1. Petitioner is aggrieved with Ext.P7 order imposing damages under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 as also interest under Section 7Q of the very same enactment. Admittedly, the issue with respect to Section 14B is pending in appeal and this Court also granted a stay of recovery, which has to be continued, till the appeal is disposed of. In such circumstance, the issue which is considered herein is confined to the interest under Section 7Q.
2. Learned counsel for the petitioner submits that contingent employees of the Municipality were in fact covered under the State Provident Fund Scheme under which coverage the other employees of the Municipalities were enrolled and continued. By an amendment of 2011, the EPF & MP Act was amended insofar as bringing in the contingent employees of the Municipality under the coverage of the said enactment. The petitioner Municipality since, had been paying contributions, under the PF Scheme of the State, a clarification was sought from the State Government. The State Government, by Ext.P4 dated 1.3.2013 clarified that the coverage of the contingent employees would be transferred to the EPF Organisation from the date of amendment and also directed the Municipalities to comply with such coverage and make contributions.
3. Petitioner, hence, immediately paid up the contributions indicated in Exts.P5 and P6. In such circumstances, there is no need for levy of interest under Section 7Q, is the contention of the petitioner. Learned counsel would take me through the provision under which interest has been claimed and contend that the words used would indicate that the interest can be levied only on “due amounts”, which dues have to be determined by an order under Section 7A. In the circumstance, there being no assessment/determination proceedings at all, it is the contention that the petitioner would not be liable to pay any interest under Section 7Q.
4. Standing counsel for the EPF Organisation, however, would rely on the decision in M/s.Arcot Textile Mills Ltd. v. Regional Provident Fund Commissioner (A.I.R. 2014 SC 295), wherein the provision under Section 7Q has been interpreted and Supreme Court found that the delay in payment would automatically attract Section 7Q and that there is also no provision for appeal which indicates that the levy is automatic.
5. Looking at Section 7A, it cannot be said that the amounts would become due only on the assessment order being passed. The contributions payable by an employer, with respect to an employee covered under EPF & MP Act would become due on the coverage and on the event occurring; of payment of salary to such employee. It is the duty of the employer to comply with the provisions of the Act and make the contribution.
6. Section 7A speaks of determination of money due from employers, only when a dispute arises as is indicated in Clause (a) of sub-section (1). In the instant case, the clarification sought from the State Government cannot be said to be a dispute which arises on the issue of contributions. It is not as if the employer had raised any such dispute before the authorities conferred with the power to adjudicate the same under EPF & MP Act. De hors any clarification issued by the State Government, the coverage made by the Central enactment would have to be complied with, by the employers, on such amendment being brought into by the EPF & MP Act.
7. The issue raised with respect to the levy of interest under section 7Q, going by the binding precedent of the Supreme Court, has to be answered against the petitioner. The Supreme Court clearly held that, even if the employer volunteers to pay the contributions after long delay, that again by itself will not confer any right as against levy of interest under Section 7Q. The only issue according to the standing counsel which could be agitated by way of an objection; is with respect to the computation of interest under Section 7Q and that does not arise in the present case. In such circumstance, the writ petition is devoid of any merit and it is dismissed. With respect to damages under Section 14B it is made clear that the proceedings will be stayed till the appeal is disposed of.
Writ petition is disposed off.
K. Vinod Chandran, Judge.
sl.