High Court · 2025

WP NO. 6194 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.09.2025CORAMTHE HONOURABLE MR.JUSTICE HEMANT CHANDANGOUDARW.P. No. 6194 of 2022and WMP.No. 6261 of 2022M/s. JBM Auto Limited(Formerly JBM Auto System Private Limited)For Supplier's Park, S.P. Koil,Chengalpet Taluk,Kancheepuram District – 603204.Rep by its Authorised Signatory – J. Anand ..PetitionerVsThe Regional Provident Fund Commissioner -II (C&R)Regional Office, EPF Organisation,Employees' Provident Fund Organisation,3, Rajaji Salai,Chennai-600045...RespondentWrit Petition is filed under Article 226 of Constituion of India praying for issuane of writ of Certiorari, calling for records of the Central Government Industrial Tribunal-cum-Labour Court & EPF Appelate Tribunal, Chennai in EPFA No. 108 of 2019 and quash its order dated 03.03.2022 confirming the order of the respondent dated 19.05.2014 and pass such further orders.For Petitioner: Mr. K.R. HariharanFor Respondent: Mr R.Thirunavukkarasu1 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 ORDERThe captioned Writ Petition has been filed seeking issuance of a Writ of Certiorari to quash the order dated 03.03.2022 passed by the Central Government Industrial Tribunal-cum-Labour Court, Chennai (hereinafter referred to as “CGIT” for the sake of brevity and clarity) in EPFA No.108 of 2019, whereby the Tribunal confirmed the order dated 19.05.2014 passed by the respondent authority determining a sum of Rs.2,33,88,768/- as dues payable by the petitioner–management towards non-contribution on omitted allowances for the period March 2011 to August 2013.2. The said determination was made pursuant to an enquiry conducted under Section 7-A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (Act 19 of 1952) (hereinafter referred to as “the Act, 1952”). The enquiry report revealed that the petitioner–establishment had approximately 1,300 employees on its direct rolls and 500 employees engaged through contractors, and that the petitioner had failed to remit provident fund contributions on eligible wages as required under the Act.3. The petitioner–management appeared before the respondent authority and contended that it had engaged “worker trainees” and not employees or 2 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 apprentices, and therefore, the provisions of the Act, 1952 were not applicable to such engagements.4. However, upon consideration of the objections raised, the respondent authority passed an order holding that the petitioner–management was liable to pay a sum of Rs.2,33,88,768/- towards provident fund contributions.5. Aggrieved by the same, the petitioner preferred an appeal before the CGIT, which, by the impugned order dated 03.03.2022, dismissed the appeal and affirmed the findings of the respondent authority. Hence, the present writ petition has been filed, assailing the concurrent findings of the authorities below.6. Mr. K.R. Hariharan, learned counsel appearing for the petitioner–management, submitted that the petitioner had produced materials to substantiate that it had engaged only worker trainees and not employees as defined under Section 2(f) of the Act, 1952. Consequently, the petitioner contends that the provisions of the Act are inapplicable.3 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 7. It was further contended that the adjudicating authority erroneously included production incentive for the purpose of computing the provident fund contributions, contrary to Section 6 of the Act, 1952.8. In support of his submissions, learned counsel placed reliance on the following decisions:1.M/s. Sri Harikrishna Paper (P) Limited & another v. ESI Corporation, Madurai — C.M.A. (MD) Nos. 921 & 953 of 2017, dated 12.07.2023.2.The Deputy Director, Employees State Insurance Corporation, Chennai v. TIDC India, Chennai — C.M.A. No. 3948 of 2019, dated 22.09.2020.3.The Regional Provident Fund Commissioner v. M/s. Central Arecanut & Cocoa Marketing & Processing Co-operative Ltd. — Civil Appeal No. 978 of 2000, dated 30.01.2006.9. Per contra, learned counsel for the respondent submitted that the petitioner failed to produce any documentary material before either the adjudicating authority or the CGIT to substantiate its claim that it had engaged worker trainees and not employees. The burden of proving that the individuals engaged were worker trainees lay squarely upon the petitioner–management, which it has failed to discharge. Hence, both the adjudicating authority and the CGIT rightly concluded that the petitioner had engaged workers who fall 4 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 within the ambit of the definition of “employee” under the Act, 1952.10. The learned counsel further submitted that production incentive forms an integral part of wages under Section 29-F of the Employees’ Provident Fund Scheme, 1952 (hereinafter referred to as “the Scheme, 1952”), and therefore, was rightly taken into account for computing provident fund contributions. The impugned orders are, therefore, in strict conformity with the statutory provisions and warrant no interference.11. The rival submissions advanced by the learned counsel on either side have been duly considered. The records and materials placed before this Court have been carefully perused.12. Before delving into the controversy, it is necessary to refer to the relevant statutory provisions of the Act, 1952 and the Scheme, 1952.(a) Section 2(f) of the Act, 1952:Section 2(f) defines the term “employee” as 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 receives wages directly or indirectly from the employer, and includes any person employed by or through a contractor in 5 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 connection with the work of the establishment, as well as an apprentice not being an apprentice engaged under the Apprentices Act, 1961 or under the Standing Orders of the establishment.13. In the present case, the petitioner–establishment has not produced any evidence to show that the persons engaged were apprentices under the Apprentices Act, 1961, or under the standing orders of the establishment. The burden to establish that the persons were worker trainees and not employees or apprentices rests upon the petitioner.14. In the absence of any material to substantiate such a claim, the authorities have rightly concluded that the persons engaged by the petitioner were employees within the meaning of Section 2(f) of the Act, 1952. The decisions relied upon by the learned counsel for the petitioner pertain to persons who do not fall within the definition of “employee” as contemplated under Section 2(f) of the Act, 1952. Hence, those precedents are clearly distinguishable from facts and, therefore, do not warrant any further deliberation or detailed discussion in the context of the present case.15. Section 29-F of the Scheme, 1952, provides that the contribution payable by the employer under the Scheme shall be at the rate of 10% of the 6 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 basic wages, dearness allowance, including cash value of food concessions, and any other allowances payable to each employee.16. Further, Section 2(b) of the Act, 1952, defines “basic wages” to mean all emoluments earned by an employee while on duty, on leave, or on holidays with wages, in accordance with the terms of employment, which are paid or payable in cash. It excludes dearness allowance, house rent allowance, overtime allowance, bonus, commission, or similar allowances.17. In the instant case, the production incentive paid to employees has been taken into account for determining the provident fund contribution. Such incentive payments, being regular and uniformly paid in the course of employment, form part of the “wages” as contemplated under Section 29-F of the Scheme, 1952, and hence have been rightly included for computing the contribution. 18. The judgment of the Hon’ble Supreme Court in Manipal Academy of Higher Education v. Provident Fund Commissioner [(2008) 5 SCC 428], relied upon by the petitioner, is not applicable to the facts of the present case, since the nature of allowances in that case was distinct and not of a recurring or 7 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 regular nature.19. The petitioner further contended that the 1,130 employees referred to in the enquiry report were not identifiable, and therefore, the adjudicating authority could not have determined the provident fund liability. However, the memorandum of appeal filed before the CGIT itself discloses that the petitioner–establishment had 1,087 worker trainees at its Maraimalai Nagar Plant, and that 118 employees continued on the rolls of the establishment. During inspection, the authorities found that 1,130 direct employees were working under the petitioner–establishment.20. The petitioner has not produced any documentary evidence to disprove the inspection report or to establish that the said finding was erroneous. Hence, in the absence of any material irregularity or legal infirmity, the findings of the CGIT confirming the order of the respondent authority cannot be interfered with.21. For the foregoing reasons, this Court finds no merit in the writ petition. The concurrent findings of the respondent authority and the CGIT are 8 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 based on proper appreciation of facts and application of statutory provisions under the Act, 1952 and the Scheme, 1952, and therefore, do not warrant interference under Article 226 of the Constitution of India.22. Accordingly, the Writ Petition stands dismissed. Consequently, the connected miscellaneous petition is also closed. There shall be no order as to costs. However, considering the financial implications, the petitioner–establishment is directed to deposit the balance amount of contribution as determined under the impugned order, in ten (10) equal monthly installments, commencing from November 2025.23. In the event of default in payment of any installment, the respondent authority shall be at liberty to initiate proceedings in accordance with law for recovery of the balance dues25.09.2025Index: Yes/NoInternet :Yesak9 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 HEMANT CHANDANGOUDAR, J.akWP No. 6194 of 202225.09.202510

WP NO. 6194 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.09.2025CORAMTHE HONOURABLE MR.JUSTICE HEMANT CHANDANGOUDARW.P. No. 6194 of 2022and WMP.No. 6261 of 2022M/s. JBM Auto Limited(Formerly JBM Auto System Private Limited)For Supplier's Park, S.P. Koil,Chengalpet Taluk,Kancheepuram District – 603204.Rep by its Authorised Signatory – J. Anand ..PetitionerVsThe Regional Provident Fund Commissioner -II (C&R)Regional Office, EPF Organisation,Employees' Provident Fund Organisation,3, Rajaji Salai,Chennai-600045...RespondentWrit Petition is filed under Article 226 of Constituion of India praying for issuane of writ of Certiorari, calling for records of the Central Government Industrial Tribunal-cum-Labour Court & EPF Appelate Tribunal, Chennai in EPFA No. 108 of 2019 and quash its order dated 03.03.2022 confirming the order of the respondent dated 19.05.2014 and pass such further orders.For Petitioner: Mr. K.R. HariharanFor Respondent: Mr R.Thirunavukkarasu1 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 ORDERThe captioned Writ Petition has been filed seeking issuance of a Writ of Certiorari to quash the order dated 03.03.2022 passed by the Central Government Industrial Tribunal-cum-Labour Court, Chennai (hereinafter referred to as “CGIT” for the sake of brevity and clarity) in EPFA No.108 of 2019, whereby the Tribunal confirmed the order dated 19.05.2014 passed by the respondent authority determining a sum of Rs.2,33,88,768/- as dues payable by the petitioner–management towards non-contribution on omitted allowances for the period March 2011 to August 2013.2. The said determination was made pursuant to an enquiry conducted under Section 7-A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (Act 19 of 1952) (hereinafter referred to as “the Act, 1952”). The enquiry report revealed that the petitioner–establishment had approximately 1,300 employees on its direct rolls and 500 employees engaged through contractors, and that the petitioner had failed to remit provident fund contributions on eligible wages as required under the Act.3. The petitioner–management appeared before the respondent authority and contended that it had engaged “worker trainees” and not employees or 2 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 apprentices, and therefore, the provisions of the Act, 1952 were not applicable to such engagements.4. However, upon consideration of the objections raised, the respondent authority passed an order holding that the petitioner–management was liable to pay a sum of Rs.2,33,88,768/- towards provident fund contributions.5. Aggrieved by the same, the petitioner preferred an appeal before the CGIT, which, by the impugned order dated 03.03.2022, dismissed the appeal and affirmed the findings of the respondent authority. Hence, the present writ petition has been filed, assailing the concurrent findings of the authorities below.6. Mr. K.R. Hariharan, learned counsel appearing for the petitioner–management, submitted that the petitioner had produced materials to substantiate that it had engaged only worker trainees and not employees as defined under Section 2(f) of the Act, 1952. Consequently, the petitioner contends that the provisions of the Act are inapplicable.3 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 7. It was further contended that the adjudicating authority erroneously included production incentive for the purpose of computing the provident fund contributions, contrary to Section 6 of the Act, 1952.8. In support of his submissions, learned counsel placed reliance on the following decisions:1.M/s. Sri Harikrishna Paper (P) Limited & another v. ESI Corporation, Madurai — C.M.A. (MD) Nos. 921 & 953 of 2017, dated 12.07.2023.2.The Deputy Director, Employees State Insurance Corporation, Chennai v. TIDC India, Chennai — C.M.A. No. 3948 of 2019, dated 22.09.2020.3.The Regional Provident Fund Commissioner v. M/s. Central Arecanut & Cocoa Marketing & Processing Co-operative Ltd. — Civil Appeal No. 978 of 2000, dated 30.01.2006.9. Per contra, learned counsel for the respondent submitted that the petitioner failed to produce any documentary material before either the adjudicating authority or the CGIT to substantiate its claim that it had engaged worker trainees and not employees. The burden of proving that the individuals engaged were worker trainees lay squarely upon the petitioner–management, which it has failed to discharge. Hence, both the adjudicating authority and the CGIT rightly concluded that the petitioner had engaged workers who fall 4 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 within the ambit of the definition of “employee” under the Act, 1952.10. The learned counsel further submitted that production incentive forms an integral part of wages under Section 29-F of the Employees’ Provident Fund Scheme, 1952 (hereinafter referred to as “the Scheme, 1952”), and therefore, was rightly taken into account for computing provident fund contributions. The impugned orders are, therefore, in strict conformity with the statutory provisions and warrant no interference.11. The rival submissions advanced by the learned counsel on either side have been duly considered. The records and materials placed before this Court have been carefully perused.12. Before delving into the controversy, it is necessary to refer to the relevant statutory provisions of the Act, 1952 and the Scheme, 1952.(a) Section 2(f) of the Act, 1952:Section 2(f) defines the term “employee” as 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 receives wages directly or indirectly from the employer, and includes any person employed by or through a contractor in 5 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 connection with the work of the establishment, as well as an apprentice not being an apprentice engaged under the Apprentices Act, 1961 or under the Standing Orders of the establishment.13. In the present case, the petitioner–establishment has not produced any evidence to show that the persons engaged were apprentices under the Apprentices Act, 1961, or under the standing orders of the establishment. The burden to establish that the persons were worker trainees and not employees or apprentices rests upon the petitioner.14. In the absence of any material to substantiate such a claim, the authorities have rightly concluded that the persons engaged by the petitioner were employees within the meaning of Section 2(f) of the Act, 1952. The decisions relied upon by the learned counsel for the petitioner pertain to persons who do not fall within the definition of “employee” as contemplated under Section 2(f) of the Act, 1952. Hence, those precedents are clearly distinguishable from facts and, therefore, do not warrant any further deliberation or detailed discussion in the context of the present case.15. Section 29-F of the Scheme, 1952, provides that the contribution payable by the employer under the Scheme shall be at the rate of 10% of the 6 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 basic wages, dearness allowance, including cash value of food concessions, and any other allowances payable to each employee.16. Further, Section 2(b) of the Act, 1952, defines “basic wages” to mean all emoluments earned by an employee while on duty, on leave, or on holidays with wages, in accordance with the terms of employment, which are paid or payable in cash. It excludes dearness allowance, house rent allowance, overtime allowance, bonus, commission, or similar allowances.17. In the instant case, the production incentive paid to employees has been taken into account for determining the provident fund contribution. Such incentive payments, being regular and uniformly paid in the course of employment, form part of the “wages” as contemplated under Section 29-F of the Scheme, 1952, and hence have been rightly included for computing the contribution. 18. The judgment of the Hon’ble Supreme Court in Manipal Academy of Higher Education v. Provident Fund Commissioner [(2008) 5 SCC 428], relied upon by the petitioner, is not applicable to the facts of the present case, since the nature of allowances in that case was distinct and not of a recurring or 7 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 regular nature.19. The petitioner further contended that the 1,130 employees referred to in the enquiry report were not identifiable, and therefore, the adjudicating authority could not have determined the provident fund liability. However, the memorandum of appeal filed before the CGIT itself discloses that the petitioner–establishment had 1,087 worker trainees at its Maraimalai Nagar Plant, and that 118 employees continued on the rolls of the establishment. During inspection, the authorities found that 1,130 direct employees were working under the petitioner–establishment.20. The petitioner has not produced any documentary evidence to disprove the inspection report or to establish that the said finding was erroneous. Hence, in the absence of any material irregularity or legal infirmity, the findings of the CGIT confirming the order of the respondent authority cannot be interfered with.21. For the foregoing reasons, this Court finds no merit in the writ petition. The concurrent findings of the respondent authority and the CGIT are 8 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 based on proper appreciation of facts and application of statutory provisions under the Act, 1952 and the Scheme, 1952, and therefore, do not warrant interference under Article 226 of the Constitution of India.22. Accordingly, the Writ Petition stands dismissed. Consequently, the connected miscellaneous petition is also closed. There shall be no order as to costs. However, considering the financial implications, the petitioner–establishment is directed to deposit the balance amount of contribution as determined under the impugned order, in ten (10) equal monthly installments, commencing from November 2025.23. In the event of default in payment of any installment, the respondent authority shall be at liberty to initiate proceedings in accordance with law for recovery of the balance dues25.09.2025Index: Yes/NoInternet :Yesak9 https://www.mhc.tn.gov.in/judis WP NO. 6194 of 2022 HEMANT CHANDANGOUDAR, J.akWP No. 6194 of 202225.09.202510