CGIT2 Delhi Order dated 17.09.2026 in EPF appeal no. D-2/12/2025 M/s. Shreya Construction vs APFC/RPFC Meerut on 17 September 2026

1. At the Ɵme of coverage (01/06/2013), the establishment provided a list of 20 employees, among whom 9 employees had wages of less than 6500, and all other employees had wages between 6500 and 15000. Therefore, all employees became coverable from 01/09/2014.

2. The establishment did not comply with the EPF Act iniƟally and did not file any ECRs unƟl April 2017. When the establishment finally started filing ECRs, it reported wages for only 9 employees for one month (not based on actual salaries), and from the subsequent month, ECRs were filed for only 1 employee. However, based on the records provided by the establishment, it is evident that ECRs should have been

filed for 9 employees unƟl 31/08/2014, and thereaŌer for all 20 employees.

3. This establishment is a wilful defaulter and is not properly complying with the EPF & MP Act. They are aƩempƟng to conceal relevant documents and are unwilling to provide required documents such as ESIC challans, Aadhar and PAN details of excluded employees, bank statements, TDS deducƟons from the salary of eligible employees, and work order/contract copies.

4. Total tentaƟve dues for period 06/2013 to 11/2017-

5. Period No of month Total eligible employees Total salary Total Dues

06/2013 to 08/2014

675000 172868 09/2014 to 03/2017

3782000 957895 Total Dues=1130763

Based on the above findings, I recommend that a new 7A inquiry should be iniƟated for this establishment from date of coverage, 06/2013 to 03/17 because establishment filed ECR first Ɵme in April 2017 for the period 06/2013 to 03/2017. Since upto this establishment was not complying with epf and mp act 1952 so we can consider list of employees provided at the Ɵme of coverage were working in this establishment Ɵll 03/2017.

--sd/— 31/07/24

Santosh Kumar Yadav

(Enforcement Officer)”

From the perusal of the above-menƟoned report, two reports both on the same dated, it appears, in the first report, a dues of rupees Rs. 11,30,763/- has been made out for the period of 06/2013 to 11/2017. The subject of the report dt 31/7/2024 is regarding extension of 7A period of Shreya construcƟon from coverage date. On the same day report on which this appeal has arisen, dues has been calculated to the amount of Rs. 28,98,672/-. In between, the appellant had deposited the amount of Rs. 1,02,645/-. Thus, the liability determined is Rs.27,96,226.

In Para-4 of Report dt 31.07.2024 at page 294 of the original record, it is stated that establishment had submiƩed documents such as balance sheet, income tax return, salary register and an incomplete form-11. In Para No.5 it has been menƟoned that the relevant documents were being withheld. Salary register does not show any deducƟon of ESIC contribuƟon for eligible employees and the employer has also not provided Aadhaar and PAN card details for excluded employees despite repeated reminders.

However, Santosh Kumar Yadav who has been called to explain the thing before this tribunal, has said, that he has not wriƩen any leƩer to the management asking the Aadhaar and PAN card details of the employee, nor he has summoned any person menƟoned in the wages sheet provided by the employer. What he has calculated that has been run on the original record on Pg-214 to 241. Page numbering has been given in the descending order. In Dec 2018 only two employees have been shown to have covered out of twenty-eight employees in the EPF Act and the contribuƟon has been paid accordingly, while the rest from Ser. No. 3 to Ser. No. 28 have been drawing more than Rs.15,000/- per month. Total wages paid has been calculated at Rs. 5,42,044/- same is in respect of January 2019, February 2019 and March 2019. Total wages have been taken of Rs.21,72,426/- (Rs. 5,42,044/- x 4) and the PF wages was determined as Rs.15,98,534/- taken as Rs.15,000/- limit per person and PF amount has been assessed as 3,99,634/-. The same calculaƟon has been made from 2019-2020, 2020-2021, 2021-2022 where the different figure has been taken as reproduced below:

Financial Year Eligible period in 7A inquiry Total Labour wages and salary period Total eligible salary for calculaƟon of PF Dues Total PF Dues months (December to March) 2172426 1598534 399634

1 year (April to March) 6884565 4979421 124485

1 year (April to March) 5289030 3850866 962717

4 months (April to July) 1386172 1165864 291466 Total PF Dues for above period(A)=2898672 Total DeposiƟon made for above period(B)=102646 So actual PF dues for above period (A-B) = 2796026

AŌer going through the Salary Sheet and wages register, this tribunal failed to understand how the assessing officer had relied upon the version of the Inquiry officer without going through the record. He had reiterated the above-said report in verbaƟm in its order dated 24.02.2025. Pg No.2 of the order, at the top, the report of Santosh Kumar Yadav, Area Enforcement Officer had been verbaƟm reproduced. No judicial mind has ever been applied to peruse the report, as to how the excluded employee as claimed by the employer has come into the net of EPF & MP Act.

EPF & MP Act (Employees' Provident Funds and Miscellaneous Provisions Act), 1952 is a social welfare legislaƟon, but social welfare does not mean that every employee is covered. Parliament itself has carved out the category of “excluded employee”, under Para 2(f) of the EPF Scheme, 1952. Paragraph 2 (f) defined excluded employee as:

(i) an employee who, having been a member of the Fund, withdrew the full amount of his accumulaƟons in the Fund under clause (a) or (c) of sub-paragraph (1) of paragraph 69;

(ii) an employee whose pay at the Ɵme he is otherwise enƟtled to become a member of the Fund, exceeds fiŌeen thousand rupees per month;

(iii) an apprenƟce under ApprenƟces Act, 1961.

AŌer 01.09.2014 amendment, an employee who has aƩained the age of of 58 years and is drawing pension is also excluded under paragraph 2 (f)(iv).

Hon’ble Supreme Court has clarified this in a catena of judgments. In Regional Provident Fund Commissioner v. M/s Vivekananda Vidya Mandir and Others, (2020) 17 SCC 643, and Sunil Kumar v. RPFC, (2022), 15 SCC 86, it was held that an employee who was once a member of Provident Fund conƟnued to be a member even if his wages crosses Rs. 15,000/-. The ceiling is applicable only at the Ɵme of joining. Therefore, the crucial test is what was the salary at the Ɵme of joining and was he already a Provident Fund member? This can only be verified through Form 11, (UAN history of the EPFO portal).

In the present case, Appellant claimed that out of twenty-eight employees from Dec 2018 to July 2021, only two were eligible and twenty-six were excluded because they were drawing more than Rs.15,000/- per month at the Ɵme of joining and had never been a PF member.

Though the burden is upon the employer to prove that the employees were excluded employee, but the wages sheet produced by the employer in regard to the twenty-six employees shiŌ the burden upon the respondent to counter the version if he disbelieves. There is no UAN number produced by the respondent to show that twenty-six employees have ever been the member of the Provident Fund. The plea that the establishment has started deposiƟng the Provident Fund aŌer four years does not aƩract any penalty of showing them as member of the Provident Fund. If the respondent has any doubt, then he can demand the parƟculars of the employee and inquire them as to how much he has received the salary or whether they have been enrolled previously as member of the fund. But that has not been done so. Santosh Kumar Yadav who had appeared had categorically stated that he has not sent any noƟce to the establishment direcƟng him to give the PAN and Aadhaar of the employee showing them as excluded employee.

Circumstances above, clearly demonstrate that the respondent has not applied its mind while determining the dues of excluded employee treaƟng them as employee covered under the PF Act though they were drawing more than Rs. 15,000 per month. The order passed by the respondent being bereŌ of any merit is set aside. The appeal is allowed. The amount deposited by the appellant worth Rs. 5,00,000/- by way of FDR, in compliance of the order passed under secƟon 7O of the Act is returned to the appellant along with accrued interest. The office is directed to return the FDR to the appellant along with an endorsement cerƟficate. The appeal file is consigned to record room. The office is directed to return the record of the Respondent forthwith.

Date: 17.09.2026

ATUL KUMAR GARG

(Presiding Officer) CGIT-Cum- Labour Court-II