor deduction. He cannot be saddled with the liability to pay the employees' contribution for the retrospective period, since he has no right to deduct the same from the future wages payable to the employees. 22. Mr Vikram Mahajan, learned counsel for the Central Government submitted that it may be possible for the employers to make deduction from subsequent wages of the workmen with the consent in writing of the Inspector as required under the third proviso to para 32 (1) of the Scheme. This submission cannot be accepted since the third proviso could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the scheme is operative. Such deduction which has not been made by accidental mistake or clerical error, could be made from the subsequent wages with the consent in writing of the Inspector concerned. The case with which we are concerned is not covered by the third proviso. It is not the case of anybody that the employer could not make deduction from the wages of the employees by accidental mistake or clerical error. The employer indeed could not have made the deduction prior to the impugned notification dated April 30, 1986 since the Scheme was not then applicable. The Scheme has been given retrospective effect w.e.f. October 1, 1984. The employer therefore, cannot take the benefit of the third proviso to para 32(1) for deducting the employees contribution in their wages payable in future. 4. Following the aforesaid decision, I set aside Exts. P5 and P8(a) and remit the matter to the first respondent for reconsideration in the light of the decision quoted above. The first W.P.(C) No.13573/2007 -:5:- respondent is directed to conclude the proceedings within four months from the date of receipt of a copy of this judgment. The petitioner shall appear before the 1[st] respondent on 04.02.2013 along with a copy of this judgment. The first respondent shall provide all necessary documents for filing show cause as requested by the petitioner. It is open to the petitioner to produce the documents to prove that no employees' share was deducted by the employer for the pre-discovery period This writ petition is disposed of as above. **sd/- B.P. RAY, JUDGE.** rv W.P.(C) No.13573/2007 -:6:-