Telangana High Court
M/S. Trinity Beverages P Ltd. vs Union Of India on 24 August, 2022
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION No.15329 OF 2021
ORDER:
Heard Mr. M.S. Farhan, learned counsel representing Mr. A. Venkatesh, learned counsel for the petitioner and Mr. G. Venkateshwarlu, learned Standing Counsel appearing for the respondents.
2. This Writ Petition is filed to declare the action of respondent No.3 in not disposing of the Appeal of petitioner filed vide S.R. No.371 of 2021, dated 29.04.2021 challenging the order dated 02.03.2021 vide No.TS/RO/PTC/39388/PD 01/7Q Order/2020- 21/2018 passed by respondent No.2 under Section - 7Q of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 determining an amount of Rs.37,12,956/- towards interest amount as illegal.
3. The petitioner herein is a Company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing and supply of soft drinks, purified water and other allied beverages. It is a Member of EPF Scheme. It has been paying contributions in respect of its employees from time to time. There is a 2 KL,J W.P. No.15329 of 2021 disruption of activities of the petitioner due to COVID-19, pandemic situation. Even then according to the petitioner, it had remitted contributions to the Department within the stipulated time as per the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short 'Act, 1952') and the Regulations. Vide summons, dated 07.08.2019, respondent No.2 initiated inquiry under Section - 14B and 7Q of the Act, 1952 with regard to the damages and interest. Summons were issued for conducting an inquiry under both the provisions. Thereafter, respondent No.2 had passed separate orders, both dated 02.03.2021 under Section - 14B and 7Q of the Act, 1952.
4. Feeling aggrieved and dissatisfied with the said orders, the petitioner herein had filed two appeals under Section 7-I of the Act, 1952 vide E.P.F. (SR) Nos.32 of 2021 and 371 of 2021. The petitioner herein had also filed waiver and stay applications along with the said appeals. There is no Presiding Officer in EPFA Tribunal at Hyderabad to decide the said appeals, waiver and stay petitions filed in both the said appeals. Therefore, the petitioner herein had filed a writ petition vide W.P. No.10889 of 2021 challenging the action of the Tribunal in not disposing of the appeal filed vide EPF (SR) No.32 of 3 KL,J W.P. No.15329 of 2021 2021 challenging the order dated 02.03.2021passed by respondent No.2 under Section - 14B of the Act, 1952, and this Court has granted interim stay subject to payment of 50% of the demanded amount within four (04) weeks. Like-wise, the petitioner herein had filed the present writ petition seeking the very same relief i.e., not disposing of the appeal filed by it vide EFP (SR) No.371 of 2021 under Section 7-I of the Act, 1952 challenging the order dated 02.03.2021 passed by respondent No.2 under Section - 7Q of the Act, 1952 including waiver application and stay application.
5. This Court vide order dated 08.07.2021 directed the respondents not to take any coercive steps against the petitioner herein on the condition of the petitioner depositing 50% of the demanded amount within a period of eight (08) weeks from that date. The said interim order was granted on the ground that there is no Presiding Officer in Appellate Tribunal. The said time granted by this Court was extended by this Court vide order dated 29.09.2021 for four (04) weeks. Thereafter, the petitioner herein had filed another application seeking extension of time of seven (07) weeks. However, the petitioner had deposited an amount of Rs.6.00 lakhs within time leaving balance of Rs.12,56,478/- and the same was also paid 4 KL,J W.P. No.15329 of 2021 thereafter in installments. However, there is delay of 49 days in depositing the said amount in compliance of the order passed by this Court dated 08.07.2021.
6. Now, the grievance of the petitioner herein is that the respondents are insisting it to pay the balance amount since the petitioner has not deposited 50% of the demanded amount in compliance of the order dated 08.07.2021 within the stipulated time. According to learned counsel for the petitioner that though an appeal under Section 7-I of the Act, 1952 is filed along with waiver and stay applications, respondent No.2 is not taking up the same. There is no Presiding Officer in respondent No.2 Tribunal. Therefore, they have approached this Court by filing the present writ petition.
7. Whereas, Mr. G. Venkateshwarlu, learned Standing Counsel, would submit that the present writ petition is not maintainable and also the appeal filed by the petitioner under Section 7-I of the Act, 1952 vide EFP (SR) No.371 of 2021 challenging the order dated 02.03.2021 passed by respondent No.2 under Section - 7Q of the Act, 1952. Though common inquiry under Sections - 14B and 7Q of the Act, 1952 was conducted, respondent No.2 had passed separate orders 5 KL,J W.P. No.15329 of 2021 under Sections - 7Q and 14B of the Act, 1952. There is no provision to file an appeal challenging an order passed under Section - 7Q of the Act.
8. In view of the above said submission, it is apt to extract Section 7-I of the Act, 1952 which is 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."
9. There is no dispute that respondent No.2 had issued summons dated 07.08.2019 and conducted inquiry under both provisions i.e., Section - 14B and 7Q of the Act, 1952. It is also not in dispute that respondent No.2 had passed separate orders. Against an order passed under Section - 14B of the Act, 1952, an appeal under Section 7-I of the Act, 1952 lies before respondent No.3 Tribunal. It 6 KL,J W.P. No.15329 of 2021 is also not in dispute that against an order passed under Section - 7Q of the Act, 1952, no appeal lies under Section 7-I of the Act, 1952.
10. However, Mr. M.S. Farhan, learned counsel for the petitioner, would submit that since respondent No.2 herein had conducted common inquiry under both the provisions, an appeal is maintainable under Section 7-I of the Act, 1952 against an order passed under Section - 7Q of the Act, 1952. He has placed reliance on the judgment of the Delhi High Court in Gaurav Enterprises v. Union of India1. In the said judgment, the Delhi High Court had considered the provisions of the Act, 1952 including Sections - 7Q, 14B and 7-I and also the principle laid down by the Hon'ble Supreme Court in Arcot Textiles Mills Ltd. v. Regional Provident Fund Commissioner [(2013) 16 SCC 1].
i) Paragraph Nos.23, 24 and 25 of the said judgment are relevant which are as under:
"23. Before adjudicating the issue at hand, it needs to be noted that the manner in which the EPF Authority firstly determines the amount due under Section 7A and thereafter, starts a completely new inquiry under Section 1 . W.P. (C) 8485/2021 & CM APPL. No.26248/2021, decided on 25.08.2021.7
KL,J W.P. No.15329 of 2021 7Q as also under Section 14B, leads to enormous delays for the parties concerned. However, the journey does not end here. After determination of the amounts under Section 7Q and Section 14B, if demands are raised, the employer is to approach the Tribunal to appeal the order under Section 14B and approach the High Court, by way of a writ petition, to appeal the order under Section 7Q. Such an approach has various disadvantages. It firstly leads to multiplicity of proceedings filed before the Tribunal and before the High Courts. There is duplicity of legal representation in both forums and a possibility of contradictory findings being rendered. If the High Court's decision is rendered earlier, it influences the decision of the Tribunal under Section 14B in some way or the other. On the other hand, if the Tribunal adjudicates on the demand under Section 14B earlier, the same may or may not be placed before the High Court and will again lead to separate and independent determinations. Once the Tribunal decides the validity and legality of the demand under Section 14B, the employer can again challenge the same under Article 226/227 before the High Court. This entire process results in enormous confusion, duplicity, inconvenience and harassment to employers and is counter- productive to the employee's interest.
24. As the facts of the present case would show, the initial order under Section 7A was passed on 31st December, 2014 demanding payments in respect of the period from 1st November, 2013 to 31st March, 2019. The proceedings 8 KL,J W.P. No.15329 of 2021 under Sections 7Q and 14B have thereafter been commenced with one single Summons. The initial and revised notice, the replies and the proceedings conducted before the Authority were the same. There was no independent inquiry conducted in respect of the demands raised under Sections 7Q and 14B. In fact, by way of illustration, the revised notice which was issued on 25th September, 2019 tabulates the amounts due in a common tabular form, as extracted in paragraph 3 above.
25. Thus, when the inquiry is common, the show cause notice is common, the reply is common and even the proceedings are common, the mere passing of two separate orders on the same date would not render the proceedings under Section 7Q and Section 14B independent of each other. The entire attempt of the Authority appears to be to somehow ensure that the employer is not able to avail of the remedy of appeal, as permitted by the decision of the Supreme Court in Arcot Textiles Mills Ltd. (supra). Such an approach cannot be condoned by this Court. In the administration of justice, it has to be ensured by this Court, both in its power of superintendence and judicial review, that an Authority operating under a statute conducts itself in a manner that does not result in multiplicity and duplicity of proceedings which are likely to result in precious judicial time being expended, both before the Tribunal and before the Court. The possibility of contradictory approaches and conflicting findings would also be required to be curtailed. Thus, after determination 9 KL,J W.P. No.15329 of 2021 of the amounts due under Section 7A, once the Authority proceeds to raise demands under Sections 7Q and 14B, it would be in the fitness of things that the employer is not made to face multiple proceedings and its remedies are not curtailed."
11. The Delhi High Court has also considered the judgment passed by a Division Bench of Delhi High Court in M/s Net 4 India Limited v. Union of India [W.P.(C) 6673/2016, decided on 2nd August, 2016]. But, in the said judgment, a common order under Section - 7Q and under Section - 14B of the Act determining interest and damages respectively was passed and, therefore, the Division Bench of the Delhi High Court held that the appeal is maintainable. Whereas, in the present case, though common inquiry was conducted by respondent No.2 with regard to the interest and damages under Sections - 7Q and 14B of the Act, respondent No.2 had passed two different orders under the said provisions. Against an order under Section - 14B of the Act, an appeal lies before the Appellate Tribunal under Section 7-I of the Act, but against an order passed under Section
- 7Q, no appeal lies.
12. In Gaurav Enterprises1, the Delhi High Court discussed about disadvantages of filing of a writ petition; an appeal; multiplicity 10 KL,J W.P. No.15329 of 2021 of proceedings and duplicity of legal representation in both forums and also a possibility of contradictory findings being rendered, held that when the inquiry is common, the show cause notice is common, the reply is common and even the proceedings are common, the mere passing of two separate orders on the same date would not render the proceedings under Section - 7Q and Section - 14B independent of each other. The entire attempt of the Authority appears to be to somehow ensure that the employer is not able to avail of the remedy of appeal, as permitted by the decision of the Apex Court in M/s. Arcot Textiles Mills Ltd. (Supra). Such an approach cannot be condoned by this Court. With the said findings, the Delhi High Court held that an appeal challenging the orders passed under Sections - 7Q and 14B of the Act is maintainable before the Tribunal. But, the said approach of the Delhi High Court is not on consideration of the language employed in Section 7-I of the Act, 1952 and also the Legislative intent.
13. It is relevant to note that the Apex Court in Babu Verghese v. Bar Council of Kerala2 categorically held that when a Statute 2 . (1999) 3 SCC 422 11 KL,J W.P. No.15329 of 2021 prescribes a particular procedure to be followed, it has to be followed in toto.
14. As discussed above, the Act, 1952 prescribes the procedure in filing an appeal under Section 7-I of the Act challenging orders passed by respondent authorities under Section - 14B and no appeal lies against an order passed under Section - 7Q of the Act. Therefore, we have to go by the language of the Act, but not on assumptions and presumptions i.e., multiplicity litigation, duplicity of legal representation and a possibility of contradictory findings being rendered and also disadvantages etc. That is not the purport of the Act. Therefore, the judgment in Gaurav Enterprises1 is not on consideration of actual facts and law.
15. In view of the above said discussion, this Court is of the considered view that the appeal filed by the petitioner vide S.R. No.371 of 2021, dated 29.04.2021 challenging the order dated 02.03.2021 passed by respondent No.2 herein under Section - 7Q of the Act, 1952 before respondent No.3 Tribunal is not maintainable. Thus, the present writ petition is devoid of merits and the same is liable to be dismissed.
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KL,J W.P. No.15329 of 2021
16. The present Writ Petition is accordingly dismissed. However, in the circumstances of the case, there shall be no order as to costs.
As a sequel, the miscellaneous petitions, if any, pending in the writ petition shall stand closed.
_________________ K. LAKSHMAN, J 24th August, 2022 Mgr