1 29.09.2026 Item No.12 and 13 Court No. 30 Aloke WPA 23880 of 2012 Star Security & Detective Agency & Anr. -vs- Union of India & Ors. with WPA 18309 of 2012 Star Security & Detective Agency & Anr. -vs- Union of India & Ors. Mr. Soumya Majumder, ld. Sr. Adv. Mr. Gour Baran Sau … for the Petitioner Mr. Alok Kr. Ghosh Mr. Dilip Kr. Chatterjee … for the KMC Mr. Anil Kr. Gupta … for the P.F. Authorities 1. The writ application has been preferred praying for direction upon the P.F. Authorities to recover t he dues as claimed from the Kolkata Municipal Corporation in view of their Memo dated 4th August, 2003. 2. The High Court in WPA 13283 (W) of 2003 passed an order dated 13th June, 2012. In compliance with the said direction of the High Court, the Municipal Commissioner vide an order dated 01.10.2012 decided the issue and came to the conclusion as to 2 the prayer of the petitioners herein, who had requested for granting of amounts from the KMC under the head of P.F. and ESI, as per memo dated 04.08.2003, issued by the Municipal Secretary, and such claim being pending for consideration by the KMC. 3. The findings of the Municipal Commissioner is as follows : “Considered memo dated 04th August, 2003. The then Municipal Secretary of KMC had recorded that the matter of covering of statutory obligations like ESI, PF etc. was under due consideration. Thereafter a memo dated 03rd February, 2005 was issued by the then Municipal Commissioner being Circular No. 38 of 2004-2005. The then Municipal Authority had decided that the EPF and the ESI amounts be shown in the wage structure of the security guards deployed through the agencies as also the Service Tax as applicable and the wage bills are generated by the Agencies accordingly. The subsequent documents also did not include any clause whereby the KMC was under contractual obligation to include payment/deposit of ESI and PF 3 contributions of the persons employed by the petitioner. On the basis of the above, after very careful examination and application of the mind, I find no contractual obligation of the KMC to include the ESI and the PF contributions of the employees engaged by the petitioner. There is no question of raising the rates. The KMC is under no obligation to include EPF and ESI contribution for the security staff employed by the Star Security & Detective Agency from any earlier date. As such the prayer of the petitioner viz. Star Security & Detective Agency, is hereby rejected and disposed of.” 4. It appears from the said order that admittedly vide the memo dated 03.02.2005, which was issued by the then Municipal Commissioner being Circular no. 38 dated 2004-2005, the Authority had decided that P.F. and ESI amounts should be shown in the wage structure of the Security Guards deployed through the agencies along with service tax applicable and the wage bills are generated by the agencies accordingly. 4 5. Change of a Municipal Commissioner and an order dated 01.10.2012 was passed, with the view, that subsequent documents did not contain any such clause and, as such, the KMC was under no obligation to include such benefits in respect of the employees engaged through the agencies. 6. It appears that the Municipal Commissioner who is of the same rank as the earlier Municipal Commissioner has totally disregarded a circular being no. 38 dated 2004-2005 and a memo dated 3rd February, 2005. 7. Considering that a person of the same rank cannot set aside/ignore an order passed by an officer of the same rank, the said order dated 01.10.2012 is also bad in law in view of the fact that, admittedly the Kolkata Municipal Corporation is the principal employer and being the principal employer is bound under the law to provide proper/fair wages and benefits to the employees of the agencies engaged. 8. Being a statutory authority herein is thus obligated to ensure that the employees engaged through the agencies to carry out the work of the principal employer being the KMC herein that no law is flouted by violation of rules and regulations and that provisions of law is duly complied with. 9. In course of hearing Mr. Majumder, learned senior counsel appearing for the 5 petitioners has placed the document dated 3rd February, 2005 being Circular No. 38 of 2004-2005 wherein it appears that Kolkata Municipal Corporation has approved contributions towards P.F. and E.S.I. in respect of the employees of the agencies. The said Circular is in force till date and as such another Municipal Commissioner’s order dated 01.10.2012 disregarding the order dated 3rd February, 2005 and the Circular being no. 38 of 2004-2005 is erroneous and thus bad in law. 10. Parties have filed their respective written notes and it is the case of the petitioners that since the issuance of the Circular being no. 38 of 2004-2005, the petitioners are being paid towards wages including contributions towards P.F. and E.S.I. by the KMC. 11. The petitioners’ case is that the respondent/EPF Authorities have initiated a proceeding under Section 7A of the EPF Act claiming the dues for the period from 2000 to 2004, which it is submitted, the EPF Authorities have to proceed against the principal employer. 12. The Kolkata Municipal Corporation who admittedly, since the execution of the first agreement in 1998 was not paying the contributions is/was in default it is not the petitioner herein. As such the liabilities 6 lies with the principal employer, the KMC and not the petitioner. 13. It is further submitted that Circular no. 38 of 2004-2005 supports the said contention of the petitioners that since then the KMC is making payments towards the contribution in respect of the employees of the agencies towards P.F. and ESI. 14. It is thus submitted that as the said payment is being made from 2004-2005, the principal employer is also liable for the period from 2000-2004 as demanded by the respondent/EPF Authorities. 15. Considering the said facts, this Court is of the view that extending the benefits of P.F. and E.S.I. to the employees whether directly engaged or through agencies/contractors is extending benefits under welfare Legislations and it is mandatory for any establishment, which qualifies to be covered under the said Acts to comply with the said provisions of the Acts, being duty bound. 16. In the present case, the petitioners’ case is that as the contribution towards benefits was not paid by the principal employer, the KMC, the petitioners were not in a position to make such payment/contributions. 17. Accordingly, this Court finds that prima facie it is the principal employer/KMC who is legally bound to make such contribution 7 to the contractor who in turn shall extend the benefit to its employees. 18. Thus, the impugned proceedings against the petitioners and the orders passed therein by the respondents/P.F. Authorities/Recovery Officer being not in accordance with law are quashed and set aside. 19. The bank attachments, if any, are hereby revoked. 20. The Provident Fund Authorities are at liberty to proceed against the principal employer/KMC in accordance with law who is bound by the impugned order dated 4th August, 2003 to make payment towards the benefits to be extended to the said employees of the contractors engaged by them. 21. The writ application stands disposed of. 22. Connected application, if any, stands disposed of. 23. Urgent photostat certified copy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (Shampa Dutt (Paul), J.)