Provident fund liability for registered contractors cannot be shifted to an exempted principal establishment, unlike unregistered contractors.

An exempted establishment under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 cannot be fastened with provident fund liability for security agencies that are independently registered and assigned separate code numbers, because such contractors are to be treated as independent employers under the Scheme. Clause 30 places responsibility on the principal employer to ensure remittance only where the contractor is not separately registered. Liability remains recoverable from the exempted establishment in respect of an unregistered contractor, but not for registered security agencies with their own code numbers. The Section 7-A order was therefore sustainable only to that limited extent.

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Issues: Whether an exempted establishment can be fastened with provident fund liability for security agencies that are independently registered and allotted separate code numbers, while liability for an unregistered contractor remains recoverable from the principal employer.

Analysis: The establishment was exempted under Section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, and the security agencies engaged by it were treated differently depending on their status under the provident fund regime. Clause 30 of the Employees' Provident Fund Scheme, 1952 places responsibility on the principal employer to ensure deposit of contributions where the contractor is not separately registered. However, where the contractor is independently registered and has its own code number, it is to be treated as an independent employer and the liability cannot be shifted to the exempted principal establishment. The order under Section 7-A was therefore sustainable only to the extent of the unregistered contractor and not in respect of the registered security agencies.

Conclusion: The liability of the exempted establishment could not be extended to the security agencies having independent code numbers, while liability for the unregistered contractor remained enforceable against it.

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