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CMA Intermediate · Business Laws and Ethics · Employees Provident Fund and Miscellaneous Provisions Act, 1952

The Central Government has authorised Meru Pharma Ltd to maintain its own provident fund account. It later fails to comply with a condition of the authorisation. Which statement is correct under the Code on Social Security, 2020?

The Central Government may cancel the authorisation by written order, but only after giving the employer a reasonable opportunity of being heard. Failure to comply with the authorisation's terms is a ground, yet cancellation is neither automatic nor allowed without a hearing, and no court order is needed.

  1. AThe authorisation may be cancelled by written order, but only after giving the employer a reasonable opportunity of being heardCorrect
  2. BThe authorisation is cancelled automatically on the failure
  3. CThe authorisation may be cancelled without hearing, as non-compliance is a ground
  4. DThe authorisation may be cancelled only by a court

Explanation

Cancellation is permitted where the employer fails to comply with any term or condition, or commits an offence under the Code, by written order of the Central Government. The proviso requires a reasonable opportunity of being heard first. Hence automatic or hearing-free cancellation is wrong.

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