1 2025:CGHC:58743 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPL No. 6867 of 2010 1 - M/s Surya Products Aged About 36 Years Through- Its Proprietor Shri Usmath Lal Tejwan, Shed No. 4, Industrial Area, Borai, Distt. Durg C.G. ... Petitioner(s) versus 1 - Employees Provident Fund Appellate Tribunal, New Delhi, Scope Minar, Core-II, 4th Floor, Laxmi Nagar, District Centre, Laxmi Nagar, New Delhi 1100 92. 2. Regional Provident Fund Commissioner, Office of Employees Provident Fund Organization, Regional Office, Indira Gandhi Vyavasaik Parisar, Pandri, Raipur (Chhattisgarh) ... Respondent(s) For Petitioner(s) : Mr. Abhishek Sharma, Advocate For Respondent No. 2 : Mr. Sunil Pillai, Advocate Hon'ble Shri Justice Sachin Singh Rajput Order On Board 03.12.2025 1. The petitioner has filed this writ petition seeking for the following relief(s); “10.1) That order dated 1.10.2010 (Annexure P/1) passed by Ld. Employees Provident Fund Appellate Tribunal New Delhi in Appeal No. ATA 680(8)/2004 be Kindly quashed. 10.2) That order dated 9.7.2004 (Annexure P/2) passed by respondent No. 2 Regional Provident Fund Commissioner Raipur be kindly quashed. 10.3) Recovery notice issued by the recovery officer dated 25/10/10 (Annexure P/13) for recovery of Rs 4,21,888 =00 along with interest amounting to Rs. 2,86884 which comes to Rs. 7,08772-00 be kindly quashed. HIFZURRAHMAN ANSARI Digitally signed by HIFZURRAHMAN ANSARI Date: 2025.12.08 17:08:37 +0530 2 10.4) This Hon'ble Court may kindly be pleased to call for the entire records pertaining to the case of the petitioner from the possession of the respondents for its kind perusal. 10.5) Any other relief or relief(s) which this Hon'ble Court may think proper in view of the facts and circumstances of the case may also kindly be granted.” 2. Learned counsel for the petitioner submits that the petitioner is a proprietorship establishment engaged in the manufacturing of biscuits and bread. The Enforcement Officer of respondent No. 2 inspected the petitioner’s establishment on 03.02.1999 and alleged that 22 employees were working therein. A report was subsequently prepared indicating that 6 regular employees and 16 daily-wage employees were engaged in the establishment. Thereafter, respondent No. 2 initiated proceedings under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short, "the Act of 1952") for the period from February 1998 to January 2004. On the dates fixed by respondent No. 2, the petitioner could not appear, and consequently an ex parte assessment order dated 01.07.2004 was passed. In the said order, respondent No. 2 treated the alleged 16 casual employees as continuously working throughout the entire period from February 1998 to January 2004 and assessed dues amounting to Rs. 8,43,777/- without any supporting documentary evidence. The authority further assumed that the average daily earning of each employee was Rs. 80/- and that the total number of employees was 22 for the entire assessment period. Based on this assessment, demand notices were issued to the petitioner. 3. Aggrieved, the petitioner preferred an appeal before the Employees’ Provident Fund Appellate Tribunal, New Delhi, which, vide order dated 01.10.2010, dismissed the appeal. Hence, the present writ petition has been filed assailing the order dated 01.10.2010, the assessment order dated 12.07.2004, and the consequential demand notices. Counsel for the petitioner contends that the mandatory procedure prescribed under Section 7A of the Act of 1952 has not been followed. He submits that the conclusion regarding the engagement of 16 casual workers is based solely on 3 assumptions and presumptions. No identification, particulars, or details of such alleged workers were ever recorded by respondent No. 2. Section 7A contemplates a proper inquiry after ascertaining the identity and particulars of the employees, and in the absence of such exercise the entire inquiry stands vitiated. Accordingly, the orders dated 25.10.2010 (Annexures P/13), 09.07.2004 (Annexure P/2) and 01.10.2010 (Annexure P/1) deserve to be set aside. Reliance is placed on the judgment of this Court in WPL No. 5521/2011, Gopi Talkies v. Employees’ Provident Fund Appellate Tribunal & Others, decided on 01.02.2022. 4. Per contra, learned counsel for respondent No. 2 submits that the inquiry was duly conducted and the inspection report (Annexure P/3) reflects that 6 regular employees and 16 daily-wage employees were found working in the petitioner’s establishment. It is further contended that the authorized representative of the petitioner has signed the inspection report, and therefore the petitioner cannot dispute the finding regarding the engagement of 16 daily-wage workers. The assessment was made on the basis of minimum wages applicable, and it was the statutory duty of the petitioner to file returns under the EPF Scheme, which it failed to do. It is submitted that despite repeated notices issued after the inspection, the petitioner failed to furnish any documents, compelling respondent No. 2 to pass the order contained in Annexure P/2. The Appellate Tribunal has upheld the order and no irregularity or illegality is found therein. It is argued that no distinction can be drawn between regular and casual workers for the purpose of EPF liability. Reliance is placed on the judgment of the Hon’ble Supreme Court in ESIC v. Harrison Malayalam Pvt. Ltd., AIR 1993 SC 2655. 5. I have heard learned counsel for the parties and carefully perused the material placed on record. 6. It is not disputed that the petitioner runs the establishment in question and that the Enforcement Officer conducted an inspection on 03.02.1998. Annexure P/3 is the inspection report prepared by respondent No. 2 on 18.05.1998, which bears the signature of the proprietor beneath that of the Enforcement Officer. The report 4 merely mentions the presence of six monthly-rated and sixteen daily-wage employees. However, it does not contain any particulars such as names, ages, designations, nature of duties, period of engagement, or any other material particulars of either category of workers. 7. Although several notices were thereafter issued to the petitioner, which admittedly remained unanswered, the assessment order (Annexure P/2) came to be passed primarily on the basis of an inspection report lacking essential particulars. The appeal against the said order was also dismissed. The contention of the petitioner is that the very foundation of the assessment i.e., the inquiry was not conducted in accordance with Section 7A of the Act of 1952. Section 7(A) of the EPF & MP Act, 1952 extracted below: [7A. Determination of moneys due from employers.— (1) The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner, or any Assistant Provident Fund Commissioner may, by order,— (a) in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and (b) determine the amount due from any employer under any provision of this Act, the Scheme or the 3[Pension] Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.] (2) The officer conducting the inquiry under sub-section (1) shall, for the purposes of such inquiry, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the following matters, namely :— (a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavit; (d) issuing commissions for the examination of witnesses, and any such inquiry shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860). (3) No order 4[***] shall be made under sub-section (1), unless 5[the employer concerned] is given a reasonable opportunity of representing his case. 6[(3A) Where the employer, employee or any other person required to attend the inquiry under sub-section (1) fails to attend such inquiry without assigning any valid reason or fails to produce any document or to file any report or return when called upon to do so, the officer conducting the inquiry may decide the applicability of the Act or determine the amount due from any employer, as the case may be, on the basis of the evidence adduced during such inquiry and other documents 5 available on record.] 7[(4) Where an order under sub-section (1) is passed against an employer ex parte, he may, within three months from the date of communication of such order, apply to the officer for setting aside such order and if he satisfies the officer that the show-cause notice was not duly served or that he was prevented by any sufficient cause from appearing when the inquiry was held, the officer shall make an order setting aside his earlier order and shall appoint a date for proceeding with the inquiry: Provided that no such order shall be set aside merely on the ground that there has been an irregularity in the service of the show-cause notice if the officer is satisfied that the employer had notice of the date of hearing and had sufficient time to appear before the officer. Explanation.—Where an appeal has been preferred under this Act against an order passed ex parte and such appeal has been disposed of otherwise than on the ground that the appellant has withdrawn the appeal, no application shall lie under this sub- section for setting aside the ex parte order. (5) No order passed under this section shall be set aside on any application under sub-section (4) unless notice thereof has been served on the opposite party.] 8. From perusal of the order passed in Section 7-A of the EPF & MP Act, 1952, it does not reflect the particulars of the employee, earning of the employee or details of the employee, which are required for determination of the EPF dues. The Hon'ble Supreme Court in the matter of Food Corporation of India v. Union of India, reported in (1990) 1 Supreme Court Cases 68 has insisted for identification of the beneficiaries, relevant portion thereof reads as under:- “It is of importance to remember that the Commissioner while conducting an inquiry under section (7A) has the same powers as are vested in a Court under the Code of Civil Procedure for trying a suit. The section reads as follows: "S. 7(A) Determination of Moneys due from Employer-- (1) The Central Provident Fund Commissioner, any Deputy Provident Commissioner or any Regional Provident Fund Commissioner may, by order determine the amount due from any em- ployer under any provision of this Act (the scheme or the Family Pension Scheme or the Insurance Scheme as the case may be) and for this purpose may conduct such inquiry as he may deem necessary. (2) The Officer conducting the inquiry under sub-section (1) shall, for the purposes of such inquiry, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908, for trying a suit in respect of the following matters, namely: (a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents; 6 (c) receiving evidence on affidavit; (d) issuing commissions for the examination of witnesses. and any such inquiry shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228, and for the purpose of Section 196 of the Indian Penal Code." It will be seen from the above provisions that the Commissioner is authorised to 'enforce attendance in person and also to examine any person on oath. He has the power requiring the discovery and production of documents. This power was given to the Commissioner to decide not abstract questions of law, but only to determine actual concrete differences in payment of contribution and other dues by identifying the workmen. The Commissioner should exercise all his powers to collect all evidence and collate all material before coming to proper conclusion. That is the legal duty of the Commissioner. It would be failure to exercise the jurisdiction particularly when a party to the proceedings requests for summoning evidence from a particular person. 9. Again the Supreme Court in the matter of Himachal Pradesh Forest Corporation v. Regional Provident Fund Commissioner reported in (2008) 5 Supreme Court Cases 756 has held as under :- “5.............We accordingly dismiss the appeals but reiterate the recommendation that the amounts due from the Corporation will be determined only with respect to those employees who are identifiable and whose entitlement can be proved on the evidence and that in the event the record is not available with the Corporation (at this belated stage), it would not be obliged to explain its loss, or that any adverse inference be drawn on this score. With this very small modification, we dismiss the appeals.” 10. This Court relying upon the above two judgment of the Honble Supreme Court in case of Gopi Talkies (supra) held that in para No. 13 held as under: “Since the assessment order is silent with regard to identification of the employee, therefore, the order is contrary to the well settled position that identification of the beneficiaries is very much required for assessing the dues as it has to be credited to individual beneficiary who is a member of EPF Act, as such, order under Section 7A of the EPF & MP Act, 1952 passed on 27.10.2006 is liable to be and is hereby set aside.” 11. In the considered opinion of this Court, the facts of the present case are squarely covered by the judgment of this Court in Gopi Talkies (supra). The Appellate Tribunal has not examined the issue from the correct perspective and has failed to appreciate that, in the absence of any identification or particulars of the alleged employees, no lawful 7 determination of liability under Section 7A could have been made. Unless the details of the employees whether regular or daily-wage are available on record, the competent authority cannot proceed to determine dues. Had the inquiry report contained such particulars, the situation would have been different. 12. In view of the above and in light of the law laid down by this Court as well as the Hon’ble Supreme Court, the impugned orders (Annexures P/1, P/2 and P/13) cannot withstand judicial scrutiny and are accordingly set aside. 13. Respondent No. 2, however, shall be at liberty to proceed afresh in accordance with law. The petitioner is directed to appear before respondent No. 2 on 05.02.2026, whereafter respondent No. 2 shall proceed in accordance with law. 14. At this stage, learned counsel for the petitioner submits that at the time of filing the appeal before the Appellate Tribunal, the petitioner had deposited 50% of the assessed amount, and pursuant to the interim order of this Court, an additional 25% amount was deposited, which may now be directed to be refunded. This submission is opposed by learned counsel for respondent No. 2. 15. Be that as it may, the disbursal of the amount already deposited shall depend upon the outcome of the fresh inquiry to be conducted by respondent No. 2. It is expected that respondent No. 2 shall conclude the proceedings expeditiously, preferably within a period of six months from the date of appearance of the petitioner. It is made clear that if the petitioner fails to appear on the stipulated date, respondent No. 2 shall be at liberty to either fix a further date or proceed ex parte. The amount deposited pursuant to the appellate proceedings (50%) and the interim order of this Court (additional 25%), if any, shall be refunded or adjusted depending upon the final outcome of the inquiry conducted in accordance with law. 16. Accordingly, the writ petition is disposed of. Sd/- (Sachin Singh Rajput) H.Ansari Judge