2026 LLR 208
MADHYA PRADESH HIGH COURT
Hon'ble Mr. Pranay Verma, J.
WP No. 47176/2025, Dt/– 8-12-2025
M/s. Lotus International School
v.
Employees Provident Fund Organisation and Ors.
EMPLOYEES PROVIDENT FUND – Payment of interest in installations – Viability of – An order was passed against the petitioner imposing damages and interest – The order pertaining to the damages has already been challenged before the CGIT – It was contended that the petitioner was ready to deposit interest if the facility of installments is given – A circular was issued by the Central Provident Fund Commissioner on 11-02-2014 in respect of grant of installments facility to the establishments for liquidating the arrears – The petitioner may submit a representation in terms of the said circular – In case the representation is allowed, the bank account of the petitioner shall be unfrozen – Writ petition is disposed of. Paras 2 and 3
For Petitioner: Mr. Gaurav Laad, Advocate.
For Respondents: Mr. Sanjay Kumar Sharma, along with Mr. Jay Sharma, Advocates.
IMPORTANT POINTS
Note: This judgment is still relevant as it involves a circular issued by the EPFO, which is still extant.
ORDER
Pranay Verma, J.–1. The petitioner has filed this present petition being aggrieved by the order dated 12-06-2025 passed under section 14B of Employees Provident Fund Act, whereby damage to the tune of Rs. 72,477/- has been imposed. The petitioner has also challenged the order dated 12-06-2025 passed under section 7Q of Employees Provident Fund Act by imposing the penal interest to the tune of Rs. 40,687/-. So far the order passed under section 14B is concerned, the petitioner is having remedy of appeal before the Central Government Industrial Tribunal (CGIT). So far the interest imposed under section 7Q is concerned, learned counsel for the petitioner submitted that the petitioner is ready to deposit the amount if the facility of installments is given. Shri Sanjay Sharma, Advocate has submitted that in case the petitioner deposits the amount within a fixed period, then the said facility may be given to him.
2. Shri Sanjay Sharma, Advocate for the respondents has produced the circular dated 11-02-2014 issued by the Chief Provident Fund Commissioner to all Regional Provident Fund Commissioners in respect of grant of installments facility to the establishment for liquidating the arrears. Para 2 to 6 of circular dated 11-02-2014 are reproduced below:—
“2. The proposal for further revising the conditions for grant of installments to the establishments for liquidating the arrears was placed before the Central Board of Trustees in its 202nd meeting held on 13-01-2014 and the Central Board acceded to the proposal. The following terms and conditions are now prescribed for allowing the establishments desirous to avail installment facility to liquidate the arrears in 36 installments:
a. The facility of installment shall be available to both Un-exempted as well as Exempted Establishments.
b. The facility of installment shall cover unpaid employees as well as employer's share of PF contribution, damages, interest.
c. Current contributions and employer's share shall be paid regularly by 15th of each month.
d. Each installment shall be paid alongwith interest under section 7Q of the month alongwith current contributions.
e. A revolving bank guarantee for an amount equal to one installment shall be furnished alongwith the application for installment facility.
f. Post Dated Cheques from the defaulting establishments for the number of installments shall be obtained for ensuring compliance of terms and conditions of installment facility.
g. Contribution in respect of outgoing/deceased member shall be paid in one lump sum in the following month itself in addition to the amount of dues and monthly installment.
h. The employer shall undertake to pay such damages as may be levied by the RPFCs concerned and that grant of installment
facility is not absolving him from the payment of statutory dues under section 14B and 7Q.i. In case of dues exceeding Rs. 25 Lakhs, the establishment shall furnish in addition to the revolving bank guarantee covering one installment, an undertaking that he shall not transfer the immovable property by sale, lease, gift or any other manner whatsoever during the currency of the installment facility.
3. Further, the following terms and conditions are prescribed to be satisfied, in addition to above, by the establishments who desire to avail installment facility to liquidate the dues in 72 installments:
(a) Proposal can only be considered in case of un-exempted Establishments.
(b) If the establishment has earlier availed the installment facility and has defaulted as per terms/conditions of installment facility, second application for the same shall not be considered in this regard.
(c) The establishment shall submit revolving bank guarantee equivalent to six months installment.
4. The delegation of for grant of installment facility as approved by the Central Board of Trustees in its 174th meeting held on 23-02-2006 and circulated vide this office circular No. Co.ord/11(24)05/Adm. Inspection/Cir/Pt/1403 dated 07-04-2006 remains unchanged. The proposals where, either the amount outstanding is beyond Rs. 50 lac or where the number of installments sought for is beyond thirty six, shall be sent to Head Office for grant of installment facility confirming all the terms and conditions stipulated at Para 2 and 3 above whichever are applicable.
5. In case of non-compliance of any of the conditions, the installment facility shall be deemed to have been withdrawn without prior notice and all recovery and penal action shall be invoked to recover the arrears.
6. This supersedes all earlier instructions in this regard.”
3. The petition is accordingly disposed off with liberty to the petitioner to submit a representation in terms of the aforesaid circular and the respondent shall consider the same. In case the representation is preferred by the petitioner as aforesaid, then his bank account shall be unfrozen, but if subsequently it is found that there is any non-compliance on part of the petitioner, it shall be lawful for the respondents to again freeze his account.
4. With the aforesaid directions, the petition stands disposed off.
Certified copy as per rules.