Dismissed

Employees Provident Fund Organization v. the Secretary, M/S.Sanjeevani Samithi

Kerala HC8 Dec 2022WP(C)/20021/2015

Case brief

AI extract

What is this about?

In this writ petition, the Employees' Provident Fund Organisation challenged an Appellate Tribunal order allowing a society's appeal against escaped PF dues. The High Court held the Assessing Authority's order was legal and justified, dismissing the petition for lack of merit.

What did the court decide?

The writ petition was dismissed as it had no force or merit; the impugned order dated 17.01.2011 stands affirmed.

Employees Provident Fund Organization Vs the… — Pension and Retirement Benefits | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE AMIT RAWAL

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THURSDAY, THE 8TH DAY OF DECEMBER 2022 / 17TH AGRAHAYANA, 1944
WP(C) NO. 20021 OF 2015

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PETITIONER:

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EMPLOYEES PROVIDENT FUND ORGANIZATION,
REPRESENTED BY ASSISTANT PROVIDENT FUND COMMISSIONER
(LEGAL), SUB-REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN,
P.B.NO.1895, KALOOR, COCHIN 682 017.

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BY ADVS.
DR.S.GOPAKUMARAN NAIR (SR.)
SRI.S.PRASANTH, SC, EMPLOYEES PROVIDENT FUND
ORGANISATION

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RESPONDENTS:

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THE SECRETARY, M/S.SANJEEVANI SAMITHI,
CHERPU, THRISSUR DISTRICT, KERALA STATE,
REPRESENTED BY ITS SECRETARY, PIN 680 561.

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BY ADVS.
SRI.C.ANIL KUMAR
SRI.S.K.HARISH
SMT.PREETHI RAMAKRISHNAN
SRI.P.RAMAKRISHNAN

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
08.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 20021 OF 2015 - 2 -

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JUDGMENT

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Order dated 17.01.2011 of Employee’s Provident Fund Appellate Tribunal Ext.P4 is under challenge on behalf of the Employees’ Provident Fund Organisation.

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Respondent is a Society registered in the year 1986. It had been managing two unaided educational institutions namely CNN Higher Secondary School and CNN Teachers Training Institute. The Higher Secondary School became operational with the approval of the Government of Kerala dated 23.01.2003 whereas the training institute, on 12.08.2004. On 11.06.2009, Society was served with a notice that the establishment was brought under the provisions of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 (hereinafter referred to as ‘the Act’, for short) with effect from 01.04.2009 under Code No.KR/24778 i.e employees of both school and institution were brought under its ambit. It was done on account of the fact that the employees strength of the two institutions crossed the

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WP(C) NO. 20021 OF 2015 - 3 -

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threshold limit of twenty(20) as per the provisions of Section 1 (3)(b) of the Act. The coverage was provisional subject to verification of records. During an inspection conducted by the Enforcement Officer, it was found that the employment strength of the institution reached the threshold limit of twenty(20) in January, 2005 itself and therefore recommended for preponement of the coverage of the Society from 01.04.2009 instead 01.05.2009. An intimation dated 25.03.20 11, in this regard, was sent to the employer but the establishment failed to comply with the directions. Accordingly, the enquiry under Section 7A of the Act was initiated and an amount of demand, with effect from January, 2005 to January, 2010 for Rs.12,98,529/- (Rupees Twelve lakh ninety eight thousand five hundred and twenty nine only) was raised after adjustment of the remittance already made with effect from 01.04.2009. The said exercise was done by taking into consideration the provisions of Section 7C of the Act which provides action in respect of the escaped amount. An appeal was preferred before

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WP(C) NO. 20021 OF 2015 - 4 -

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the Appellate Tribunal which has been allowed vide impugned order dated 17.01.2011 Ext.P4.

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Learned counsel appearing on behalf of the petitioner submitted that though the establishment initially was covered with effect from 01.04.2009, on the basis of the proforma for coverage notice dated 11.06.2009 submitted under the signature of the employee-respondent for obtaining the code enrollin g 27 employees working under both the establishments for which respondent did not falter. Appellate authority has not taken into consideration the attendance register reflecting combined employment strength from August, 2002 to April, 2009.

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Tribunal ought to have found that the coverage of the respondent establishment was pre-poned on the basis of the attendance register Ext.P6 and statement Ext.P7. Once the respondent had been complying the provisions of the Act by remitting the statutory contribution with effect from April, 2009 the department is not prevented to examine the record as per the

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WP(C) NO. 20021 OF 2015 - 5 -

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powers prescribed under Section 7C of the Act.

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On the other hand, learned counsel appearing on behalf of the respondent submitted that the order is perfectly legal and justified and cannot be interdicted for the reason that there was no financial, functional or managerial integrality from 01.04.2005 to 2009. Both the establishments are different and did not suffice the requirement of Section 1(3)(d) as the number of the employees in both institutions were less than twenty(20). The respondent on their ow n volunteered to bring the two establishments under the coverage by filling the proforma for coverage whereby the attendance register was also enclosed. The assessing authority, thus, had committed illegality in assessing the compensation under the grab of provisions of Section 7C being an escaped amount.

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I have heard learned counsel for the parties and appraised the paper books and of the view that there is no force or merit.

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WP(C) NO. 20021 OF 2015 - 6 -

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As per the provisions of Clause (d) of Section 7C of the Act the limitation to initiate steps for escaped amount is five years from the date of the communication of the order passed under Section 7A of the Act. The period referred to was from 01.01.2005. Therefore, the proceedings for escaped amount were though within the period prescribed, but the fact remains respondent was neither given the copy of the enquiry report conducted by the enforcement officer or the documents allegedly relied upon in the assessment order for covering the two institutions with effect from January, 2005. The coverage letter 11.06.2019 also specified period with effect from 01.04.2009, contained in the attendance register of 2009. Order of the assessment Ext.P3 do not reflect any discussion of such documents except the reference that the employees deployed in the unaided and self financing school were taken together and the strength exceeded nineteen(19) with effect from 01.01.2005. The said portion is extracted hereinbelow:

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WP(C) NO. 20021 OF 2015 - 7 -

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“The employees of Sl.No.1 above are engaged the benefits under the State Govt. rules as the school is aided. The number of employees deployed in the unaided/self financing schools were taken together and its total employment strength exceeds 19 with effect from 1.1.2005. The employees in these institutions are not in employment of any benefit of PF/Pension etc. Hence the Act is applicable to M/s.Sanjeevani Samithi which was the unaided and self financing college and the benefits under the Act and the Schemes are applicable to these employees. The Enforcement Officer has also reported the dues payable in respect of these employees. The applicability of the Act and the correctness of the dues payable by the employer has not been contested during the course of enquiry.

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Shri. P I Somanathan, President, Sh.K.S.Padmanabhan, Secretary and Sh P M Sankaran are Authorised representative of the establishment attended the enquiry without any records.”

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The aforementioned observation also would not bring the case within the purview of Section 1(3)(b) of the Act as it has not been specified whether the members have been working with effect from January,

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WP(C) NO. 20021 OF 2015 - 8 -

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2005 till 01.04.2009. Appellate Authority found that there was n o integrality of financial and functional between the two institutions, with effect from 01.01.2005 till April, 2009.

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The order i s justiciable, leg al and cannot be faulted with warranting interference under Article 226 of the Constitution of India. Writ petition sans merit, accordingly, dismissed.

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Sd/-

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AMIT RAWAL JUDGE

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vv

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WP(C) NO. 20021 OF 2015 - 9 -

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PETITIONER EXHIBITS

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EXHIBIT P1TRUE COPY OF THE COVERAGE NOTICE DATED
11.6.2009

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EXHIBIT P2TREU COPY OF THE PROFORMA OF THE
COVERAGE
EXHIBIT P3TRUE COPY OF THE 7A PROCEEDINGS DATED
9.7.2010
EXHIBIT P4TRUE COPY OF THE ORDER OF THE EPF ATA
NO.615(7) 2010 DATED 17.1.2011
EXHIBIT P5TRUE OCPY OF THE PROCEEDINGS OF ENQUIRY
DATED 9.7.2010
EXHIBIT P6TRUE COPY OF THE ATTENDANCE REGISTER
EXHIBIT P7TRUE COPY OF THE COMBINED EMPLOYEMENT
STRENGHT OF THE TWO INSTITUTIONS
EXHIBIT P8TRUE COPY OF THE PROFORMA A STATEMENT
FROM 1/2005 TO 1/2010
EXHIBIT P9TRUE OCPY OF THE ORDER IN ATA NO.810(7)
2005 DATED 29.7.2005
EXHIBIT P10TRUE COPY OF THE JUDGMENT DATED
6.11.2012

Employees Provident Fund Organization v. the Secretary, M/S.Sanjeevani Samithi

Case brief

What is this about?

What did the court decide?

Employees Provident Fund Organization v. the Secretary, M/S.Sanjeevani Samithi

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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