Authority: Calcutta High Court (Justice Shampa Dutt (Paul))

Order Date: 07 July 2026

Case Overview

  • Petitioners: Vodafone Idea Limited (Petitioner No.1) and Aniruddha Banerjee (proprietor of Shomuk Engineering & Consultancy Services) filed WPA 27424 of 2024; separate writ WPA 27799 of 2024 was filed by the contractor.
  • Respondents: Regional Provident Fund Commissioner‑II/Recovery Officer, Employees' Provident Fund Organisation and other PF authorities.
  • Background: In 2014 Vodafone Idea entered a service agreement with Shomuk Engineering for manpower supply and engineering works, subsisting until August 2018. The agreement stipulated that the service provider (Shomuk) would pay salaries and all statutory contributions, while Vodafone would only reimburse service fees.
  • On 6 April 2023 the EPF Commissioner issued an assessment order (E‑Court Diary No. 83/2017) directing Shomuk Engineering to pay Rs 1,81,34,381 for non‑payment of statutory EPF contributions under Section 7A of the EPF & MP Act, 1952.
  • The assessment was based on multiple reports (EO reports dated 12‑03‑2019, 18‑01‑2023, and clarification dated 10‑03‑2023) which found wage‑splitting, abnormally high conveyance allowances (18‑65 % of basic pay), and sub‑terfuge to reduce PF liability.
  • Shomuk accepted the quantum of dues in the hearing dated 23‑01‑2023 and the liability was broken down in Annex‑A to Annex‑F (conveyance allowance, contractor‑wise EPF dues, site expenses, etc.).
  • On 3 September 2024 Shomuk sent a letter to Vodafone stating that Vodafone was liable for employee dues, attaching the 6‑April‑2023 assessment order.
  • A subsequent notice dated 6 Nov 2024 demanded Vodafone remit Rs 1,49,89,347 (the contractor’s share) within seven days, invoking Section 8(A)(1) of the EPF & MP Act.
  • Vodafone contested, arguing that it was not a party to the Section 7A proceeding, that the service agreement placed salary and statutory obligations on Shomuk, and that the assessment covered employees of several principal employers, not solely Vodafone.
  • The court noted that the contractor had admitted payment of salaries and that the EPF authority’s reliance on Section 8(A)(1) was misplaced given the contractual terms and the multi‑employer nature of the assessment.
  • Earlier related proceedings: WPA 21772 of 2023 (assessment accepted, cheque of Rs 50 lakh ordered, later dismissed), appeal MAT 41/42 of 2025 (Division Bench upheld appellant’s undertaking to pay, labelled attempts to resile as contempt), and subsequent writ applications.

Final Outcome

  • The impugned notice dated 6 Nov 2024 and the assessment order dated 6 April 2023 are quashed as being bad in law.
  • WPA 27424 of 2024 is allowed.
  • WPA 27799 of 2024 is dismissed on the ground of having no merit.
  • The PF authorities are restrained from proceeding against Vodafone Idea beyond Rs 38,09,646, and the assessment order of 6 April 2023 is set aside.
  • All connected applications and interim orders, if any, are vacated.
  • Parties may obtain a certified copy of the order upon compliance.

Topics: EPF Liability, Service Agreement Interpretation, Court Judgment