Case Note & Summary
The petitioner, M/s Bharat Sanchar Nigam Ltd. (BSNL), challenged an order dated 1.7.2013 passed by the Employees Provident Fund Appellate Tribunal, New Delhi, which upheld the order of the Regional Provident Fund Commissioner dated 9.11.2009. The Commissioner, in an inquiry under Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (PF Act), found that workers engaged by contractors for BSNL's work were covered under the definition of 'employee' under Section 2(f) of the Act. The Commissioner identified 261 eligible employees and determined that Rs. 1,06,00,537/- was payable as provident fund dues for the period from October 2000 to August 2008. Since the contractors had not paid this amount, the Commissioner directed BSNL, as principal employer under Para 30 of the Employees Provident Fund Scheme, 1952, to pay the amount within seven days. BSNL appealed to the Appellate Tribunal, which dismissed the appeal. BSNL then filed a writ petition in the High Court of Bombay at Goa. The court considered the arguments that BSNL was not the employer of the contract workers and that the contractors were primarily liable. The court held that under Para 30 of the Scheme, the principal employer is vicariously liable for the defaults of the contractor. The definition of 'employee' under Section 2(f) includes persons employed through a contractor. The court found no illegality or perversity in the orders of the Commissioner and the Tribunal. The petition was dismissed with no order as to costs.
Headnote
A) Employees Provident Fund - Principal Employer Liability - Section 2(f), Section 7A, Employees Provident Funds and Miscellaneous Provisions Act, 1952, Para 30 of Employees Provident Fund Scheme, 1952 - The court considered whether the principal employer is liable to pay PF contributions for contract workers when contractors default. Held that the principal employer is vicariously liable under Para 30 of the Scheme, and the definition of 'employee' under Section 2(f) includes contract workers. The court upheld the order of the Commissioner and the Appellate Tribunal. (Paras 1-10)
Issue of Consideration
Whether the petitioner, as principal employer, is liable to pay provident fund contributions for workers engaged through contractors when the contractors have failed to pay.
Final Decision
The High Court dismissed the writ petition, upholding the orders of the Commissioner and the Appellate Tribunal. No order as to costs.
Law Points
- Principal employer liability
- Contract workers covered under Section 2(f) of EPF Act
- Para 30 of EPF Scheme
- 1952
- Vicarious liability for contractor's default
Case Details
2014 LawText (BOM) (04) 115
WRIT PETITION NO. 659 OF 2013
Mr. Jose Filip Melo for petitioner; Mr. Y. V. Nadkarni and Mr. R. Shirodkar for respondents
M/s Bharat Sanchar Nigam Ltd., The General Manager, M/s Bharat Sanchar Nigam Ltd., Goa Telecom Distt., Goa Sanchar Bhavan, EDC Plot No. 3, Patto, Panaji, Goa, 403 3001
1. The Regional Provident Fund Commissioner-I, Bhavishya Nidhi Bhavan, 24, Patto Plaza, Panaji-Goa, 403001. 2. The Assistant Regional Provident Fund Commissioner And Recovery Officer, Regional Office, Bhavishya Nidhi Bhavan, 24, Patto Plaza, Panaji-Goa, 403 001.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition challenging the order of the Employees Provident Fund Appellate Tribunal upholding the Commissioner's order directing payment of provident fund dues.
Remedy Sought
Petitioner sought quashing of the order dated 1.7.2013 passed by the Appellate Tribunal and the order dated 9.11.2009 passed by the Commissioner.
Filing Reason
Petitioner was directed to pay provident fund contributions for contract workers as principal employer due to default by contractors.
Previous Decisions
Commissioner's order dated 9.11.2009 directed petitioner to pay Rs. 1,06,00,537/-; Appellate Tribunal dismissed appeal on 1.7.2013.
Issues
Whether the petitioner is liable as principal employer for provident fund contributions of contract workers under the PF Act and Scheme.
Whether the definition of 'employee' under Section 2(f) includes workers engaged through contractors.
Submissions/Arguments
Petitioner argued that it is not the employer of the contract workers and that the contractors are primarily liable.
Respondents argued that under Para 30 of the Scheme, the principal employer is vicariously liable for defaults of the contractor.
Ratio Decidendi
Under Para 30 of the Employees Provident Fund Scheme, 1952, the principal employer is vicariously liable to pay provident fund contributions for employees engaged through contractors when the contractors default. The definition of 'employee' under Section 2(f) of the PF Act includes such contract workers.
Judgment Excerpts
the Commissioner, being principal employer in terms of para 30 of the Employees Provident Fund Scheme, 1952, to pay the said amount within a period of seven days from the date of issuance of the order dated 9.11.2009.
Procedural History
Commissioner initiated inquiry under Section 7A, passed order on 9.11.2009 directing petitioner to pay Rs. 1,06,00,537/-. Petitioner appealed to Appellate Tribunal, which dismissed appeal on 1.7.2013. Petitioner then filed writ petition in High Court of Bombay at Goa, which was dismissed on 11.4.2014.
Acts & Sections
- Employees Provident Funds and Miscellaneous Provisions Act, 1952: Section 2(f), Section 7A
- Employees Provident Fund Scheme, 1952: Para 30
