Allowed

Centre for Water Resources Development and Management v. Assistant Provident Fund Commissioner

Kerala HC2 Nov 2022WP(C)/392/2022

Case brief

AI extract

What is this about?

The court disposed of a writ petition challenging the assessment of damages under the EPF Act. It rejected the plea that enrolled employees were exempt from contributions. The court upheld the reduced damages of 60% and directed the petitioner to deposit the balance in six equal monthly instalments.

What did the court decide?

The balance damages of Rs.1,78,466/- to be deposited in six equal monthly instalments commencing from 01.12.2022; defaulters liable for action.

Centre for Water Resources Development and… — Pension and Retirement Benefits | Kerala HC (2022)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE AMIT RAWAL

¶4

WEDNESDAY, THE 2ND DAY OF NOVEMBER 2022 / 11TH KARTHIKA, 1944
WP(C) NO. 392 OF 2022

¶5

PETITIONER:

¶6

CENTRE FOR WATER RESOURCES DEVELOPMENT AND MANAGEMENT
(CWRDM), REPRESENTED BY ITS EXECUTIVE DIRECTOR.
KUNNAMANGALAM P.O, KOZHIKODE-673 571.
KOZHIKODE, PIN – 673571

¶7

BY ADVS.
T.D.SUSMITH KUMAR
C.SIVADAS
T.O.DEEPA

¶8

RESPONDENT:

¶9

ASSISTANT PROVIDENT FUND COMMISSIONER,
EMPLOYMENT PROVIDENT FUND SUB REGIONAL OFFICE,
BHAVISHYA NIDHI BHAVAN, ERANHIPPALAM P.O,
KOZHIKODE, PIN – 673006

¶10

BY ADV
DR.ABRAHAM P.MEACHINKARA,SC,EPF

¶11

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
02.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶12

WP(C) NO. 392 OF 2022 -2-

¶13

JUDGMENT

¶14

Petitioner, an establishment covered under the EPF & MP Act and allotted an EPF number, during the course of the business, have been inspected and found to have not made any contribution towards the employees.

¶15

There were twenty employees enrolled from 03.08.2015 to 23.02.2018, so would not fall under the definition of employees but would be excluded employees as envisaged under Section 2(ff) of the EPF & MP Act, 1952. However, were brought within the EPF scheme as there was no other social security scheme and this was acknowledged by Kerala State Council for Science, Technology and Environment (KSCSTE) which passed an order on 17.10.2018 directing to enroll all the employees who joined after 01.04.2013 in the EPF scheme by limiting the employer’s share of PF contribution to 12% of Rs.15,000/- vide Ext.P3. Petitioner remitted the EPF contribution of the twenty(20) number of employees, of Rs.17,38,526/- (Rupees Seventeen lakh thirty eight

¶16

WP(C) NO. 392 OF 2022 -3-

¶17

thousand five hundred and twenty six only) on 21.01.2019 and 22.01.2019. Therefore there was no willful negligence or delay on the part of the petitioner in making the contribution. A show cause notice dated 22.05.2019 was issued under Section 14B of the 1952

¶18

Act calling upon the petitioner to make the deposit of damages.

¶19

It is contended on behalf of the petitioner that once the employees were falling under the Scheme, there was no liability of making contribution under the 1952 Act. The assessing authority assessed the damages to the extent of 100% but in appeal has been reduced to 60%. The said amount is also on a higher side as petitioner is not a profit making concern.

¶20

On the other hand, learned counsel for the respondents opposed the aforementioned prayer and submitted that once the proceeding under section 7A attained finality, petitioner cannot be permitted to submit that the employees were not covered under the

¶21

WP(C) NO. 392 OF 2022 -4-

¶22

1952 Act owing to their enrollment under EPF Act.

¶23

I have heard learned counsel for the parties and appraised the paperbooks.

¶24

It is a matter of record that an order under Section 7A of the EPF & MP Act, 1952 was passed assessing the liability on behalf of the petitioner which has been honoured. In this view of the matter petitioner cannot be permitted to voltface and take a plea that the employees were falling under the scheme and therefore not liable for contribution under the provisions of 1952 Act. Non payment of the contribution would entail into initiation of proceedings under Section 7Q and 14B of the 1952 Act. In other words, they are inevitable and accordingly the authorities initiated action. For assessing the damages under Section 14B, it is not necessary for the authorities to blindly apply the provisions of the Act and impose damages to the extent of 100%, but other attenuating circumstances supported by the documents on the point that if the concern was

¶25

WP(C) NO. 392 OF 2022 -5-

¶26

actually running into losses can be minimized 25%. The assessing authority assessed the damages under section 14B of the 1952 Act to the tune of Rs.5,94,887/-(Rupees Five lakh ninety four thousand eight hundred and eighty seven only). In appeal aforementioned amount has been reduced to the extent of 60%.

¶27

This Court while admitting the writ petition had granted the interim protection to the petitioner subject to deposit of Rs.1,78,466/-(Rupees One lakh seventy eight thousand four hundred and sixty six only) on or before 31.01.2021. Learned counsel for the respondents do not deny the factum of deposit of the same. However, no substantial arguments have been made supported by any documents that the company was running in losses, impelling this court to reduce further damages from 60% to 25%. At the best this Court can grant liberty to the petitioner to deposit the same in some instalments. While upholding the order under challenge reducing the damages from 100% to 60% and

¶28

WP(C) NO. 392 OF 2022 -6-

¶29

since 50% of the reduced damages had already been deposited, the balance amount of Rs.1,78,466/- is ordered to be deposited in six equal monthly instalments commencing from 01.12.2022. In case of three perpetual defaults respondents shall be at liberty to take actions in accordance with law.

¶30

Writ petition stands disposed of with the aforementioned directions.

¶31

Sd/-

¶32

AMIT RAWAL JUDGE

¶33

vv

¶34

WP(C) NO. 392 OF 2022 -7-

¶35

APPENDIX OF WP(C) 392/2022

¶36

PETITIONER EXHIBITS

¶37

Exhibit1TRUE COPY OF THE RELEVANT PAGES OF THE
PAYROLL REGISTER MAINTAINED BY THE
PETITIONER.
Exhibit2TRUE COPY OF CIRCULAR
NO.1539/C1/2017/KSCSTE DATED 10-05-
2017 ISSUED BY MEMBER SECRETARY,
KSCSTE.
Exhibit3TRUE COPY OF THE ORDER
NO.256/2018/SCSTE DATED 17-10-2018
MEMBER SECRETARY KERALA SCIENCE,
TECHNOLOGY AND ENVIRONMENT.
Exhibit4TRUE COPY OF SHOW CAUSE NOTICE
NO.KR/KKD/0004938/000/ENF2(1)/DAMAGES/
2019 DATED 22.5.2019 ISSUED BY THE
ASSISTANT PROVIDENT FUND COMMISSIONER.
Exhibit5TRUE COPY OF THE SAID WRITTEN
EXPLANATION LETTER NO.
CWRDM/EPF/DAMAGES/2019 DATED 15-06-
2019 SUBMITTED BY THE EXECUTIVE
DIRECTOR OF THE PETITIONER.
Exhibit6TRUE COPY OF PROCEEDINGS CODE NO.
KR/KKD/4938 DATED 03-07-2019 ON THE
FILE OF ASSISTANT PROVIDENT FUND
COMMISSIONER, KOZHIKODE.
Exhibit7TRUE COPY OF THE ORDER DATED 23-04-
2021 IN APPEAL NO.304 OF 2019 ON THE
FILE OF CENTRAL GOVERNMENT INDUSTRIAL
TRIBUNAL-CUM LABOUR COURT, ERNAKULAM.

Centre for Water Resources Development and Management v. Assistant Provident Fund Commissioner

Case brief

What is this about?

What did the court decide?

Centre for Water Resources Development and Management v. Assistant Provident Fund Commissioner

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

K.K.Rajesh, Vs C.D.Suresh

Dr.S.Y. Ganga Vs Dr. Venu

Dr.Sunny Joseph Vs the Recovery Officer

Saran C.R. Vs Rani Chandrasekharan

Dr. Menons Nursing Home Vs the Central Board of Trustees

N. Omanakuttan Vs Bharath Sanchar Nigam Limited, represented by Chief Manager