EPF authorities has to insist on Videograpy and CCTV installation in and around factory premise-Punjab & Haryana HC

EPF authorities has to insist on Videograpy and CCTV installation in and around factory premise for recording of panchanama . In disputed matter evidence can be taken from videographing.

EPF authorities has to insist on videography-CCTV

ABCAUS Case Law Citation:
ABCAUS 1248 (2017) (05) HC

The Grievance:
The appellant petitioner had questioned the validity of the order passed by the Regional Provident Fund Commissioner and Employees’ Provident Fund Appellate Tribunal.

Important Case Laws Cited relied upon:
Saraswati Construction Company vs. Central Board of Trustees and another
Maharashtra State Coop. Bank Ltd. Vs. Provident Fund Commissioner
Organo Chemical Industries v. Union of India
Himachal Pradesh State Forest Corporation Vs. Regional PF Commissioner
Grand Chemical Work
Harbans Lal v. Jagmohan Saran

Brief Facts of the Case:
The e petitioner’s company was established in the year 1969. It was a partnership till 5.1.1994. On 6.12.1996, EPF Department officials and Inspectors gave a surprise visit to the petitioner’s factory and found that there were 21 employees. The same was recorded and authorities obtained signature and seal on behalf of the Proprietor (by his son).

EPF Authorities advised the petitioner company that in view of the number of employees employed in the factory, the petitioner had to comply the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (‘EPF Act’). The petitioner denied employing 19 employees and stated that he had engaged only 6 employees. Therefore EPF Act was not applicable to the factory owned by the petitioner. The company had requested for personal hearing if further action was proposed to be taken by the department.

EPF Department furnished report of the Inspectors, coverage form and list of employees and further reiterated that the petitioner-company was covered by EPF Act and requested for compliance of EPF Act. For non-compliance of EPF Act by the petitioner, the Enforcement Officer reported to Regional Provident Fund Commissioner to initiate proceedings against the petitioner-company for non-compliance of EPF Act. Notice was given to the petitioner for drawing proceedings under Section 7- A of the EPF Act.

After hearing the petitioner and perusal of the records, Section 7-A proceedings of the EPF Act were initiated holding that EPF Act had been made applicable to the petitioner establishment and petitioner was statutorily bound to report compliance within 30 days.

Feeling aggrieved by the order dated 30.4.1998, the petitioner preferred an appeal before the Appellate Tribunal. The Appellate Tribunal dismissed the appeal of the petitioner, while observing certain factual aspects against which the petitioner company had presented this petition before the Hon’ble High Court.

Contentions of the Petitioner assessee:
It was contended that the EPF Department proceeded to initiate proceedings and directed the petitioner to comply EPF Act merely based on the inspecting squad report.  It was contended that in his factory hardly there were 7 employees and not as contended or recorded by the EPF Department that 21 employees were employed in his factory. It was also contended that in the absence of petitioner – proprietor, petitioner’s son’s signature and factory seal was obtained by the EPF squad by force. It was further submitted that from the records of attendance register, wages register evident that only 6-7 employees were employed in the petitioner’s factory. Therefore, the proceedings drawn by the EPF authorities under the statutory provision were contrary to the facts.

It was also contended that the High Court had no jurisdiction relating to examination of fact finding.

Observations made by the High Court:
The Hon’ble High Court opined that  the contention of the petitioner was an after thought for the reasons that petitioner’s factory premises was inspected by the EPF Department on 6.12.1996 and for the first time the petitioner took the above contention before the EPF Department only against issuance of show cause notice after lapse of more than 6-7 months. Further no mala fide was urged against any person or inspecting squad as to what was the enmity so as to record 21 employees were working. If the inspecting squad forcibly taken signature a complaint before jurisdiction police should have been lodged.

Regarding the documents maintained by the petitioner company like attendance register, wages register and annual returns, balance sheet, the Hon’ble High Court observed that EPF Department had rightly rejected the cited documents of the petitioner since these were not authenticated when physical verification was made by the Inspecting squad of the EPF Department. Therefore, the petitioner failed to adduce necessary evidence before the EPF Department.

It was opined that in view of the principle laid down by the various High Courts, it was bound down duty of the petitioner to establish that the petitioner’s factory do not fall under the EPF Act, since the EPF Department, the Appellate Authority were competent to give a fact finding in the matter and the fact that the petitioner failed to place necessary materials before the EPF Department, scope of examination of facts under Article 226 of the Constitution was limited and confined to the legality, propriety, arbitrariness and denial of natural justice only. As per perusal of the records, it was evident that there was not illegality, arbitrariness and denial of natural justice to the petitioner.

Finally, the Hon’ble High Court opined that the EPF Department in order to avoid disputes relating to number of employees employed by the employer and if there is no co-operation from employer or its agent/manager/any person in such circumstances, Department has to utilize recording of panchanama by videographing and insisting for installation of CCTV in and around factory premises. Thus in disputed matter evidence can be taken from videographing.

The writ petition was held as liable to be rejected.

EPF authorities has to insist on Videograpy-CCTV

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EPFO letter to Field Officers on the subject Click Here >>

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