Orissa High Court
Ms Isar Engineers Pvt Ltd vs The Presiding Officer Employees ... on 26 July, 2016
Author: S.N. Prasad
Bench: S.N. Prasad
ORISSA HIGH COURT : CUTTACK.
W.P.(C) No.7595 of 2010.
In the matter of an application under Articles 226 & 227 of the
Constitution of India.
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M/s.ISAR Engineers (Pvt.) Ltd.
......... Petitioner.
-Versus-
The Presiding Officer, Employees' Provident
Fund Appellate Tribunal and others.
......... Opp. Parties.
For Petitioner : M/s. Narendra Kumar Mishra,
D.K. Pani, A.K. Ray and A. Mishra
For Opp. Parties : M/s.Upendra Kumar Samal, C. D.
Sahoo, S.K. Das, B. C. Pradhan,
K. Patnaik and S. P. Mohanty (for
O.P. No.2 & 3.)
PRESENT :
THE HONOURABLE SHRI JUSTICE S.N. PRASAD
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Date of hearing and judgment :- 26.07.2016
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S. N. Prasad, J.This writ petition is against the order dtd.03.03.2008 passed U/s.7-A and 7-Q of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (Annexure-3) and the order dtd.24.2.2010 passed by the E.P.F. Appellate Tribunal in ATA No.281(1) of 2008 (Annexure-7).
2. The case of the petitioner in brief is that the petitioner being an establishment incorporated under the Companies Act, 1956, involved in different types of construction works throughout 2 the State set up its establishment on 9.9.1999 with a minimal workforce. In the year 2003 the number of employees touched and exceeded 20 and accordingly the petitioner applied for coverage under the P.F. Act voluntarily. The P.F. authorities after necessary enquiry and investigation of the relevant records and documents has came to conclusion that there were in fact 20 employees on roll for which the provision of P.F. Act was applicable to the petitioner - establishment w.e.f. 01.01.2003 with allotment of Code No.OR/7964.
The petitioner has been served with a show cause notice on 25.8.2005 alleging as to why the establishment shall not be made liable in respect of an estimated 235 employees approximately for labour charges of Rs.42,39,576/- shown in the P.L. account records of the company as reported by the Enforcement Officer. The petitioner has given reply but the authority being not satisfied with the same has initiated a proceeding U/s.7-A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act') and came to conclusion that the petitioner -establishment is liable to deposit the contribution w.e.f. 01.04.2000 since the Act is applicable from that date.
The petitioner being aggrieved with the said assessment has preferred an appeal before the appellate authority and the appellate authority has affirmed the order passed U/s.7-A of the Act, 1952. The grounds taken by the petitioner in assailing the order is that the authority while deciding the issue U/s.7-A of the Act has not provided adequate and sufficient opportunity of being heard. In order to demonstrate this argument, learned senior counsel representing the petitioner has submitted that the authorities have passed the order relying upon some reports submitted by the Enforcement Officer but the said reports have not been supplied to the petitioner.
3He further submits that the departmental representative who had appeared in the proceeding has been directed to submit his report after verification of the records and for which he has been given one month time as would be evident from the order dtd.19.4.2006, allowing his prayer the authority fixed the proceeding of the case on 19.5.2006 for submission of report by the departmental representative but on 19.5.2006 the departmental representative has not appeared. However, the representative of the establishment had appeared for personal hearing but the case was closed and the authorities have fixed the case on 19.1.2007 with a direction to assess the dues and the case was kept reserved for order.
It has been submitted that on 19.1.2007 the case was taken up for passing speaking order and the authorities have taken into consideration the various reports submitted by the Enforcement Officer and relying upon the same the order U/s.7-A has been passed.
According to the learned senior counsel representing the petitioner when the authorities have closed the hearing on 19.5.2006, as such no further document ought to have been accepted by him which is going to the root of the issue involved in this case, by accepting the said documents on record and deciding the issue by placing reliance upon the same, the petitioner has greatly been prejudiced and in that way adequate and sufficient opportunity of hearing has not been provided to him which is in violation of principle of section 7(A)(3) of the Act, 1952.
It has been submitted that this point has emphatically been raised before the appellate authority but the appellate authority in a very mechanical manner has affirmed the order passed by the authority U/s.7-A of the Act, 1952, hence this writ petition.
43. After being noticed the P.F. authorities have appeared and filed detail counter affidavit and contested the case.
Learned counsel representing the P.F. Authority has submitted that it is incorrect to say that the petitioner has not been provided with adequate and sufficient opportunity, rather the petitioner has been provided opportunity to represent his case, as would be evident from the order dtd.19.4.2006 and 19.5.2006.
Learned counsel for P.F. authority has given much emphasis on the order dtd.19.5.2006 by submitting that on that date the stand taken by the representative of the establishment that he has nothing to say, since he has already submitted the written submission in this regard and as such once he has chosen not to say anything save and except what has been stated in the written submission, he cannot take the plea that sufficient opportunity has not been provided to him.
He further submits that the P.F. Authority after considering the fact that the establishment is prolonging the matter and also considering the matter that the proceeding is to enact the beneficial legislation, as such came to conscious finding to close the proceeding.
In view thereof it has been submitted that the original authority as well as the appellate authority after providing adequate opportunity of being heard and relying upon the documents have passed well reasoned order which needs no interference by this court.
4. Heard the learned counsels for the parties and perused the documents available on record.
The sole dispute raised by the petitioner in this case is that the Act is applicable w.e.f.01.10.2003 and not w.e.f.01.04.2000.
5It has been submitted that the date of applicability of the Act has been preponed placing reliance upon the enquiry report submitted by the Enforcement Officer, but the said enquiry report has not been supplied to the petitioner.
There is no dispute about the fact that the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 is a beneficial legislation having been promulgated by the Central Government to provide relief to the poor section of the society who are having no future benefits to be given under any scheme, but simultaneously it is also to be seen that the Act, 1952 provides certain provision conferring power upon the authorities to adjudicate the issue after following the same in accordance with the provision provided therein.
The provision has been made U/s.7-A for determination of money due from the employers and it is also settled that when the Act is applicable the authority is required to assess the amount U/s.7-A but in accordance with the procedure laid down U/s.7-A. It is also evident from perusal of provision as contained U/s.7(A)(3) that no order shall be made U/s.7(A) unless the employer concerned is given reasonable opportunity to represent his case meaning thereby before passing final order reasonable opportunity to represent the case is mandatorily required.
There is no dispute about the fact that the court of law or the quasi judicial authorities or even Administrative authorities are expected to follow the procedural fairness which is the requirement of the principle of natural justice and if the fairness in the procedure will not be followed it cannot be said that justice has been meted out to the parties. The function of the judicial and quasi-judicial authorities is to secure justice with fairness and to prevent miscarriage of justice. The principles are extended even to 6 those who have to take administrative decision and who are not necessarily discharging judicial or quasi-judicial functions. They are a kind of code of fair administrative procedure.
The aspect of procedural fairness, namely, right to a fair hearing would mandate what is literally known as 'hearing the other side' which is the legal rules requiring procedural fairness. It is on the aforesaid jurisprudential premise that the fundamental principles of natural justice, including audi alteram partem, have developed. It is for this reason that the courts have consistently insisted that such procedural fairness has to be adhered to before a decision is made.
In this respect reference may be made to the judgments rendered by Hon'ble Apex Court in the cases of Institute of Chartered Accountants of India Vrs. L.K. Ratna, (1986) 4 SCC 537, Charan lal Sahu Vrs. Union of India, (1990) 1 SCC 613.
The case of Charan Lal Sahu Vrs. Union of India related to Bhopal Gas Leak Disaster and in the case of C. B. Gautam Vrs. Union of India, (1993) 1 SCC 78 their Lordships at paragraph 61 have been pleased to hold that it is well settled law that principle of natural justice are integral part of Art.14 and no decision prejudicial to a party should be taken without affording an opportunity or supplying the material which is the basis for the decision. The enquiry report constitutes fresh material which has great persuasive force or effect on the mind of the disciplinary authority. The supply of report along with the final order is like a post mortem certificate with putrefying odour. The failure to supply copy thereof to the delinquent would be unfair procedure offending not only Articles 14, 21 and 311(2) of the Constitution, but also the principles of natural justice.
7Thus it is settled proposition that the authority is to adopt fair procedure in adjudicating an issue and then only it can be said that the authorities have given reasonable opportunity of being heard.
5. So far as the facts of this case is concerned and which is not in dispute that on 12.10.2005 proceeding U/s.7(A) was initiated, summons have been issued and accordingly on 21.1.2006 the representative of establishment had appeared for the first time and had filed time petition which was allowed and the matter was directed to be fixed on 16.2.2006. Notice was not served, accordingly direction was passed by the authority to issue fresh notice U/s.32 of the Code of Civil Procedure to ensure attendance and the case was directed to be posted on 27th January 2006. Representative of establishment had appeared on 27.1.2006 and filed time petition which was allowed and the case was directed to be posted on 8 th March 2006 but on that date the case could not have been taken up since the authority was pre-occupied with other work and accordingly the case was shifted to 19.4.2006 and on that date the representative of the establishment was present along with Chartered Accountant and filed some document such as written submission dtd.19.4.2006, Audited Balance Sheet for 2000-01 to 2002-03 and break up of employees remuneration and benefits.
The departmental representative one Mr. Das has sought for time to go through the records and to submit his report after verification of these records, allowing his prayer the case was adjourned to be posted on 19.5.2006. The case was posted on 19.5.2006 but none represented the departmental authority, however, the representative of the establishment was present. The report from the departmental representative not received. The representative of the employer has submitted minimum required documents and as such the authority after taking into consideration the intent of the Act and considering not to prolong the proceeding 8 has closed it with a direction to assess the dues. The case was kept reserved for passing speaking order.
It appears from the order passed U/s.7(A) of the Act that the case which was reserved for passing speaking order vide order dtd.19.5.2006 has again been taken up on 19.1.2007 but no notice has been issued for appearance of the representative of establishment on 19.1.2007.
There is no dispute about the settled proposition of law that on each and every date there is no requirement to issue notice to the parties but the fact in this case is that in presence of representative of establishment the case was closed and it was kept reserved for passing speaking order and as such it was the duty of the authority not to open the case for further hearing or even for entertaining any further document.
It further transpires that when the case was taken up on 19.1.2007 in the meanwhile some reports have been submitted by the Enforcement Officer by one Sri P.K. Swain dtd.9.12.2003, 16.2.2004, 16.7.2004, 26.10.2004 and 30.6.2005 which were said to be kept in main file at page 31/C, 45/C to 47/C, 55/C, 106/C to 108/C and 115/C. Thus it is evident that there was no occasion for the representative of the establishment to get the copy of these reports and it is apparent that the authorities have placed reliance upon some of the reports which have been submitted by the representative of the department after closure of the case on 19.5.2006 and as such admittedly these documents i.e. the enquiry reports dtd.9.12.2003, 16.2.2004, 16.7.2004, 26.10.2004 and 30.6.2005 which were said to be kept in main file at page 31/C, 45/C to 47/C, 55/C, 106/C to 108/C and 115/C have not been supplied to the petitioner - establishment.
9In this backdrop there is no hesitation to hold that the petitioner has not been provided with reasonable opportunity of being heard.
It is settled that if any document goes to the root of the issue, the requirement of law is that it has to be supplied other wise it will be said that there is no compliance of principle of natural justice. Reference in this regard may be made to the judgment rendered by Hon'ble Apex Court in the case of State Bank of India and Others vrs. D.C. Aggarwal and Another, AIR 1993 SC 1197.
However, the matter pertains to departmental proceeding but in that case the order of dismissal has been passed placing reliance upon the report of the Central Vigilance Commission but the Hon'ble Apex Court is of the view that since the order of dismissal has been passed placing reliance upon the report of Central Vigilance Commission but without supplying copy of the report of the Commission, the Central Vigilance Commission report being a material obtained behind back of the respondent without his knowledge or supplying any copy to him, the order passed by the authority since been quashed by the High Court, the Hon'ble Apex Court has been pleased to approve the view of the High Court and applying the said principle in this case, since the authorities while passing the order U/s.7(A) has placed reliance upon some reports, as such the authorities ought to have supplied the same, but admittedly the same has not been supplied.
Moreover, the authorities exercising the power conferred U/s.7(A) is exercising quasi-judicial power and there must be transparency in the proceeding but what has been gathered by this court is that proceeding has been closed and in absence of petitioner, without giving information in this regard the case has again been taken up on 19.1.2007 hence this action of the authority cannot be approved by this court.
10The petitioner being aggrieved with the order passed U/s.7(A) has preferred an appeal raising this aspect of the matter as would be evident from the memo of appeal and notes of argument annexed to the writ petition but from perusal of the appellate order it is apparent that the same has not been answered.
From perusal of the provision as contained in Section 7(I) of the Act, 1952 it is evident that the authorities deciding the appeal has been conferred with the same power as has been conferred with the authority who is deciding the 7(A) application and it is the further duty of the appellate authority that if any point is being urged, it has to be answered and if not answered then the order will be said to be mechanical.
Keeping this aspect of the matter, in my considered view, the order dtd.03.03.2008 passed U/s.7-A and 7-Q of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (Annexure-3) by the Asst. Provident Fund Commissioner, Rourkela and the order dtd.24.2.2010 passed by the E.P.F. Appellate Tribunal in ATA No.281(1) of 2008 (Annexure-7) are not sustainable in the eye of law and accordingly quashed.
In the result, the matter is remitted before the Assistant Provident Fund Commissioner, Rourkela to pass fresh order after supplying copy of the enquiry reports to the petitioner which have been referred in the order dtd.3.3.2008, i.e. reports dtd.9.12.2003, 16.2.2004, 16.7.2004, 26.10.2004 and 30.6.2005 which were said to be kept in main file at page 31/C, 45/C to 47/C, 55/C, 106/C to 108/C and 115/C. The petitioner - establishment is directed to appear before the Asst. Provident Fund Commissioner, Rourkela on 25th August 2016 at 10.30 A.M. 11 The Asst. Provident Fund Commissioner shall provide the reports referred in the order passed U/s.7(A) of the Act and inform the petitioner regarding the date of hearing.
The petitioner is directed to appear on the date fixed for hearing. The Asst. Provident Fund Commissioner is further directed to pass speaking order within reasonable period, preferably within four weeks from the date of appearance of the petitioner as per the date fixed by him.
The amount already deposited will depend upon the final decision which is to be taken by the Asst. Provident Fund Commissioner as indicated herein above.
Accordingly, the writ petition stand disposed of with the above observations and directions.
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S.N. Prasad, J.
Orissa High Court, Cuttack.
Dated the 26th July, 2016/MKP