EPF Act - The Legal Chamber

This Supreme Court judgment interprets the interplay between the priority of secured creditors under Section 26E of the SARFAESI Act and the statutory first charge for provident fund dues under Section 11(2) of the EPF & MP Act. The Supreme Court held that the statutory first charge for provident fund contributions overrides the priority granted to secured creditors, even under a non-obstante clause in a later enactment. Facts Of The Case: The appellant, Jalgaon District Central Co-operative Bank Ltd., is a secured creditor which had advanced loans to a co-operative sugar society, secured by a mortgage and hypothecation of the society's assets. The sugar factory became defunct, leading to loan defaults. The bank initiated recovery under the SARFAESI Act, took possession o...

The Supreme Court upheld the clubbing of two pharmaceutical companies under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, emphasizing the principles of unity of ownership, management, functional integrality, and financial unity. The Court rejected the argument that separate juristic entities preclude clubbing, affirming that the EPF Act, as a beneficial legislation, must be interpreted to prevent evasion. The decision reiterated that multiple factors, including common premises, shared infrastructure, and unified management, cumulatively determine whether entities constitute a single establishment. The judgment reinforced the authorities' discretion to assess dues retrospectively once clubbing is established. Facts Of The Case: The case involved M/s Torino Laborat...

Tag: EPF Act

Landmark Ruling: Supreme Court Says Two Companies Are One for EPF Compliance