THE EMPLOYEES’ PROVIDENT FUNDS AND

MISCELLANEOUS PROVISIONS ACT, 1952

An Act to provide for the institution of provident funds, pension fund and
deposit-linked insurance fund for employees in factories and other
establishments.

Be it enacted by Parliament as follows:-

1. Short title, extent and application.- (1) This Act may be called the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) Subject to the provisions contained in section 16, it applies -

(a) to every establishment which is a factory engaged in any industry

specified in Schedule I and in which twenty or more persons are employed and

(b) to any other establishment employing twenty or more persons or class of

such establishments which the Central Government may, by notification in the
Official Gazette, specify, in this behalf:

Provided that the Central Government may, after giving not less than two months’
notice of its intention so to do, by notification in the Official Gazette, apply the
provisions of this Act to any establishment employing such number of persons less
than twenty as may be specified in the notification.

(4) Notwithstanding anything contained in sub-section 3 of this section or-

sub-section 1 of section16, where it appears to the Central Provident Fund
Commissioner, whether on an application made to him in this behalf or otherwise,
that the employer and the majority of employees in relation to any establishment
have agreed that the provisions of this Act should be made applicable to the
establishment, he may, by notification in the Official Gazette, apply the provisions
of this Act to that establishment on and from the date of such agreement or from
any subsequent date specified in such agreement.

(5) An establishment to which this Act applies shall continue to be governed

by this Act notwithstanding that the number of persons employed therein at any
time falls below twenty.

2. Definitions. - In this Act, unless the context otherwise requires, -

(a) “Appropriate Government” means -

(i) in relation to an establishment belonging to, or under the control of, the
Central Government or in relation to, an establishment connected with a railway
company, a major port, a mine or an oil-field or a controlled industry or in relation
to an establishment having departments or branches in more than one State, the
Central Government: and

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(ii) in relation to any other establishment, the State Government:

(aa) “authorised officer” means the Central Provident Fund Commissioner,

Additional Central Provident Fund Commissioner, Deputy Provident Fund
Commissioner, Regional Provident Fund Commissioner or such other officer as
may be authorised by the Central Government, by notification in the Official
Gazette;

(b) “basic wages” means all emoluments which are earned by an employee
while on duty or on leave or on holidays with wages in either case in accordance
with the terms of the contract of employment and which are paid or payable in cash
to him, but does not include-

(i) the cash value of any food concession;

(ii) any dearness allowance that is to say, all cash payments by whatever name
called paid to an employee on account of a rise in the cost of living, house-rent
allowance, overtime allowance, bonus, commission or any other similar allowance
payable to the employee in respect of his employment or of work done in such
employment;

(iii) any presents made by the employer;

(c) “Contribution” means a contribution payable in respect of a member under a

scheme or the contribution payable in respect of an employee to whom the
Insurance Scheme applies;

(d) “controlled industry” means any industry the control of which by the Union has
been declared by a Central Act to be expedient in the public interest;

(e) “employer” means-

(i) in relation to an establishment which is a factory, the owner or occupier of the

factory, including the agent of such owner or occupier, the legal representative of a
deceased owner or occupier and, where a person has been named as a manager
of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act,
1948 (63 of 1948), the person so named; and

(ii) in relation to any other establishment, the person who, or the authority which,
has the ultimate control over the affairs of the establishment, and where the said
affairs are entrusted to a manager, managing director or managing agent, such
manager, managing director or managing agent;

(f) “employee” means any person who is employed for wages in any kind of work,
manual or otherwise, in or in connection with the work of an establishment and
who gets his wages directly or indirectly from the employer, and includes any
person,-

(i) employed by or through a contractor in or in connection with the work of the

establishment;

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(ii) engaged as an apprentice, not being an apprentice engaged under the
Apprentices Act, 1961 (52 of 1961) or under the standing orders of the
establishment;

(ff) “exempted employee” means an employee to whom a Scheme or the

Insurance Scheme, as the case may be, would, but for the exemption granted
under section 17, have applied;

(fff) “exempted establishment” means an establishment in respect of which an

exemption has been granted under section 17 from the operation of all or any of
the provisions of any Scheme or the Insurance Scheme, as the case may be,
whether such exemption has been granted to the establishment as such or to any
person or class of persons employed therein;

(g) “factory” means any premises, including the precincts thereof, in any part of
which a manufacturing process is being carried on or is ordinarily so carried on,
whether with the aid of power or without the aid of power;

(gg) ***

(ggg) ***

(h) “Fund” means the Provident Fund established under a Scheme;

(i) “industry” means any industry specified in Schedule I, and includes any
other industry added to the Schedule by notification under section 4;

(ia) “Insurance Fund” means the Deposit-linked Insurance Scheme

framed under sub-section 2 of section 6C;

(ib) “Insurance Scheme” means the Employees’ Deposit-linked

Insurance Scheme framed under sub-section 1 of section 6C;

(ic) “manufacture” or “manufacturing process” means any process

for making, altering, repairing, ornamenting, finishing, packing, oiling, washing,
cleaning, breaking up, demolishing or otherwise treating or adapting any article or
substance with a view to its use, sale, transport, delivery or disposal;

(j) “member” means a member of the Fund;

(k)“occupier of a factory” means the person, who has ultimate control over the
affairs of the factory, and, where the said affairs are entrusted to a managing
agent, such agent shall be deemed to be the occupier of the factory;

(kA) “Pension Fund” means the Employees’ Pension Fund established under

sub-section 2 of section 6A;

(kB) “Pension Scheme” means the Employees’ Pension Scheme framed

under sub-section 1 of section 6A;

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 (ka) “prescribed” means prescribed by rules made under this Act;

(kb) “Recovery Officer” means any officer of the Central Government, State

Government or the Board of Trustees constituted under section 5A, who may be
authorised by the Central Government, by notification in the Official Gazette, to
exercise the powers of a Recovery Officer under this Act;

(l) “Scheme” means the Employees’ Provident Funds scheme framed under
section 5;

(l1) “superannuation”, in relation to an employee, who is the member of the

Pension Scheme, means the attainment, by the said employee, of the age of fifty-
eight years.

(m) “Tribunal” means the Employees’ Provident Funds Appellate Tribunal

constituted under section 7D.

2A. Establishments to include all departments and branches.

- For the removal of doubts, it is hereby declared that where an establishment
consists of different departments or has branches, whether situate in the same
place or in different places, all such departments or branches shall be treated as
parts of the same establishment.

3. Power to apply Act to an establishment which has a common

provident fund with another establishment. - Where immediately before this
Act becomes applicable to an establishment there is in existence a provident fund
which is common to the employees employed in that establishment and employees
in any other establishment, the Central Government may, by notification in the
Official Gazette direct that the provisions of this Act shall also apply to such other
establishment.

4. Power to add to Schedule I. – (1) The Central Government may, by

notification in the Official Gazette, add to Schedule I any other industry in respect
of the employees whereof it is of opinion that a Provident Fund Scheme should be
framed under this Act, and thereupon the industry so added shall be deemed to be
an industry specified in Schedule I for the purpose of this Act.

(2) All notifications under sub-section 1 shall be laid before Parliament, as

soon as may be, after they are issued.

5. Employees’ Provident Funds Scheme. – (1) The Central

Government may, by notification in the Official Gazette, frame a scheme to be
called the Employees’ Provident Fund Scheme for the establishment of provident
funds under this Act for employees or for any class of employees and specify the
establishments or class of establishments to which the said Scheme shall apply
and there shall be established, as soon as may be after the framing of the
Scheme, a Fund in accordance with the provisions of this Act and the Scheme.

(1A) The Fund shall vest in, and be administered by, the Central Board
constituted under section 5A.

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 (1B) Subject to the provisions of this Act, a Scheme framed under sub-
section 1 may provide for all or any of the matters specified in Schedule II.

(2) A Scheme framed under sub-section 1 may provide that any of its
provisions shall take effect either prospectively or retrospectively on such date as
may be specified in this behalf in the Scheme.

5A. Central Board. - (1) The Central Government may, by notification in

the Official Gazette, constitute, with effect from such date as may be specified
therein, a Board of Trustees for the territories to which this Act extends
hereinafter in this Act referred to as the Central Board consisting of the following
persons as members, namely:-

(a) a Chairman and a Vice-Chairman to be appointed by the Central

Government;

(aa) the Central Provident Fund Commissioner, Ex officio;

(b) not more than five persons appointed by the Central Government from
amongst its officials;

(c) not more than fifteen persons representing Governments of such States as
the Central Government may specify in this behalf, appointed by the Central
Government;

(d) ten persons representing employers of the establishments to which the

Scheme applies, appointed by the Central Government after consultation with such
organisations of employers as may be recognised by the Central Government in
this behalf; and

(e) ten persons representing employees in the establishments to which the

Scheme applies, appointed by the Central Government after consultation with such
organisations of employees as may be recognised by the Central Government in
this behalf.

(2) The terms and conditions subject to which a member of the Central
Board may be appointed and the time, place and procedure of the meetings of the
Central Board shall be such as may be provided for in the Scheme.

(3) The Central Board shall subject to the provisions of section 6 and
section 6C administer the Fund vested in it in such manner as may be specified in
the Scheme.

(4) The Central Board shall perform such other functions as it may be
required to perform by or under any provisions of the Scheme, the Pension
Scheme and the Insurance scheme.

(5) The Central Board shall maintain proper accounts of its income and
expenditure in such form and in such manner as the Central Government may,
after consultation with the Comptroller and Auditor-General of India, specify in the
Scheme.

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(6) The accounts of the Central Board shall be audited annually by the
comptroller and Auditor-General of India and any expenditure incurred by him in
connection with such audit shall be payable by the Central Board to the
Comptroller and Auditor-General of India.

(7) The Comptroller and Auditor-General of India and any person appointed by
him in connection with the audit of the accounts of the Central Board shall have the
same rights and privileges and authority in connection with such audit as the
Comptroller and Auditor-General has, in connection with the audit of Government
accounts and, in particular, shall have the right to demand the production of books,
accounts, connected vouchers, documents and papers and inspect any of the
offices of the Central Board.

(8) The accounts of the Central Board as certified by the Comptroller and
Auditor-General of India or any other person appointed by him in this behalf
together with the audit report thereon shall be forwarded to the Central Board
which shall forward the same to the Central Government along with its comments
on the report of the Comptroller and Auditor-General.

(9) It shall be the duty of the Central Board to submit also to the Central
Government an annual report of its work and activities and the Central
Government shall cause a copy of the annual report, the audited accounts together
with the report of the Comptroller and Auditor-General of India and the comments
of the Central Board thereon to be laid before each House of Parliament.

5AA. Executive Committee. – (1) The Central Government may, by

notification in the Official Gazette, constitute, with effect from such date as may be
specified therein, an Executive Committee to assist the Central Board in the
performance of its functions.

(2) The Executive Committee shall consist of the following persons as

members, namely:-

(a) a Chairman appointed by the Central Government from amongst the

members of the Central Board:

(b) two persons appointed by the Central Government from amongst the
persons referred to in clause (b) of sub-section (1) of section 5A;

(c) three persons appointed by the Central Government from amongst the
persons referred to in clause (c) of sub-section (1) of section 5A;

(d) three persons representing the employers elected by the Central Board
from amongst the persons referred to in clause (d) of sub-section (1) of section 5A;

(e) three persons representing the employees elected by the Central Board
from amongst the persons referred to in clause (e) of sub-section (1) of section 5A;

(f) the Central Provident Fund Commissioner, ex-officio.

(3) The terms and conditions subject to which a member of the Central
Board may be appointed or elected to the Executive Committee and the time,
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place and procedure of the meetings of the Executive Committee shall be such as
may be provided for in the Scheme.

5B. State Board.- (1) The Central Government may, after consultation with
the Government of any State, by notification in the Official Gazette, constitute for
that State a Board of Trustees hereinafter in this Act referred to as the State Board
in such manner as may be provided for in the Scheme.

(2) A State Board shall exercise such powers and perform such duties as the

Central Government may assign to it from time to time.

(3) The terms and conditions subject to which a member of a State Board

may be appointed and the time, place and procedure of the meetings of a State
Board shall be such as may be provided for in the Scheme.

5C. Board of Trustees to be body corporate.- Every Board of Trustees

constituted under section 5A or section 5B shall be a body corporate under the
name specified in the notification constituting it, having perpetual succession and
a common seal and shall by the said name sue and be sued.

5D. Appointment of officers. – (1) The Central Government shall appoint a

Central Provident Fund Commissioner who shall be the chief executive officer of
the Central Board and shall be subject to the general control and superintendence
of that Board.

(2) The Central Government may also appoint a Financial Adviser and Chief
Accounts Officer to assist the Central Provident Fund Commissioner in the
discharge of his duties.

(3) The Central Board may appoint, subject to the maximum scale of pay, as may
be specified in the Scheme, as many Additional Central Provident Fund
Commissioners, Deputy Provident Fund Commissioners, Regional Provident Fund
Commissioners, Assistant Provident Fund Commissioners and such other officers
and employees as it may consider necessary for the efficient administration of the
Scheme, the Pension Scheme and the Insurance Scheme.

(4) No appointment to the post of the Central Provident Fund Commissioner or

an Additional Central Provident Fund Commissioner or a Financial Adviser and
Chief Accounts Officer or any other post under the Central Board carrying a scale
of pay equivalent to the scale of pay of any Group ‘A’ or Group ‘B’ post under the
Central Government shall be made except after consultation with the Union Public
Service Commission:

Provided that no such consultation shall be necessary in regard to any such

appointment –

(a) for a period not exceeding one year; or

(b) if the person to be appointed is at the time of his appointment-

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(i) a member of the Indian Administrative Service, of

(ii) in the service of the Central Government or a State Government or the

Central Board in a Group ‘A’ or Group ‘B’ post.

(5) A state Board may, with the approval of the State Government concerned,
appoint such staff as it may consider necessary.

(6) The method of recruitment, salary and allowances, discipline and other
conditions of service of the Central Provident Fund Commissioner, and the
Financial Adviser and Chief Accounts Officer shall be such as may be specified by
the Central Government and such salary and allowances shall be paid out of the
fund.

(7) (a) The method of recruitment, salary and allowances, discipline and other
conditions of service of the Additional Central Provident Fund Commissioner,
Deputy Provident Fund Commissioner, Regional Provident Fund Commissioner,
Assistant Provident Fund Commissioner and other officers and employees of the
Central Board shall be such as may be specified by the Central Board in
accordance with the rules and orders applicable to the officers and employees of
the Central Government drawing corresponding scales of pay:

Provided that where the Central Board is of the opinion that it is necessary to make
a departure from the said rules or orders in respect of any of the matters aforesaid,
it shall obtain the prior approval of the Central Government.

(b) In determining the corresponding scales of pay of officers and employees

under clause (a), the Central Board shall have regard to the educational
qualifications, method of recruitment, duties and responsibilities of such officers
and employees under the Central Government and in case of any doubt, the
Central Board shall refer the matter to the Central Government whose decision
thereon shall be final.

(8) The method of recruitment, salary and allowances, discipline and other
conditions of service of officers and employees of a State Board shall be such as
may be specified by that Board, with the approval of the State Government
concerned.

5DD. Acts and proceedings of the Central Board or its Executive

Committee or the State Board not to be invalidated on certain grounds. – No
act done or proceeding taken by the Central Board or the Executive Committee
constituted under section 5AA or the State Board shall be questioned on the
ground merely of the existence of any vacancy in, or any defect in the constitution
of, the Central Board or the Executive Committee or the State Board, as the case
may be.

5E. Delegation. - The Central Board may delegate to the Executive

Committee or to the Chairman of the Board or to any of its officers and a State
Board may delegate to its Chairman or to any of its officers, subject to such
conditions and limitations, if any, as it may specify, such of its powers and
functions under this Act as it may deem necessary for the efficient administration of
the Scheme, the Pension Scheme and the Insurance Scheme.
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6. Contributions and matters which may be provided for in Schemes. – The
contribution which shall be paid by the employer to the Fund shall be ten percent,
of the basic wages, dearness allowance and retaining allowance, if any, for the
time being payable to each of the employees whether employed by him directly or
by or through a contractor, and the employee’s contribution shall be equal to the
contribution payable by the employer in respect of him and may, if any employee
so desires, be an amount exceeding ten percent of his basic wages, dearness
allowance and retaining allowance if any, subject to the condition that the employer
shall not be under an obligation to pay any contribution over and above his
contribution payable under this section:

Provided that in its application to any establishment or class of establishments

which the Central Government, after making such inquiry as it deems fit, may, by
notification in the Official Gazette specify, this section shall be subject to the
modification that for the words “ten percent”, at both the places where they occur,
the words “12 percent” shall be substituted:

Provided further that where the amount of any contribution payable under this Act
involves a fraction of a rupee, the Scheme may provide for rounding off of such
fraction to the nearest rupee, half of a rupee, or quarter of a rupee.

Explanation I – For the purposes of this section dearness allowance shall be

deemed to include also the cash value of any food concession allowed to the
employee.

Explanation II. – For the purposes of this section, “retaining allowance” means
allowance payable for the time being to an employee of any factory or other
establishment during any period in which the establishment is not working, for
retaining his services.

6A. Employees’ Pension Scheme. – (1) The Central Government may, by

notification in the Official Gazette, frame a scheme to be called the Employees’
Pension Scheme for the purpose of providing for –

(a) superannuation pension, retiring pension or permanent total disablement

pension to the employees of any establishment or class of establishments to which
this Act applies; and

(b) Widow or widower’s pension, children pension or orphan pension payable

to the beneficiaries of such employees.

(2) Notwithstanding anything contained in section 6, there shall be

established , as soon as may be after framing of the Pension Scheme, a Pension
Fund into which there shall be paid, from time to time, in respect of every
employee who is a member of the Pension Scheme, -

(a) such sums from the employer’s contribution under section 6, not
exceeding eight and one-third per cent of the basic wages, dearness allowance
and retaining allowance, if any, of the concerned employees, as may be specified
in the Pension Scheme;

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(b) such sums as are payable by the employers of exempted establishments
under sub-section (6) of section 17;

(c) the net assets of the Employees’ Family Pension as on the date of
establishment of the Pension Fund;

(d) such sums as the central Government may, after due appropriation by
Parliament by law in this behalf, specify.

(3) On the establishment of the Pension Fund, the Family Pension Scheme
hereinafter referred to as the ceased scheme shall cease to operate and all assets
of the ceased scheme shall vest in and shall stand transferred to, and all liabilities
under the ceased scheme shall be enforceable against, the Pension Fund and the
beneficiaries under the ceased scheme shall be entitled to draw the benefits, not
less than the benefits, they were entitled to under the ceased scheme, from the
Pension fund.

(4) Pension Fund shall vest in and be administered by the Central

Board in such manner as may be specified in the Pension Scheme.

(5) Subject to the provisions of this Act, the Pension Scheme may
provide for all or any of the matters specified in Schedule III.

(6) The Pension Scheme may provide that all or any of its provisions
shall take effect either prospectively or retrospectively on such date as may be
specified in that behalf in that scheme.

(7) A Pension Scheme, framed under sub-section (1) shall be laid, as

soon as may be after it is made, before each House of Parliament, while it is in
session, for a total period of thirty days which may be comprised in one session or
in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the scheme or both Houses agree that
the scheme should not be made, the scheme shall thereafter have effect only in
such modified form or be of no effect, as the case may be; so, however, that any
such modification or annulment shall be without prejudice to the validity of anything
previously done under the scheme.

6C. Employees’ Deposit-linked Insurance Scheme. - (1) The Central

Government may, by notification in the Official Gazette, frame a scheme to be
called the Employees’ Deposit-linked Insurance Scheme for the purpose of
providing life insurance benefits to the employees of any establishment or class of
establishments to which this Act applies.

(2) There shall be established, as soon as may be after the framing of Insurance
Scheme, a Deposit-linked Insurance Fund into which shall be paid by the
employer from time to time in respect of every such employee in relation to whom
he is the employer, such amount, not being more than one per cent of the
aggregate of the basic wages, dearness allowance and retaining allowance if any
for the time being payable in relation to such employee as the Central Government
may, by notification in the Official Gazette, specify.

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Explanation. - For the purposes of this sub-section, the expressions “dearness
allowance’ and ‘retaining allowance’ have the same meanings as in section 6.

(3) ***

(4) (a) The employer shall pay into the Insurance Fund such further
sums of money, not exceeding one-fourth of the contribution which he is required
to make under sub-section (2), as the Central Government may, from time to time,
determine to meet all the expenses in connection with the administration of the
Insurance Scheme other than the expenses towards the cost of any benefits
provided by or under that Scheme.

(b) ***

(5) The Insurance Fund shall vest in the Central Board and be
administered by it in such manner as may be specified in the Insurance Scheme.

(6) The insurance Scheme may provide for all or any of the matters
specified in Schedule IV.

(7) The Insurance Scheme may provide that any of its provision shall
take effect either prospectively or retrospectively on such date as may be specified
in this behalf in that Scheme.

6D. Laying of Schemes before Parliament. - Every scheme framed under

section 5, section 6A and section 6C shall be laid, as soon as may be after it is
framed, before each House of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session
or the successive sessions aforesaid, both Houses agree in making any
modification in the scheme, or both Houses agree that the scheme should not be
framed, the scheme shall thereafter have effect only in such modified form or be of
no effect, as the case may be; so however, that any such modification or
annulment shall be without prejudice to the validity of anything previously done
under that scheme.

7. Modification of Scheme – (1) The Central Government may, by

notification in the Official Gazette add to, amend or vary either prospectively or
retrospectively, the Scheme, the Pension Scheme or the Insurance Scheme, as
the case may be.

(2) Every notification issued under sub-section (1) shall be laid, as soon as
may be after it is issued, before each House of Parliament while it is in session, for
a total period of thirty days, which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the notification, or both Houses agree that the
notification should not be issued, the notification shall thereafter have effect only in
such modified form or be of no effect, as the case may be ; so, however, that any
such modification or annulment shall be without prejudice to the validity of anything
previously done under that notification.

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7A. 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:

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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.

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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.

7D. Employees’ Provident Funds Appellate Tribunal. – (1) The Central

Government may, by notification in the Official Gazette, constitute one or more
Appellate Tribunals to be known as the Employees’ Provident Funds Appellate
Tribunal to exercise the powers and discharge the functions conferred on such
Tribunal by this Act and every such Tribunal shall have jurisdiction in respect of
establishments situated in such area as may be specified in the notification
constituting the Tribunal.

(2) A Tribunal shall consist of one person only to be appointed by the

Central Government.

(3) A person shall not be qualified for appointment as a Presiding Officer

of a Tribunal hereinafter referred to as the Presiding Officer, unless he is, or has
been, or is qualified to be, -

(i) a Judge of a High Court; or

(ii) a District Judge.

7E. Term of office. - The Presiding Officer of a Tribunal shall hold office for
a term of five years from the date on which he enters upon his office or until he
attains the age of sixty-two years, whichever is earlier.

7F. Resignation. – (1) The Presiding Officer may, by notice in writing

under his hand addressed to the Central Government, resign his office;

Provided that the Presiding Officer shall, unless he is permitted by the

Central Government to relinquish his office sooner, continue to hold office until the
Page 14 of 34
expiry of three months from the date of receipt of such notice or until a person duly
appointed as his successor enters upon his office or until the expiry of his term of
office, whichever is the earliest.

(2) The Presiding Officer shall not be removed from his office except by
an order made by the President on the ground of proved misbehaviour or
incapacity after an inquiry made by a Judge of the High Court in which such
Presiding Officer had been informed of the charges against him and given a
reasonable opportunity of being heard in respect of those charges.

(3) The Central Government may, by rules, regulate the procedure for the
investigation of misbehaviour or incapacity of the Presiding Officer.

7G. Salary and allowances and other terms and conditions of service of
Presiding Officer. - The salary and allowances payable to, and the other terms
and conditions of service including pension, gratuity and other retirement benefits
of, the Presiding Officer shall be such as may be prescribed:

Provided that neither the salary and allowances nor the other terms and conditions
of service of the Presiding Officer shall be varied to his disadvantage after his
appointment.

7H. Staff of the Tribunal. - (1) The Central Government shall determine the
nature and categories of the officers and other employees required to assist a
Tribunal in the discharge of its functions and provide the Tribunal with such
officers and other employees as it may think fit.

(2) The officers and other employees of a Tribunal shall discharge their
functions under the general superintendence of the Presiding Officer.

(3) The salaries and all allowances and other conditions of service of the
officers and other employees of a Tribunal shall be such as may be prescribed.

7 – I. Appeals to the Tribunal. – (1) Any person aggrieved by a notification

issued by the Central Government, or an order passed by the Central Government,
or any authority, under the proviso to sub-section (3), or sub-section (4), of section
I, or section3, or sub-section(1) of section 7A, or section 7B except an order
rejecting an application for review referred to in sub-section (5) thereof, or
section 7C, or section 14B may prefer an appeal to a Tribunal against such order.

(2) Every appeal under sub-section (1) shall be filed in such form and
manner, within such time and be accompanied by such fees, as may be
prescribed.

7 – J. Procedure of Tribunals. – (1) A Tribunal shall have power to regulate its

own procedure in all matters arising out of the exercise of its powers or of the
discharge of its functions including the places at which the Tribunal shall have its
sittings.

(2) A Tribunal shall, for the purpose of discharging its functions, have all
the powers which are vested in the officers referred to in section 7A and any
proceeding before the Tribunal shall be deemed to be a judicial proceeding within
Page 15 of 34
the meaning of sections 193 and 228, and for the purpose of section 196, of the
Indian Penal Code (45 of 1860) and the Tribunal shall be deemed to be a civil
court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal
Procedure, 1973 (2 of 1974).

7K. Right of appellant to take assistance of legal practitioner and of

Government, etc., to appoint presenting officers. – (1) A person preferring an
appeal to a Tribunal under this Act may either appear in person or take the
assistance of a legal practitioner of his choice to present his case before the
Tribunal.

(2) The Central Government or a State Government or any other

authority under this Act may authorise one or more legal practitioners or any of its
officers to act as presenting officers and every person so authorised may present
the case with respect to any appeal before a Tribunal.

7L. Orders of Tribunal. – (1) 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 or may 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.

(2) A Tribunal may, at any time within five years from the date of its order,
with a view to rectifying any mistake apparent from the record, amend any order
passed by it under sub-section (1) and shall make such amendment in the order if
the mistake is brought to its notice by the parties to the appeal:

Provided that an amendment which has the effect of enhancing the amount due
from, or otherwise increasing the liability of, the employer shall not be made under
this sub-section, unless the Tribunal has given notice to him of its intention to do so
and has allowed him a reasonable opportunity of being heard.

(3) A Tribunal shall send a copy of every order passed under this section
to the parties to the appeal.

(4) Any order made by a Tribunal finally disposing of an appeal shall not
be questioned in any court of law.

7M. Filling up of vacancies. – If, for any reason, a vacancy occurs in the office
of the Presiding Officer, the Central Government shall appoint another person in
accordance with the provisions of this Act, to fill the vacancy and the proceedings
may be continued before a Tribunal from the stage at which the vacancy is filled.

7N. Finality of orders constituting a Tribunal. – No order of the Central

Government appointing any person as the Presiding Officer shall be called in
question 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.

7–O. Deposit of amount due, on filing appeal. – No appeal by the employer

Page 16 of 34
shall be entertained by a Tribunal unless he has deposited with it seventy-five per
cent of the amount due from him as determined by an officer referred to in section
7A:

Provided that the Tribunal may, for reasons to be recorded in writing, waive or
reduce the amount to be deposited under this section.

7P. Transfer of certain applications to Tribunals. – All applications which are

pending before the Central Government under section 19A, shall stand transferred
to a Tribunal exercising jurisdiction in respect of establishments in relation to which
such applications had been made as if such applications were appeals preferred to
the Tribunal.

7Q. The employer shall be liable to pay simple interest at the rate of twelve per
cent per annum or at such higher rate as may be specified in the Scheme on any
amount due from him under this Act from the date on which the amount has
become so due till the date of its actual payment:

Provided that higher rate of interest specified in the Scheme shall not exceed
the lending rate of interest charged by any scheduled bank.

8. Mode of recovery of moneys due from employers– any amount due -

(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
Page 17 of 34
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 section 8, 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.

Page 18 of 34
(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

Page 19 of 34
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.
Page 20 of 34
(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

Page 21 of 34
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).

8G. Application of certain provisions of Income-tax Act.

The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43
of 1961) and the Income-tax Certificate Proceedings rules, 1962, as in force from
time to time, shall apply with necessary modifications as if the said provisions and
the rules referred to the arrears of the amount mentioned in section 8 of this Act
instead of to the income-tax:

Provided that any reference in the said provisions and the rules to the “assessee”
shall be construed as a reference to an employer as defined in this Act.

9. Fund to be recognised under Act 11 of 1922.

For the purpose of the Indian Income-tax Act, 1922 (11 of 1922), the Fund shall be
deemed to be a recognised provident fund within the meaning of Chapter IXA of
that Act:

Provided that nothing contained in the said Chapter shall operate to render
ineffective any provision of the Scheme under which the Fund is established, which
is repugnant to any of the provisions of that Chapter or of the rules made
thereunder.

10. Protection against attachment.

(1) amount standing to the credit of any member in Fund or of any exempted
employee in a provident fund shall not in any way be capable of being assigned or
charged and shall not be liable to attachment under any decree or order of any
court in respect of any debt or liability incurred by the member or the exempted
employee, and neither the official assignee appointed under the Presidency Towns
Insolvency Act, 1909 (3 of 1909) nor any receiver appointed under the Provincial
Insolvency Act, 1920 (5 of 1920), shall be entitled to or have any claim on, any
such amount.

(2) Any amount standing to the credit of a member in the fund or of an

exempted employee in a provident fund at the time of his death and payable to his
nominee under the Scheme or the rules of the provident fund shall, subject to any
deduction authorised by the said Scheme or rules, vest in the nominee and shall
be free from any debt or other liability incurred by the deceased or the nominee
before the death of the member or of exempted employee and shall also not be
liable to attachment under any decree or order of any court.

Page 22 of 34
(3) The provisions of sub-section (1) and sub-section (2) shall, so far as
may be, apply in relation to the pension or any other amount, payable under the
Pension Scheme and also in relation to any amount payable under the Insurance
Scheme as they apply in relation to any amount payable out of the Fund.

11. Priority of payment of contributions over other debts.

(1) Where any employer is adjudicated insolvent or, being a company, an order for
winding up is made, the amount due -

(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 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

contribution to the provident fund or any insurance fund in so far as it relates to
exempted employees, under the rules of the provident fund or any insurance fund,
any contribution payable by him towards the Pension Fund under sub-section (6)of
section 17, damages recoverable under section 14B or any charges payable by
him to the appropriate Government under any provision of this Act, or under any of
the conditions specified under section 17,

shall where the liability therefore has accrued before the order of adjudication or
winding up is made, be deemed to be included among the debts which under
section 49 of the Presidency Towns Insolvency Act, 1909 (3 of 1909) or under
section 61 of the Provincial Insolvency Act, 1920 (5 of 1920) or under section 530
of the Companies Act, 1956 (1 of 1956), are to be paid in priority to all other debts
in the distribution of the property of the insolvent or the assets of the company
being wound up, as the case may be.

Explanation. - In this sub-section, and in section 17, “insurance fund” means any
fund established by an employer under any scheme for providing benefits in the
nature of life insurance to employees, whether linked to their deposits in provident
fund or not, without payment by the employees of any separate contribution or
premium in that behalf.

(2) Without prejudice to the provisions of sub-section 1, if any amount is

due from an employer, whether in respect of the employee’s contribution deducted
from the wages of the employees or the employer’s contribution, the amount so
due shall be deemed to be the first charge on the assets of the establishment, and
shall, notwithstanding anything contained in any other law for the time being in
force, be paid in priority to all other debts.

12. Employer not to reduce wages, etc.

No employer in relation to an establishment to which any Scheme or the Insurance

Scheme applies shall, by reason only of his liability for the payment of any
contribution to the Fund or the Insurance Fund or any charges under this Act or the
Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages
Page 23 of 34
of any employee to whom the Scheme or the Insurance Scheme applies or the
total quantum of benefits in the nature of old age pension, gratuity, provident fund
or life insurance to which the employee is entitled under the terms of his
employment, express or implied.

13. Inspectors.

(1) The appropriate Government may, by notification in the Official Gazette,

appoint such persons as it thinks fit to be Inspectors for the purposes of this Act,
the Scheme, the Pension Scheme or the Insurance Scheme and may define their
jurisdiction.

(2) Any Inspector appointed under sub-section (1) may, for the purpose of
inquiring into the correctness of any information furnished in connection with this
Act or with any Scheme or the Insurance Scheme or for the purpose of
ascertaining whether any of the provisions of this Act or of any Scheme or the
Insurance Scheme have been complied with in respect of an establishment to
which any Scheme or the Insurance Scheme applies or for the purpose of
ascertaining whether the provisions of this Act or any Scheme or the Insurance
Scheme are applicable to any establishment to which the Scheme or the
Insurance Scheme has not been applied or for the purpose of determining whether
the conditions subject to which exemption was granted under section 17 are being
complied with by the employer in relation to an exempted establishment.

(a) require an employer or any contractor from whom any amount is

recoverable under section 8A to furnish such information as he may consider
necessary.

(b) At any reasonable time and with such assistance, if any, as he may think
fit, enter and search any establishment or any premises connected therewith and
require any one found in charge thereof to produce before him for examination any
accounts, books, registers and other documents relating to the employment of
persons or the payment of wages in the establishment;

(c) Examine, with respect to any matter relevant to any of the purposes
aforesaid, the employer or any contractor from whom any amount is recoverable
under section 8A, his agent or servant or any other person found in charge of the
establishment or any premises connected therewith or whom the Inspector has
reasonable cause to believe to be or to have been, an employee in the
establishment;

(d) Make copies of, or take extracts from, any book, register or other
document maintained in relation to the establishment and, where he has reason to
believe that any offence under this Act has been committed by an employer, seize
with such assistance as he may think fit, such book, register or other document or
portions thereof as he may consider relevant in respect of that offence;

(e) Exercise such other powers as the Scheme may provide.

(2A) Any Inspector appointed under sub-section (1) may, for the purpose of
inquiring into the correctness of any information furnished in connection with the
Pension Scheme or for the purpose of ascertaining whether any of the provisions
Page 24 of 34
of this Act or of the Pension Scheme have been complied with in respect of an
establishment to which the Pension Scheme applies, exercise all or any of the
powers conferred on him under clause (a), (b), clause (c), or clause (d) sub-
section (2).

(2B) The provisions of the Code of Criminal Procedure, 1898 (5 of 1898)

shall, so far as may be, apply to any search or seizure under sub-section (2) or
under sub-section (2A), as the case may be, as they apply to any search or seizure
made under the authority of a warrant issued under section 98 of the said Code.

(3) ***

14. Penalties.

(1) Whoever, for the purpose of avoiding any payment to be made by himself
under this Act, the Scheme, the Pension Scheme or the Insurance Scheme or of
enabling any other person to avoid such payment, knowingly makes or causes to
be made any false statement or false representation shall be punishable with
imprisonment for a term which may extend to one year, or with fine of five
thousand rupees, or with both.

(1A) An employer who contravenes, or makes default in

complying with, the provisions of section 6 or clause a of sub-section (3) of section
17 in so far as it relates to the payment of inspection charges, or paragraph 38 of
the Scheme in so far as it relates to the payment of administrative charges, shall
be punishable with imprisonment for a term which may extend to three years but –

(a) which shall not be less than one year and a fine of ten thousand
rupees in case of default in payment of the employees’ contribution which has
been deducted by the employer from the employees’ wages;

(b) which shall not be less than six months and a fine of five thousand
rupees, in any other case:

Provided that the Court may, for any adequate and special reasons to be recorded
in the judgment, impose a sentence of imprisonment for a lesser term.

(1B) An employer who contravenes, or makes default in

complying with, the provisions of section 6C, or clause a of sub-section (3A) of
section 17 in so far as it relates to the payment of inspection charges, shall be
punishable with imprisonment for a term which may extend to one year but which
shall not be less than six months and shall also be liable to fine which may extend
to five thousand rupees:

Provided that the Court may, for any adequate and special reasons to be recorded
in the judgment, impose a sentence of imprisonment for a lesser term.

(2) Subject to the provisions of this Act, the Scheme, the Pension Scheme
or the Insurance Scheme may provide that any person who contravenes, or makes
default in complying with, any of the provisions thereof shall be punishable with
imprisonment for a term which may extend to one year, or with fine which may
extend to four thousand rupees, or with both.
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(2A) Whoever contravenes or makes default in complying with any provision
of this Act or of any condition subject to which exemption was granted under
section 17 shall, if no other penalty is elsewhere provided by or under this Act for
such contravention or non-compliance, be punishable with imprisonment which
may extend to six months, but which shall not be less than one month, and shall
also be liable to fine which may extend to five thousand rupees.

14A. Offences by companies

(1) If the person committing an offence under this Act, the Scheme or the
Pension Scheme or the Insurance Scheme is a company, every person who at the
time the offence was committed was incharge of, and was responsible to, the
company for the conduct of the business of the company, as well as the company,
shall be deemed to be guilty of the offence and shall be liable to be proceeded
against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such
person liable to any punishment, if he proves that the offence was committed
without his knowledge or that he exercised all due diligence to prevent the
commission of such offence.

(2) Notwithstanding anything contained in sub-section (1)where an

offence under this Act, the Scheme or the Pension Scheme or the Insurance
Scheme has been committed by a company and it is proved that the offence has
been committed with the consent or connivance of, or is attributable to, any neglect
on the part of, any Director or Manager, Secretary or other officer of the company,
such Director, Manager, Secretary or other officer shall be deemed to be guilty of
that offence and shall be liable to be proceeded against and punished accordingly.

Explanation – For the purposes of this section, -

(a) “Company” means any body corporate and includes a firm and other
association of individuals; and

(b) “Director” in relation to a firm, means a partner in the firm.

14AA. Enhanced punishment in certain cases after previous

conviction - Whoever, having been convicted by a court of an offence punishable
under this Act, the Scheme or the Pension Scheme or the Insurance Scheme,
commits the same offence shall be subject for every such subsequent offence to
imprisonment for a term which may extend to five years, but which shall not be less
than two years, and shall also be liable to a fine of twenty five thousand rupees.

14AB. Certain offences to be cognizable - Notwithstanding anything

contained in the Code of Criminal Procedure, 1898 (5 of 1898) an offence relating
to default in payment of contribution by the employer punishable under this Act
shall be cognizable.

14AC. Cognizance and trial of offences – (1) No Court shall take

cognizance of any offence punishable under this Act, the Scheme or the Pension
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Scheme or the Insurance Scheme except on a report in writing of the facts
constituting such offence made with the previous sanction of the Central Provident
Fund Commissioner or such other officer as may be authorised by the Central
Government, by notification in the Official Gazette, in this behalf, by an Inspector
appointed under Section 13.

(2) No court inferior to that of a Presidency Magistrate or a Magistrate of

the first class shall try any offence under this Act or the Scheme or the Pension
Scheme or the Insurance Scheme.

14B. Power to recover damages - Where an employer makes default in the

payment of any contribution to the Fund the Pension Fund or the Insurance Fund
or in the transfer of accumulations required to be transferred by him under sub-
section (2) of section 15 or sub-section (5) of section 17 or in the payment of any
charges payable under any other provision of this Act or of any Scheme or
Insurance Scheme or under any of the conditions specified under section 17, the
Central Provident Fund Commissioner or such other officer as may be authorised
by the Central Government, by notification in the Official Gazette, in this behalf
may recover from the employer by way of penalty such damages, not exceeding
the amount of arrears, as may be specified in the Scheme.

Provided that before levying and recovering such damages, the employer shall be
given a reasonable opportunity of being heard.

Provided further that the Central Board may reduce or waive the damages levied
under this section in relation to an establishment which is a sick industrial company
and in respect of which a scheme for rehabilitation has been sanctioned by the
Board for Industrial and Financial Reconstruction established under section 4 of
the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), subject
to such terms and conditions as may be specified in the Scheme.

14C. Power of court to make orders - (1) Where an employer is

convicted of an offence of making default in the payment of any contribution to the
Fund, the Pension Fund or the Insurance Fund or in the transfer of accumulations
required to be transferred by him under sub-section (2) of section 15 or sub-section
(5) of section 17, the court may, in addition to awarding any punishment, by order
in writing require him within a period specified in the order which the court may, if it
thinks fit and on application in that behalf from time to time, extend, to pay the
amount of contribution or transfer the accumulations, as the case may be, in
respect of which the offence was committed.

(2) Where an order is made under sub-section (1), the employer shall not
be liable under this Act in respect of the continuation of the offence during the
period or extended period, if any, allowed by the court, but if, on the expiry of such
period or extended period, as the case may be, the order of the court has not been
fully complied with, the employer shall be deemed to have committed a further
offence and shall be punished with imprisonment in respect thereof under section
14 and shall also be liable to pay fine which may extend to one hundred rupees for
every day after such expiry on which the order has not been complied with.

15. Special provisions relating to existing provident funds - (1) Subject to

the provisions of section 17, every employee who is a subscriber to any provident
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fund or an establishment to which this Act applies shall, pending the application of
a Scheme to the establishment in which he is employed, continue to be entitled to
the benefits accruing to him under the provident fund, and the provident fund shall
continue to be maintained in the same manner and subject to the same conditions
as it would have been if this Act had not been passed.

(2) On the application of any Scheme to an establishment, the

accumulations in any provident fund of the establishment, standing to the credit of
the employees who become members of the Fund established under the Scheme
shall, notwithstanding anything to the contrary contained in any law for the time
being in force or in any deed or other instrument establishing the provident fund
but subject to the provisions, if any, contained in the Scheme, be transferred to the
fund established under the Scheme, and shall be credited to the accounts of the
employees entitled thereto in the Fund.

16. Act not to apply to certain establishments - (1) This Act shall not
apply –

(a) to any establishment registered under the Co-operative Societies Act,

1912 (2 of 1912), or under any other law for the time being in force in any State
relating to co-operative societies employing less than fifty persons and working
without the aid of power; or

(b) to any other establishment belonging to or under the control of the

Central Government or a State Government and whose employees are entitled to
the benefit of contributory provident fund or old age pension in accordance with
any Scheme or rule framed by the Central Government or the State Government
governing such benefits; or

(c) to any other establishment set up under any Central, Provincial or

State Act and whose employees are entitled to the benefits of contributory
provident fund or old age pension in accordance with any scheme or rule framed
under that Act governing such benefits;

(2) If the Central Government is of opinion that having regard to the financial
position of any class of establishments or other circumstances of the case, it is
necessary or expedient to do so, it may, by notification in the Official Gazette, and
subject to such conditions, as may be specified in the notification, exempt whether
prospectively or retrospectively that class of establishments from the operation of
this Act for such period as may be specified in the notification.

16A. Authorising certain employers to maintain provident fund accounts -

(1) The Central Government may, on an application made to it in this
behalf by the employer and the majority of employees in relation to an
establishment employing one hundred or more persons, authorise the employer
by an order in writing, to maintain a provident fund account in relation to the
establishment, subject to such terms and conditions as may be specified in the
Scheme :

Provided that no authorisation shall be made under this sub-section if the employer
of such establishment had committed any default in the payment of provident fund

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contribution or had committed any other offence under this Act during the three
years immediately preceding the date of such authorisation.

(2) Where an establishment is authorised to maintain a provident fund

account under sub-section (1), the employer in relation to such establishment shall
maintain such account, submit such return, deposit the contribution in such
manner, provide for such facilities for inspection, pay such administrative charges,
and abide by such other terms and conditions, as may be specified in the Scheme.

(3) Any authorisation made under this section may be cancelled by the
Central Government by order in writing if the employer fails to comply with any of
the terms and conditions of the authorisation or where he commits any offence
under any provision of this Act:

Provided that before cancelling the authorisation, the Central Government shall
give the employer a reasonable opportunity of being heard.

17. Power to exempt - (1) The appropriate Government may, by

notification in the Official Gazette, and subject to such conditions as may be
specified in the notification exempt, whether prospectively or retrospectively, from
the operation of all or any of the provisions of any Scheme -

(a) any establishment to which this Act applies, if, in the opinion of the
appropriate Government, the rules of its provident fund with respect to the rates of
contribution are not less favourable than those specified in section 6 and the
employees are also in enjoyment of other provident fund benefits which on the
whole are not less favourable to the employees than the benefits provided under
this Act or any Scheme in relation to the employees in any other establishment of a
similar character; or

(b) any establishment if the employees of such establishment are in

enjoyment of benefits in the nature of provident fund, pension or gratuity and the
appropriate Government is of opinion that such benefits, separately or jointly, are
on the whole not less favourable to such employees than the benefits provided
under this Act or any Scheme in relation to employees in any other establishment
of a similar character.

Provided that no such exemption shall be made except after consultation with the
Central Board which on such consultation shall forward its views on exemption to
the appropriate Government within such time limit as may be specified in the
Scheme.

(1A). Where an exemption has been granted to an establishment under

clause (a) of sub-section (1),

(a) the provisions of sections 6, 7A, 8 and 14B shall, so far as may be, apply
to the employer of the exempted establishment in addition to such other conditions
as may be specified in the notification granting such exemption, and where such
employer contravenes, or makes default in complying with any of the said provision
or conditions or any other provision of this Act, he shall be punishable under
section 14 as if the said establishment had not been exempted under the said
clause (a);
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(b) the employer shall establish a Board of Trustees for the administration of
the provident fund consisting of such number of members as may be specified in
the Scheme;

(c) the terms and conditions of service of members of the Board of Trustees
shall be such as may be specified in the Scheme:

(d) The Board of Trustees constituted under clause (b) shall –

(i) maintain detailed accounts to show the contributions credited,

withdrawals made and interest accrued in respect of each employee;

(ii) submit such returns to the Regional Provident Fund Commissioner or any
other officer as the Central Government may direct from time to time;

(iii) invest the provident fund monies in accordance with the directions issued
by the Central Government from time to time;

(iv) transfer, where necessary, the provident fund account of any employee;
and

(v) perform such other duties as may be specified in the Scheme.

(IB) Where the Board of Trustees established under clause (b) of sub-
section (1A) contravenes, or makes default in complying with, any provisions of
clause (d) of that sub-section, the Trustees of the said Board shall be deemed to
have committed an offence under sub-section (2A) of section 14 and shall be
punishable with the penalties provided in that sub-section.

(IC) The appropriate Government may, by notification in the Official

Gazette, and subject to the condition on the pattern of investment of pension fund
and such other conditions as may be specified therein, exempt any establishment
or class of establishments from the operation of the Pension Scheme if the
employees of such establishment or class of establishments are either members of
any other pension scheme or propose to be members of such pension scheme,
where the pensionary benefits are at par or more favourable than the Pension
Scheme under this Act.

(2) Any Scheme may make provision for exemption of any person or class
of persons employed in any establishment to which the Scheme applies from the
operation of all or any of the provisions of the Scheme, if such person or class of
persons is entitled to benefits in the nature of provident fund, gratuity or old age
pension and such benefits, separately or jointly, are on the whole not less
favourable than the benefits provided under this Act or the Scheme:

Provided that no such exemption shall be granted in respect of a class of persons

unless the appropriate Government is of opinion that the majority of persons
constituting such class desire to continue to be entitled to such benefits.

(2A) The Central Provident Fund Commissioner may, if requested so to do by

the employer, by notification in the Official Gazette, and subject to such conditions
as may be specified in the notification, exempt, whether prospectively or
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retrospectively, any establishment from the operation of all or any of the provisions
of the Insurance Scheme, if he is satisfied that the employees of such
establishment are, without making any separate contribution or payment of
premium, in enjoyment of benefits in the nature of life insurance, whether linked to
their deposits in provident fund or not, and such benefits are more favourable to
such employees than the benefits admissible under the Insurance Scheme.

(2B) Without prejudice to the provisions of sub-section (2A), the Insurance

Scheme may provide for the exemption of any person or class of persons
employed in any establishment and covered by that scheme from the operation of
all or any of the provisions thereof, if the benefits in the nature of life insurance
admissible to such person or class of persons are more favourable than the
benefits provided under the Insurance Scheme.

(3) Where in respect of any person or class of persons employed in an

establishment an exemption is granted under this section from the operation of all
or any of the provisions of any Scheme whether such exemption has been granted
to the establishment wherein such person or class of persons is employed, or to
the person or class of persons as such, the employer in relation to such
establishment -

(a) shall, in relation to the provident fund, pension and gratuity to which any
such person or class of persons is entitled, maintain such accounts, submit such
returns, make such investment, provide for such facilities for inspection and pay
such inspection charges, as the Central Government may direct.

(b) shall not, at any time after the exemption, without the leave of the Central
Government, reduce the total quantum of benefits in the nature of pension, gratuity
or provident fund to which any such person or class of persons was entitled at the
time of exemption; and

(c) shall, where any such person leaves his employment and obtains re-
employment in another establishment to which this Act applies, transfer within such
time as may be specified in this behalf by the Central Government, the amount of
accumulations to the credit of that person in the provident fund of the
establishment left by him to the credit of that person’s account in the provident fund
of the establishment in which he is re-employed or, as the case may be, in the
Fund established under the Scheme applicable to the establishment.

(3A) Where, in respect of any person or class of persons employed in any

establishment, an exemption is granted under sub-section (2A) or sub-section (2B)
or from the operation of all or any of the provisions of the Insurance Scheme
whether such exemption is granted to the establishment wherein such person or
class of persons is employed or to the person or class of persons as such, the
employer in relation to such establishment –

(a) shall, in relation to the benefits in the nature of life insurance, to which
any such person or class of persons is entitled, or any insurance fund, maintain
such accounts, submit such returns, make such investments, provide for such
facilities for inspection and pay such inspection charges, as the Central
Government may direct;

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(b) shall not, at any time after the exemption without the leave of the
Central Government, reduce the total quantum of benefits in the nature of life
insurance to which any such person or class of persons was entitled immediately
before the date of the exemption.

(c) ***

(4) Any exemption granted under this section may be cancelled by the
authority which granted it, by order in writing, if an employer fails to comply, -

(a) in the case of an exemption granted under sub-section (1), with any of
the conditions imposed under that sub-section or sub-section (1A) or with any of
the provisions of sub-section (3);

(aa) in the case of an exemption granted under sub-section (1C), with any
of the conditions imposed under that sub-section; and

(b) in the case of an exemption granted under sub-section (2), with any of
the provisions of sub-section (3);

(c) in the case of an exemption granted under sub-section (2A), with any
of the conditions imposed under that sub-section or with any of the provisions of
sub-section (3A);

(d) in the case of an exemption granted under sub-section (2B), with any
of the provisions of sub-section (3A).

(5) Where any exemption granted under sub-section (1), sub-section (1C),
sub-section (2), sub-section (2A) or sub-section (2B) is cancelled, the amount of
accumulations to the credit of every employee to whom such exemption applied, in
the provident fund, the Pension Fund or the Insurance Fund of the establishment in
which he is employed together with any amount forfeited from the employer’s
share of contribution to the credit of the employee who leaves the employment
before the completion of the full period of service shall be transferred within such
time and in such manner as may be specified in the Scheme or the Pension
Scheme or the Insurance Scheme to the credit of his account in the Fund or the
Pension Fund or the Insurance Fund, as the case may be.

(6) Subject to the provisions of sub-section (1C), the employer of an

exempted establishment or of an exempted employee of an establishment to which
the provisions of the Pension Scheme apply, shall, notwithstanding any exemption
granted under sub-section (1) or sub-section (2), pay to the Pension Fund such
portion of the employer’s contribution to its provident fund within such time and in
such manner as may be specified in the Pension Scheme.

17A. Transfer of accounts – (1) Where an employee employed in an

establishment to which this Act applies leaves his employment and obtains re-
employment in another establishment to which this Act does not apply, the amount
of accumulations to the credit of such employee in the fund, or as the case may be,
in the provident fund of the establishment left by him shall be transferred, within
such time as may be specified by the Central Government in this behalf, to the
credit of his account in the provident fund of the establishment in which he is re-
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employed, if the employee so desires and the rules in relation to that provident
fund permit such transfer.

(2) Where an employee employed in an establishment to which this Act

does not apply leaves his employment and obtains re-employment in another
establishment to which this Act applies, the amount of accumulations to the credit
of such employee in the provident fund of the establishment left by him may, if the
employee so desires and the rules in relation to such provident fund permit, be
transferred to the credit of his account in the Fund or as the case may be, in the
provident fund of the establishment in which he is re-employed.

17AA. Act to have effect notwithstanding anything contained in Act 31 of 1956 -

The provisions of this Act shall have effect notwithstanding anything inconsistent
therewith contained in the Life Insurance Corporation Act, 1956 (31 of 1956).

17B. Liability in case of transfer of establishment - Where an employer, in

relation to an establishment, transfers that establishment in whole or in part, by
sale, gift, lease or licence or in any other manner whatsoever, the employer and
the person to whom the establishment is so transferred shall jointly and severally
be liable to pay the contribution and other sums due from the employer under any
provision of this Act or the Scheme or the Pension Scheme or the Insurance
Scheme as the case may be, in respect of the period upto the date of such
transfer:

Provided that the liability of the transferee shall be limited to the value of the assets
obtained by him by such transfer.

18. Protection of Action taken in good faith - No suit, prosecution or other

legal proceeding shall lie against the Central Government, a State Government,
the Presiding Officer of a tribunal, any authority referred to in section 7A, an
Inspector or any other person for anything which is in good faith done or intended
to be done in pursuance of this Act, the Scheme, the Pension Scheme or the
Insurance Scheme.

18A. Presiding Officer and other officers to be public servants - The

Presiding Officer of a Tribunal, its officers and other employees, the authorities
referred to in section 7A and every Inspector shall be deemed to be public servants
within the meaning of section 21 of the Indian Penal Code (45 of 1860).

19. Delegation of powers - The appropriate Government may direct that

any power or authority or jurisdiction exercisable by it under this Act, the Scheme,
the Pension Scheme or the Insurance Scheme shall, in relation to such matters
and subject to such conditions, if any, as may be specified in the direction, be
exercisable also -

(a) where the appropriate Government is the Central Government, by

such officer or authority subordinate to the Central Government or by the State
Government or by such officer or authority subordinate to the State Government,
as may be specified in the notification; and

Page 33 of 34
(b) where the appropriate Government is a State Government, by such
officer or authority subordinate to the State Government as may be specified in the
notification.

20. Power of Central Government to give directions - The Central

Government may, from time to time, give such directions to the Central Board as it
may think fit for the efficient administration of this Act and when any such direction
is given, the Central Board shall comply with such direction.

21. Power to make rules – (1) The Central Government may, by notification in the
Official Gazette, make rules to carry out the provisions of this Act.

(2) Without prejudice to the generality of the foregoing power, such rules
may provide for all or any of the following matters, namely:-

(a) the salary and allowances and other terms and conditions of service
of the Presiding Officer and the employees of a Tribunal;

(b) the form and the manner in which, and the time within which, an
appeal shall be filed before a Tribunal and the fees payable for filing such appeal;

(c) the manner of certifying the copy of the certificate, to be forwarded to

the Recovery Officer under sub-section (2) or section 8C; and

(d) any other matter which has to be, or may be, prescribed by rules under
this Act.

(3) Every rule made under this Act shall be laid, as soon as may be after it
is made, before each House of Parliament, while it is in session, for a total period
of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session
or the successive sessions aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be made, the
rule shall thereafter have effect only in such modified form or be of no effect, as the
case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.

22. Power to remove difficulties – (1) If any difficulty arises in giving effect
to the provisions of this Act, as amended by the Employees’ Provident Funds and
Miscellaneous Provisions (Amendment) Act, 1988, the Central Government may,
by order published in the Official Gazette, make such provisions, not inconsistent
with the provisions of this Act, as appear to it to be necessary or expedient for the
removal of the difficulty:

Provided that no such order shall be made after the expiry of a period of three
years from the date on which the said Amendment Act receives the assent of the
President.

(2) Every order made under this section shall, as soon as may be after it is made,
be laid before each House of Parliament.

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