Provisions of the EPF Act are Applicable to a Private Security Agency Engaged in the Expert Service of Providing Personnel to its client: SC

Provisions of EPF Act are applicable to a private security agency engaged in the expert service of providing personnel to its client: SC

The Supreme Court, 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, has ruled 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.

Contention of the appellant

Appellant argued 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.

Observation made by the Court

  • The Court held that, the Act of 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. A license is mandatory under Section 4 and those security agencies existing since earlier were mandated to obtain such license within one year of coming into force of the Act. A complete procedure is provided with regard to making of an application for grant of a license under Section 7, renewal under Section 8 of the Act. The eligibility for appointment as a security guard with such security agency is provided under Section 10 of the Act. Section 11 provides for the condition of the license and the license can be cancelled under Section 13. A private security agency under Section 15 is required to maintain a register inter alia with the names, addresses, photographs and salaries of the private security guards and supervisors under its control.
  •  The Private Security Agencies Central Model Rules, 2006, framed under the Act of 2005, requires verification by the security agency before employing any person as a security guard or supervisor in the manner prescribed. Proper security training of the person employed is the responsibility of the security agency under Rule 5, and Rule 6 prescribes the standard of physical fitness for security guards. Under Rule 14 the security agency is required to maintain a Register in Form VIII, Part­I of which contains details of the management, Part­II contains the name of the guard, his parentage, address, photograph, badge no. and the salary with the date of commencement. Part III contains the name of the customer, address, the number of guards deployed, date of commencement of duty and date of discontinuance. Part IV contains the name of the security guard/supervisor, address of the place of duty if accompanied by arms, date and time of commencement of duty and date and time of the end of duty, it said.
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“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.”

  • It further added 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 Court held that, “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 Name: PANTHER SECURITY SERVICE PRIVATE LIMITED vs. EMPLOYEES’ PROVIDENT FUND ORGANISATION

Citation:  CIVIL APPEAL NOs.4434­4435 OF 2010
Coram: Justices Navin Sinha and Surya Kant

[ Provisions of EPF Act are applicable to a private security agency engaged in the expert service of providing personnel to its client: SC ]

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