No EPF exemption for private educational institutions: Hyderabad High Court

Hyderabad: The Hyderabad High Court has made it clear that private educational institutions cannot claim exemption from the Employees Provident Fund Act 1952 merely on the ground that they are governed by the AP Education Act, 1982.

A division bench comprising Acting Chief Justice Dilip B. Bhosale and Justice P. Naveen Rao set aside an order passed by the EPF Appellate Tribunal at Delhi granting exemption to private educational institutions in undivided AP on a petition by the AP Private Vidya Samstala Sangham.

The Sangham had in 1996 sought exemption from the EPF Act but the Provident Fund commissioner rejected the application. The Sangham then moved an appeal before the tribunal which granted an order in its favour. The regional commissioner of EPF organisation referred the writ petition before the High Court in 1998 and a division bench ruled that EPF Act was applicable to Private Educational Institutions and allowed the plea.

The Sangham moved a civil appeal before the Supreme Court in 2002 and court remanded the matter to the High Court advising it to consider the SC judgments in the cases Sanatan Dharam Girls Secondary School and others and take a decision afresh.

After hearing the arguments, the bench disposed of the petition noting that: “If an educational institution seeks to claim exemption from EPF Act it must satisfy that there is a similar or more beneficial scheme made under the Act, and employees are enrolled into the fund.

The bench also noted that the burden lies on the individual educational institution to ensure that it has enrolled its employees under a scheme formulated by the AP government and, therefore, is exempted from the provisions of the Act.

The bench set aside the order of the tribunal pointing out that the regional commissioner raised a specific objection before the tribunal on maintainability of appeal and it has passed the order without recording the finding on the objection.

The bench made it clear that its order does not preclude individual private educational institutions from representing to the Regional Provident Fund commissioner seeking exemption, by satisfying him that they fulfil the conditions mentioned in the EPF Act.