Allowed

Valavi and Co. v. Employees Provident Fund Organization

Kerala HC11 Jul 2022WP(C)/3268/2020

Case brief

AI extract

What is this about?

The High Court allowed a writ petition quashing an order under the EPF and MP Act. It found that authorities failed to disclose details of the Employees Enrollment Campaign Scheme to the petitioner. The court directed the Assistant Provident Fund Commissioner to explain the scheme contents before further action.

What did the court decide?

Order dated 31.12.2019 is quashed. Petitioner allowed to seek exemption upon examination of Scheme contents by respondents.

Valavi and Co. Vs Employees Provident Fund… — 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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MONDAY, THE 11TH DAY OF JULY 2022 / 20TH ASHADHA, 1944

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WP(C) NO. 3268 OF 2020

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PETITIONER:

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VALAVI AND CO.,
BROADWAY, ERNAKULAM-682 031,
REPRESENTED BY ITS MANAGING PARTNER, JOSE JOHN VALAVI.

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BY ADVS.
THUSHARA JAMES
SRI.M.S.AMAL DHARSAN

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RESPONDENTS:

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1 EMPLOYEES PROVIDENT FUND ORGANIZATION, REGIONAL OFFICE, KALOOR, ERNAKULAM-682 017, REPRESENTED BY THE REGIONAL PROVIDENT FUND COMMISSIONER.

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2 THE ASSISTANT PROVIDENT FUND COMMISSIONER, REGIONAL OFFICE, EMPLOYEES PROVIDENT FUND ORGANIZATION, KALOOR, ERNAKULAM-682 017.

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BY ADV SRI.S.PRASANTH

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
11.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 3268 OF 2020 -2-

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JUDGMENT

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Petitioner is a partnership firm engaged in the business of paper and paper products. Government of India came out with a scheme called Employees Enrollment Campaign effective from 01.01.2017 to 31.03.2017 and subsequently was extended till 30.06.2017 as per the press release Exts.P1 and P1(a). On 27.02.2017 a Code number under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as ‘EPF and MP Act’, for short) was issued in favour of the petitioner and ECR returns, alleged to have been submitted, in respect of dues from February, 2014 to September, 2016. Since the petitioner wanted to avail the benefit of the scheme qua twenty four(24) employees the implication and the applicability was not disclosed. In the meantime an

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inspection, on 31.03.2017, was conducted and after verification of the record it was reported that employer had not enrolled twenty two (22) eligible employees to the accounts for the period February, 2014 to September, 2016 nor the dues and administrative charges payable in respect of the employees under different heads of accounts as per the provisions under Employees’ Provident Fund Scheme, 1952, Employees’ Pension Scheme, 1995 and Employees’ Deposit Linked Insurance Scheme 1976 were remitted.

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A notice was issued to the petitioner for holding an enquiry under Section 7A of the EPF and MP Act. On appearance certain documents were submitted in support of claim of exemption. The Assistant Provident Fund Commissioner declined the exemption for payment of dues under the EPF Act only on the ground that petitioner did not make the payment of 12% interest under Employment

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Enrollment Campaign (hereinafter referred to as ‘EEC’, for short). Since, according to the petitioner there was an error apparent on the record as per the order of enquiry under Section 7A, a Review Petition under Section 7B of EPF and MP Act was preferred giving the details that there were twenty four (24) employees who were eligible for claiming the benefit of EEC Scheme. During intervening period petitioner, on 28.11.2018, deposited an amount of Rs.9,67,454/(Rupees nine lakh sixty seven thousand four hundred and fifty four only) and also expressed willingness to deposit without any further interest.

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Smt.Dr.Thushara James, learned counsel appearing on behalf of the petitioner submitted that though the orders under challenge are appealable, since both of them suffer from a jurisdictional error and non adherence to the contents of the EEC Scheme, availment of the statutory appeal would be only a

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farcical exercise, for, an amount under the EEC Scheme had been deposited though belatedly. The firm had repeatedly been asking, as evident from Ext.P5, of the details of the aforementioned scheme so that the twenty four employees could avail the benefit of the said scheme and taken out of the applicability of EPF and MP Act. But the respondents neither before the proceedings under Section 7A or 7B much less in this Court, vide statement, have not disclosed the particulars and therefore not only this Court but the petitioner had remained in oblivion, thus, the orders under challenge are liable to be set aside.

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On the other hand, learned counsel representing the respondents submitted that as per the contents of the scheme any establishment entitled to take the benefit of the EEC was required to deposit the amount within fifteen(15) days of its promulgation i.e., with effect from 31.03.2017. Concededly petitioner

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deposited the amount for 9,67,454/- on 28.11.2018, thus there was a delay. Rightly so the Assistant Provident Fund Commissioner noticed that there was no payment of interest at the rate of 12% and declined to grant the exemption viz-a-viz the employees referred to above and brought under the purview of the 1952 Act. All this pleas could have been taken in the appeal but non availment of that do not entitle the petitioner to invoke the extra ordinary jurisdiction of this Court under Article 226 of the Constitution of India.

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I have heard learned counsel for the parties and appraised the paper books.

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The report of the Enforcement Officer on the basis of the inspection dated 31.03.2017 reveals that the petitioner had not made any contribution under the EPF 1952 Act i.e., the contribution of the employer and the employees, but had claimed the benefit of the EEC Scheme. The Assistant Provident Fund Commissioner,

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since the petitioner firm did not deposit the 12% interest, refused to grant the exemption from the applicability of 1952 Act and proceeded with the proceedings under Section 7A. Since the order aforementioned did not reflect the provisions of the EEC Scheme, as per the comprehension of the petitioner it was case of an error apparent record a statutory review petition under Section 7B of the Act, was filed. From the contents of the review petition as well as from the order impugned dated 31.12.2019 Ext.P12, it is revealed that the entire thrust of the authority had been on the non-compliance of the provisions of the EEC Scheme. The said exercise on behalf of the authorities, i.e, proceedings under Sections 7A and 7B, in my view, are wholly erroneous and suffer from a glaring aberration, for the reason that the respondents who were harping upon the non payment of the interest as per the alleged contents of

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the scheme, did not put forth contents, either to the petitioner, despite written request or the authorities in the order, much less in the statement filed in this Court.

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This Court would not be in a position to comment further as it is a fit case for revisiting the issue at the stage when the Review Petition was filed. Accordingly the order dated 31.12.2019 Ext.P12 is quashed. Writ petition is allowed.

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Parties through their counsel or representatives are directed to appear before the 2^nd respondent on 25.07.2022 at 10 a.m. The Assistant Provident Fund Commissioner would apprise the petitioner the contents of the EEC Scheme and thereafter the petitioner would be at liberty on examination of the same either take the benefit or for challenge can also pray for condonation subject to any subsisting right. Let this exercise be undertaken in accordance with law

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within a period of two months. Parties are at liberty to place on record additional material in support of the submissions.

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Sd/-

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AMIT RAWAL
JUDGE

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VV

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WP(C) NO. 3268 OF 2020 -10-

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APPENDIX OF WP(C) 3268/2020

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PETITIONER EXHIBITS

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`EXHIBIT P1`	`TRUE PHOTOCOPIES OF THE PRESS` `RELEASE DATED 5.1.2017 AND` `30.3.2017`
`EXHIBIT P2`	`TRUE PHOTOCOPY OF THE INSPECTION` `REPORT`
`EXHIBIT P3`	`TRUE PHOTOCOPY OF THE PROCEEDINGS` `DATED 21.12.2017`
`EXHIBIT P4`	`TRUE PHOTOCOPY OF THE` `REPRESENTATION DATED 21.9.2018 TO` `THE RESPONDENT NO 1`
`EXHIBIT P5`	`TRUE PHOTOCOPY OF THE` `REPRESENTATION DATED 28.11.2018`
`EXHIBIT P6`	`TRUE PHOTOCOPY OF THE LETTER DATED` `9.4.2019`
`EXHIBIT P7`	`TRUE PHOTOCOPY OF THE CORRIGENDUM` `DATED 16.4.2019`
`EXHIBIT P8`	`TRUE PHOTOCOPY OF THE PROCEEDINGS` `DATED 7.5.2019`
`EXHIBIT P9`	`TRUE PHOTOCOPY OF THE JUDGMENT IN` `WPC 114017/2019 DATED 15.11.2019`
`EXHIBIT P10`	`TRUE PHOTOCOPY OF THE 7B` `PROCEEDINGS DATED 23.10.2018`
`EXHIBIT P11`	`TRUE PHOTOCOPY OF THE` `SUBMISSIONS/OBJECTIONS TO S.7A` `PROCEEDINGS DATED 24.12.2019`

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WP(C) NO. 3268 OF 2020 -11-

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EXHIBIT P12TRUE PHOTOCOPY OF THE PROCEEDINGS
DATED 31.12.2019

Valavi and Co. v. Employees Provident Fund Organization

Case brief

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Valavi and Co. v. Employees Provident Fund Organization

Case brief

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