GANESHDHAM BUSINESS PRIVATE LIMITED vs REGIONAL PROVIDENT FUND COMMISSIONER -II AND ANR

IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
APPELLATE SIDE
Present:
The Hon’ble Justice Shampa Dutt (Paul)

WPA 5968 of 2026

Ganeshdham Business Private Limited
Vs
Regional Provident Fund Commissioner-II & Anr.

with
WPA 5969 of 2026

Gangadhar Agencies Private Limited
Vs
Regional Provident Fund Commissioner-II & Anr.



For the Petitioner : Mr. Soumya Majumder, ld. Sr. Adv.
Mr. Dwaipayan Sengupta,
Ms. Sanjukta Dutta.


For the Respondent Nos. 1 & 2 : Mr. Rajib Ray.


Judgment reserved on : 28.07.2026
Judgment delivered on : 31.08.2026
Shampa Dutt (Paul), J.:

1. The writ applications have been preferred challenging an order
th
dated 20 December, 2024, passed by the respondent
no.1/Regional Provident Fund Commissioner-II under Section 7A of

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the Act of 1952, and notices dated 29.01.2026 and 19.02.2026
issued by the recovery officer.
2. Vide the impugned order the authority concerned held as follows:-
“Whereas, an inspection was conducted at the
establishment by Shri Saket Nandan Sahay, the then
Enforcement Officer through Shram Shuvidha Portal for
verification of default in payment by the establishment.
In his report, dated 06/12/2021and 10/12/2021, Sh.
Saket Nandan Sahay the then Enforcement Officer
submitted an outstanding dues of Rs.9,18,562/- payable
by establishment towards dues related to excluded
employees.
And whereas, pursuant to the Inspection Report as
above of the Enforcement Officer, a Show Cause Notice
dated 27/12/2021 was issued to the establishment with
the direction to comply as per Section 2(f) of EPF & MP
Act, 1952 monthly P.F. contribution & allied dues be
deposited with the Statutory Fund as per provision under
Section 6 of the Act, 1952 read with Para 29,30,36,36-B
and 38 of the Employees’ Provident Fund Scheme, 1952
from 09/2019 to 01/2022. In reply to the said Show
Cause Notice the establishment sent a letter dated
12.01.2022, which was not satisfactory.
An Establishment named BMA Wealth Creators Ltd.
Bearing PF code no. WB/PRK/42136 which was all of a
sudden closed by SEBI orders w.e.f. 08/2019 and at the
time of closure, its employees strength was nearly 1160
as per PF records. Subsequently its maximum staff
joined two establishments namely M/s Ganeshdham
Business Pvt. Ltd. Bearing PF Code No.
WB/CAL/2015725 and M/s. Gangadhar Agencies Pvt.
Ltd. Bearing PF code no. Wb/CAL/2017589 from

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09/2019 and the date of start of PF in these two
establishments itself is also the very 09/2019 after
closure of M/S BMA Wealth Creators Ltd. It is found that
establishment has discontinued PF membership of
nearly 29 employees upon joining M/s Gangadhar
Agencies Pvt. Ltd. enhancing basic salary to Rs.15050.
Establishment did not submit any F/11. It is found that
establishment has not acted in accordance with Para
69(5) of the scheme, 1952.”

3. It appears from the said impugned order that the authority
concerned has proceeded by the parties and finally, the authority
concerned relying upon the provisions of the Provident Fund
Scheme held as follows:-
“The establishment has failed to remit the dues in
respect of all the Employees who were working in M/s
BMA Wealth Creators Pvt. Ltd. Bearing PF code no.
WB/PRK/42136" and subsequently joined the present
Establishment.
In terms of Para 26A, the Member of Establishment
M/s BMA Wealth Creators Pvt. Ltd. Bearing PF code no.
WB/PRK/42136 continued to be member as they did
not withdraw the Amount from their Provident Fund in
terins of Para 69(5).
The Establishment and the Department have
already made their submissions and does not have any
further submissions to make. The employer has been
given a reasonable opportunity of being heard and of
putting forward his explanation. The notice had been
duly served on the employer. Time expended in
recording futile proceedings could be utilized

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purposefully in other pressing matters apart from
avoiding unnecessary expenditure incurred in
adjournment letters/notices etc. The enquiry cannot be
allowed to prolong unnecessarily. The Inquiry U/s 7A
stands concluded on the basis of available facts on the
record.

ORDER
AMIT ATHALEY
1. , Regional Provident Commissioner
(Compliance & Recovery), in exercise of powers
conferred on the under section 7A(3A) of the
Employees' Provident Funds & Miscellaneous
Provisions Act, 1952 hereby assess the dues of Rs.
1,31,47,107 ( Rupees One Crore Thirty one lakh
forty seven thousand one hundred seven only. only
as per details given below, as due from them on
account of the Provident Fund, Pension Fund
contributions and administrative/inspection charges
towards the Provident Fund and Deposit Linked
Insurance Fund for the period 09/2019 TO
01/2022 deposited within 15 (Fifteen) days from
the date of the receipt of this Order otherwise
appropriate legal action will be initiated against the
establishment and its Employer, as per provision
under the Act and Schemes framed there under, in
order to realise the said outstanding dues, without
further notice”

4. It appears that the period under consideration was from September
09/2019 to 01/2022. The total period is covered by the COVID
pandemic which was in three phases.

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5. It further appears from the impugned order that the authority
concerned has referred to an inspection conducted by an
enforcement officer and submitted two reports dated
06.12.2021 and 10.12.2021. None of which was served upon the
petitioners nor has the contents of the reports been discussed in
the impugned order. The authority concerned also reiterated the
reply to the show-cause notice filed by the establishment by
holding t hat the same is not satisfactory.
6. Mr. Majumder learned senior counsel appearing for the petitioners
submits that during the said period when the dates were fixed for
hearing, the hearings were being conducted virtually or in hybrid
manner and, as such, there was a gap in receipt of copies and there
was lack of connection. Though the authority in the show-cause
notice recorded that the P.F. membership of 29 employees of
Gangadhar Agencies Pvt. Ltd. has been discontinued. It appears
that there is no discussion as to the said 29 employees in the
impugned order.
7. The case of the respondent authority in their show-cause notice
dated 16.12.2021 (COVID pandemic) contents the following
questions asking the petitioner to show-cause:-
“Whereas, an Enforcement Officer has visited your
establishment and submitted his report after verification of
records/documents so produced by your establishment
and served Part II dated 29/11/2021 mentioning
following irregularities found during the course of
inspection.

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1. M/s Ganeshdham Business Pvt Ltd covered itself under
the Purview of the Employees' Provident Fund &
Miscellaneous Provisions Act, 1952 w.e.f. 01-09-2019
after sudden closure of M/s BMA Wealth Creators Ltd
w.e.f. 08/2019 and subsequently its maximum staff
joined in M/s Ganeshdham Business Pvt Ltd during
09/2019 but PF membership of nearly 10 employees have
been discontinued upon joining in M/s Ganeshdham
Business Pvt Ltd which clearly shows that you have failed
to extend PF benefit to nearly 10 employees from 09/2019
as a result total dues arrived Rs. 303214/- upto July
2021.
2. It has been found that the establishment has failed to
follow the statutory provision as stipulated under
Paragraph 69(5) of the EPF Scheme 1952.
3. It has been found that the establishment has failed to
provide Form-11 in support of excluded employees.
4. It has been found that salary of employees of the
establishment bifurcated in different heads such as Other
allowances, Conveyance allowance, HRA, Medical
allowance, Miscellaneous, Performance Incentive, Special
allowance etc so as to bear minimum PF liability and kept
Basic salary nearly 10 to 25 percent of the gross salary as
such you are required to pay PF and allied statutory dues
on Other allowances including Special allowance in terms
of provisions stipulated under Section 6 read with Section
2(b) of the EPF & MP Act, 1952.

8. The respondent/P.F. Authority herein has filed a report in the form
of affidavit wherein the inspection report has been annexed.
9. It appears from the said report that the enforcement officer stated
as follows:-

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“3. That, M/s Gangadhar Agency Private Limited,
was issued a Show Cause Notice, as to why necessary
actions as per provisions of EPF & MP Act, shall not be
initiated against the establishment vide letter No. R-NE-
WB/CAL/2017589/CC-IV/1138 dated 27.12.2021
(Annexure-A) wherein it is mentioned that as per Area
Enforcement Officer's report dated 10.12.2021 the
establishment has failed to pay PF and other allied dues in
respect of newly 29 employees from 09/2019 and the
establishment bifurcated the Salary Structure in different
heads such as Other Allowances, Convenience Allowances,
Medical Allowance, Special Allowances etc so that the
establishment bear minimum liability. PF compliance
remitted on Basic which is nearly 10 to 25% of the Gross
Salary. Which is the violations of the guidance vide Section
6 read with 2(b) of the EPF Act.
On going through the records submitted by the
establishment such as Salary Sheet from 09/2019 to
01/2022, it was observed that the establishment has
remitted the PF dues on Earned Basic Salary
excluding the Convenience Allowance, HRA, Medical
Re-imbursement, Performance Incentive, Special
Allowances.”
10. It appears from paragraph 4 of the said report that there is no
details given as to what is considered as evaded wages. The
enforcement officer has noted only a consolidated amount without
giving the details specification of such evaded wags as claimed. The
statement of accounts to that extent is totally silent on the said
fact.

11. In respect of WPA 5968/2026 the report filed by the respondent
nos.1 and 2 reads as follows:-

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“Due to default inspection was caused & undersigned visited
address of Gangadhar Agencies P(LTD) but couldn't find any
such functional office there. Later the authorized person was
contacted and he produced salary sheet from 09/19 to
07/21, Challan from 09/19 to 03/20 and some other
challans, P/L account of 2019-20. Upon verification of all
these records and gathered information it is to submit that
there was an establishment named BMA Wealth Creators
Ltd bearing PF code no. WB/PRK/42136 which was all of a
sudden closed by SEBI orders w.e.f 08/2019 and at the time
of closure its employee strength was nearly 1160 as per PF
records. Subsequently its maximum staff joined two
establishments namely M/s Ganeshdham Business Pvt Ltd.
bearing PF code no. WB/CAL/2015725 and M/s Gangadhar
Agencies Pvt Ltd. bearing PF code no. WB/CAL/2017589
from 09/19 and the date of start of PF in these two
establishments itself is also the very 09/19 after closure of
M/s BMA Wealth Creators Ltd. It is found that estb.
discontinued PF membership of nearly 29 employees
upon joining M/s Gangadhar Agencies Pvt Ltd
enhancing basic salary to Rs. 15050. Establishment did
not submit any F/11. It is found that estb. has not acted in
accordance with para 69(5) of the epf scheme. As such the
dues related to excluded employees is Rs. 918562. Other
excluded employees as claimed may not be the excluded
employees either in true sense. Further establishment has
bifurcated its salary structure in Basic, HRA,
Conveyarice, Medical, Performance incentive, LTA,
special allowances, LTA, Miss. etc to mitigate the PF
liability and made basic to nearly 10 to 30%. This type
of bifurcation to mitigate PF liability should not be accepted if
agreed to. Estb. was directed to comply within seven days
but it has not replied. Undersigned recommends to initiate

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7A hearing for determination of dues. The indicative dues
is…….”
12. Exception to the said report was filed by the petitioner who has
denied the entire case of the petitioner herein.
13. In the exception it is submitted that the contentious issue raised as
regards alleged discontinuation of nearly 29 employees, is
absolutely vague, baseless and without identification as they had
crossed the wage ceiling. The adjudication directly determines the
statutory status of individual employees. Whether an employee is
an excluded employee, existing member, or required to contribute
directly affects his statutory rights. Despite this, none of the
concerned employees was heard. That apart the respondents have
not disclosed or identified the said 29 employees.
14. Initially, the show cause notice dated 27.12.2021 alleged dues of
only Rs.9,18,562/ upto July 2021. Subsequently, without any
fresh inspection or disclosed material, the liability suddenly
increased to Rs.1,31,47,107/- from 9/2019 upto 1/2022 in the
said order passed u/s 7A of the Act. The authority appears to have
enlarged the scope of the proceedings from the original show cause
to a final demand of Rs.1.31 crore without issuing any fresh show
cause notice. The action and the order of the respondents thus
completely violates the basic and fundamental principles of natural
justice.
15. Section 7A order determines dues for September 2019 to January
2022 whereas the recovery notice seeks recovery for April 2019 to

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March 2022 although the establishment itself came under coverage
st
only from 1 September 2019. The Inspection report as disclosed in
the said Report for the first time, also relies upon the inspection
report dated 10.12.2021. Even this disclosed Inspection Report
does not give any basis for the calculation of dues, and on such
vague and oblique disclosure, no civil consequence can entail on
the petitioner.
16. The petitioners submit that at first they aware of the proceedings
when they were served with a recovery notice.
17. Learned counsel for the PF Authority has subsequently field salary
sheets of the establishment.
18. Admittedly, the salary sheets are not part of the report of the
enforcement officer and is a record which was produced before the
enforcement officer.
19. Written notes of argument placed by the parties reiterated their
submission in the case as made out in the writ applications and
the report filed in the form of affidavit.
20. The petitioner has relied upon the following judgments:-

i) Narinder Mohan Arya v. United India Insurance Co.
Ltd. (2006) 4 SCC 713;
ii) Gurbir Kaur and Regional Provident Fund
Commissioner, Employees’ Provident Fund
Organization & Ors. 2006(2) L.L.N. 791.

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21. The respondent no. 2 has challenged the maintainability of the writ
application on the ground that the same is subject to appeal.
Admittedly, considering that the prima facie case has been made by
the petitioners that the findings of the enforcement officer is
perverse and an abuse of the process of law, the writ application
was admitted for hearing.

22. The respondent has relied upon the judgment of the Supreme
Court in Whilrpool Corporation v. Registrar of Trade Marks
(1998) 8 SCC 1.
23. On hearing the parties and considering the materials on record, it
further appears that the authority concerned has gone beyond
his show-cause notice dated 16.12.2021 and held that the
petitioner establishment failed to remit the dues in respect of the
employees as follows:-
“The establishment has failed to remit the dues in respect
of all the Employees who were working in M/s BMA
Wealth Creators Pvt. Ltd. Bearing PF code no.
WB/PRK/42136 and subsequently joined the present
Establishment.”

24. The said finding is prima facie beyond the show-cause as in the
show cause dated 16.12.2021/27.12.2021, the issue against the
petitioner herein was that PF number of nearly 10/29 employees
was discontinued on joining M/s. Ganeshdham Business Private
Ltd./M/s. Gangadhar Agencies Private Ltd. and bifurcation of
salary under different heads to bear minimum PF liability.

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25. That though the show cause notices note alleged default in respect
of 10/29 employees, the authority initially in it’s order has only
noted alleged default of 29 employees in case of M/s. Ganeshdham.
Nothing is noted about the 10 employees as noted in the show
cause notice dated 16.12.2026.
26. Subsequently the authority in the impugned orders in both the writ
applications has held that the respective establishments have failed
to remit the dues in respect of all employees who later joined the
present establishments, which is not only beyond the show cause
notices issued, but also without proper reasons.
27. It appears that hearing dates were fixed during the covid
pandemic, and the authority has also noted that hearing could not
take place on several dates due to technical problem during
virtual hearing sessions.
28. The impugned order gives no reasons as to it’s findings and has
recorded default beyond the show cause notice.
29. There is also no details as to how the amount assessed has been
arrived at.
30. There is also no finding as to the alleged bifurcation of salary
to reduce P.F. liability as stated in the show cause notices.
31. Thus, considering the said facts, this Court finds that the
impugned orders are beyond the notices to show-cause and have
been passed on the basis of report of the enforcement officer which
has not been discussed nor has any copy of the said report been
served upon the petitioners. The decision of the authorized officer is

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also on the basis of only the said report, without any independent
findings/reasons of his own.
32. It further appears that the impugned order is not a reasoned order,
where no discussion has been given in respect of the documents
relied upon. The erroneous findings of the authority concerned
relates to what was stated in the notice to show-cause in respect of
the number of employees discontinued and no findings as to
alleged bifurcation of salary.
33. Considering the said facts, the impugned order being perverse and
not in accordance with law and also against the principle of natural
justice and an abuse of the process of law is quashed and set
aside.
34. WPA 5968 of 2026 with WPA 5969 of 2026 are allowed.
35. Applications, if any, connected thereto stand disposed of
consequently.
36. Interim order, if any, stands vacated.
37. Photostat certified copy of this Judgment, if applied for, be given to
the parties on priority basis upon compliance of all formalities.


(Shampa Dutt (Paul), J.)