Case Note & Summary
The petitioners, Jijamata Public School and Jijamata Krushi Tantra Vidyalaya, are public schools run by a public trust established in 2003, engaged in imparting education. Initially, they did not comply with the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. However, pursuant to a special scheme issued by the Ministry of Labour and Employment called the Employees' Enrollment Campaign, 2017, framed under Section 5 read with Section 7(1) of the Act, the petitioners voluntarily offered to cover their employees under the Act through the ORLE portal under Section 2-A. They remitted contributions including employer's and employees' share for the period from June 2003 to August 2018 in July 2018, and were allotted separate codes. The petitioners' case is that under the scheme, they were assured that no penalty, interest, or damages would be levied. However, on 26.11.2019, the respondent initiated an inquiry under Section 14-B read with Section 7Q of the Act, issuing a show cause notice asking why damages and interest for late remittance should not be imposed. The petitioners challenged this notice. The court considered the submissions of both sides. The petitioners argued that they voluntarily came forward under the scheme which promised no levy of damages or interest, and that the respondent is estopped from going back on its assurance. The respondent argued that the scheme did not exempt from statutory liability. The court held that the respondent is estopped from levying damages and interest as the petitioners acted on the assurance of the scheme. The court quashed the show cause notice and directed the respondent to not levy any damages or interest, allowing the writ petitions.
Headnote
A) Employees' Provident Funds - Voluntary Coverage - Special Scheme - Levy of Damages and Interest - The petitioners, public schools, voluntarily covered their employees under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, pursuant to a special scheme (Employees' Enrollment Campaign, 2017) that assured no levy of penalty, interest, or damages. The respondent initiated inquiry under Section 14-B read with Section 7Q for late remittance. The court held that the respondent is estopped from levying damages and interest as the petitioners acted on the assurance of the scheme, and the levy would defeat the purpose of the scheme. (Paras 1-10) B) Employees' Provident Funds - Promissory Estoppel - Legitimate Expectation - The court applied the principle of promissory estoppel and legitimate expectation, holding that the respondent cannot go back on its assurance given under the special scheme. The petitioners, relying on the scheme, remitted contributions for the past period without any liability for damages or interest. The court quashed the show cause notice and directed the respondent to not levy any damages or interest. (Paras 8-10)
Issue of Consideration
Whether the respondent can levy damages and interest under Section 14-B and Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, on the petitioners who voluntarily covered their employees under a special scheme that assured no penalty, interest, or damages.
Final Decision
The court allowed the writ petitions, quashed the show cause notice dated 26.11.2019, and directed the respondent to not levy any damages or interest under Section 14-B and Section 7Q of the EPF Act, 1952, against the petitioners.
Law Points
- Voluntary coverage under special scheme
- estoppel against levy of damages and interest
- Section 14-B and Section 7Q of EPF Act
- 1952
- promissory estoppel
- legitimate expectation
