In Food Corporation of India v. Provident Fund Commissioner rep orted

Heard Mr. B. Pathak, the learned Counsel appearing for the petitioner in the WP( C) No.66/2009 and WP(C) No.2214/2010. Mr. M.R. Das, the learned Counsel appears in the WP(C) NO.3805/2008. For the respondents Mr. D. Dey and Mr. D.N. Bhattacha rjee, the learned Counsel appears for the Regional Provident Fund (PF) Commissio ner and others. 2. These three cases arise out of the proceeding under Section 7A o f the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (hereinaf ter referred to as (cid:28)the PF Act (cid:29)). In the WP(C) No.66/2009, the BSNL authorities challenge the order dated 20.11.2008 (Annexure-9) of the Asstt. P.F. Commissione r (ENF), whereby the assessment of the P.F. dues was done without identifying th e beneficiaries under the contractors, but by specifying the names of 22 contrac tors in the assessment order. Here the P.F. dues payable under Section 7A and pe nal interest calculated under Section 7Q of the P.F. Act were assessed and the B SNL authorities were directed to deposit the assessed amount with the P.F. autho rities. In the WP(C) No.2214/2010, the petitioner challenge the direction given to the Silchar Branch Manager of the Indian Bank on 30.3.2010 (Annexure-3) by th e Recovery Officer, whereby the bank was directed to pay the Certificate amount to the Regional P.F. Commissioner. In the WP(C) No.3805/2008, similar direction of the Asstt. P.F. Commissioner issued on 1.8.2008 (Annexure-VIII) to the Tezpu r Branch Manager of the Indian Bank to remit the statutory dues under the P.F. A ct form the bank account of the assessed establishment, is challenged. 3. At the very outset it is relevant to note that assessment in eac h of these cases relate to the P.F. benefits payable for the employees under the contractors and in all the cases, the payable amount was assessed by the P.F. C ommissioner without identifying the beneficiaries. 4.1 Mr. B. Pathak, the learned Counsel submits that the BSNL is not opposing the disbursal of the P.F. benefits to the employees engaged by the cont ractors but the primary objection to the impugned process is on account of the f act that beneficiaries have not been identified and therefore deposit of the ass essed dues with the P.F. authorities would hardly achieve the objective of the b eneficial legislation. 4.2 It appears that several petty contractors, who were not register ed under the P.F. Act, were engaged for execution of works under the BSNL and re quisite payment was made for the works executed by those contractors. But the BS NL authorities had no records of the employees deployed by the contractors and t herefore it is contended that the requisite information for identifying the bene ficiaries should be collected from the contractors and without such identificati on, the assessment under the P.F. Act would be unjustified. 5. In Food Corporation of India Vs. Provident Fund Commissioner rep orted in (1990) 1 SCC 68, the Supreme Court after analysing the powers conferre d on the Commissioner under Section 7A of the P.F. Act has held that the authori ty is empowered to determine the precise payable amount by conducting an effecti ve enquiry and he is empowered to collect all evidence to identify the workmen t o whom the P.F. dues is to be disbursed. According to the petitioners in those c ases the authorities failed to secure the names of the employees from the contra ctors and therefore it is contended that realization of the assessed amount from the BSNL will hardly meet the objective of the P.F. Act.

6. For those establishments where employees are engaged sporadicall y and the employment is of migratory character, lump sum assessment is provided under Clause-8 of the Government guideline issued on 30.11.2012, by the Ministry of Labour and Employment to all authorities under the P.F. Act. Under Sub-Claus e (c) of Clause 8, assessment is barred without identifying the individual membe r in whose account, the fund is to be credited. To ensure that the benefits under the P.F. Act reaches the targe 7. ted beneficiaries, the BSNL authorities had incorporated a specific eligibility clause in their earlier tenders whereby, the contractors were required to furnis h their registration numbers under the P.F. Act. But the aggrieved contractors c hallenged the insertion of such clause in the tender notice by contending that t his will operate prejudicially to the small time contractors who do not employ 2 0 or more persons in their establishments. Accepting this projection from the co ntractors’ side, this Court in the WP(C) No.2159/2006 (Pulak Bhattacharjee & oth ers vs. Bharat Sanchar Nigam Ltd. and others) had held that the right of the con tractors to participate in the tender process can’t be curtailed under the P.F. Act and because of this judgment, several petty contractors without being regist ered under the P.F. Act, were able to execute contracts for the BSNL. 8. In the present case, the authorities under the P.F. Act have fai led to exercise their statutory powers to collect the names of the employees (un der the contractors) to whom the P.F. dues are to be remitted and even without t his vital information, the payable amount under the P.F. Act was determined. Thi s was not the correct approach as was held by the Apex Court in the Food Corpora tion of India (Supra). 9. That apart, assessment without identifying the individual member in whose account the P.F. dues is to be credited is prohibited, by the Ministry ’s Circular dated 30.11.2012. Of course it can’t also be ignored that this circu lar was issued only after the assessment in the present cases were made under th e P.F. Act. In view of the above discussion, I am of the considered opinion 10. that the assessment of the P.F. dues on account of the employees under the contr actors, was not made through due process and accordingly the impugned decisions of the P.F. authorities are held to be unsustainable in law. Thus the cases are remanded back for fresh adjudication by the competent authority under the P.F. A ct, who should make re-assessment after identifying the names of the beneficiari es. The requisite information must be collected from the concerned contractors a s the names of the employees are not available with the BSNL authorities. It is ordered accordingly. 11. t any order on cost. With the above direction, these petitions are disposed of withou