High Court · 2025

W.P No. 15146 of 2022IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 11.09.2025CORAM THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDARW.P No. 15146 of 2022and WMP.Nos. 14337 and 14339 of 2022 M/s. Hindustan Motor Finance Corporation Ltd.,No. 6, GST Road, St. Thomas Mount,Chennai-600016Rep by its Authorised Signatory..PetitionerVs1. The Regional Provident Fund Commissioner,Employees Provident Fund OrganisationSub Regional Office Ambattur,Mugappair Road, Mugappair East Chennai,R-40, A1, TNHB Shopping cum Office ComplexMugappair Road, Mugappair East,Chennai-600037.2.The Recovery Officer,Employees Provident Fund OrganisationSub Regional Office Ambattur,Mugappair Road, Mugappair East Chennai,R-40, A1, TNHB Shopping cum Office ComplexMugappair Road, Mugappair East,Chennai-600037...RespondentsWrit petition is filed under Article 226 of Constitution of India, praying for issuance of writ of certiorari, calling for the records of the Central Government Industrial Tribunal-cum- Labour Court, Chennai pertaining EPFA 445 of 2018 and quash its order dated 21.02.2022 and pass such further or other orders.1 https://www.mhc.tn.gov.in/judis W.P No. 15146 of 2022For Petitioner: Mr.Anand GopalanFor M/s G.AnandakrishnanFor Respondents: Mr. M.S. Viswanathan, Standing Counsel. ORDERThe captioned writ petition has been filed seeking issuance of a writ of certiorari to quash the order dated 21.02.2022 passed by the Central Government Industrial Tribunal-cum-Labour Court, Chennai (hereinafter referred to as “CGIT”) in EPFA No. 445 of 2018, confirming the order dated 13.01.2016 passed by the 1st respondent under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “the 1952 Act”) in Proceedings No. TN/SRO/AMB/18770/CC-I/A-4/2015-16. By the said order, the petitioner was directed to remit a sum of Rs. 33,68,853/- towards provident fund contribution in respect of 152 non-enrolled employees for the period from September 1997 to February 2005.2. The petitioner contended before the 1st respondent that the 152 persons in question were not employees but trainees during the relevant period, and therefore there was no obligation to contribute towards provident fund under Section 6 of the 1952 Act.2 https://www.mhc.tn.gov.in/judis W.P No. 15146 of 20223. The 2nd respondent (Recovery Officer), however, took the stand that the said 152 persons were workmen and not trainees, thereby attracting statutory liability under Section 6 of the 1952 Act. The 1st respondent, by order dated 13.01.2016, held that the said persons were workmen and not trainees for reasons recorded therein. Aggrieved thereby, the petitioner preferred an appeal under Section 7I of the 1952 Act before the CGIT. The CGIT, by order dated 21.02.2022, dismissed the appeal. Hence, the present writ petition.4. Learned counsel for the petitioner submitted that the materials on record, including the settlement entered into under Section 12(3) of the Industrial Disputes Act, 1947, clearly establish that the 152 persons were engaged as trainees during the relevant period. Therefore, the liability to contribute provident fund for that period did not arise. It was further submitted that the orders passed by the 1st respondent as well as the CGIT are unsustainable in law.5. Per contra, learned counsel for the respondents 1 and 2 submitted that the obligation to contribute provident fund under Section 6 of the 1952 Act is statutory in nature and cannot be waived or negated by any private settlement between the management and the workmen. Accordingly, it was contended that the writ petition is devoid of merit and liable to be dismissed.3 https://www.mhc.tn.gov.in/judis W.P No. 15146 of 20226. Arguments advanced by both parties and materials placed on record have been duly considered.7. Section 6 of the 1952 Act mandates that the employer shall contribute to the Fund at 10% of the basic wages, dearness allowance, and retaining allowance (if any) payable to each employee. The 1st respondent, in the order dated 13.01.2016, concluded that the 152 persons were workmen and not trainees, inter alia on the ground that the petitioner had not furnished the list of workmen engaged in the manufacturing process at the relevant time, among other grounds.8. It is, however, seen from the subsequent settlement entered into between the petitioner-management and the workmen under Section 12(3) of the Industrial Disputes Act, 1947, that the 152 persons categorically admitted that they were appointed only as trainees during the relevant period and were designated as workmen only thereafter. The Union and workmen further agreed that they would not claim any benefits, including provident fund, for the period during which they were engaged merely as trainees on stipend. Although the workmen had earlier contended before the 1st respondent that they were functioning as workmen, they unequivocally admitted in the statutory settlement that they were trainees during the relevant period.9. A settlement under Section 12(3) of the Industrial Disputes Act, 1947 4 https://www.mhc.tn.gov.in/judis W.P No. 15146 of 2022is a statutory agreement binding on all parties, including the employees. In the present case, the workmen, having expressly foregone their claim for provident fund during the training period and their provident fund accounts having been closed pursuant to such settlement, the liability of the petitioner to pay provident fund for the said period does not survive. Since, as per the statutory settlement, they were not employees but only trainees, the employer is not statutorily liable to contribute towards the fund in respect of the trainees Consequently, the impugned orders of the 1st respondent and the CGIT cannot be sustained in view of the subsequent binding settlement.10. Accordingly, the following order is passed:i.The impugned order of the CGIT dated 21.02.2022 and the order of the 1st respondent dated 13.01.2016 are hereby set aside.ii.The writ petition is allowed.iii.The 1st respondent is directed to refund the amount already deposited by the petitioner pursuant to the order dated 13.01.2016 passed by the Respondent No.1 within a period of two (2) months from the date of receipt of a copy of this order.iv.It is made clear that the 152 workmen who were parties to the settlement entered into under Section 12(3) of the Industrial 5 https://www.mhc.tn.gov.in/judis W.P No. 15146 of 2022Disputes Act, 1947, are not entitled to raise any further claim against respondents 1 and 2 for provident fund contribution for the relevant period.v.Consequently, connected miscellaneous petitions are closed. There shall be no order as to costs 11.09.20251/3Index:Yes/NoInternet : Yes/NoNeutral Citation : Yes/Noak6 https://www.mhc.tn.gov.in/judis W.P No. 15146 of 2022HEMANT CHANDANGOUDAR, J.akW.P No. 15146 of 202211.09.2025 1/37