Allahabad High Court
M/S Rampur Distillery And Another vs Regional P.F. Commmissioner And Others on 8 July, 2019
Equivalent citations: AIRONLINE 2019 ALL 1564, (2019) 162 FACLR 822 (2020) 1 LAB LN 59, (2020) 1 LAB LN 59
Bench: Vikram Nath, Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 55 Case :- SPECIAL APPEAL No. - 1855 of 2011 Appellant :- M/S Rampur Distillery And Another Respondent :- Regional P.F. Commmissioner And Others Counsel for Appellant :- Shakti Swarup Nigam Counsel for Respondent :- Dhananjay Awasthi,K.L. Grover,Rajiv Sharma,Satish Chataurvedi,Satyajit Mukerji Hon'ble Vikram Nath,J.
Hon'ble Pankaj Bhatia,J.
The present appeal arises against the order dated 25.8.2011 passed in Writ C No.5987 of 1997 wherein the learned Single Judge had dismissed the writ petition with directions to pay the amount in question along the compound interest at the rate of 12% on the entire amount which he was required to deposit under the impugned order.
We have heard Sri Shakti Swarup Nigam, Senior Advocate.
Sri Nigam has assailed the order on the ground that the order passed under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is wholly arbitrary and illegal. He argues that the bare perusal of the order dated 8.10.1996 which was impugned in the writ petition relates to provident fund dues in respect of contractors employees for the period 4/1992 to 8/1993 whereas the report on which the said order is passed relates to the period May 1995 to July 1996. Before the learned Single Judge it was argued that the report relied upon was never supplied to the petitioner. The learned Single Judge after recording submission had observed that from 1996 onward on several occasions proceedings were adjourned at the instance of the employer, the learned Single Judge recorded as under :-
?3. However, the submission, in my view, has no legs to stand. From the impugned orders it is evident that from 1996 and onwards consistently on several occasions, proceedings were adjourned at the instance of employer, i.e., petitioner. Moreover, Annexure 11 to the writ petition shows that in the presence of one Madhu Shankar Sharma, Deputy Manager, (Personnel and Legal), the Regional Provident Fund Commissioner directed for an inspection to be made by a squad who was also to examine membership in respect to contractor's employee. It also shows that Sri Sharma assured Provident Fund Commissioner that he shall produce the record to inspecting officer on 12.9.1996. Despite thereof, the requisite documents were not produced and thereafter, after making inspection the report was submitted and the impugned orders were passed. The opportunity was given to petitioner which he failed to avail whereafter the respondent no. 1 passed the impugned orders.?
This Court while entertaining the appeal had passed the following order on 22.9.2011 :-
?Learned counsel for the appellants urged that the alleged complaint is in respect of the period 1992 to August, 1993 whereas the respondent no. 1 without adjudicating the issue regarding the quantum, period and number of employees merely relying upon a report which was in respect of the year 1995-96, determined the amount payable under the Employees' Provident Fund Act, 1952 and imposed a liability of Rs.8,69,209/-.
We are of the view that prima-facie case for admission is made out.
Admit.
Since the respondents no. 1, 2 & 3 are represented by respective counsel therefore, no notices are required to be issued to them.
Issue notice to respondents no. 4 & 5 through registered post, returnable within six weeks.
Requisite to be filed within a week.
Considering the submission and looking to the facts of the case, operation of the order dated 7.11.1996 of the Regional Provident Fund Commissioner shall be kept in abeyance provided the appellants deposit a sum of Rs.8,69,209/- as determined, within a month and further give an undertaking in writing to pay the amount of interest levied by the learned single Judge in the event of dismissal of this appeal.
It is further provided that in the event the aforesaid deposit is made the Regional Provident Fund Commissioner shall invest the entire amount by opening a Fixed Deposit Account in a Nationalised Bank earning highest rate of interest and the same shall be subject to final result of this appeal.?
Sri Shakti Swarup Nigam was confronted to reveal as to for the period in question relating to which the impugned order relates i.e. April 1992 to May 1993, whether the Provident Fund relating to the employees had been deposited by the Contractor or the appellant. Sri Nigam submits that the employees were engaged through a Contractor and, thus, it was the duty of the Contractor to deposit the Provident Fund dues.
Sri Satyajit Mukerji, learned counsel appearing for the respondents on the other hand has relied upon the definition of employee as contained in Section 2(f) the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 which is as under :-
?2. Definitions. ?....
?...
(f) ?employee? means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of 7[an establishment], and who gets, his wages directly or indirectly from the employer, 8[and includes any person,?
(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), or under the standing orders of the establishment;] [(ff) ?exempted employee? means an employee to whom a Scheme or the Insurance Scheme, as the case may be,] would, but for the exemption granted under [***] section 17, have applied;
(fff) ?exempted 11[establishment]? means [an establishment] in respect of which an exemption has been granted under section 17 from the operation of all or any of the provisions of any Scheme [or the Insurance Scheme, as the case may be], whether such exemption has been granted to the [establishment] as such or to any person or class of persons employed therein;]?
Thus, the contribution of the employees had to be deposited and the employees even though may have been engaged through a Contractor were bound to be considered as employees of the appellant. There being no dispute that the amount pertaining to the workmen/employees not being deposited and Sri Nigam not being in a position to controvert that the contribution for the employees had actually been deposited coupled with the fact that there is no pleading on record either before the Single Judge or before this Court to the effect that the contribution in respect of the employees in question had been deposited or that number of employees recorded in the report were incorrect. That being the position, the argument of Sri Nigam has no legs to stand as it is well settled that the Courts are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. The Hon'ble Supreme Court in the case of M/s Dharampal Satyapal Ltd. Vs. Dy. Commissioner of Central Excise and others 2015 Vol. 8 SCC 519, observed as under:-
At the same time, it cannot be denied that as far as Courts are concerned, they are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. This was so clarified in the case of Managing Director, ECIL (supra) itself in the following words: ?31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court/ Tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/ Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as it regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the Courts/Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Court/Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment.? Keeping in view the aforesaid principles in mind, even when we find that there is an infraction of principles of natural justice, we have to address a further question as to whether any purpose would be served in remitting the case to the authority to make fresh demand of amount recoverable, only after issuing notice to show cause to the appellant. In the facts of the present case, we find that such an exercise would be totally futile having regard to the law laid down by this Court in R.C. Tobacco (supra).
To recapitulate the events, the appellant was accorded certain benefits under Notification dated July 08, 1999. This Notification stands nullified by Section 154 of the Act of 2003, which has been given retrospective effect. The legal consequence of the aforesaid statutory provision is that the amount with which the appellant was benefitted under the aforesaid Notification becomes refundable. Even after the notice is issued, the appellant cannot take any plea to retain the said amount on any ground whatsoever as it is bound by the dicta in R.C. Tobacco (supra). Likewise, even the officer who passed the order has no choice but to follow the dicta in R.C. Tobacco (supra). It is important to note that as far as quantification of the amount is concerned, it is not disputed at all. In such a situation, issuance of notice would be an empty formality and we are of the firm opinion that the case stands covered by 'useless formality theory'.
There is one more aspect in the case bearing in mind the submission made by Sri Nigam that the liability of payment was that of the Contractor, the Act provides for such a contingency as contained in Section 8A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, which is as under:-
[8A. Recovery of moneys by employers and contractors.
(1) [The amount of contribution (that is to say the employer?s contribution as well as the employee?s contribution in pursuance of any Scheme and the employer?s contribution in pursuance of the Insurance Scheme)], and any charges [***] for meeting the cost of administering the Fund paid or payable by an employer in respect of any employee employed by or through a contractor may be recovered by such employer from the contractor, either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.
(2) A contractor from whom the amounts mentioned in sub-section (1) may be recovered in respect of any employee employed by or through him, may recover from such employee the employee?s contribution 4[under any Scheme] by deduction from the basic wages, dearness allowance and retaining allowance (if any) payable to such employee.
(3) Notwithstanding any contract to the contrary, no contractor shall be entitled to deduct the employer?s contribution or the charges referred to in sub-section (1) from the basic wages, dearness allowance, and retaining allowance (if any) payable to an employee employed by or through him or otherwise to recover such contribution or charges from such employee.
Explanation.?In this section, the expressions, ?dearness allowance? and ?retaining allowance? shall have the same meanings as in section 6.] Thus,the appeal lacks merit and deserves to be dismissed.
However, with regard to the directions given by the learned Single Judge to deposit the amount along with compound interest at the rate of 12%, we delete the same as interest is specified in Section 7Q of the Act itself and any amount which is not deposited within the specified time is liable to be deposited along with statutory interest as provided under Section 7Q of the Act, as such any further interest beyond what is prescribed under the Act would be unreasonable. Thus, we set aside the judgment of the learned Single Judge dated 25.8.2011 in so for as it directs the payment of compound interest at the rate of 12% on the entire amount.
In view of the reasoning recorded above, the appeal is partly allowed to the extent that the appellant will not deposit 12% compound interest. It is, however clarified that the appellant will be liable to pay all the sum dues in the impugned order along with statutory interest as provided in Section 7Q of the Act.
The appeal is accordingly disposed of and the interim order dated 22.9.2011 is vacated with the directions to appropriate the amounts deposited in pursuance to the interim order dated 22.9.2011.
Order Date :- 8.7.2019
Hasnain
( Pankaj Bhatia,J.) ( Vikram Nath,J.)