tBEFORE THE REGIONAL PROVIDENT FUND COMMISIONER - I,

AUTHORITY U/S 7A OF THE EPF AND MP ACT, 1952, EPFO

REGIONAL OFFICE, DELHI (WEST)

In the matter of:

M/s Mass Management Services Pvt. Ltd, 320-321, Third Floor, Ansal Chamber -
II, 6, Bhikaji Cama Place, New Delhi 110066

Ref : Inquiry U/s 7A of the EPF and MP Act, 1952

Period of Inquiry : 04.2012 to 03.2016

Date of hearing : 10 December 2019

FINAL SUBMISSION ON BEHALF OF M/S MASS MANAGEMENT IN

COMPLIANCE OF THE DIRECTIONS ISSUED BY THE HON'BLE
AUTHORITY VIDE ORDER DATED 19.11.2019

Sir,

Most Respectfully Showeth:

At the outset, the Answering Respondent denies all the averments that have been
alleged upon the Answering Respondent made in the reply save as and except those
specifically admitted hereinafter. Any facts or averments in the reply which are not
specifically traversed hereinafter may be treated as specifically denied. The
Answering Respondent is astonished to receive a reply inconsistent with the true
facts and statements which are misrepresented by the Enforcement Officer (for the
sake of brevity hereinafter referred to as the "EO"). The EO has not placed on record
any document or an iota of evidence to substantiate his claim. Further, the allegations
are ill founded and misconceived, and is an attempt to mislead the Adjudicating
Authority.

INTERIM PRELIMINARY SUBMISSIONS:

1. That this submission is being provided to you after carefully perusing all the
documents submitted by the Department and in light of all the judgments of
 various courts on provident fund (in short "PF"). The bills that Answering
Respondent has submitted in the previous hearings clearly show that in no
circumstance, the Answering Respondent received any sum of money on
account of the PF deposit, which it failed to deposit.

2. That the Answering Respondent has strictly complied with the agreement
between Ashok Hotel and Mass Management dated 30.03.2012 and the rules
and regulations therein and deposited the contributions according to the
amount provided to the Answering Respondent. The Answering Respondent’s
accounts and balance sheets clearly indicate that they have submitted exactly
the amount which was instructed to pay and thereafter paid the dues of the all
employees.

3. That to give some perspective a man day constitutes 8 hours of work in a day.
Also, extra time/ over time means that a person who has worked for more than
48 hours in a week over and above that is considered as working extra time.
Let's take one example, in the case of Jitender Yadav for the month of July
2012, the PF amount is 955 which is calculated on Basic wages (7020 x 13.61/
100) = 955. Whereas, if it were calculated on the total amount or on man-days
multiplied with per day rate for normal duty then the result would have been
different like 13230 x 13.61/ 100 = 1800.6 which is not the case as can been
seen from the payment sheet provided to the Ashok Hotel. The final invoice
(inclusive of all amount) that has been is attached is a collation of the CTC of
all workers/employees. Whereas, the excel sheet has the break up as per the
governing law of EPF. Therefore, EPF does not apply directly on the CTC.

4. That Ashok hotel has given in their written submissions that they have not
made any payment of PF on extra duties and by submitting this, it is clear that
Ashok has admitted that the Answering Respondent has not been paid the PF
amount on the total salary of each worker but only on basic wages. Also, in
the PF report itself, the EO has admitted that PF amount is not deducted from
employees on any extra amount except wages so it is absolutely clear that
neither the Answering Respondent has been paid any extra PF on total man
days or on extra days nor deducted any amount from employees and kept with
the Answering Respondent, so allegation of siphon is unfounded and the
Answering Respondent have submitted with competent authority all the
 documentary evidence in support of complete bill and payment sheet, the
Answering Respondent are submitting bank transfer details, salary slips in
support which clearly suggests that whatever amount the Answering
Respondent have received in term of incentives has been paid to the workers
directly and nothing has been kept by the Answering Respondent.

5. That as per terms of NIT tender and as per government norms, man-days
would mean 26 x 8 = 208 hours in a month, if a person works more than 8
hours in a day, it would be considered overtime or incentive, this extra amount
is basically the same amount and if there is any confusion due to this fact, then
it's a case of overtime wages and not a case of PF not being paid. Moreover,
it is clear to Ashok Hotel and in accordance to their calculations, the amount
of incentives were paid and this work was allocated as per a matter of choice
of employees and the workers are not forced/coerced to work. It is a matter of
fact and record that the Answering Respondent are only a medium between
Ashok Hotel and the contractual staff. It is pertinent to mention that the
Answering Respondent is the medium and not the controller of the workers.
Ashok Hotel has the financial control, administrative control

6. That if we calculate the wages that were paid to the employees they comply
to the statutory requirements of the Minimum Wages Act, 1948 and are above
the minimum wages which the government was supposed to pay to all its
workers from the year 2012 to 2016. Therefore, the Answering Respondent in
compliance with the abovesaid provisions cannot be held liable as the
minimum wages paid by the Answering Respondent are in accordance with
the Minimum Wages Act, 1948.

7. It is pertinent to note from the fictitious claims by the EO that it is a clear

indication of the fact that the sole purpose of the EO was to extort large sum
of money with a mala fide intent to defeat the interest of the innocent
Answering Respondent. Ergo, the acts of EO prima facie depict that mala fide
intent to deceive this Hon'ble adjudicating authority.

INTERIM PARAGRAPH WISE REPLY

1. That the contents of Paragraph 1 needs no reply.

2. The contents of Paragraph 2 seem to be partially true but the amount decided
by the squad of the Enforcement Officer is frivolous and baseless. That it is
true that the cause of initiation of the present inquiry was the complaint filed
by Ashok Hotel Mazdoor Janta Union for non payment of PF on leave salary
of employees for the period April 2012 to March 2016. The month wise
evaded dues in respect of the Answering respondent has been wrongly
quantified on the basis of the bills raised by the Principal Employer for the
inquiry period vide the report of the Enforcement Officer dated 04.07.2019 to
the tune of INR 1,26,78,996 (One Crore Two Six Lakhs Seventy Eight
Thousand Nine Hundred And Sixty Six Only). The same has been considered
as dues payable by the Answering Respondent for the period from April 2012
to March 2016. It is vague and uncertain as to how the department has
calculated the sum of INR 1,26,78,996 ( One Crore Twenty Six Lakhs Seventy
Eight Thousand Nine Hundred and Sixty Six Only) without any calculations,
which makes it questionable since, there have been no computations shown in
that reply.

3. That the contents of paragraph 3 are denied and nothing in your reply be
treated as admitted merely for want of the specific traverse and the
observations of the squad are essential in finding the correct sum which is
liable to be paid.
 The sub point No. 1 is true.
 The sub point No. 2 is true.
 The job work contract has two types of workers namely Unskilled and
Semi Skilled. Under the contract, the answering respondent was
awarded the contract on a temporary basis for a period of one year on
an annual rate of 1,36,85,028/- all inclusive excluding service tax from
the date of commencement of work w.e.f. 1 April 2012. It is incorrect
that the contactor is paid unit wise prescribing minimum mandays
required per day. It is true that the contactor is paid inclusive of all
wages and statutory liabilities but not material.
 It is false that in case of empanelled agencies, the Answering
Respondent hires skilled, technical and professional manpower who
 are paid minimum wages and the contractor agencies are paid service
charge.
 It is true that bills were raised separately for Kitchen, Food and
Beverage, Banquet services, Drivers etc. It is true an additional sum has
been paid to the workers on account of working on weekly off and as
relievers. It is false that the contractor has claimed all the statutory dues
including the employer share of PF contribution from the hotel on the
extra duty wages. Under the Act, the definition of basic wages does not
include PF on the overtime work or extra duty work. There was no
money remitted because there was in fact no money claimed from
Ashok Hotel for the extra duty work and therefore no money was given
to EPFO on this aspect. It is true that no employee share was deducted
on extra duty wages as per wage sheet because under the Act, PF is not
liable to be paid on extra duty wages/ over time work.
 It is false that bills have been raised on the basis of mandays and not on
the basis of wages earned by the individual worker. The wage sheets
are very elaborate, specific and completely coincide/equate with all the
accounts. It is absolutely incorrect to state that the number of mandays
have been multiplied with the CTC per worker to arrive at the amount
of workers remuneration. In fact, the wage sheet gives a clear picture
that the PF and ESIC has been calculated on the basic wages earned by
the employee. For instance, let's take the case of Jitender Yadav for the
month of July 2013, the PF amount is 1051 which is calculated on Basic
wages (7722 x 13.61/ 100) = 1051. Whereas, if it were calculated on
the total amount or on man-days multiplied with per day rate for normal
duty then the result would have been different like 15147 x 13.61/ 100
= 2061.5 which is not the case as can been seen from the wage sheet
provided to the Ashok Hotel. It is wrong and denied that the extra duties
rendered by the workers on weekly offs, national holidays and overtime
wage have been converted into mandays and wages, PF, ESIC and other
liabilities have been claimed on the total amount as per the mandays.
Our wage sheet speaks for itself and one glance at the wage sheet will
disprove all the erroneous claims made by the department.
 That it is vague and unclear that the bills raised by service provider for
the period April 2012 to March 2016 has claimed a sum amounting to
 INR 54,63,193/- from the Ashok Hotel against employer fund
contributions @ 13.61%. These claims made by the department hold no
substance as they have not given the details of how the sum has been
calculated neither is there any annexure provided to substantiate the
claim of INR 54,63,193/-.
 That it is outrageous and unbelievable that the PF dues have been
totaled as INR 1,26,78,966 with a calculation sheet of the squad which
has been made without any proof of how the sum was calculated. The
wage sheet has been made arbitrarily and has no basis or the department
has not explained where the sum has been calculated. This wage sheet
holds no veracity and cannot form a legal basis to claim money. For
e.g. Serial No. 1, April 2012 evaded PF wages have been calculated as
INR 5,92,026 but how did the department come up with this number?

4. That the contents of Paragraph 4 seem to be true and needs no reply.

5. That the contents of Paragraph 5 are true and are the submissions of answering
respondent which it relies upon with other facts to prove its case.

6. That the contents of Paragraph 6 is a matter of fact and needs no reply.

7. That the contents of Paragraph 7 is a matter of fact and undisputed which

needs no reply.

8. That the contents of Paragraph 8 are partially true and is accepted that it was
the duty of the Answering Respondent to follow the terms of payment to the
workers with the dictated sanctity under the contract which the Answering
Respondent has done and any scheme of payment which compromised with
the terms and ethos of the contract was not only against the stated objective
of the contract but also a compromise on the cost of social security incentive
of the concerned workers of the Answering Respondent, more so as it played
to the monetary benefits to the Answering Respondent over and above the
rightful social security interest of the workers.

9. That the contents of Paragraph 9 are partially true and is accepted that the
question of EPF liability should be looked from the lens of the terms of
 contract but it is wrong to state that the Answering Respondent has not
followed the law of the land and dispense its statutory liabilities as per the
terms of trade and has rather exhibited nothing to substantiate its claim other
that self-designed salary sheet which in all fairness is an abrupt contradiction
from the terms of contract. But we would like to state it is that the salary sheet
provided is as per the terms of the trade and gives a much more detailed point
of view of the structure of the wages of the workers.

10.That the contents of Paragraph 10 are denied being frivolous, misconceived

and baseless as it is incorrect for the Principal Employer to state that
Answering Respondent despite receiving the monthly payment as per the
contract chose not to deliver upon its EPF responsibility and did not pay the
proportionate EPF component of the wage charged from them, In fact we
would like to state that all the payment with respect to EPF has been disbursed
by the Answering Respondent and that is the reason why there was a breakup
figure in the salary structure to inform the Principal Employer that the EPF
amount has been disbursed by the Answering Respondent as per the terms of
the trade.

11.That the contents of Paragraph 11 are partially admitted. It is true that the
agreement stipulated that the service provider would deploy its workforce as
per the minimum mandays indicated in the scope of work which has been
complied by mass management. It is true as per the contract that there can be
no rotation of the same manpower by giving additional duties during holidays.
The Answering Respondent would like to throw some light on the fact that
as per the cost of contract which has been provided to us as an Annexure it is
mentioned that number of Operative staff required per day for room and house
maintenance is 84 in unskilled category and 3 in supervisory category whereas
mass management has in fact provided more that 150 staff per day to perform
its duties. Also as per the agreement Relievers were provided by the
Answering Respondent for weekly off and holidays.

12.The contents of Paragraph 12 are a matter of record and needs no reply.

13.That the contents of Paragraph 13 are a matter of fact that mass management
has given the calculation sheet total contract amount to the Principal Employer
with detailed breakup. It is true that the above total amount includes EPF
 component of 13.61% in the scheme of charges is received by mass
management from the bills raised to Ashok Hotel.
14.That the contents of Paragraph 14 are partially admitted. It is admitted that
there should not be rotation of the same staff and in furtherance of that we
have provided more than the required personnel. Also, the matter regarding
payment to the workers for the duties of the extra/over time that they perform
is within the jurisdiction of another adjudicating authority and EPFO does not
have the authority to look into this matter. The answering respondent has paid
the requisite money in the EPF account of its workers
15.That the contents of Paragraph 15 are partially true. It is true that the monthly
CTC per workers also include the statutory PF share and minimum mandays
have been prescribed in the contract per days and it is also true to state that
Service Provider should employ extra manpower of suitable category to and
not rotate the same manpower by giving additional duties during holidays/
weekly off etc. but it is incorrect to state that statutory EPF dues has not been
paid by the Answering Respondent . We would like to clarify that the
Answering Respondent has paid the above mentioned dues. It is stated that
the department has not provided the Annexure for calculating the sum of INR
1149315/- for the year 2012-13. Further, as per the agreement and as per law
there is no requirement to pay PF on overtime work and thus, PF has been
remitted to the EPFO as was claimed by Ashok Hotel.
16.That the contents of Paragraph 16 are denied being frivolous, misconceived
and baseless as it is incorrect to state that Answering Respondent rotated the
regular staff for absentees which is in gross violation of the terms of the
agreement as it has been provided by the Answering Respondent in an
Annexure that it has provided 150 personnel which way more than what was
demanded by the Principal Employer which completes negates the statement
made by them in this paragraph.
17.That the contents of Paragraph 17 are denied being frivolous, misconceived
and baseless and are liable to be dismissed as it is incorrect to state that we
have not paid the EPF dues by way of entailing a fabricated scheme of Extra
wages. We would like to state that the above mentioned dues has been paid
by the Answering Respondent and no fabricated scheme has been used by us.
Also, the statement given by the Principal Employer that there is no rotation
of manpower does not hold water as it has been clearly stated above that more
than required amount of Personnel has been provided by the Answering
 Respondent to Ashok Hotel. Also, the matter regarding payment for the
overtime work is matter which is to be adjudicated by another Labour
authority and the same does not come under the purview of employees
provident. The answering respondent has not paid provident fund benefits on
extra duty wages because under the law there is no requirement to pay PF on
extra/over time work.
18.That the contents of Paragraph 18 is wrong and denied in so far as it rests its
claim of full provident fund payment upon the money it charged from its
principal employer as the Answering Respondent raised the bill on the basis
of mandays and not on the basis of wages earned for the individual worker. In
fact, the answering respondent has paid the full amount of provident fund on
the basic wages of the workers as per the law and not paid PF on the “Extra
Duty” wages. It is wrong and denied that the appropriate EPF contribution
towards each employee can only be arrived at by calculating EPF
contributions over the appropriate remuneration to each such employee which
in fact, is the amount calculated by multiplying the number of mandays with
the CTC per worker which in deed has been claimed by the Answering
Respondent from its principal employer. This is where the department has
confusion, the answering respondent has calculated the EPF only on the basic
wages of the employees and not on the total cost to company and this is as per
the requirement of law and this is exactly the sum claimed from the principal
employer. It would be grossly incorrect if the Answering Respondent
calculates the sum by multiplying the number of working days with the cost
to company per worker as it would be highly inflated and the amount would
not be as per the Agreement.
19.That the contents of Paragraph 19 are incorrect and unacceptable. The
conclusion drawn by the department is based on incorrect understanding of
the issue. The answering respondent has claimed bona fide statutory dues
from the principal employer in accordance to the provisions of the agreement.
The bifurcation of the wage component into basic and extra wages has been
done so as to give a complete picture and a detailed outlook on the wages
given to its worker. It is true that no wage component in the name and style
of “Extra Duty Wages” finds any mention under the terms of agreement.
20.That the contents of Paragraph 20 is wrong and denied that the whole scheme
of things is one such way of siphoning the funds and PF evasion. It is wrong
that the Answering Respondent’s computation of wage sheet favours its
 financial suitability in such a way that the amount claimed by from the
principal employer in the bills as shown as tallied with the wage sheet in
accordance with the bills and PF is deducted only on the basic wages whereas
the employer share of PF contribution/ components have been claimed from
the principal employer on the basis of man days as explained above.
21.That the contents of Paragraph 21 have been taken from our reply dated
20.09.2019 and have been ditto copied from our submissions. The cases
mentioned are landmark cases which defined basic wages elaborately and they
are not relevant to prove any point by the department and by this submission
the department has shown that they have not applied their mind while
providing this reply.
22.That the contents of Paragraph 22 have been taken from our reply dated
20.09.2019 and have been ditto copied from our submissions. The case that
has been mentioned gives a detailed account of which amount is to be included
in basic wages, which is not relevant to the claims made by the department.
The department is alleging evasion of EPF then why would the department
give case laws relating to the definition of basic wages is incomprehensible to
the answering respondent.
23. That the contents of Paragraph 23 are partially admitted as under
i) It is admitted that the agreement dated 30.03.2012 provide for grant of EPF
benefit to each and every worker.
ii) It is admitted that CTC per worker has been defined in the agreement.
iii) It is admitted that point number 3 is mentioned in the agreement.
iv) It is admitted that the point number 4 is mentioned in the agreement.
v) It is true that there is no salary head extra duty wages in the agreement but
this bifurcation is given to differentiate between basic wages and overtime
wages and not to mislead anyone.
vi) It is incorrect to state that the bills raised by the establishment are
contradictory to the terms and conditions of the agreement.
vii) It is factually wrong to state that the EPF and allied dues proposed to
be determined has been certified by the principal employer

PRAYER
That the answering respondent, therefore, humbly prays this Hon'ble
Adjudicating Authority for the following orders:
a. Dismiss any form of proceeding against the Answering Respondent and
exempt the penalty of INR 1,26,78,966 (One Crore Twenty Six Lakhs
Seventy Eight Thousand Nine Hundred And Sixty Six Only);
b. Prosecute the Enforcement Officer for mala fide intention and
misrepresentation before this Authority;
c. Further orders be made and direction be given as this Hon'ble Adjudicating
Authority may deem fit and proper.

And the Answering Respondent as in duty bound shall ever pray.

Director
Mass Management Services Pvt. Ltd.