Himachal Pradesh High Court
Dav Sr. Sec. School vs Regional Provident Fund Commissioner on 7 September, 2016
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 4110 of 2010.
.
Decided on: 7.9.2016.
DAV Sr. Sec. School, Mandi & another. ....Petitioners.
Versus
Regional Provident Fund Commissioner, Shimla. ... Respondent.
................................................................................................
Coram
of
The Hon'ble Mr. Justice Ajay Mohan Goel, Judge.
Whether approved for reporting?1 Yes.
rt
For the petitioners. : Mr. Atul Jhingan, Advocate.
For the respondent. : Mr. Rajiv Jiwan, Advocate.
Ajay Mohan Goel, J (Oral).
By way of present petition, the petitioners have prayed for the following relief:-
"It is, therefore, prayed that this writ petition may very kindly be allowed with costs throughout and after summoning the records and perusing the same, the impugned notice dated 5.8.2003 (Annexure P-4) issued by the respondent and orders dated 31.3.1999 (Annexure P-20 AND 20.2.2004(Annexure A-6) along with order dated 21.5.2010 (Annexure A-9) passed by the Employees' Provident Fund Appellate Tribunal, New Delhi in ATA 67(17)2008 may be quashed and set aside. Any other or further orders as may be deemed just and proper in the peculiar facts and circumstances of the case may also be passed while allowing the writ petition, in the interest of justice."
2. The case as has been put-forth by the petitioners is that an order was passed by Regional Provident Fund Commissioner, Shimla dated 31.3.1999 under Section 7-A of the 1 Whether reporters of the local papers may be allowed to see the judgment?
::: Downloaded on - 15/04/2017 21:11:06 :::HCHP 2Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (in short "EPF Act"), in the matter of determination of amount due from the petitioners and as per this order, Regional .
Provident Fund Commissioner made assessment of the amounts which were due from the petitioners as contemplated under Section 7-A of the above mentioned EPF Act. The assessment so made by Regional Provident Fund Commissioner was honoured of by the petitioners. This was followed by communication dated 22.7.2009 addressed by Regional Provident Fund Commissioner to the Recovery Officer in which it was mentioned that rt petitioners had deposited an amount of Rs. 6,75,522/- on account of EPF contributions due from September, 1984 to November, 1998 and recovery certificate sent to the petitioners was accordingly withdrawn and no further action was required on the same.
3. This was followed by issuance of notice dated 5.8.2003 by Regional Provident Fund Commissioner, Shimla to the petitioners on the subject "notice under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) levy of damages", vide which the petitioners were called upon to show cause as to why damages at such rates as are deemed fit be not imposed and recovered from the petitioners on account of default which was made by the petitioners in paying employees provident fund contribution etc. ::: Downloaded on - 15/04/2017 21:11:06 :::HCHP 3 from September, 1984 till February, 1999. Said notice was duly replied to by the petitioners. However, Regional Provident Fund Commissioner vide order dated 20.2.2004 imposed damages to .
the tune of Rs. 5,05,808/- upon the petitioners in exercise of powers conferred upon the said authority under Section 14-B of the EPF Act.
4. Feeling aggrieved by order dated 20.2.2004, the of petitioners initially filed CWP No. 191 of 2004 which was disposed of by this Court vide order dated 11.12.2007 with the direction to the petitioners to file an appeal before the Provident rt Fund Appellate Tribunal.
5. The appeal so filed by the petitioners before the Employees Provident Appellate Tribunal was dismissed by the said Tribunal under signatures of Presiding Officer, EPFAT vide order dated 21.5.2010. The order so passed by the Appellate Tribunal is quoted here-in-below:-
"The appeal in this case is preferred against the order passed by the PF authority under Section 14-B of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 directing the appellant to deposit the damage and interest.
2. The case of the appellant is that the appellant is a small school and it was covered under the Act under 7-A proceedings and directed to deposit Rs. 670522/-. The appellant deposited the same by transferring the amount from the bank. The EPF authorities started a proceedings under Section 14-B alleging that there was delay and imposed the penalty and interest which is illegal one.
3. The case of the respondent is that as there was a default, the penalty and interest is correctly imposed.
4. It is contended that the appellant had no intention to met the default and the default is not intentional. Reliance is ::: Downloaded on - 15/04/2017 21:11:06 :::HCHP 4 placed in the case of M/s Shyam Glass Workers Vs. State of UP and Supper Processors Vs. Union of India.
5. The Ld. Advocate of the respondent supported the order.
.
6. The applicability of the Act and the default is not questioned. It is only contended that the delay is not intentional and the amount was immediately transferred from the bank. In the case of Ernakulam Cooperative Bank Vs. RPFC in 2000 Vol. 1 LLJ at page 1662 their Lordship held that "even through there is sufficient reason for the petitioner to met the belated payment that is not a ground for granting exemption".
No other cause was assigned for the belated payment. No inconsistency is noticed in the order of the authority.
7. Hence order, the appeal is dismissed. Copy of order be of sent to the parties. File be consigned to record room."
6. By way of present petition, both orders dated 20.2.2004 passed by Regional Provident Fund Commissioner as rt well as order dated 21.5.2010 passed by the Employees' Provident Fund Appellate Tribunal are under challenge.
7. I have heard learned counsel for the parties and have also gone through the relevant documents produced on record by the respective parties.
8. A perusal of the order passed by the Appellate Tribunal demonstrates that the appeal filed against the order of Regional Provident Fund Commissioner by the present petitioners has been disposed of by the Employees' Provident Fund Appellate Tribunal, Shimla by passing a totally non-
speaking and unreasoned order. It is apparent from perusal of the Appellate order that neither the contentions raised in the appeal by the present petitioners have been taken note of in the Appellate order, nor there is any determination of the ::: Downloaded on - 15/04/2017 21:11:07 :::HCHP 5 contentions so raised in the appeal by way of a speaking and reasoned adjudication.
9. It is well settled principle of law that justice should .
not only be done but it should also seem to have been done.
Employees' Provident Fund Appellate Tribunal is a statutory Tribunal. The same has been constituted under the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, of 1952. Right of appeal is not a common law right but is a statutory right. Whenever an authority adjudicates upon an issue as the First Appellate Court, then that Appellate authority is rt bound to take into consideration all the factual aspects of the matter as well as evidence produced on record by the respective parties and after due appreciation of all the facts and evidence on record, as well as law, the Appellate authority has to adjudicate upon the appeal so filed before it.
10. During the course of arguments, Mr. Jhingan learned counsel appearing for the petitioners vehemently argued that the order passed by the Regional Provident Fund Commissioner against which appeal was filed was itself a non-speaking and unreasoned order.
11. A perusal of appeal filed before the Appellate Tribunal demonstrates that the order passed by Regional Provident Fund Commissioner was, inter alia, challenged on nine grounds. None of these grounds find mention in the impugned ::: Downloaded on - 15/04/2017 21:11:07 :::HCHP 6 order passed by the Appellate Authority and as I have already mentioned above, no reasoning worth its name has been given by the Appellate Tribunal as to why the said Tribunal did not find .
merit in the appeal so filed by the present petitioners.
12. Hon'ble Supreme Court in Kranti Associates Private Limited and another Vs. Masood Ahmed Khan and others, (2010) 9 Supreme Court Cases 496 has held as under:-
of "12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognized a sort of demarcation between administrative orders and quasi- judicial rt orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipak and others vs. Union of India.
13. In Kesava Mills Co. Ltd. vs. Union of India this Court approvingly referred to the opinion of Lord Denning in R. v.
Gaming Board for Great Britain, ex p Benaim and quoted him as saying "that heresy was scotched in Ridge v. Baldwin.
14. The expression `speaking order' was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of Writ of Certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order. (See pp. 1878-97 Vol. 4 Appeal Cases 30 at 40 of the Report).
15. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the `inscrutable face of a Sphinx' x x x x x x x x"
45. In English vs. Emery Reimbold and Strick Limited, it has been held that justice will not be done if it is not apparent to the parties why one has won and the other has lost. The House of Lords in Cullen vs. Chief Constable of the Royal Ulster Constabulary, Lord Bingham of Cornhill and Lord Steyn, on the requirement of reason held: (WLR p. 1769, para 7) "7. ..........First, they impose a discipline ... which may contribute to such decisions being considered with care.::: Downloaded on - 15/04/2017 21:11:07 :::HCHP 7
Secondly, reasons encourage transparency ... Thirdly, they assist the Courts in performing their supervisory function if judicial review proceedings are launched."
46. The position in the United States has been indicated by this .
Court in S.N. Mukherjee in SCC p. 602, para 11 : AIR para 11 at page 1988 of the judgment. This Court held that in the United States the Courts have always insisted on the recording of reasons by administrative authorities in exercise of their powers. It was further held that such recording of reasons is required as "the Court cannot exercise their duty of review unless they are advised of the considerations underlying the action under review". In S.N. Mukherjee this Court relied on the decisions of the U.S. Court in Securities and Exchange Commission vs. Chenery Corporation and Dunlop v. Bachowski of in support of its opinion discussed above.
47. Summarizing the above discussion, this Court holds:
a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone rt prejudicially.
b. A quasi-judicial authority must record reasons in support of its conclusions.
c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.
f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.
g. Reasons facilitate the process of judicial review by superior Courts.
h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose ::: Downloaded on - 15/04/2017 21:11:07 :::HCHP 8 which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
j. Insistence on reason is a requirement for both judicial .
accountability and transparency.
k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process.
of m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. rt (See David Shapiro in Defence of Judicial Candor n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain EHRR, at 562 para 29 and Anya vs. University of Oxford, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions".
o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "due process".
13. This legal position has been reiterated by the Hon'ble Supreme Court in Oryx Fisheries Private Limited Vs. Union of India and others, (2010) 13 Supreme Court Cases 427.
14. Hon'ble Supreme Court in Manohar S/o Manikrao Anchule Vs. State of Maharashtra and another, (2012) 13 Supreme Court Cases 14 has held as under:-::: Downloaded on - 15/04/2017 21:11:07 :::HCHP 9
17. The State Information Commission is performing adjudicatory functions where two parties raise their respective issues to which the State Information Commission is expected to apply its mind and pass an order directing disclosure of the information asked for or declining the same. Either way, it .
affects the rights of the parties who have raised rival contentions before the Commission. If there were no rival contentions, the matter would rest at the level of the designated Public Information Officer or immediately thereafter. It comes to the State Information Commission only at the appellate stage when rights and contentions require adjudication. The adjudicatory process essentially has to be in consonance with the principles of natural justice, including the doctrine of audi alteram partem. Hearing the parties, application of mind and recording of reasoned decision are the basic elements of natural of justice. It is not expected of the Commission to breach any of these principles, particularly when its orders are open to judicial review. Much less to Tribunals or such Commissions, the Courts have even made compliance to the principle of rule of natural justice obligatory in the class of administrative matters as well."
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15. It is apparent from ratio laid down in the above mentioned cases that hearing the parties, application of mind and recording of reasoned decision are basic elements of natural justice and Tribunals or Commissions or Courts are not expected to breach any of these principles. Therefore, in my considered view, without entering into the merits of the issues, the order passed by the Appellate Tribunal dated 21.5.2010 is liable to be quashed and set aside on this count alone that the same is a non-speaking and unreasoned order.
The writ petition is accordingly allowed and order dated 21.5.2010 passed by the Learned Appellate Tribunal is hereby quashed and set aside and the case is remanded back to the Learned Appellate Tribunal with a direction that the appeal be decided by it afresh after affording an opportunity to all the ::: Downloaded on - 15/04/2017 21:11:07 :::HCHP 10 parties of being heard by passing a speaking and reasoned order as expeditiously as possible, preferably before 30th November, 2016.
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(Ajay Mohan Goel) Judge 7th September, 2016.
(Guleria) of rt ::: Downloaded on - 15/04/2017 21:11:07 :::HCHP