2026 LLR 234
MADRAS HIGH COURT
Hon'ble Mrs. N. Mala, J.
WP No. 46278/2025, Dt/ 28-11-2025
M/s. Ansar Stores
v.
The Regional Provident Fund Commissioner and Ors.
EMPLOYEES PROVIDENT FUND Appeal against order determining dues and recovery proceedings The petitioner suffered losses and proceedings under section 14 of the SARFAESI Act were initiated against it The petitioner closed its business owing to the covid-19 pandemic In March 2014, an inspection was conducted by the EPFO in the absence of the petitioner The officials in the inspection erroneously treated the employees of the agencies as the petitioner's staff, recorded an inflated workforce and allotted PF Code No notice was given to the petitioner for bringing it under PF coverage After 5 years, on 24-10-2019, an enquiry was initiated against the petitioner but he could not attend the same owing to ill-health On 14-02-2023, the 1st respondent passed the impugned order under section 7A of the EPF Act for a sum of Rs. 48,22,128/- Attachment proceedings were initiated Recovery officer passed an order on 28-10-2025 The petitioner filed an appeal before the CGIT challenging the 7A order and the consequential recovery order The Tribunal dismissal the appeal and imposed costs of Rs. 1 lakh Hence, the present writ Held, the appeal was filed against both the 7A order and the consequential recovery order The Tribunal erroneously recorded that the 7A order was not challenged The observation of the Tribunal that no appeal would lie against the recovery proceedings as the appellant was bound to comply with the order is legally untenable The Tribunal even without examining the validity of the 7A order found that the petitioner was bound to comply with it The said finding reflects total non-application of mind to the basic facts of the case The impugned order is illegal and set aside The matter is remanded to the CGIT for hearing the matter afresh Respondents are directed to not to take action till the matter is taken up for hearing by CGIT Writ petition is disposed of. Paras 7 to 11
For Petitioner: Mrs. A. Srijayanthy for Mrs. T.P. Savitha, Advocate.
For Respondent: Mr. R. Thirunavukarasu, Advocate.
IMPORTANT POINTS
Note: This judgment is still relevant as it enumerates general principles pertaining to provident fund related law.
ORDER
N. Mala, J.1. Writ petition is filed for Writ of Certiorarified Mandamus, calling for the records of the impugned order EPFA No. 72 of 2025, dated 28-10-2025, passed by the Central Government Industrial Tribunal-cum-Labour Court, Chennai, confirming the order passed by the 1st respondent dated 14-02-2023 and consequential notice dated 28-06-2023, and the 3rd respondent's order dated 14-11-2024 and consequential proceedings dated 28-01-2025, and to quash the same.
2. The petitioner is running a store by name Ansar Stores, since the year 2013. The petitioner states that the petitioner suffered severe losses in the business which resulted in initiation of proceedings under section 14, of the SARFAESI Act, 2002 against it. With continued financial distress during covid pandemic, the petitioner closed its business. The petitioner states that it had a practice of allotting shelves to various marketing agencies, whose own staff operated from the premises. While so during March 2014, inspection was conducted by the EPF officials in the absence of the petitioner. The officials in the inspection erroneously treated the employees of the agencies as the petitioner's staff, recorded an inflated workforce, and without any documentary or factual basis, suo moto allotted a PF Code, on an assumption that the petitioner employed more than 20 employees. The petitioner states that no notice was given to the petitioner while bringing the petitioner under EPF coverage. After nearly 5 years, on 24-10-2019, the 1st respondent issued summons for an enquiry, but the petitioner due to ill health and family issues did not attend the same. Therefore, on 14-02-2023, the 1st respondent passed the impugned order under section 7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, and demanded a sum of Rs. 48,22,128/- towards EPF dues. Based on the 7A order, attachment proceedings were initiated and therefore, the petitioner filed writ petition in WP No. 25612 of 2014, which was disposed of with a direction to submit a representation. The petitioner submitted a representation on 22-10-2024, but the same was not responded to by the 1st respondent. The petitioner filed another writ petition in WP No. 37911 of 2024, and the same was also disposed of with a similar direction to consider the representation. Thereafter, the recovery officer passed an order on 28-10-2025. The petitioner under the circumstances was constrained to file appeal before the Central Government Industrial Tribunal cum Labour Court, challenging the 7A order and also the consequential recovery order. The Appellate Authority dismissed the appeal by a non speaking order and imposed costs of Rs. 1,00,000/-. The petitioner, hence, left with no other remedy, filed the above writ petition for the aforesaid relief.
3. The learned counsel for the petitioner submitted that the impugned order of the presiding officer, of the Central Government Industrial Tribunal cum Labour Court, Chennai was a cryptic and non-speaking order and therefore it deserved to be set aside.
4. The learned counsel for the respondents on the other hand submitted that, there was no infirmity in the impugned order and therefore, no interference was called for by this Court.
5. I heard both the learned counsels and perused the materials placed on record. With the consent of both the learned counsels, the main writ petition is taken up for final disposal.
6. The facts are undisputed. The only issue is whether the impugned order passed by the Central Government Industrial Tribunal cum Labour Court, Chennai, in EPFA No. 72 of 2025, is sustainable or not.
7. The main contention of the learned counsel for the petitioner is that the impugned order is ex facie illegal as it reflects total non-application of mind. This Court finds merit in the said contention. The impugned order reads as follows:
The learned counsel for the appellant and the Respondent are present. The present Appeal has been filed by the Appellant on 03-03-2025 against the order No. TB/TAM/RO/ENF/CC-II/ T-7/ 63939/ Proceeding 2023 dated 14-02-2023 and the consequential order No. TB/TAM/RO/REC/CC1/DIV/527-63939-2024-25 dated 28-01-2025 assessed under section 7A of the EPF & MP Act, 1952 passed by the Regional Provident Fund Commissioner-II, Tambaram Chennai and the Recovery Officer, Tambaram, Chennai for remittance under section 7A of the Act amounting to Rs. 48,22,128/-.
The Recovery Officer decided the representation submitted by the Employer dated 22-10-2024. The recovery proceedings were initiated in compliance to the order passed by the RPFC-II, Tambaram, Chennai in the impugned order No. TB/TAM/RO/ENF/CC-II/T-7/63939/Proceeding 2023 dated 14-02-2023 which was never challenged by the Appellant, but submitted the Review Application dated 15-09-2023 decided by the Recovery Officer as per the contention of the appellant.
8. The Labour Court in para 1, recorded that the appeal was filed against both 7A order and the consequential recovery order. However, in the very next paragraph, it erroneously observed that the 7A order was not challenged. The Authority failed to appreciate that the appeal before it assailed both 7A as well as the recovery proceedings. The further observation of the Labour Court, while dismissing the appeal, that no appeal would lie against the recovery proceedings, as the appellant was bound to comply with the order is legally untenable. The Labour Court even without examining if the 7A Order, which was challenged before it, was valid, found that the petitioner was bound to comply with it. The said finding definitely reflects total non-application of mind to the basic facts of the case.
9. This Court is therefore of the view that the order of the CGIT cum Labour Court, Chennai, is illegal and unsustainable. Accordingly, the impugned order is set aside. The matter is remanded to the Central Government Industrial Tribunal cum Labour Court, Chennai, for fresh consideration. The CGIT cum Labour Court, Chennai, shall afford reasonable opportunity to both the petitioner and the respondent to file pleadings/additional pleadings and thereafter consider the matter on merits and in accordance with law. The CGIT cum Labour Court, Chennai, shall pass a reasoned order, within a period of twelve weeks, from the date of receipt of a copy of this order.
10. The respondents are directed not to take action till the matter is taken up for hearing by the Central Government Industrial Tribunal cum Labour Court, Chennai, on remand.
11. Writ petition is accordingly disposed of. No costs. Consequently, the connected miscellaneous petitions are closed.