Gujarat High Court
Bharat Sanchar Nigam Limited vs Employees' Provident on 15 February, 2016
Author: Paresh Upadhyay
Bench: Paresh Upadhyay
C/SCA/2988/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 2988 of 2015
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BHARAT SANCHAR NIGAM LIMITED ....Petitioner
Versus
EMPLOYEES' PROVIDENT
FUND ORGANIZATION ....Respondent
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Appearance:
MS P J DAVAWALA, ADVOCATE for the Petitioner
MS E.SHAILAJA, ADVOCATE for the Respondent
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CORAM: HONOURABLE MR.JUSTICE PARESH UPADHYAY
Date : 15/02/2016
ORAL ORDER
1. Challenge in this petition is made by the Bharat Sanchar Nigam Limited to the order passed by the Assistant Provident Fund Commissioner, SRO, Naroda, Ahmedabad dated 23.04.2015. By the impugned order, the respondent Authority has levied on the petitioner Establishment, (i) Interest of Rs.17,38,168/- under Section 7-Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and (ii) Damages of Rs.21,07,075/- under Section 14-B of the Act. (Total Rs.38,45,243/-).
2. At the outset it is noted that, Ms.E.Shailaja, learned advocate for the respondent Authority has, by referring to the affidavit in reply dated 17.07.2015, more particularly para:7 thereof, raised the preliminary objection against the maintainability of this petition. It is submitted that the petitioner Authority need to approach the Employees Provident Fund Appellate Tribunal under Section 7-I of the Act. It is noted Page 1 of 11 HC-NIC Page 1 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER that, there are other objections also against this petition and there is also contest on merits, however since the issue is raised against the maintainability of this petition, the same needs to be adjudicated first.
3. Ms.Davawala, learned advocate for the petitioner Authority has contended that the impugned order is passed in exercise of powers under Sections 7-Q and 14-B of the Act. It is submitted that the appeal can be filed before the Tribunal under Section 7-I of the Act, for the component of the order which relates to Section 14-B of the Act but no appeal would lie to the Tribunal, so far the part of impugned order which is under Section 7-Q of the Act is concerned. It is submitted that, when there is composite order and one part is not appealable before the Tribunal, the writ petition would be maintainable before this Court. In support of this contention, reliance is placed on the decision of Hon'ble the Supreme Court of India in the case of Arcot Textile Mills Limited Vs. Regional Provident Fund Commissioner and Others reported in (2013) 16 SCC 1. Ms.Davawala, learned advocate for the petitioner has relied on para:17 and 20 of this Judgment. Learned advocate for the petitioner has further contended that, approaching the Tribunal is not an efficacious remedy and on that count also, this petition be entertained. In support of this contention, reliance is placed on the decision of Hon'ble the Supreme Court of India in the case of Commissioner of Income Tax and Others Vs. Chhabil Dass Agarwal reported in (2014) 1 SCC 603.
4. Ms.E.Shailaja, learned advocate for the respondent Authority has submitted that, when there is composite order and one part thereof is appealable before the Tribunal, the Page 2 of 11 HC-NIC Page 2 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER entire order can be challenged before the Tribunal. It is submitted that the decision in the case of Arcot Textile Mills Limited (supra) which is relied by learned advocate for the petitioner itself makes this position clear. Ms.Shailaja, learned advocate for the respondent has relied on para:21 and 22 of this Judgment.
5. Before the rival contentions are gone into, it would be necessary to refer to Section 7-I of the Act, which reads as under.
"7-I Appeals to Tribunal: (1) Any person aggrieved by a notification issued by the Central Government, or an order passed by the Central Government or any authority, under the proviso to sub-section (3), or sub-section (4) of section 1, or section 3, or sub-section (1) of section 7A, or section 7B [except an order rejecting an application for review referred to in sub- section (5) thereof], or section 7C, or section 14B, may prefer an appeal to a Tribunal against such notification or order.
(2) Every appeal under sub-section (1) shall be filed in such form and manner, within such time and be accompanied by such fees, as may be prescribed.]"
6. Having heard learned advocates for the respective parties and having gone through the material on record and Page 3 of 11 HC-NIC Page 3 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER keeping in view the statutory provision quoted above and the decisions cited at the bar, this Court finds as under.
6.1 The impugned order is passed by the Authority in exercise of its powers under Sections 7-Q and 14-B of the Act. It is not in dispute that, so far the component of the impugned order under Section 14-B of the Act is concerned, an appeal would lie to the Tribunal. It is also not in dispute that so far the component of the impugned order under Section 7-Q of the Act is concerned, it is not referred to in the language of Section 7-I of the Act.
6.2 The issue before this Court is, when there is composite order, and one part of which is appealable and one is not before the Tribunal, whether the appeal would be maintainable before the Tribunal against the entire order.
6.3 Keeping in view the statutory provision in this regard, as quoted above, Hon'ble the Supreme Court of India in the case of Arcot Textile (supra) has observed as under.
"17. On a perusal of the aforesaid provision it is evident that an appeal to the tribunal lies in respect of certain action of the Central Government or order passed by the Central Government or any authority on certain provisions of the Act. We have scanned the anatomy of the said provisions before. On a studied scrutiny, it is quite vivid that though an appeal lies against recovery of damages under Section 14B of the Act, no appeal is provided Page 4 of 11 HC-NIC Page 4 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER for against imposition of interest as stipulated under Section 7Q. It is seemly to note here that Section 14B has been enacted to penalize the defaulting employers as also to provide reparation for the amount of loss suffered by the employees. It is not only a warning to employers in general not to commit a breach of the statutory requirements but at the same time it is meant to provide compensation or redress to the beneficiaries, i.e., to recompense the employees for the loss sustained by them. The entire amount of damages awarded under Section 14B except for the amount relatable to administrative charges is to be transferred to the Employees' Provident Fund. (see Organo Chemical Industries and another v. Union of India.)"
20. On a scrutiny of Section 7I, we notice that the language is clear and unambiguous and it does not provide for an appeal against the determination made under 7Q. It is well settled in law that right of appeal is a creature of statute, for the right of appeal inheres in no one and, therefore, for maintainability of an appeal there must be authority of law. This being the position a provision providing for appeal should neither be construed too strictly nor too liberally, for if given either of these extreme interpretations, it is bound to Page 5 of 11 HC-NIC Page 5 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER adversely affect the legislative object as well as hamper the proceedings before the appropriate forum. Needless to say, a right of appeal cannot be assumed to exist unless expressly provided for by the statute and a remedy of appeal must be legitimately traceable to the statutory provisions. If the express words employed in a provision do not provide an appeal from a particular order, the court is bound to follow the express words. To put it otherwise, an appeal for its maintainability must have the clear authority of law and that explains why the right of appeal is described as a creature of statute.
(See: Ganga Bai v. Vijay Kumar and others[3], Gujarat Agro Industries Co. Ltd. v. Muncipal Corporation of the City of Ahmedabad and Ors. [4], State of Haryana v. Maruti Udyog Ltd. and others[5], Super Cassettes Industries Limited v. State of U.P. and another[6], Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement and another[7], Competition Commission of India v. Steel Authority of India Limited and another[8])"
21. At this stage, it is necessary to clarify the position of law which does arise in certain situations. The competent authority under the Act while determining the monies due from the employee shall be required to conduct an inquiry and pass an order. An order under Section 7-A is an order that determines the Page 6 of 11 HC-NIC Page 6 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER liability of the employer under the provisions of the Act and while determining the liability the competent authority offers an opportunity of hearing to the establishment concerned. At this stage, the delay in payment of the dues and component of interest are determined. It is a composite order. To elaborate, it is an order passed under Sections 7-A and 7-Q together. Such an order shall be amenable to appeal under section 7-I. The same is true of any composite order a facet of which is amenable to appeal and Section 7-I of the Act. But, if for some reason when the authority chooses to pass an independent order under Section 7-Q the same is not appealable.
22. Coming to the case at hand, it is evident that the appellant had sent a communication dated 3.10.2007 to the Regional Provident Fund Commissioner submitting that establishment could not pay the provision fund dues from 1998 due to financial crisis, etc. and it was remitting Rs.83,01,037.80 (Rupees eighty three lacs one thousand thirty seven and eighty paise only) from 1998 to April 2006. Under these circumstances, there was no adjudication with regard to liability as the appellant company had accepted the fault on its own. As it appears the respondent does not have any cavil with regard to the dues payable towards Page 7 of 11 HC-NIC Page 7 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER the provident fund by the appellant to the company. What is disputed is that the third respondent issued a demand notice on 23.10.2007 requiring the appellant to remit a sum of Rs.94,27,334/- towards interest under Section 7Q of the Act for the belated remittances made from December 1998 to April 2006. The letter stated a computation sheet was attached to said demand notice which was rebutted by the petitioner by sending a communication stating that it was not sent and it may be provided so that they may reconcile the accounts. The demand notice manifestly has been issued in exercise of power under Section 7Q of the Act and is an independent action and against such an order or issue of demand no appeal could have been filed.
Therefore, the conclusion of the learned Single Judge as well as by the Division Bench on the said score is not sustainable."
7.1 From the above, the conclusion which can be drawn is as under.
7.2 If there is an order solely under Section 7-A or 14-B of the Act, the appeal would lie before the Tribunal, since for both the components there is reference in the language of Section 7-I of the Act. As the necessary consequence, writ would not be maintainable.
7.3 If the order is not a composite order but an independent Page 8 of 11 HC-NIC Page 8 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER order, which is otherwise not appealable before the Tribunal, such as the order under Section 7-Q of the Act, then the appeal would not be maintainable before the Tribunal and as the necessary consequence, writ would be maintainable before this Court.
7.4 But when there is a composite order like the present one, under Section 7-Q (against which appeal would otherwise not lie to the Tribunal) and 14-B (against which appeal would otherwise lie to the Tribunal), the entire order would be appealable before the Tribunal. (Vide Arcot Textile (supra) para:21 quoted above) "......To elaborate, it is an order passed under Sections 7-A and 7-Q together. Such an order shall be amenable to appeal under section 7-I. The same is true of any composite order a facet of which is amenable to appeal and Section 7-I of the Act. But, if for some reason when the authority chooses to pass an independent order under Section 7-Q the same is not appealable."
7.5 The reliance on the decision of Arcot Textile (supra) by the learned advocate for the petitioner is not well founded for the observations in para:22 of the said decision, more particularly the following.
".......The demand notice manifestly has been issued in exercise of power under Section 7Q of the Act and is an independent action and against such an order or issue of demand no Page 9 of 11 HC-NIC Page 9 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER appeal could have been filed. Therefore, the conclusion of the learned Single Judge as well as by the Division Bench on the said score is not sustainable."
7.6 In view of above, the preliminary objection raised by the respondent against the maintainability of this petition, on the ground of availability of alternative statutory remedy is upheld.
8. So far the alternative contention of the petitioner Authority that approaching the Tribunal is not an efficacious remedy is concerned, the same needs to be and is rejected, on the ground that the petitioner - Bharat Sanchar Nigam Limited which is also a creation of a statute can not contend that the statutory remedy created by an Act, is not an efficacious remedy for it. The decision cited by learned advocate for the petitioner in the case of Commissioner of Income Tax (supra) would not take the case of the petitioner any further for more than one reasons. Firstly, it was the case under the Income Tax Act, and further none of the exceptions enumerated therein is attracted in the facts of this case. Further the decision in the case of Arcot Textile (supra) is on the Act in question, and is also subsequent in point of time.
9. Considering the totality, it is held that, the impugned order is appealable before the Tribunal and there is no extraordinary case on facts, to exercise writ jurisdiction of this Court, on the face of availability of alternative statutory remedy. This petition therefore needs to be dismissed.
10. For the reasons recorded above, this petition is Page 10 of 11 HC-NIC Page 10 of 11 Created On Sat Feb 20 00:34:57 IST 2016 C/SCA/2988/2015 ORDER dismissed. Notice is discharged. No order as to costs.
11. At this stage, learned advocate for the petitioner states that, the interim protection granted by this Court vide order dated 11.06.2015 to the effect that no coercive recovery shall be made from the petitioner, be continued for some time. This request is opposed by learned advocate for the respondent Authority. With a view to see that, challenge if any to this order remains meaningful to the petitioner Authority, the said protection is ordered to be extended for a period of 30 days from today.
(PARESH UPADHYAY, J.) M O Bhati/05 Page 11 of 11 HC-NIC Page 11 of 11 Created On Sat Feb 20 00:34:57 IST 2016