Central Board of Trustees Employees' Provident Fund Organisation v Kailas Cashew Exports

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 8[TH] DAY OF NOVEMBER 2023 / 17TH KARTHIKA,** **1945** ## **WP(C) NO. 7837 OF 2015** ## **PETITIONER/S:** THE CENTRAL BOARD OF TRUSTEES EMPLOYEES' PROVIDENT FUND ORGANISATION, REPRESENTED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER, SUB REGIONAL OFFICE, CHINNAKKADA, KOLLAM. BY ADV SRI.PIRAPPANCODE V.S.SUDHIR ## **RESPONDENT/S:** KAILAS CASHEW EXPORTS PEZHUKONAM, CHEERANKAVU, EZHUKONE, KOLLAM691505, REPRESENTED BY THE PROPRIETOR, P. SOMARAJAN. BY ADVS. SRI.T.M.CHANDRAN SRI.S.SUJITH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR HEARING ON 21.08.2023, ALONG WITH WP(C).9934/2014, THE COURT ON 08.11.2023 DELIVERED THE FOLLOWING: WP(C) Nos.7837/2015 & 9934/2014 ..2.. ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 8[TH] DAY OF NOVEMBER 2023 / 17TH KARTHIKA, 1945** ## **WP(C) NO. 9934 OF 2014** ## **PETITIONER/S:** P.SOMARAJAN PROPRIETOR, KAILAS CASHEW EXPORTS, PEZHOOKONAM, CHEERANKAVU, KOLLAM-691 505. BY ADVS. SRI.T.M.CHANDRAN SRI.S.SUJITH ## **RESPONDENT/S:** 1 REGIONAL PROVIDENT COMMISSIONER EMPLOYEES PROVIDENT FUND SUB REGIONAL OFFICE, KOLLAM-691 001. 2 ASSISTANT PROVIDENT FUND COMMISSIONER THIRUVANANTHAPURAM-695 001. BY ADV SRI.PIRAPPANCODE V.S.SUDHIR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR HEARING ON 21.08.2023, ALONG WITH WP(C).7837/2015, THE COURT ON 08.11.2023 DELIVERED THE FOLLOWING: WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** ## **JUDGMENT** WP(C) No.7837 of 2015 has been filed by the Central Board of Trustees of the Employees' Provident Fund Organisation, represented by the Assistant Provident Fund Commissioner, Thiruvananthapuram, aggrieved by Ext.P4 order dated 09.10.2013 passed by the Employees' Provident Fund Appellate Tribunal, New Delhi (for short, “the Tribunal”) in ATA No.673(7)2008, which was filed by M/s Kailas Cashew Exports challenging the order of the Assistant Provident Fund Commissioner, Thiruvananthapuram. 2. WP(C) No.9934 of 2014 has been filed by the proprietor of Kailas Cashew Exports seeking for a direction to the Regional Provident Fund Commissioner, Employees Provident Fund Sub Regional Office, Kollam to refund an amount of Rs.15,00,000/- deposited by them in ATA WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** No.673(7)2008 before the Tribunal, during pendency of the appeal. 3. Since cause of action and the parties are same, both these writ petitions are heard and being disposed of together. For convenience, WP(C) No.7837 of 2015 is taken as the leading case and the parties are referred to, as they are arrayed in WP(C) No.7837 of 2015. 4. The petitioner is a corporate body constituted under Section 5A of the Employees' Provident Fund & Miscellaneous Provisions Act, 1952 (for short, “the Act”), which consists of representatives from the Central Government, State Government, the employers and the employees. They alleged that the respondent, a factory covered under the Act with EPF Code No.KR/1294-A, failed to remit Provident Fund (for short, “PF”), Pension Fund, Insurance Fund contribution and administrative charges as envisaged under the Act for the period from WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** September, 2002 to August, 2006. After conducting an inquiry under Section 7A of the Act, Ext.P1 order was passed on 22.11.2007, challenging which, the respondent filed Ext.P2 appeal before the Tribunal. The main argument raised by the respondent was that 1036 employees in the establishment are “excluded employees” and hence, the establishment need not remit PF for such employees. The Tribunal, after considering the issue, as per Ext.P4 order, set aside Ext.P1 order, finding that the respondent is not liable to pay any amount. Aggrieved by Ext.P4 order, the petitioner has approached this Court with WP(C) No.7837 of 2015. 5. The respondent filed a counter affidavit, contending that the Assistant Provident Fund Commissioner is not competent or authorized personnel to represent the EPF organization in order to file the writ petition. It is further contended that under Section 7A of the Act, the WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** assessing authorities are not entitled to challenge the appellate order. According to the respondent, they have remitted all contributions in full on actual wages for the relevant period in respect of the employees, who are legally and factually entitled to. They had produced all the documents including declarations in Form No.11 showing the details furnished by the “excluded employees” themselves before the department, to which, according to them, no objection had been raised by the department. It is further contended that they were not served with copy of the report of the Enforcement Officer alleged to have been prepared. According to them, they are not liable to maintain a register showing the details of the “excluded employees” as no contribution need be paid as far as the “excluded employees” are concerned. It is further contended that in case of any doubt regarding the declarations submitted by the employees, the Enquiring Authority ought WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** to have examined the concerned employees in exercise of the power under paragraph 26-B of the Employees' Provident Fund Scheme, 1952 (for short, “the Scheme”). It is pointed out that the authority has not made any attempt to find out facts on enquiry as to whether those retired employees had worked earlier in the factories of the Kerala State Cashew Development Corporation, CAPEX or other establishments and whether they have withdrawn PF, rather, only a general statement was given to render a decision that the details in the declaration are false. According to the respondent, the “excluded employees” were served with the Pension Payment Order by the department after satisfying that the accumulation under the Act was withdrawn by them. It is further pointed out that the 1036 “excluded employees” were working in all the five factories of the respondent and the petitioner has not even stated that those employees had not withdrawn WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** full amount. Hence, according to them, Ext.P4 order passed by the Tribunal does not warrant any interference and the writ petition is only to be dismissed. 6. Heard the learned Standing Counsel for the petitioner and the learned counsel for the respondent. 7. The first issue that arise for consideration is whether the Assistant Provident Fund Commissioner is competent to file this writ petition on behalf of the Central Board of trustees. The learned Standing Counsel for the petitioner, handing over a copy of circular dated 15.09.2014 issued by the Additional Central Provident Fund Commissioner-I (Compliance), submitted that the Central Board of trustees is the competent authority to file cases; and the concerned official signing the petition derives his authority to represent the Board of Trustees. On a perusal of the circular dated 15.09.2014, it WP(C) Nos.7837/2015 & 9934/2014 **==> picture [31 x 8] intentionally omitted <==** is seen that as per resolution dated 04.04.1989, the concerned official signing the petition derives his authority to represent the Board of Trustees. Therefore, according to the learned counsel, the Assistant Provident Commissioner, who has filed the writ petition, is the competent officer to represent the Central Board of Trustees. _Per contra,_ the learned counsel for the respondent further submits that assessing authorities under Section 7A of the EPF & MP Act are not aggrieved persons and not entitled to challenge the order of the Appellate Tribunal. 8. The learned counsel for the petitioner relied on a judgment in **Central Board of Trustees** ## **v. The Registrar, EPF Appellate Tribunal** [MANU/WB/0690/2022] of the High Court of Kolkata, wherein the very same issue regarding the question of maintainability was considered. On a perusal of the afore judgment, it is seen that it was held therein that writ petition can be filed WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** in the name of the Central Board of Trustees, EPF through the Regional Provident Fund Commissioner (RPFC) or the Assistant Provident Fund Commissioner (APFC) or the law officers. In paragraphs 40 and 41 of the judgment in **Central** **Board of Trustees** _(supra),_ it was held thus: “40. The Learned Writ Court in the impugned order had commented upon the use of the word "organisation" while describing the appellant. The dictionary meaning of "organization" would state that it is an organized group of people with a particular purpose such as business or the Government department. As a structure, organization as a network of internal authority and responsibility and relationships. It is a framework of relationships of persons operating at various levels to accomplish common objectives. An organizational structure is a systematic combination of people, functions and physical facilities. The four common elements of organization include common purpose, coordinated effort, division of labour and hierarchy of authority. Therefore, we have no hesitation to hold that the appellant is undoubtedly an "organization" and to describe themselves as the Employees Provident Fund Organisation cannot be faulted, MAT NO. 1141 OF 2017 & MAT NO. 350 OF 2018 as it is an organized structured formed with an object. Therefore, the observations made by the Learned Single Bench in this regard needs to be completely eschewed. 41. In the light of the above, we hold that the writ petitions filed at the instance of the Central Board of Trustees of the Employees Provident Fund Organisation represented by the RPFC/APFC to be maintainable. That apart, had the writ petitioners been filed by the RPFC/APFC WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** as a delegate of the Central Board is also held to be maintainable. The settled legal principle being form over substance should be preferred and reckoned.” 9. Earlier writ petition, WP(C) No.17673 of 2014, filed by the Employees Provident Fund Organisation represented by its Assistant Provident Fund Commissioner challenging the very same order, was withdrawn and liberty was granted by this Court as per judgment dated 13.03.2015. Thereafter, the present writ petition was filed by the Central Board of Trustees represented by the Assistant Provident Commissioner. Following the judgment in **Central Board of Trustees** _(supra),_ I am of the opinion that this writ petition filed by the Central Board of Trustees represented by the Assistant Provident Fund Commissioner is maintainable. 10. As regards the issue as to whether the 1036 employees said to have been employed in the respondent establishment are “excluded employees” WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** or not, the learned Standing Counsel for the petitioner submitted that the Tribunal has arrived at the conclusion that those employees are “excluded employees” only taking note of the fact that they are pensioners. As far as the definition of “excluded employee” is concerned, an “excluded employee” should be a member of PF before joining the establishment and should have withdrawn his/her PF accumulation from the previous PF on superannuation attaining the age of 55 years. Here, the Tribunal failed to consider the issue whether the 1036 employees have withdrawn their PF accumulation at the time of superannuation. 11. Learned counsel for the respondent, on the other hand, submitted that the 1036 employees in the establishment were pensioners, who had already withdrawn PF from the establishments, where they had worked with, and it is not necessary for them to get enrolled in the PF WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** since they are all “excluded employees”. Learned counsel for the respondent further submitted that though declarations in Form No.11 were produced before the authorities concerned to prove that the 1036 employees were “excluded employees”, the officer concerned had rejected the same without proper investigation and enquiry, stating that they are false/fake declarations and have been fabricated by the employer. 12. On a perusal of Ext.P4 order, it is seen that the Tribunal has not gone into those details and has considered only the issue that the respondent had employed retired personnel from the Kerala State Cashew Development Corporation, CAPEX and other similar establishments, which was not disputed by the petitioner. It was also found therein that once such persons retired on attaining the age of superannuation, which is higher than 55 years, they shall be treated as “excluded employees”. The finding of the Tribunal WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** that the persons who retired on attaining the age of superannuation, which is higher than 55 years, have to be treated as “excluded employees”, is factually incorrect. In this context, it is relevant to extract paragraph 2(f) of the Scheme, which defines “excluded employee” as follows; “ **2. Definition** xxxxxx (f)"excluded employee" means— (i) an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the Fund under clause (a) or (c) of sub-paragraph (1) of paragraph 69; (ii) an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds fifteen thousand rupees per month; (iii) omitted; (iv) an apprentice.” On a reading of clause (i) of paragraph 2(f) of the Scheme, it is clear that, to become “excluded employee”, an employee should be a member of the PF and should have withdrawn the full amount of his accumulation in PF on retirement from service after attaining the age of 55 years or WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** immediately before migration from India for permanent settlement abroad or for taking employment abroad. However, the Tribunal, while considering the appeal, failed to consider the relevant aspect as to whether the 1036 employees, though retired from service, have withdrawn their PF accumulation, if any, from the previous establishment on attaining the age of superannuation. Hence, I am of the opinion that the matter has to be remanded to the Tribunal for adjudication of the relevant issue, which was left unconsidered. Accordingly, the writ petitions are disposed of, as follows; a)The order dated 09.10.2013 [Ext.P4 in WP(C) Nos.7837/2015 & 9934/2014] passed by the Tribunal in ATA No.673(7)2008 is set aside. b)The Tribunal is directed to reconsider the issue as to whether the 1036 employees said to have been employed with the respondent WP(C) Nos.7837/2015 & 9934/2014 **==> picture [37 x 8] intentionally omitted <==** establishment are “excluded employees” as defined in paragraph 2(f) of the Scheme. c)Since Ext.P4 order dated 09.10.2013 is set aside and the matter is remanded to the Tribunal for consideration afresh, the refund of the amount of Rs.15,00,000/- deposited by the respondent establishment in ATA No.673(7)2008 before the Tribunal, as sought for in WP(C) No.9934 of 2014, shall be subject to the orders passed by the Tribunal, as aforementioned. ## **Sd/-** ## **SHOBA ANNAMMA EAPEN** ## **JUDGE** bka/- WP(C) Nos.7837/2015 & 9934/2014 ..17.. ## **APPENDIX OF WP(C) 9934/2014** PETITIONER EXHIBITS P1 : COPY OF THE CHALLAN DTD.16.10.2009 ISSUED BY THE STATE BANK OF INDIA. P2 : COPY OF THE COVERING LETTER ALONG WITH THE DEMAND DRAFT. P3 : COPY OF THE ORDER DTD.9.10.2013 IN ATA 673(7)/2008. P4 : COPY OF THE LETTER DTD.16.1.2014. WP(C) Nos.7837/2015 & 9934/2014 ..18.. ## **APPENDIX OF WP(C) 7837/2015** PETITIONER EXHIBITS EXHIBIT P1: TRUE COPY OF THE ORDER NO.KR/1294A/ENF.I(8)/2007/7248 DATED 22.11.2007. EXHIBIT P2: TRUE COPY OF THE MEMORANDUM OF APPEAL NO.ATA 673(7)/2008 FILED BEFORE THE HON'BLE EPF APPELLATE TRIBUNAL WITHOUT ANNEXURE A1. EXHIBIT P3: TRUE COPY OF THE COUNTER AFFIDAVIT FLED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER KOLLAM IN EXT.P2 APPEAL. EXHIBIT P4: TRUE COPY OF THE ORDER DATED 9.10.2013 IN ATA NO.673(7)/2008.