Where the lessee has right to occupy the property and dictate its management, the lessee is also responsible for remitting the EPF contributions: Himachal Pradesh High Court

The petitioner by way of lease had acquired the management of M/S Sidhbari Cooperative Tea Factory. Later, it was found that M/S Sidhbari Cooperative Tea Factory had deducted the employee’s share of contribution from their wages, but failed to deposit the contribution into the statutory fund, following which an FIR was registered against the petitioner. The petitioner asserted that he had no concern with the processing, producing, transporting and marketing of tea. Further, it was also contended that the petitioner is not registered under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (“EPF Act”) and the contributions are to be paid by the principal employer. The workers were not employed by the petitioner, but they were engaged by M/S Sidhbari Cooperative Society.

The Himachal Pradesh High Court while delving into the issue in this Cr. MMO No. 211 of 2025, observed that, the petitioner was running the factory at the time of inspection. It was specifically mentioned in the present petition that the petitioner had taken the factory on lease from M/s Sidhbari Cooperative Tea Factory. Section 2(e) of the EPF Act defines the employer as the owner or occupier of the factory, including the agent of such owner or occupier. The term occupier of the factory is defined in Section 2(k) of the EPF Act as the person who has ultimate control over the affairs of the factory, and where the affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory, the averments made in the present petition show that management of the factory was entrusted to the petitioner by way of lease. In view of the same, petitioner cannot deny his liability of remitting the contributions under the EPF Act. (Judgement dated 18.06.2025).