Labour Law Reporter

2022 LLR 1276
KERALA HIGH COURT
Hon'ble Mr. Amit Rawal, J.
WP (C) No. 26789/2022, Dt/- 24-8-2022

Sarabahi Institute of Science and Technology Uriakode, Vellanad
vs.
The Assistant Provident Fund Commissioner, Employees Provident Fund Organization

EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 – Section 7A – EPF Authority assessed EPF dues directing the petitioner to remit the same – Petitioner challenged order of EPF Authority in appeal which was dismissed – Petitioner filed writ petition challenging orders of the Tribunal as well as of EPF Authority – Held, EPF Authority contended that employer has not covered certain employees under the Act – Petitioner contended that EPF Authority did not provide copy of report of Enforcement Officer on the basis of which assessment was made – It is not liable to deposit EPF contributions in respect of trainees who are exempted from the ambit of the Act – Drivers are not employees of petitioner since they were engaged through contractors – Held, there is no force and merit in the submissions of petitioner since it has not submitted any evidence with regard to employees engaged through contractor – Settled law is that if contractor is not registered under the Employees Provident Fund Act, EPF contributions are to be paid by principal employer – Principal employer is liable to pay EPF contributions unless it has proved that it does not have an effective appropriate control over the payment of salary and other benefits payable to employees – Since principal employer has failed to place documents on record to prove so, writ petition is dismissed. Paras 5 and 6

For Petitioner: Mr. T.K. Ananda Krishnan, Advocate.

For Respondent: Mr. Ajoy P.B., Advocate and Mr. Sajeevkumar K. Gopal, SC

IMPORTANT POINTS

Settled law is that if contractor is not registered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, EPF contributions are to be paid by principal employer in respect of employees engaged through contractor.
Principal employer is liable to pay EPF contributions unless it is proved that it does not have an effective appropriate control over the payment of salary and other benefits payable to employees.
If the principal employer fails to place documents on record to prove that it does not have an effective appropriate control over the payment of salary and other benefits payable to employees, it would be liable to remit EPF contributions in respect of employees engaged through contractor.

JUDGMENT

Amit Rawal, J.–1. Order dated 20.12.2021 of the Appellate Tribunal dismissing the appeal preferred by the petitioner bearing No. 547/2019 against the order dated 15.01.2010, assessing dues of Rs. 4,12,536.65 under section 7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter called ‘EPF & MP Act, 1952) has been assailed in the present writ petition.

2. Petitioner is a self financing Engineering College functioning under the Space Engineer's Welfare Society Limited. This is an establishment covered under the provisions of the Act. Summons under section 7A was received from the respondent for appearance on 03.12.2008, on the basis of the enquiry by the Enforcement Officer wherein it was alleged that there were non-enrollment of 26 employees for the period 04/2006 to 09/2008, eight canteen employees for the period 07/2006 to 09/2008 and of 8 drivers from 07/2007 to 09/2008 and evasion of eight employees for a period of 08/2008 to 09/2008, which entailed into the assessment order dated 15.01.2010.

3. Learned counsel appearing on behalf of the petitioner submitted that before passing the order of 2010 as well as at the time of pendency of appeal, they were not provided with the report of the Enforcement Officer. There were so many employees as trainees who have been exempted from the ambit of the Act. The employees of the canteen would not be employees of the petitioner as there is no relationship of employer and employee and in view thereof petitioner was not under obligation to deposit their dues. Drivers were also engaged by the contractors for commutation of the students. In support of the contention, the judgment of Supreme Court rendered in Civil Appeal Nos. 10264-10266 of 2013 titled as Balwant Rai Saluja & Another v. Air India Limited & Others, 2014 LLR 1009.

4. I have heard the learned counsel for the petitioner and appraised the paper book and am of the view that there is no force and merit in the submissions.

5. Petitioner has not been able to place on record any evidence with regard to the employment of the employees alleged to be working with them under the establishment or indirectly employed by the contractor. It is settled law that if the contractor is not registered under the Employees Provident Fund Act, the contributions are to be paid by the principal employer as per the provisions of section 2(f) of the EPF & MP Act, 1952. The same reads as under:

“(f) “employee” means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of [an establishment], and who gets his wages directly or indirectly from the employer, [and includes any person—”

6. There is no dispute to the ratio decidendi culled out in the judgment cited above but the matter pertains to regularisation of the services of the employees employed by the contractor in the canteen premises of Air India. Supreme Court found that since Air India did not have an effective appropriate control, payment of the salary could not be granted to the employees. Here the situation is different, in view of definition of section 2(f) employment may be directly or indirectly. The order of the appellate authority does not suffer from any illegality or perversity to form a different opinion than the one arrived at. Writ petition sans merit and accordingly dismissed.

Move to Top