MADURAI: The Madurai Bench of Madras High Court on Monday imposed Rs 1 lakh cost on the Employees Provident Fund Organisation (EPFO), Tiruchy, for a five-year delay in challenging a decision by the EPF Appellate Tribunal, New Delhi, in 2014.
The tribunal, on November 20, 2014, had allowed an appeal filed by a private school in Nagapattinam, against the organisation’s order directing the school to pay Rs 42 lakh contribution payable under EPF Act.
Allowing a petition filed by the Tiruchy EPF commissioner in 2019, Justice B Pugalendhi noted that despite having a well-equipped legal wing and adequate administrative infrastructure, the EPFO challenged the order after a five-year delay.
Though this delay is a valid ground to reject the petition, the same is not done as the subject matter relates to the PF contribution of employees, and denying the plea would result in serious prejudice to their statutory rights, he added.
However, the PF authorities, being custodians of employees’ contributions, are under a bounden duty to ensure that the funds are duly secured and credited to the workmen, he pointed out. Just as the authorities impose damages when an employer delays remittance of contributions, the same principle of accountability must apply to the authorities themselves when there is a delay in pursuing legal remedies, the judge observed and imposed Rs 1 lakh cost.
The said amount should be paid from the funds of the department and recovered from the authorities who were responsible for the delay, and should be disbursed to eligible employees, he added.
According to EPFO’s petition, the school had maintained dual sets of wage registers and manipulated figures to conceal the allowances paid to the employees to evade PF liability. Based on an inspection report submitted by the area enforcement officer, the organisation had conducted an inquiry, and in May 2014, it had directed the school to remit the dues by treating all allowances except House Rent Allowance (HRA) as ‘basic wages’ for EPF contribution.
Challenging this, the school had filed an appeal before the tribunal, which was allowed in November 2014, on the ground that the organisation had passed a non-speaking order without considering the objections made by the school. Aggrieved by the same, the organisation moved the High Court in 2019. The counsel representing the school claimed that the petition was not maintainable since the EPFO is a quasi-judicial authority.
However, Justice Pugalendhi noted that PF authorities perform various roles apart from quasi-judicial determination and therefore, there is no such bar preventing it from moving the High Court. He also rejected the tribunal’s reasoning and said the objections of the school were duly considered and a reasoned order was passed. He set aside the tribunal’s decision and restored the organisation’s order.