Madras HC: No relief to Gammon over EPFO’s recovery summons

The Madras High Court has refused to stay recovery proceedings initiated by the Employees Provident Fund Organisation (EPFO) against Gammon India Limited – the company handling Chennai Metro Rail projects.

Justice SM Subramaniam on disposing the plea moved by the Gammon assailing the summons issued by the regional commissioner, EPF, Chennai on March 11, 2015, in connection with the recovery proceedings said, “Constitutional courts cannot usurp the powers of the competent authorities in the absence of any legally acceptable reason, so as to paralyze the quasi-judicial functions of the competent authorities under the statute.” The petitioner had contended that as per the EPFscheme, contribution is liable to be paid only on basic pay, dearness allowance, cash value of food concessions and retaining allowances, if any. But the EPFO demanded that the contribution should be based on all the allowances paid by the company including, conveyance, special allowance, adhoc a l l o w a n c e , chilling allowance, stipend, LTA, medical, dress reimbursement, cold room shift allowance, attendance incentive and meals allowances.

However, the matter is now sub-judice before the Supreme Court, which has passed interim orders saying that the PF commissioner may proceed to make the assessment but not to raise any demand.

Justice Subramaniam on holding that the Supreme Court has not granted stay in respect of enquiry and that it is mandatory on the part of the petitioner to appear before the authorities and defend their cases, said, “Contrarily, they have moved this writ petition challenging the very notice issued by the competent authorities and therefore, this writ petition is not maintainable and should be rejected.”

“The statutory powers conferred under the Act cannot be taken away at the stage of conducting enquiry and in the event of preventing the competent authority from exercising such powers, the very purpose and object of the welfare legislation of the PF will be defeated,” the judge added.