Provident Fund administration for absorbed employees must continue under the public audit framework where service protection is preserved.

The notification converting Punjab Engineering College into a deemed university and placing it under a society preserved the absorbed employees' service conditions and prohibited detriment by later modification. Because the institution remained fully funded by the Chandigarh Administration and its annual audit was to be entrusted to the Comptroller and Auditor General of India, the provident fund accounts were to continue under that public framework. A private trust could not be substituted for that purpose where it would prejudice employees. The refusal to maintain the General Provident Fund accounts was held unsustainable, and continuation of maintenance by the Comptroller and Auditor General was directed.

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Issues: Whether the General Provident Fund accounts of the employees of Punjab Engineering College, after its conversion into a deemed university and management by a society, were required to continue to be maintained by the Comptroller and Auditor General of India, and whether the creation of a private trust for that purpose was unsustainable.

Analysis: The employees had been serving the Chandigarh Administration and their service conditions were expressly protected by the notification governing the conversion of the college into a deemed university and its transfer to a society. Clause 29 preserved the service conditions of absorbed employees and prohibited any modification to their detriment. Clause 35 also provided that, the institution being fully funded by the Chandigarh Administration, its annual audit would be entrusted to the Comptroller and Auditor General of India. In that background, the Court held that the responsibility of the Comptroller and Auditor General did not end merely because the college had been reorganised, especially when the provident fund accounts had earlier been maintained under the same public framework and the shift to a private trust would prejudice the employees.

Conclusion: The refusal of the Comptroller and Auditor General to maintain the provident fund accounts was unsustainable, and the employees' accounts were directed to continue to be maintained by that office.

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