A Very Important Judgment on EPF by Madras High Court
Hon'ble Mr. M. Duraiswamy, J. Brakes India Ltd (Brakes Division), Sholinghur-631 102, represented by its Vice-President (Pers. & HRD) Vs Employees’ Provident Fund Organisation, Vellore, represented by its Regional Provident Funds Organization
Employees Provident Funds and Miscellaneous Provisions Act, 1952
Sections 2(1) and 14B – Provident fund dues and damages – Liability for depositing PF contribution – In respect of employees of an independent contractor who was allotted and has been holding his own PF Code No. – Not of the principal employer but of the contractor – Contractor committed default in paying EPF contributions – EPF Authority initiated proceedings under section 7A of the Act against the contractor, directing the principal employer to pay the amount if the contractor is found having committed the default – Petitioner, the principal employer, filed a writ petition challenging the order of the EPF Authority – Held, EPF Authority not entitled to recover either PF contribution or damages from the principal employer – Contractors, registered with the PF Department, having independent Code numbers, are to be treated as ‘Independent employers’ – However, the liability of unregistered contractors would fall on the principal employer in view of clause 30 of the EPF Scheme, 1952 – Accordingly, the writ petition is allowed.
For Petitioner: Mr. Sanjay Mohan for S. Ramasubramanian Associates, Advocates.
For Respondent: Mr. V.J. Latha, Advocate.
Important Points
1. EPF Authority is not entitled to recover either PF contribution or damages from the principal employer in respect of employees engaged through contractors, registered with the PF Department, having independent Code numbers.
2. Contractors, registered with the PF Department, having independent Code numbers, are to be treated as ‘independent employers’.
3. However, the liability of unregistered contractors, for payment of EPF contributions or damages, in case of default on their part, would fall on the principal employer if not paid by the unregistered contractor, in view of clause 30 of the EPF Scheme, 1952.
Hon'ble Mr. M. Duraiswamy, J. Brakes India Ltd (Brakes Division), Sholinghur-631 102, represented by its Vice-President (Pers. & HRD) Vs Employees’ Provident Fund Organisation, Vellore, represented by its Regional Provident Funds Organization
Employees Provident Funds and Miscellaneous Provisions Act, 1952
Sections 2(1) and 14B – Provident fund dues and damages – Liability for depositing PF contribution – In respect of employees of an independent contractor who was allotted and has been holding his own PF Code No. – Not of the principal employer but of the contractor – Contractor committed default in paying EPF contributions – EPF Authority initiated proceedings under section 7A of the Act against the contractor, directing the principal employer to pay the amount if the contractor is found having committed the default – Petitioner, the principal employer, filed a writ petition challenging the order of the EPF Authority – Held, EPF Authority not entitled to recover either PF contribution or damages from the principal employer – Contractors, registered with the PF Department, having independent Code numbers, are to be treated as ‘Independent employers’ – However, the liability of unregistered contractors would fall on the principal employer in view of clause 30 of the EPF Scheme, 1952 – Accordingly, the writ petition is allowed.
For Petitioner: Mr. Sanjay Mohan for S. Ramasubramanian Associates, Advocates.
For Respondent: Mr. V.J. Latha, Advocate.
Important Points
1. EPF Authority is not entitled to recover either PF contribution or damages from the principal employer in respect of employees engaged through contractors, registered with the PF Department, having independent Code numbers.
2. Contractors, registered with the PF Department, having independent Code numbers, are to be treated as ‘independent employers’.
3. However, the liability of unregistered contractors, for payment of EPF contributions or damages, in case of default on their part, would fall on the principal employer if not paid by the unregistered contractor, in view of clause 30 of the EPF Scheme, 1952.