Gujarat High Court
Gujarat Industrial Security Force ... vs Regional Provident Fund Commissioner on 12 November, 2025
NEUTRAL CITATION
C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3789 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK Sd/-
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Approved for Reporting Yes No
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GUJARAT INDUSTRIAL SECURITY FORCE SOCIETY
Versus
REGIONAL PROVIDENT FUND COMMISSIONER & ORS.
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Appearance:
MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1
MR ANKIT SHAH(6371) for the Respondent(s) No. 3
MR CHAITANYA S JOSHI(5927) for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
Date : 12/11/2025
ORAL JUDGMENT
1. By way of present petition under Article 14, 19(1)(g) and 226 of the Constitution of India read with provision under Section 7Q and 14B of the Employees' Provident Fund and Misc. Provisions Act, 1952 (hereinafter be referred to as the "Act"), the petitioner has prayed for the following relief/s:
8. (A) This Hon'ble Court may be pleased to issue a writ of mandamus and/or a writ in the nature of mandamus and/or any other appropriate writ, order or direction
(i) to quash and set aside impugned orders dated 28.08.2014 as also orders dated 16.04.2018 and undated December 2018 passed under Sections 14B and 7Q of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 by respondent no.Page 1 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025
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(ii) Be pleased to hold and declare that coercive recovery undertaken by the respondent no.1 from the bank account of the petitioner under section 8B to 8G of the Act is illegal unjust and be pleased to quash and set aside the said action of the respondent no.1.
(iii) to quash and set aside impugned show cause notice dated 15.05.2019 at Annexure k to the petition;
(iv) As a consequence of setting aside of the impugned orders under section 14 B and section 7Q of the Act, the respondent no.1 may be directed to refund the amount recovered by it to the petitioner;
(v) to hold and declare that action initiated by respondent No.1 against the petitioner is nothing but malicious in law and vexatious and accordingly be pleased to quash and set aside the same by awarding the exemplary cost against the respondent No.1;
(vi) to direct respondent Nos.2 and 3 to immediately look into the affairs of respondent No.1 and be pleased to direct appropriate action in the matter against respondent No.1.
(vii) to quash and set aside two different orders dated 21.11.2019 passed under Sections 7Q and 148 of the Act at Annexure-M and Annexure-N to the petition;
(B) Pending the admission, hearing and final disposal of the petition, this Hon'ble Court may be pleased to stay the execution, implementation and operation of the impugned show-cause dated 15.05.2019 issued notice by respondent No.1 at Annexure-k to the petition;
(BB) Pending the admission, hearing and final disposal of the petition, this Hon'ble Court may be pleased to stay the execution, implementation and operation of the impugned orders dated 21.11.2019 passed separately under Sections 7Q and 14B of the Act at Annexure-M and Annexure-N to the petition, (C) Pending the admission, hearing and final disposal of the present petition, respondent Nos.2 and 3 may be directed to take appropriate action against respondent No.1 and action taken report may be directed to be placed on record of this case;
(D) Any other and further relief or reliefs to which this Hon'ble Court deemed fit, in the interest of justice; may kindly be granted."
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2. The facts giving rise to the present petition are that the petitioner is a society registered under the Societies Registration Act, 1860. The petitioner society was registered on 03.07.1997, wherein seven persons were appointed as promoters of the society for the benefit of the Gujarat Industrial Security Force personnel. Out of these seven promoters, the General Manager, GIDC, Mr. K. K. Thakkar, was appointed as the Nodal Officer, and on the basis of the resolution passed by the State Government, the society was registered under the Societies Registration Act, 1860 on 04.07.1997.
2.1 The society looks after the wages of the personnel of the Industrial Security Force and also manages their provident fund and gratuity. Once they collect the amount from the concerned industrial unit, they deduct the provident fund amount and deposit the same with the respondent.
2.2 The respondent authority issued a notice to the petitioner's society on 11.09.2014 and, prior thereto, passed an order under Section 14B of the Act stating that the society had not deposited the provident fund contribution deducted from its employees, i.e., security force personnel, as well as the administrative charges, employee's pension fund contribution, EDLI scheme contribution, and EDLI administrative charges within the Page 3 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025 NEUTRAL CITATION C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025 undefined specific time limit prescribed under the Employees' Provident Fund Scheme, 1952, the Employees' Pension Scheme, 1995, and the Employees' Deposit Linked Insurance Scheme, 1976.
2.3 Initially, respondent issued a notice-summon on different dates, i.e., on 14.03.2014 and 15.04.2015, stating that for the period from 01.04.2011 to 28.02.2014, the petitioner had not deposited the amount of contribution within time and therefore was liable to pay the amount along with delayed charges and damages. While passing the order, the authority recorded that since the society agreed to remit the dues, the authority passed the order under Section 14B of the Act and deducted the entire amount from the account of the society, including the penal damages. However, while passing the impugned order, no reasons were recorded by the authority. That order was passed on 27.08.2014. Then the authority issued a further summons to appear for hearing under Section 14B read with Section 7Q of the Act for payment of interest for the period from 01.03.2014 to 31.10.2017, and thereafter the authority passed an order under Section 14B of the Act.
2.4 Being aggrieved and dissatisfied with the impugned orders dated 28.8.2014, 16.04.2018 and 21.11.2019 the petitioner has preferred present petition.
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3. Heard Mr. Dipak R. Dave, learned counsel for the petitioner and Mr. Chaitanya S. Joshi, learned counsel for the respondents.
4. Mr. Dipak R. Dave, learned counsel appearing on behalf of the petitioner, has submitted that insofar as the order imposing 100% damages and interest passed by the authority and deducted from the bank account of the society is concerned, the same has been passed without recording any cogent or valid reasons, and the authority has not recorded on what basis it arrived at the conclusion of fastening the liability upon the petitioner for payment of damages and interest. He has further submitted that in view of the settled principles of law, the authority cannot pass the orders without recording any reasons meaning thereby, the authority was required to pass a speaking order as if it is held by the Hon'ble Apex Court as well this Court in various decisions. He has submitted that though the representative of the society remained present before the authority and has tried to explain the situation and produced the relevant documents, however, without considering the same, the authority has passed non-speaking order. He has submitted that in the absence of the petitioner the authority ought to have passed a reasoned order. Over and above the grounds agitated in the memo of the petition Mr. Dave, learned counsel for the petitioner, has Page 5 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025 NEUTRAL CITATION C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025 undefined argued that the matter requires to be remanded before the concerned authority to take a decision afresh and after giving proper and reasonable opportunity to the petitioner.
4.1 Mr. Dave, learned counsel for the petitioner further submitted that the petitioner being a trust looking after the welfare of industrial security personnel and ultimately the society is formed for the purpose of welfare. Both are under the Government and therefore, the liability fasten upon the present petitioner society for the damages and interest is causing great prejudice to their personnel. As the promoters of the society are not benefited by causing delay in depositing the contribution, on the contrary they are losing the benefit of the schemes. However, without considering all these facts, the impugned orders passed by the authority under Section 14B read with Section 7Q of the Act are the subject matter of the petition and are challenged before this Court by way of the present petition, and thus the decision taken by the authority while exercising jurisdiction under Section 14B read with Section 7Q of the Act deserves to be quashed and set aside.
4.2 In support of his submissions, Mr.Dave, learned counsel for the petitioner has referred and relied upon the decision of this Court dated 10.09.2024 rendered in case of Aaram Services vs. Regional Provident Fund Page 6 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025 NEUTRAL CITATION C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025 undefined Commissioner and another in Special Civil Application No.3792 of 2023 and submitted that in identical facts of the case, this Court has quashed the order of authority relying upon the decision of the Hon'ble Apex Court in case of Kranti Association Pvt. Ltd. and Anr. v. Masood Ahmed Khan and Others, reported in [2010] 9 SCC 496 and under such circumstance, learned advocate Mr.Dave has urged that the present petition be allowed and the matter be remanded back to the concerned authority for deciding afresh.
5. Per contra, learned advocate Mr. Chaitanya Joshi, appearing on behalf of the respondent authorities Nos.1 and 2 has supported the impugned order passed by the respondent authority.
5.1 Mr. Joshi, learned counsel for the respondent has submitted that the EPF & MP Act, 1952 and the Schemes framed thereunder are fully applicable to the petitioner, who is under a statutory obligation to deposit EPF dues within the prescribed time. He has submitted that the petitioner, however, has consistently and repeatedly defaulted in timely remittance of EPF contributions on three different occasions covering long periods. He has submitted that in each of the first two proceedings, the petitioner's authorised representatives unequivocally admitted the delay and voluntarily deposited the damages Page 7 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025 NEUTRAL CITATION C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025 undefined and interest determined and the allegation of undue pressure is, therefore, false, baseless and an afterthought.
5.2 Mr. Joshi, learned counsel for the respondent has submitted that despite being granted multiple opportunities during each inquiry, the petitioner never produced any explanation or material to show timely payment, nor did it challenge the earlier orders before the statutory Tribunal. He has submitted that these orders have thus attained finality. He has submitted that even with respect to the last order dated 21.11.2019, the petitioner has an equally efficacious statutory remedy available, and the present writ petition is not maintainable.
5.3 Mr. Joshi, learned counsel for the respondent has submitted that the Act is a welfare legislation intended to safeguard employees and the habitual and repeated defaults by the petitioner have caused serious prejudice to its employees. He has submitted that the conduct of the petitioner reflects wilful and deliberate disregard of statutory obligations.
5.4 Mr. Joshi, learned counsel for the respondent has lastly submitted that in view of the above, the impugned orders are legal, valid and passed strictly in accordance with the provisions of the Act and the Schemes framed Page 8 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025 NEUTRAL CITATION C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025 undefined thereunder and the present petition being devoid of merit deserves to be dismissed.
6. I have gone through the relevant materials and documents produced on record. I have also perused and examined the impugned order passed by the EPF Authority. From the bare perusal of the orders under challenge, it appears that without assigning any cogent reasons, the authority has passed the order fastening the liability upon the petitioner society to pay 100% damages with interest. In fact, considering the facts of the present case and considering the provisions of Section 7Q read with Section 14B of the Act, 1952, the provisions of Section 6(A) (B) & (C) are required to be taken into consideration and under that circumstances, the order passed by the authority cannot sustain as it was observed by the Hon'ble Apex Court in Kranti Association Pvt. Ltd. (Supra). This Court had dealt with the said contention of the respondent and after considering the judgment of the Hon'ble Apex Court, the Co-ordinate Bench had allowed the petition and quashed and set aside the order passed by the authority. Even this Court, after considering the submissions in the case of Aaram Services (supra), has quashed the impugned order passed by the authority and remanded the matter back to the concerned authority for deciding the issue afresh and therefore, this Court is of the opinion that the present petition is required to be Page 9 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025 NEUTRAL CITATION C/SCA/3789/2020 JUDGMENT DATED: 12/11/2025 undefined remanded back to the concerned authority for deciding the issue afresh.
7. In the result, the present petition is hereby partly allowed. The impugned orders dated orders dated 28.8.2014, 16.04.2018 and 21.11.2019 are hereby quashed and set aside. The matter is remanded back to the concerned respondent authority for deciding the issue afresh and the concerned respondent authority shall decide the same in accordance with law, after giving ample opportunity of hearing to all the concerned parties as expeditiously as possible preferably within a period of three months from the date of initiation of fresh proceedings, but not later than 31/03/2026. Rule is made absolute to the aforesaid extent.
8. It is open for the parties to raise all the contentions before the authority available under the law. It is also observed that the both the parties shall cooperate with the proceedings and shall not seek unnecessary adjournments and shall remain present before the authority either personally or through their representative on the date fixed by the authority.
Sd/-
(HEMANT M. PRACHCHHAK,J) SURESH SOLANKI Page 10 of 10 Uploaded by SURESH SOLANKI(HC00208) on Mon Nov 17 2025 Downloaded on : Mon Nov 17 21:37:43 IST 2025