Without Inquiry u/s 7A Dues Under EPF Act Cannot be Determined
- Case Name: Edunetwork Private Limited Vs Regional Provident Fund
- Judge(s): Justice A. S. Gadkari, Justice Shyam C Chandak
The Bombay High Court quashed an FIR against Edunetwork Pvt. Ltd. for failing to deposit ₹37,23,451 in EPF subscriptions, citing procedural lapses under the EPF Act.
The company claimed the failure was due to operational transitions and later deposited ₹73,50,586, including penalties, following a Provident Fund Officer’s visit.
The Court ruled that the mandatory inquiry under Section 7A of the EPF Act was not conducted before initiating criminal proceedings, rendering the FIR unwarranted.
The Court emphasized leniency for startups and highlighted procedural deficiencies, including lack of verifiable complaints and requisite approvals for inspections.
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