1 wp6636-11.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6636 OF 2011 Vithalrao Shinde Sahakari Sakhar Karkhana Ltd .. Petitioner versus Union of India & Ors .. Respondents Mr.Drupal S. Patil for the petitioner. Mr.Suresh Kumar with Mr.Rajinder Kumar for the respondent. CORAM : S.C.DHARMADHIKARI, J. 24th August 2011. P.C.: . This writ petition under Articles 226 and 227 of the Constitution of India, is directed against the order passed by the Assistant Provident Fund Commissioner, Solapur on 31st May 2007 and by the Employees Provident Fund Appellate Tribunal dated 18th October 2010. 2 The petitioner is a co-operative sugar factory. The petitioner has stated that the said co-operative society was established on 21st May 1999 and the Act, viz., the Employees Provident Fund and 2 wp6636-11.doc Miscellaneous Provisions Act, 1952, was made applicable to the Society and a code number was allotted. The petitioner has appointed several agents to carry out activities in the factory. Various contractors are appointed and these contractors were duly directed to comply with the Act. However, the contractors did not comply with the Act. The inquiry was initiated by respondent No.3 under section 7A of the Act and the petitioner appeared. The petitioner pointed out that the responsibility was that of the contractor to remit the contribution with respect to their employees and to comply with the provisions of the Act. That burden cannot be foisted on the petitioner and particularly when the contractors are not party to the inquiry. However, without taking into consideration this aspect, the grievance of the petitioner is that the inquiry came to be concluded and respondent No.3 passed an order dated 31st May 2007 directing the petitioner to deposit a sum of Rs. 17,42,435/-. This was the sum in relation to the employees of the contractor for the period 2001-2002 and 2005- 2006. The petitioner deposited the amount under protest to avoid coercive steps. The petitioner applied for review of the order dated 31st May 2007, which review application was also dismissed on 20th June 2007. 3 wp6636-11.doc Aggrieved by both orders, the memorandum of appeal was filed being the statutory appeal before the Appellate Tribunal. That statutory appeal has been dismissed and there also, this aspect has not been considered. 3 I have heard Mr.Patil appearing on behalf of the petitioner, who invited my attention to the petition and annexures thereto and the specific case which was raised in the memo of appeal and even prior thereto. It is argued by him that the Tribunal noted the contention that the petitioner-appellant is not the principal employer and labourers engaged by the contractor are not his employees. Further, there is no identification of the labourers and non examination of the contractor has caused prejudice to the petitioner. 4 He submits that this aspect has not been considered at all and merely because the definition of the term “employee” is inclusive, that the Tribunal has proceed to dismiss the appeal. The Tribunal has very clearly observed that it is true that the assessment has to be made for the identifiable employees. It is the 4 wp6636-11.doc duty of the appellant to prepare the list of the employees engaged by him as per para 36A and 36B. However, while observing that it is true that the contractors were not examined, what the petitioner appellant has been faulted with by the Tribunal is that it never requested the Employees Provident Fund Commissioner to summon and examine the contractor. 5 According to Mr.Patil, this is incorrect because specific request was made throughout to summon such contractors and even the list of the contractors and their employees, was placed on record. Therefore, the Tribunal was in complete error in dismissing the appeal by making such observations. 6 On the other hand, Mr.Suresh Kumar appearing for the Provident Fund Authorities has supported the impugned order. He submits that if the Tribunal has come to conclusion as a matter of fact, that the details were not provided, then, there is no question of any prejudice and the appeal has been rightly dismissed. 7 With the assistance of counsel appearing for both sides, I 5 wp6636-11.doc have perused the petition and all annexures thereto. The inquiry is under section 7A of the Act. The assessment order that is passed on 31st May 2007 refers to the fact that the documents were produced including ledger and other records. The finding is that the establishment has to pay sum of Rs.17,42,435/- in respect of internal contract employees for the aforementioned period. However, it is clear that when the records were produced, the petitioner-Karkhana, had pointed out that the bifurcation of the contractual amount is submitted by the individual contractor on the basis of their Books of Account and not as per the sugar factory record. The establishment has submitted the entire amount of contractors as per their record. The bifurcation made by the contractor is not taken into consideration at the time of assessing the dues. The eligible amount is shown by the contractor only after deducting the statutory items and even that has to be considered. It is clear that a specific plea was raised that the Assessing Authority neither called the record of the contractor, nor the contracting person and, therefore, there is huge difference in the eligible salary and even the illustrations were pointed out. 6 wp6636-11.doc 8 To my mind, the authorities under the Act were obliged with these facts and circumstances, to take into consideration the plea raised and particularly with regard to the liability of the petitioner- establishment. When the authorities themselves do not dispute that the contractors were engaged for various works in the factory and that the employees were of the contractors, then, the records in relation to such employees should have been summoned and necessary clarifications obtained from the contractors. That having not being done and still the petitioner was disbelieved, clearly vitiates the impugned order. In these circumstances, both, the assessment order so also the appellate order, are set aside. The matter is remitted back to the Employees Provident Fund Commissioner of the concerned region, who shall carry out an assessment afresh. The learned advocate appearing for the petitioner submits that the petitioner-sugar factory will render all assistance by providing list of contractors, their proper addresses, the details of the employees engaged and working in the establishment at the relevant time so also the records maintained by the factory in that behalf. The Employees Provident Fund Commissioner to then summon the contractor by issuing 7 wp6636-11.doc appropriate summons. On perusal of the entire record, he shall pass an fresh order and without being influenced by any conclusions rendered earlier. The Employees Provident Fund Commissioner shall do so as expeditiously as possible and within a period of four months from the date of receipt of a copy of this order. All contentions of the petitioner are kept open. The petition is disposed off in these terms but without any order as to costs. (S.C.DHARMADHIKARI, J)