The Hindu Business Line : Madurai HC stays order in non-payment of PF contribution case

THE Madurai Bench of the Madras High Court has granted interim stay of an order passed by the Assistant Provident Fund Commissioner, Tirunelveli, imposing a fine on a local firm for non-payment of contribution to the employees' provident fund.

The Sankar Nagar-based firm M/s ABCOY, in its petition under Section 226 of the Constitution, had challenged the order issued under Section 7A(2) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952.

According to the petitioner, the relevant section of the Act did not contemplate imposing a fine for non-payment of the contribution on behalf of the workers. Mr Justice S. Rajeswaran, who heard the counsel for the petitioner, ordered interim stay and issue of notice to the respondent.

The counsel for the petitioner, Mr Aravind Subramaniam, contended that the firm, since inception in 1966, had been regularly paying contributions to the PF. However, for the period July 2005 to October 2005, there was a slight delay in production of the records as they were with the auditor for purposes of preparing the income-tax return. Section 7A contemplated only calculation of the provident fund amount, but had no provision to levy a fine for non-production of records. The entire process was opposed to the principle of natural justice and no opportunity was given to the petitioner to explain the position.

The order dated December 9, 2005 issued by the respondent showed no application of mind, and the same had to therefore be quashed. There was no provision for appeal under the Act against the said order. The petitioner prayed for issue of an interim order staying the operation of the order pending disposal of the petition.