HC relief for PEC employees, CAG to maintain PF accounts

  • Sanjeev Verma, Hindustan Times, Chandigarh
  • Updated: Apr 26, 2014 11:42 IST

In a relief to around 350 teaching and nonteaching employees of Punjab Engineering College ( PEC) University of Technology, Chandigarh, the Punjab and Haryana high court ordered that general provident fund (GPF) accounts of employees would be maintained by the Comptroller and Auditor General (CAG) and not by the PEC society.

The directions came from a division bench comprising chief justice Sanjay Kishan Kaul and justice Arun Palli while disposing of a bunch of petitions pending since 2006.

The court directed PEC as well as CAG to t r ansfer t he funds from the PEC society to CAG while quashing orders of the accountant general (A&E), Punjab, and union territory of Chandigarh of August 3, 2006.

The court made it clear, “CAG has been carrying on the audit in the present case earlier and the conditions of the notification converting the college into a deemed university and thereafter, entrusting its management to a society registered for the said purpose itself require a continued role of CAG.”


Since it started functioning, PEC was a college under the Chandigarh administration and petitioners were regular employees of the UT. However, a notification was issued on October 16, 2003, granting a status of deemed university to the college under the University Grants Commission Act, 1956, and the college administration was vested in PEC society in July 2004.

Also, a decision was taken that responsibility of payment of salaries, allowances, loans, advances and other admissible concessions to employees should be borne by the PEC society.

Aggrieved by the decision, the employees approached the Chandigarh bench of the Central Administrative Tribunal (CAT), but in December 2005 it also refused to entertain their plea, holding that apprehensions expressed by them regarding their service conditions were only apprehensions in their minds than any reality.

Then the employees approached the high court in 2006 challenging CAT judgment.


Appearing for the petitioners, senior advocate Puneet Bali argued that when the PEC society was fully funded by the Chandig arh administration and its accounts audit was to be entrusted to CAG, then how could the authorities contend that CAG was absolved of the responsibility of maintaining accounts, including GPF of employees.

Explaining about the possible serious consequences after the creation of private trust and the GPF accounts not being maintained by CAG, it was submitted that the private trust would not have any security even regarding shortfall in the corpus.

Further, the pension trust fund would depend upon trust’s own funds alone. However, on being maintained by CAG, account was a part of the consolidated fund of India that would be secure.

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