EPF Provisions Applicable To Private Security Agency Providing Personnel To Its Client: Supreme Court

The Supreme Court has observed that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act are applicable to a private security agency engaged in the expert service of providing personnel to its client, if it meets the requirement of the EPF Act.

The bench comprising Justices Navin Sinha and Surya Kant observed thus while dismissing an appeal filed by Panther Security Service Private Ltd. against the High Court order affirming the Assistant Provident Fund Commissioner's order  holding it liable for compliance with the provisions of the EPF Act  and to deposit statutory dues.

In appeal, the contention was that since the salary was paid by the client and who had the ultimate control over the security guards deployed with them, the company was not the employer of these security guards and neither were they their employees. 

The court noted that Private Security Agencies (Regulation) Act, 2005 defines a private security agency under Section 2(g) as an organization engaged in the business of providing security services including training to private security guards and providing such guards to any industrial or business undertakings or a company or any other person or property.

"We have no doubt in our mind that the appellant is engaged in the specialised and expert services of providing trained and efficient security guards to its clients on payment basis. The contention that the appellant merely facilitated in providing  Chowkidars cannot be countenanced. The provisions of the Act of 2005 make it manifest that the appellant is the employer of such security guards and who are its employees and are paid wages by the appellant. Merely because the client pays money under a contract to the appellant and in turn the appellant pays the wages of such security guards from such contractual amount received by it, it does not make the client the employer of the security guard nor do the security guards constitute employees of the client.", the bench observed.

The court also said that since the company never made available the statutory registers under the Act of 2005 to the authorities under the EPF Act, it should be held that it actually withheld relevant papers. While dismissing the appeal, the bench observed:

"That the provisions of the EPF Act are applicable to a private security agency engaged in the expert service of providing personnel to its client, if it meets the requirement of the EPF Act. The question is no more res integra evident from the discussions contained in Group 4 Securitas Guarding Ltd. vs. Employees Provident Fund Appellate Tribunal & Ors., 184 (2011) DLT 591, G4S Secure Solutions India Pvt. Ltd. vs. The Regional Provident Fund Commissioner­I and Ors., ILR 2018 Karnataka 2527, Orissa State Beverages Corporation Limited vs. Regional Provident Fund Commissioner & Ors., 2016 LLR 413, Roma Henney Security Services Private Limited vs.  Central Board of Trustees, EPF Organisation, 2012 SCC OnLine Del 3597, Sarvesh Security Services Private Limited vs. University of Delhi, 2017 SCC OnLine Del 12209."

Case: PANTHER SECURITY SERVICE PRIVATE LIMITED vs. EMPLOYEES' PROVIDENT FUND ORGANISATION [ CIVIL APPEAL NOs.4434­4435 OF 2010] 
Coram: Justices Navin Sinha and Surya Kant 
Counsel: Adv S. Sunil, Adv Divya Roy

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