Recovery of Money Under Employee Provident Fund

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 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 1960.

(3) No order shall be made under sub-section 1, unless the employer concerned is given a reasonable opportunity of representing his case.

(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 available on record.

(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.

7B. Review of orders passed under Section 7A.

(1) Any person aggrieved by an order made under sub-section 1 of section 7A, but from which no appeal has been preferred under this Act, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made, or on account of some mistake or error apparent on the face of the record or for any other sufficient reason, desires to obtain a review of such order may apply for a review of that order to the officer who passed the order:

Provided that such officer may also on his own motion review his order if he is satisfied that it is necessary so to do on any such ground.

(2) Every application for review under sub-section 1 shall be filed in such form and manner and within such time as may be specified in the Scheme.

(3) Where  it appears to the officer receiving an application  for review that there is no sufficient ground for a review, he shall reject the application.

(4) Where the officer is of opinion that the application for review should be granted, be shall grant the same:

Provided that, -

(a) No such application shall be granted without previous notice to all the parties before him to enable  them to appear and be heard in support of the order in respect of which a review is applied for, and

(b) No such application shall be granted on the ground of discovery of new matter or evidence which the applicant alleges was not within his knowledge or could not be produced by him when the order was made, without proof of such allegation.

(5) No appeal shall lie against the order of the officer rejecting an application for review, but an appeal  under this Act shall lie against an order passed under review as if the order passed under review were the original order passed by him under section 7A.

7C.   Determination of escaped amount.

Where an order determining the amount due from an employer under section 7A or section 7B has been passed and if the officer who passed the orders –

(a) Has reason to believe that by reason of the omission or failure on the part of the employer to make any document or report available, or to disclose, fully and truly, all material facts necessary for determining the correct amount due from the employer, any amount so due from such employer for any period has escaped his notice;

(b) Has, in consequence of information in his possession, reason to believe that any amount to be determined under section 7A  or section 7B has escaped from his determination for any period notwithstanding that there has been no omission or failure as mentioned in clause a on the part of the employer, he may, within a period of five years from the date of communication of the order passed under section 7A or section 7B, re-open the case and pass appropriate orders re-determining the amount due from the employer in accordance with the provisions  of this Act:

Provided that no order re-determining the amount due from the employer shall be passed under this section unless the employer is given a reasonable  opportunity of representing his case.

Employees provident funds appellate tribunal (sec.7-d to7-p)

Constitution of appellate tribunal(sec.7d)

The central govt. may , by notification of official gazzete, constitute one or more appellete tribunal to be known as the employes provident fund appellate tribunal. Every tribunal shall have jurisdiction in respect of establishment situated in such area as may be specified in the notification constituting the tribunal.

Membership:

A tribunal shall consist of 1 person only to be appointed by the central govt.

Term of office (sec. 7-e):

The presiding officer of a tribunal shall hold office for a term of years from the date on which he enters upon his office or until he attains the age of 62 wichever is earliar.

Employment Appeal Tribunal

The Employment Appeal Tribunal´s main purpose is to consider appeals from decisions made by Employment Tribunals.

An appeal must be on a point of law, i.e. it must identify flaws in the legal reasoning of the original decision. The Employment Appeal Tribunal will not normally re–examine issues of fact.

Orders of tribunal (sec.7-L)

A tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against. The tribunal may also refer the case back to the authority which passed such order with such directions as the tribunal may think fit, for a fresh adjudication or order, as the case may be, after taking additional evidence, if necessary(sec.7-L){1}.

Rectification of mistake

The tribunal may, at any time within 5 years from the date of its order, with a view to rectifying any mistake apparent from the record, amend any order passed by under sec.7-L(1). Further it shall make such amendment in the order if the mistake is brought to its notice by the parties to the appeal {sec.7-L92)}.

Opportunity of hearing to employer :

If the amendment of an order has the effect of enhancing the amount due from, or otherwise increasing the liability of, the employer, it shall not be made under sec.7-L(2), unless the tribunal has given notice to the employer of its intention to do so and has allowed him a reasonable opportunity of being heard[provision to sec. 7-L(2).]

Order of tribunal not to be questioned:

Any order made by the tribunal finally disposing of an appeal shall not be questioned in any court of law{sec. 7-L(3)}

Finalty of orders constituting a tribunal (sec.7-N):

No order of the central govt. appointing any person as the presiding officer shall be called in questioned in any manner, and no act or proceeding before a tribunal shall be called in question in any manner on the ground merely of any defect in the constitution of such tribunal.

Deposit of amount due, on filling appeal (sec.7-O):

No appeal by the employer shall be entertained by a tribunal unless he has deposited with it 75% of the amt. due from him as determined by an officer reffered to in sec. 7A. however, the tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section.

Transfer of certain applications to tribunals (sec.7P):

All application which are pending to the central govt. under sec. 19A, before its repeal, shall stands to transferred to a tribunal exercising jurisdiction in respect of establishment in relation to which such application had has been made as if such application were appeals preffered to the tribunal.

Interest payable by the employer (sec. 7Q):

The employer shall liable to pay simple interest at the rate of 12% per annum or at a such higher rate as may be specified in the employees provident fund scheme on any amt. due from him under this act from date on which the amt. is become so due to till the date of its actual payment. The higher rate of interest charged by any scheduled bank.

8. Mode of recovery of moneys due from employers–

(a) From the employer in relation to an establishment to which any Scheme or the Insurance Scheme applies in respect of any contribution payable to the Fund or, as the case may be, the Insurance Fund, damages recoverable under section 14B, accumulations required to be transferred under sub-section 2  of section 15 or under sub-section 5 of section 17 or any charges payable by him under any other provision of this Act or of any provision of the Scheme or the Insurance Scheme; or

(b) From the employer in relation to an exempted establishment in respect of any damages recoverable under section 14B or any charges payable by him the appropriate Government under any provision of this Act or under any of the conditions specified under section 17 or in respect of the contribution payable by him towards the Pension Scheme under the said section 17, may, if the amount is in arrear, be recovered in the manner specified in section 8B to 8G.

8A. Recovery of moneys by employers and contractors.

(1)  The amount of contribution that is to say, the employer’s contribution as well as the employee’s contribution in pursuance of any Scheme and the employer’s contribution in pursuance of the Insurance Scheme and any charges for meeting the cost of administering the Fund paid or payable by an employer in respect of an employee employed by or through a contractor may be recovered by such employer from the contractor, either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

(2) A contractor from whom the amounts mentioned in sub-section 1 may be recovered in respect of any employee employed by or through him, may recover from such employee the employee’s contribution under any Scheme  by deduction from the basic wages, dearness allowance and retaining allowance if any payable to such employee.

(3) Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the employer’s contribution or the charges referred to in sub-section 1 from the basic wages, dearness allowance, and retaining allowance if any payable to an employee employed by or through him or otherwise to recover such contribution or charges from such employee.

Explanation. – In this section, the expressions “dearness allowance" and “retaining allowance" shall have the same meanings as in section 6.

8B. Issue of certificate to the Recovery Officer.

(1) Where  any amount is in arrear under section8, the authorised officer may issue, to the Recovery Officer, a certificate under his signature specifying the amount of arrears and the Recovery Officer, on receipt of such certificate, shall proceed to recover the amount specified therein from the establishment or, as the case may be, the employer by one or more of the modes mentioned below:-

(a) Attachment and sale of the movable or immovable property of the establishment or, as the case may be, the employer;

(b) Arrest of the employer and his detention in prison;

(c) Appointing a receiver for the management of the movable or immovable properties of the establishment or, as the case may be, the employer:

Provided that the attachment and sale of any property under this section shall first be effected against the properties of the establishment and where such attachment and sale is insufficient for recovery the whole of the amount of arrears specified in the certificate, the Recovery Officer may take such proceedings against the property of the employer for recovery of the whole or any part of such arrears.

(2) The authorised officer may issue a certificate under sub-section 1, notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.

8C.  Recovery officer to whom certificate is to be forwarded.

(1)  The authorised officer may forward the certificate referred to in section 8B to the Recovery Officer within whose jurisdiction the employer –

(a) Carries on his business or profession or within whose jurisdiction the principal place of his establishment is situated; or

(b) Resides or any movable or immovable property of the establishment or the employer is situated.

(2) Where an establishment or the employer has property within the jurisdiction of more than one Recovery Officers and the  Recovery Officer to whom a certificate is sent by the authorised officer -

(a) Is not able to recover the entire amount by the sale of the property movable or immovable, within his jurisdiction; or

(b) Is of the opinion that, for the purpose of expediting or securing the recovery of the whole or any part of the amount, it is necessary so to do, he may send the certificate or, where only a part of the amount is to be recovered, a copy of the certificate certified in the prescribed manner and specifying the amount to be recovered to the Recovery Officer within whose jurisdiction the establishment or the employer has property or the employer resides, and thereupon that Recovery Officer shall also proceed to recover the amount due under this section as if the certificate or the copy thereof had been the certificate sent to him by the authorised officer.

8D. Validity of certificate, and amendment thereof.

(1) When the authorised officer issues a certificate to a Recovery Officer under section 8B, it shall not be open to the employer to dispute before the Recovery Officer the correctness of the amount, and no objection to the certificate on any other ground shall also be entertained by the Recovery Officer.  

(2) Notwithstanding the issue of  a certificate to a Recovery Officer, the authorised officer shall  have power to withdraw the certificate  or correct any clerical or arithmetical mistake in the certificate by sending an intimation to the Recovery Officer.

(3) The authorised officer shall intimate to the Recovery Officer any orders  withdrawing or canceling a certificate or any correction made by him under sub-section 2 or any amendment made under sub-section 4 of section 8E.

8E. Stay of proceedings under certificate and amendment or withdrawal thereof.

(1) Notwithstanding that a certificate has been  issued to the Recovery Officer  for the recovery of any amount, the authorised officer may grant time for the payment of the amount, and thereupon the Recovery Officer shall stay the proceedings until the expiry of the time so granted.

(2) Where a certificate for the recovery of amount has been issued, the authorised officer shall keep the Recovery Officer informed of any amount paid or time granted for payment, subsequent to the issue of such certificate.

(3) Where the order giving rise to a demand of amount for which  a certificate  for recovery has been issued has been modified in appeal or other proceeding under this Act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of further proceeding under this Act, the authorised officer shall stay the recovery of such part of the amount of the certificate  as pertains to the said reduction for the period for which the appeal or other proceeding remains pending.

(4) Where a certificate for the recovery of amount has been issued and subsequently the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act, the authorised officer shall, when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate or withdraw it, as the case may be.

8F. Other modes of recovery.

(1) Notwithstanding the issue of a certificate to the Recovery Officer under section 8B, the Central Provident Fund Commissioner   or any other officer authorised by the Central Board may recover the amount by any one or more of the modes provided in this section.

(2) If any amount is due from any person to any employer who is in arrears, the Central Provident Fund Commissioner  or any  other officer authorised by the Central Board in this behalf  may require such person to deduct from the said amount the arrears due from such employer under  this Act, and such person shall comply with any such requisition and shall pay the sum so deducted to the credit of the Central Provident Fund Commissioner or the officer so authorised, as the case may be:

Provided  that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908).

(3)  

(i) The Central Provident Fund Commissioner or any other officer authorised by the Central Board  in  this behalf may, at any time or from time to time, by notice in writing, require any person from whom money is due or may become due to the employer or, as the case may be, the establishment or any person who holds  or may subsequently hold money for or on account of the employer or as the case may be, the establishment, to pay to the Central Provident Fund Commissioner either  forthwith upon the money becoming  due or being held or at or within the time specified in the notice not being before the money becomes due or is held so much of the money as is sufficient to pay the amount due from the employer in respect of arrears or the whole of the money when it is equal to or less than that amount.

(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the employer jointly with any other person and for the purposes of this sub-section, the shares of the joint holders in such account shall be presumed, until the contrary is proved, to be equal.

(iii) A copy of the notice shall be forwarded to the employer at his last address known to the Central Provident Fund Commissioner or as the case may be, the officer so authorised and in the case of a joint account to all the joint holders at their last addresses known to the Central Provident Fund Commissioner or the officer so authorised.

(iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, bank or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made notwithstanding any rule, practice or requirement to the contrary.

(v) Any claim respecting any property in relation to which a notice under  this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.

(vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the employer or that he does not hold any money for or on account of the employer, then nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Central Provident Fund Commissioner  or the officer so authorised  to extent of his own liability to the employer on the date of the notice, or to the extent of the employer’s liability for any sum due under this Act, whichever is less.

(vii) The Central Provident Fund Commissioner or the officer so authorised may, at any time or from time to time, amend or revoke any notice issued  under this sub-section or extend the time for making any payment in pursuance of such notice.

(viii) The Central Provident Fund Commissioner or the officer so authorised shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the employer to the extent of the amount so paid.

(ix) Any person discharging any liability to the employer after the receipt of a notice under this sub-section shall be personally liable to the Central Provident Fund Commissioner  or the officer so authorised to the extent of his own liability to the employer so discharged or  to the extent of the employer’s liability for any sum due under this Act, whichever is less.

(x) If the person  to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Central Provident Fund Commissioner or the officer so authorised he shall  be deemed to be an employer in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear due from  him, in the manner  provided in sections 8B to 8E and the notice shall have the same effect as an attachment of a debt by the Recovery Officer in exercise of his powers under section 8B.

(4) The Central Provident Fund Commissioner or the officer authorised by the Central Board in this behalf may apply to the court in whose custody there is money belonging to the employer for payment to him of the entire  amount of such money, or if it is more than the amount due, an amount sufficient to discharge the amount due.

 (5) The Central Provident Fund Commissioner or any officer not below the rank of Assistant Provident Fund Commissioner  may, if so authorised by the Central Government  by general or special order, recover any arrears of amount due from an employer or, as the case may be, from the establishment by distraint and sale of his or its movable property in the manner laid down in the  Third Schedule  to the Income-Tax Act, 1961 (43 of 1961).

Recovery of money by employers and contractors(sec.8-A)

An employer may recover from contractor the amount of contribution ( that is to say, the employers contribution as well as the employees contribution in pursuance of any of employees provident fund scheme and the employers contribution in pursuance of the employees deposit linked insurance scheme) and any charges for meeting the cost of administering the fund paid or payble by him in respect of an employee employed by or through the contractor. He may recover the amount either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

A contractor from whom the amt. mentioned in sec. 8-A(1) may be recovered in respect of any employee or employed by him, may recover from such employee the employees contribution by deduction from the basic wages, dearness allowance and retaining allowance (if any), payable such employee {sec. 8-A(2)}. And notwithstandingany contract to the contrary, the contractor shall not be entitled to deduct the employers contribution or charge reffered to in sec. 8-A(1) from the basic wages, dearness allowance and retaining allowance (if any) payable to an employee employed by or through him or otherwise to recover such contribution or charges from such employee{sec. 8A(3)}.

 Recovery of bonus due from an employer.

Recovery of bonus due from an employer.- Where any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement, the employee himself or any other person authorised by him in writing in this behalf, or in the case of the death of the employee, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government or such authority as the appropriate Government may specify in this behalf is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue: Provided that every such application shall be made within one year from the date on which the money became due to the employee from the employer: Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period. Explanation.--In this section and in "employee" includes a person who is entitled to the payment of bonus under this Act but who is no longer in employment.