Gujarat High Court
Perfect Borng Pvt. Ltd vs Employees Provident Fund Organization ... on 2 November, 2015
Author: S.R.Brahmbhatt
Bench: S.R.Brahmbhatt
C/SCA/6068/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 6068 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
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1 Whether Reporters of Local Papers may be allowed to see the
judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the
interpretation of the Constitution of India or any order made
thereunder ?
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PERFECT BORNG PVT. LTD.....Petitioner
Versus
EMPLOYEES PROVIDENT FUND ORGANIZATION & 2....Respondents
======================================
Appearance:
MR PRABHAKAR UPADYAY, ADVOCATE for the Petitioner
DS AFF.NOT FILED (N) for the Respondent No. 3
MR UT MISHRA, ADVOCATE for the Respondent No. 2
MS E.SHAILAJA, ADVOCATE for the Respondent No. 1
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CORAM: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
Date : 02/11/2015
ORAL JUDGMENT
1. Draft amendment is granted. The petitioner, by way of this petition filed under Article 226 of the Constitution of India, has approached this Court with following prayers.
"(A) YOUR LORDSHIPS may kindly be pleased to Page 1 of 28 HC-NIC Page 1 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT issue a Writ of Mandamus and / or any other appropriate Writ, direction and order to quash and set aside the impugned Order dated 04.03.2015 issued by the present respondent no.2 at AnnexureL to this petition.
(B) YOUR LORDSHIPS may kindly be pleased to issue a Writ of Mandamus and/or any other appropriate Writ, direction and order to quash and set aside the Summons dated 08102012 issued by the present respondent no.2 Authority under the Act, 1952 by holding and declaring that the proceeding initiated under Section 7B of the Act, 1952 against the petitioner Company is without jurisdiction and contrary to the provisions of law.
(C) Pending hearing and final disposal of this petition, YOUR LORDSHIPS may kindly be pleased to stay the further proceedings in connection with the Summons dated 08.10.2012 issued under Section 7B of the Act, 1952, initiated by the present respondent no.2 against the present petitioner.
(D) Any other and further relief may kindly be granted as Your Lordships deemed fit just and proper in the interest of justice."
Thus, what is essentially under challenge is the order dated 4th March 2015 passed by the Assistant Provident Fund Commissioner, Page 2 of 28 HC-NIC Page 2 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT wherein the preliminary contentions raised by the present petitioner in the proceedings under Section 7B of the Act, 1952 has been rejected and also the final order dated 8th June 2015, wherein the petitioner is calledupon to deposit Rs.31,16,445/ in 15 days towards arrears of provident fund or else the proceedings under Section 8 B to 8 G would be initiated.
2. The facts in brief as could be culledout from the memo of the petition deserve to be setout as under.
3. The present petitioner company is incorporated under the provisions of the Companies Act, 1956. The provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Act, 1952") made applicable to the present petitioner establishment from 7th January 2005. The present respondent no.3 made a complaint on 31st May 2006 to the Regional Officer, Enforcement Office, Ahmedabad with regard to breach of Provident Fund Act in the petitioner company and in pursuance to the complaint, the Provident Fund Enforcement Officer Mr.Makwana, had visited the factory premises and examined the necessary documents on 28th June 2006. The present respondent authorities issued the summons dated 21st August 2006 and the proceedings initiated under Section 7A of the Provident Funds and Miscellaneous Provisions Act, 1952. The present petitioner appeared in the proceedings through the representative and the necessary documentary evidence submitted before the Authorities. The Authorities after verification found that the respondent no.3 was drawing the salary of Rs.7,500/ (Basic) + Rs.1,000/ (Allowances) = Total Rs.8,500/. Therefore, as defined under Section 2 (ff) of the Act, 1952, the present respondent no.3 was the "exempted employee", during his service tenure and after examining all the records of the company, an order dated 13th June 2007 passed by the respondent no.2, whereby the Page 3 of 28 HC-NIC Page 3 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT inquiry under Section 7A of the Act, 1952 initiated against the present petitioner was dropped.
4. The respondent no.3 made applications for information regarding actions taken by Enforcement Section, under the provisions of the Right to Information Act, 2005 and the respondent Authority vide communication dated 21st April 2011 gave the information to the present respondent no.3. By an order dated 16th February 2012, the respondent no.2 Authority provided the information to the respondent no.3, whereby it was informed that the Review Application under Section 7B of the Act, 1952 can only be considered if filed by the establishment within the prescribed time limit i.e. 45 days from the date of the original order passed under Section 7A of the Act, 1952. The respondent no.2 authority, has issued Summons under Section 7B of the Act, 1952 dated 8th October 2012, wherein the petitioner was informed that the Review Application has been filed by the present respondent no.3 under Section 7B of the Act, 1952. The proceedings under Section 7B of the Act, 1952 were initiated by the respondent no.2 and adjourned from time to time. The petitioner submitted reply dated 30 th July 2013 in the proceedings initiated under Section 7B of the Act, 1952.
5. Thereafter, the petitioner has filed Special Civil Application No.118 of 2014 before the Court, challenging the illegal action on the part of the respondent authorities of issuing the summons dated 8th October 2012. Wherein, this Court permitted the petitioner to withdraw the petition with a liberty to approach the authority with all contentions which had been raised in the petition and directed the respondent authorities to decide the matter as expeditiously as possible preferably within 3 months from the date of receipt of the order. Again on 7th January 2015 the respondent authority has issued summons to the Page 4 of 28 HC-NIC Page 4 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT petitioner and in pursuance thereof, the petitioner filed preliminary objections regarding maintainability of the proceedings initiated under Section 7B of the Act, 1952 alongwith all the relevant documents as well as the decision of the Apex Court and the High Courts. The respondent no.2 passed an order dated 4th March 2015 rejecting the preliminary contentions raised by the petitioner in the proceedings under Section 7B of the Act, 1952. In the proceedings under Section 7 A of the Act, 1952, the present petitionercompany submitted all the documentary evidence before the respondent Authority and after considering the material on record, the respondent no.2 had concluded the proceedings by an order dated 13th June 2007. After the lapse of about five years, the present respondent no.3, with malafide and deliberate intentions, made an application to the respondent authority, though having no locus to lodge any complaint as he is falling within the category of "exempted employee" as defined under Section 2 (ff) of the Act, 1952. By lodging the complaint before the Conciliation Officer, Ahmedabad under the provisions of the Industrial Disputes Act, 1947 on 6th June 2006, the respondent no.3 challenged the alleged order of termination dated 18th April 2006. The provisions of P.F. Act, 1952 would not be applicable to the respondent no.3 as he was drawing the salary more than Rs.6,500/ per month. Only with a view to adopt the pressurize tactics, the respondent no.3 has lodged the complaint. Being aggrieved by the order dated 4th March 2015 the petitioner has filed this petition.
6. Learned advocate for the petitioner, submitted that the respondent authority ought not to have entertained the complaint of the respondent no.3. He further submitted that the respondent no.2 authority without properly taking into consideration the provisions of the Act, 1952, has initiated the proceedings under Section 7B of the Act, 1952. Learned advocate for the petitioner invited Court's attention to Page 5 of 28 HC-NIC Page 5 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT the relevant provision of the Act, 1952 and submitted that the proceedings initiated against the petitioner is without jurisdiction. He further submitted that as per the provisions, after the expiry of 45 days from the date of order passed under Section 7A of the Act, 1952, the Authorities become "Functus officio".
7. Learned advocate for the petitioner, submitted that the respondent authority has passed the order on 13th June 2007 under Section 7A and after lapse of more than five years, the summons under Section 7B of the Act, 1952 has been issued. The respondent authorities ought not have entertained the application filed under Section 7B of the Act, 1952 as the same has been made after lapse of more than 45 days. Hence, the proceedings initiated against the petitioner by the respondent in response to the summons dated 8th October 2012 is without jurisdiction. He further submitted that though the respondent authorities has no jurisdiction even to entertain the application, the summons has been issued and proceedings have been initiated under Section 7B of the Act, 1952.
8. Learned advocate for the petitioner, submitted that while passing the order, the respondent authority had not taken into consideration the necessary documents produced by the petitioner for the purpose of deciding the preliminary issues. Learned advocate for the petitioner, submitted that the respondent authority has committed a gross jurisdictional error on the face of the record.
9. Learned advocate for the petitioner, contended that the proceedings initiated under Section 7B of the Act, 1952 against the petitioner is abinitio void. It is further contended by the learned advocate for the petitioner that the review application is to be filed within the time as may be specified in the scheme, but from the record, Page 6 of 28 HC-NIC Page 6 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT it transpires that the said review application has been filed after lapse of more than five years, though as per paragraph 79A of the scheme, the application for review is to be preferred within a period of 45 days and therefore, the application for review is not maintainable, as it is preferred beyond the time limit prescribed under the Act.
10. Learned advocate for the petitioner, contended that the decisions on which the petitioner has relied upon are not taken into consideration by the respondent authority, while passing the order impugned. Therefore, the order impugned deserves to be quashed and set aside.
11. Learned advocate for the petitioner, submitted that on the basis of false and fabricated complaint made by the respondent no.3, the respondent authority has initiated the proceedings under Section 7B of the Act, 1952. The application under Section 7B is maintainable only if the application has been made by the aggrieved party in the prescribed form and as the respondent no.3 is not aggrieved person and filed such complaint, the same should not have been entertained by the authority. Hence, the proceedings initiated by the respondent no.2, is in contravention of provisions of Section 7B (1) Act, 1952 R/W para 79A of the Scheme, 1952.
12. Learned advocate for the petitioner, submitted that on bare perusal of the complaint of the respondent no.3 dated 31st May 2006, it reveals that the respondent authority, while exercising the power conferred under Section 7A of the Act, 1952 had taken into consideration all the facts and evidence, which were scrutinized by the Authorities at the relevant point of time and therefore, petitioner has no other option but to approach this Court by way of present petition.
13. To support his contention learned advocate for the Page 7 of 28 HC-NIC Page 7 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT petitioner relied upon the following judgments.
(1) In S.C.A. No.18542 of 2014, Judgment rendered by Larger Bench of this Court, in case of Panoli Intermediate (India) Pvt. Ltd., V/s. Union of India & 2, dated 13th March 2015.
(2) In case of Jayminbhai Navinbhai Doshi V/s.
State of Gujarat, reported in 2015 (1) GLH 167.
(3) In case of Whirlpool Corporation V/s.
Registrar of Trade Marks, Mumbai, reported in 1998 (8) SCC 1.
(4) In case of State of Orissa V/s. Kanhu Charan Majhi, reported in 2014 (1) SCC 156.
14. Learned advocates for the respondent nos.1 and 2, submitted that petitioner has tried to misguide this Court by making incorrect and false statements and on the said ground alone, the present petition deserve to be dismissed.
15. Learned advocates for the respondent nos.1 and 2, contended that the petition is not maintainable before this Court in view of the order dated 8th June 2015 passed in the proceedings under reference. The respondent has followed the procedure laid down in inquiry under Section 7B of the E.P.F. & M.P. Act, 1952. Learned advocates for the respondent nos.1 and 2, invited Court's attention to the subpara three of the order passed in S.C.A. No.118 of 2014 and submitted that when the matter was withdrawn, to enable the petitioner to approach the authority, it became the bounden duty of the authority to take into consideration the observations of the Court.
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16. Learned advocates for the respondent nos.1 and 2, contended that provisions of Section 7B of the E.P.F. & M.P. Act, 1952 has been misinterpreted by the petitioner. Learned advocates further submitted that plain and simple reading of Section 7B of the Act indicates that any person who is aggrieved by an order made under Section 7A of the Act can opt for review of the order on discovery of new and important matter of evidence, which despite exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made. It is further contended that respondent no.3 of the petitioner establishment was aggrieved by the order issued under Section 7A of the Act, which was given to him pursuant to an application under R.T.I. Act, 2005 he filed Review application under Section 7B of the E.P.F. & M.P. Act, 1952.
17. Learned advocates for the respondent nos.1 and 2, submitted that as and when the copy of 7A order was made available to the respondent no.3, he could opt for review application within 45 days and on that ground also the respondent no.3 was eligible to apply for review of the 7A order. It is further submitted that respondent authority has not exceeded the jurisdiction nor has it become "Functus Officio" after 45 days of the passing of the order under Section 7A. It is submitted by the learned advocates for the respondent nos.1 and 2 that review proceedings are well within the jurisdiction of the reviewing authority and the respondent no.2 was justified in moving the review application within 45 days of receipt of 7A order supplied to him in reply to his application made under R.T.I. Act, 2005 and the said aspect was appropriately considered and rejected vide the order impugned in the petition as detailed by the reviewing authority before entertaining the review application and the said proceedings have been concluded vide order dated 8th June 2015 pending the present petition and thus the Page 9 of 28 HC-NIC Page 9 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT present petition is required to be dismissed in limine.
18. It is further contended that the petition be dismissed, as any relief granted in the matter will adversely affect the interest of workers working for the petitioner establishment and they will be deprived from the social security rights provided under the E.P.F. & M.P. Act. He further submitted that this Court may uphold the action of the respondent in light of the fact that the above provisions to the effect were incorporated in the Act to ensure the success of the various social security schemes administered by the respondent department for effective and prompt compliance by the employers like the petitioner. It is further contended that looking to the facts and circumstances of the case on hand, the respondent authority required to reopen the 7A order pursuant to which the review proceedings were initiated. Therefore, grant of any relief in this petition will set a wrong precedent to other employers to evade from P.F. liability through litigation and ultimately the real subscribers of the P.F. working in the petitioner's establishment will suffer and deprived of the Social Security benefits, which are made available through social security schemes administered by the respondent authority.
19. It is submitted that the petition be dismissed, as allowing the petition will inspire the employer from evading remittance of P.F. and allied dues which will adversely affect the interests of the subscribers of the Employees Provident Fund. It is further submitted that the prayers made in this petition deserves to be rejected and the petition requires to be dismissed with costs.
20. Ms. E. Shailaja, learned advocate for the respondent no.1, relied upon the following judgments.
1) In case of Regional Provident Fund
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Commissioner V/s. Hooghly Mills Company
Limited and others, reported in (2012) 2 Supreme Court Cases 489.
2) In S.C.A. No.30921 of 2007 order dated 11th February 2008, in case of Swati Enterprise V/s. Asst. Provident Fund Commissioner & other.
3) In S.C.A. No.1962 of 2013, CAV order dated 30th July 2013, in case of Deeya Gems through partner V/s. Commissioner Employees Provident Fund and another.
4) In S.C.A. No.7303 of 2008, judgment dated 14th October 2008, in case of Cookvel Foods (I) Pvt. Ltd., & Anr. V/s. Union of India Through Ministry of Labour & Ors.
21. Mr. U. T. Mishra, learned advocate for the respondent no.3, submitted that the present petition is not maintainable as the principle of constructive res judicata is applicable and only on this ground the petition is required to be dismissed.
22. Learned advocate for the respondent no.3, further contended that petitioner filed S.C.A. No.118 of 2014 in this Court, wherein the Court had issued notice and granted interim relief, but the petitioner intentionally not joined the respondent no.3 as a party respondent. The respondent no.3 filed civil application for joining him as a partyrespondent in the original petition, the same is allowed by this Court. Learned advocate, further submitted that after joining respondent no.3, as a partyrespondent in the main matter and after Page 11 of 28 HC-NIC Page 11 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT hearing both the sides, this Court has taken a view to dismiss the petition with cost and hence, learned advocate for the petitioner sought permission to withdraw the petition. Therefore, this Court granted the permission to withdraw the petition and directed the authority to consider the contentions of the petitioner and rival contentions of respondents and decide the matter as expeditiously as possible, preferably within 3 months from the date of receipt of this order.
23. Learned advocate for the respondent no.3, submitted that the employer has challenged the order passed by the respondent authority u/s. 7(B) of the E.P.F. & M.P. Act, 1952, whereas he has remedy to challenge the order passed by the E.P.F. Authority u/S. 7 (Q) of the E.P.F. Act before the E.P.F. Tribunal and hence, the petition filed by the petitioner is not maintainable, since the petitioner has alternative efficacious remedy. Learned advocate for the respondent no.3, further submitted that even on merits, the petition is required to be dismissed with exemplary cost.
24. Learned advocate for the respondent no.3, further contended that his complaint was disposed off without granting him any opportunity of hearing, nor he was called by the authority to produce any documentary evidence and therefore, the order passed by the authority is exparte. Learned advocate for the respondent no.3, submitted that he was not informed about the order passed by the authority u/s. 7 (A) of the E.P.F. & M.P. Act, 1952 and only after filing an application under R.T.I. Act, the respondent no.3 was informed by the respondent authority about the disposal of his complaint. Learned advocate for the respondent no.3, further submitted that on filing of Review Application u/s. 7 (B) of the E.P.F. & M.P. Act, by him, pointing out several irregularities of the petitioner, the authority has issued summons and in the entire proceeding employer did not challenge the Page 12 of 28 HC-NIC Page 12 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT same, but when the employerpetitioner, came to know that they will be held responsible for not paying the contribution of the Employee Provident Fund, they immediately approached this Court by filing S.C.A. No.118 of 2014. It is submitted by the learned advocate for respondent no.3, that in the earlier proceedings, the respondent no.3 had produced the Certified copies of the Balancesheet for the F.Y. 200304, 200506, 200607, which copies were obtained from Ministry of Corporate Affairs. It is further submitted that the balancesheets produced by the employer before the P.F. Authority is entirely different. However, the Court observed that to avoid heavy liability of employees' P.F. contribution, the petitioner produced the balancesheet and on this ground the Court has taken the view to dismiss the petition. Thereafter, the advocate of the petitioner withdrawn the petition, without inviting order on merits.
25. It is submitted by the learned advocate for the respondent no.3, that the petitioner, now approached this Court by way of this petition seeking the same relief, which is not maintainable, therefore, the same is required to be dismissed.
26. Learned advocate for the respondent nos.2, relied upon the following judgments.
(1) In case of Addl. General Manager - Human Resource, Bharat Heave Electricals Ltd., V/s.
Suresh Ramkrishna Burde, reported in (2007) 5 SCC 336.
(2) In case of India Household and Healthcare Ltd., V/s. L.G. Household and Healthcare Ltd., reported in (2007) 5 SCC 510.
(3) In case of Assistant P.F. Commissioners,
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Employees Provident Fund Organisation And
Pawankumar Agarwala and others, reported in
2008IILLJ969 (Cal).
(4) In case of Poonam V/s. Sumit Tanwar,
reported in (2010) 4 SCC 460.
27. From the aforesaid discussion the following indisputed aspects would emerged.
(a) The petitioner establishment was subjected to 7A inquiry on account of the complaint filed by respondent no.3. It was the say of the petitioner that the petitioner establishment was covered under the P.F. Act only on and after 7th January 2005. The respondent no.3 made a complaint on 31 st May 2006.
(b) The proceedings came to be initiated under Section 7A of the Act against the petitioner.
(c) On 13th June 2007 the concerned the then Assistant Provident Fund Commissioner, concluded the inquiry and decided to close it vide order dated 13th June 2007, which is produced at page no.25 in the compilation, which unfortunately do not disclose anywhere the contentions or material placed on record by the respondent no.3, at whose behest the inquiry had been initiated. The cryptic order on 13th June 2007 contains satisfaction of the then Assistant Provident Fund Commissioner for closing the inquiry.
(d) It has been not in dispute that the respondent no.3
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had never been called or summoned or permitted or given an opportunity to put forward his case at all.
(e) The respondent no.3, had not been even informed about the outcome of the complaint and the initiation of inquiry, as he was constrained to lodge a proceedings under the Right to Information Act in the year 2011 and in reply thereto, for the first time, he received information that the order of 13th June 2007 is passed closing the inquiry, which gave rise to filing of the application to the concerned authority by the respondent no.3. The information given to the respondent no.3 by the office of the respondent nos.1 and 2 was on 16th February 2012.
(f) The respondent no.3 moved the Provident Fund Commissioner for taking appropriate steps under Section 7B of the Act, wherein the concerned authority issued summons on 8th October 2012.
(g) The said summon was challenged by way of writ petition being S.C.A. No.118 of 2014 before this Court, which came to be withdrawn on 10th December 2014 with a liberty to petitioner to raise all the contentions before the concerned authority. Thereafter, on 7th January 2015, the summons were issued. The objections were raised.
(h) The preliminary objections were raised and they have been dealt with and decided vide order dated 4 th March 2015, which as stated herein above is a subject matter of challenge to this petition. During the pendency of this petition, the draft amendment came to be filed on 1st July 2015, which is required Page 15 of 28 HC-NIC Page 15 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT to be reproduced in its totality for appreciating the scope and purport. Hence, the same is reproduced as under : "PROPOSED DRAFT AMENDMENT The following paragraph may kindly be permitted to add immediately after Para16 as Para 16A and following prayers may kindly be permitted to add immediately after 20(B) as 20 (B)(B) in Memo of the Petition.
"16A The petitioner respectfully states and submits that this Hon'ble Court (Coram : Mr. Justice S. G. Shah) have been pleased to issue notice on 16.04.2015 returnable on 16.06.2015. During the pendency of the present petition, the present respondent authority passed an order dated 08.06.2015. Whereby, the present respondent authority has directed the present petitioner to pay in sum of Rs.31,16,445/, as the respondent authority has no jurisdiction or authority to exercise the power conferred under Section 7 (B) of the Act, 1952, as the same is beyond the period of 45 days prescribed under the law. A copy of the order dated 08.06.2015 passed by the Authority is annexed hereto and as AnnexureO to this petition."
"Prayer Clause 20 (B)(B) Your Lordships may kindly be pleased to issue writ of Mandamus and/or Certiorari and/or any other appropriate Page 16 of 28 HC-NIC Page 16 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT Writ, direction and order to quash and set aside the order dated 08.06.2015 passed by the present respondent No.2 at annexureo to this petition.""
(i) Thus, under the draft amendment, the final order dated 8th June 2015 is also challenged. Unfortunately, it is required to be noted at this stage that the proposed draft amendment does not contain any contention qua the challenge to the order on merits at all. In other words, it can well be said that the petitioner did not choose to challenge this order in this proceeding, so far as the merits and order of levying of the arrears and fixing the liability of the petitioner is concerned, accept only on the ground that the said order could not have been passed as the concerned authority did not have jurisdiction in view of paragraph no.79A of the scheme in which for exercising power under Section 7B, the time limit of 45 days from the date of the order had gone by, as the original order was that of 13th June 2007.
28. Against the aforesaid backdrop of factual aspects, the moot questions arises as to whether the impugned orders were without authority of law or the respondent authorities exercise power beyond the jurisdiction. For answering these questions, it would be most appropriate to setout the relevant provisions hereunder of the Act and the scheme.
"7B. Review of orders passed under Section 7 A.(1) Any person aggrieved by an order made under subsection (1) of section 7A, but from which no appeal has been preferred under this Act, and who, from the discovery of new and Page 17 of 28 HC-NIC Page 17 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made, or on account of some mistake or error apparent on the face of the record or for any other sufficient reason, desires to obtain a review of such order may apply for a review of that order to the Officer who passed the order:
Provided that such officer may also on his own motion review his order if he is satisfied that it is necessary so to do on any such ground.
(2) Every application for review under subsection (1) shall be filed in such form and manner and within such time as may be specified in the Scheme.
(3) Where it appears to the officer receiving an application for review that there is no sufficient ground for a review, he shall reject the application.
(4) Where the officer is of opinion that the application for review should be granted, he shall grant the same :
Provided that,
(a) no such application shall be granted without previous notice to all the parties before him to enable them to appear and be heard in support of the order in respect of which a review is applied for, and Page 18 of 28 HC-NIC Page 18 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT
(b) no such application shall be granted on the ground of discovery of new matter or evidence which the applicant alleges was not within his knowledge or could not be produced by him when the order was made, without proof of such allegation. (5) No appeal shall lie against the order of the officer rejecting an application for review, but an appeal under this Act shall lie against an order passed under review as if the order passed under review were the original order passed by him under section 7 A.]"
"[79 A. Filing application for review.Any person aggrieved by an order made under sub section (1) of section 7A and who desires to obtain a review of such order may apply for a review of that order, as provided in subsection (1) of section 7 B of the Act in Form 9 to the officer who passed such order :
Provided that no application for review of an order will be entertained by the concerned officer, unless the application for review is submitted within 45 days from the date of making such order.]"
29. The plain and simple reading of the aforesaid two provisions would clearly indicate that there is a time limit of 45 days from the date of the order for moving the authority for seeking review Page 19 of 28 HC-NIC Page 19 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT on the part of the person aggrieved. The person "aggrieved" is not defined anywhere, but this phraseology has to be understood in its correct meaning and purport.
30. The fact remains to be noted that in the present proceedings, the entire issue had been revolving around the aspect of the present petitioner allegedly avoiding its liability under the Provident Fund Act and hence, the complaint came to be filed by the respondent no.3, which gave rise to the initial proceedings under Section 7A. Therefore, it can well be said that the respondent no.3 was not an alien at all to the proceedings in question and in absence of respondent no.3, there could not have been any effective adjudication or decision making process under Section 7A of the Act. If one looks at the original order of 13th June 2007, passed by the then Assistant Provident Fund Commissioner, one will have to conclude that there appears to be no reference to the respondent no.3 or his submission or contention. In other words, the respondent no.3 had not been given any opportunity whatsoever for putting forward his version and case against the present petitioner. Not only that the respondent no.3, had not been given an opportunity of being heard, but even the final order had not been communicated to the respondent no.3, who would have otherwise take out appropriate proceedings in accordance with law. In respect thereof, a question arises therefore, as to whether the order dated 13th June 2007 can be said to be an order so as to make it complete and operational in eye of law in absence of its service to the respondent no.3, who was in fact party in the proceedings. It cannot be gain said that the nonservice of the order to the affected party would render the order inoperative so far as that party is concerned. In other words, for order to become effective, it has to be communicated to the concerned and in the instant case, it is not the case of anyone that the respondent no.3 had in any manner avoided receipt thereof. On the contrary, the respondent no.3 Page 20 of 28 HC-NIC Page 20 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT appears to have been a catalyst in setting the entire procedure in motion so far as Section 7A inquiry was concerned. Therefore, it was all the more incumbent upon the concerned Assistant Provident Fund Commissioner to see to it that the respondent no.3 is given an opportunity and is also informed about the order in question.
31. The provision of paragraph no.79A of the scheme is unequivocally clear to the effect that the period of limitation of 45 days would start from the date of the order and not from the date of the knowledge or the date of the receipt of the order by the aggrieved party. The fact remains to be noted that in the instant case, the then Assistant Provident Fund Commissioner, who decided Section 7A application did not offer any opportunity whatsoever to respondent no.3, at whose instance that proceedings had started. Nor did he bother to serve the copy of that order upon him. Had he been vigilant to serve the copy of that order upon the respondent no.3 and respondent no.3 had not filed review application under Section 7B within 45 days therefrom, then there was a clear case of matter being time barred. The Court hastened to add here that the plain and simple language of paragraph no.79A would not permit any other interpretation, but to say that the date of the order is the date wherefrom the period of 45 days limitation commences. Therefore, the decision cited at the bar on behalf of the petitioner for supporting his contention that the period of limitation as envisaged under paragraph no.79A cannot be stretched or extended even if any delay condonation application is filed, as the same has not provided in the paragraph no.79A itself. The Court, therefore, is of the view that the contention raised on behalf of the petitioner qua paragraph no.79A being not capable of stretching the limitation "from the date of order" and not from the date of knowledge of the order is correct and there cannot be any dispute qua the said proposition of law.
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32. In view of the aforesaid unequivocal and unambiguous language of paragraph no.79A, one has to accept the proposition of law that the date of knowledge and date of service of the order to the aggrieved party as are provided in such provision, being absent in provision of paragraph no.79A, the same would not stretch or extend the period of limitation. In other words, the respondent no.3 cannot claim that the period of limitation would get extended in the instant case only on account of nonservice of the order impugned upon him. At the same time, he may be justified in arguing that, that order is nullity qua him as it has not been served upon him. If he is permitted to contend that the period of limitation in his case would start from the date when he had knowledge of the order, then it would amount to providing something more than what is not there in the plain and simple language of paragraph no.79A. A question arises as to whether such causus omissus is required in the instant case, the answer is simply "no", as the language of the provision is unequivocally clear and therefore, this Court is of the view that the period of limitation cannot get extended or stretched on account of nonservice of the order. However, the same would not preclude the respondent no.3 from bringing the material with him to the knowledge of the authorities which of course is not precluded by takingup suo motu action of review, as the language of paragraph no.79A does not debar the authority from taking suo motu action on his own, if the suo motu action is warranted on account of the reasons mentioned in Section 7BH of the P.F. Act. In the instant case, though it is required to be noted that the action of issuance of summons were at the instance of respondent no.3 only. But, the satisfaction of the authority for taking the order dated 13th June 2007, as it could be seen from the final order rendered on 8th June 2015, cannot be said to be a proceedings only at the instance of respondent no.3. The authority's action is required to be viewed from its power to take suo motu review and suo motu review procedure is not debarred on or after the period of Page 22 of 28 HC-NIC Page 22 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT 45 days from the date of the original order on account of the plain and simple language of paragraph no.79A, this Court has no hesitation to hold that the period of limitation of 45 days said to have been enuring or restricting the right of "aggrieved party" and not that of the authority in takingup suo motu action.
33. This Court is of the considered view that if paragraph no.79A of the scheme is required to be strictly construed so as to debar the respondent no.3 from maintaining the review application on account of its clear language that the aggrieved party can move the review application within the period of 45 days from the date of the order, then the said strict interpretation would indicate that the language of paragraph no.79A does not limit or place any embargo upon the reviewing authority to takeup suo motu review of the earlier order as it is provided in the proviso of Section 7B of the P.F. Act and hence, if one looks at the entire proceedings from that angle, one will have to accept the proposition that the authority passing the order on 4th March 2015 and 8th June 2015 was justified in maintaining the review though it might not have been in so many words narrated in the scheme.
34. A question arises as to whether the review filed after the period of limitation can be said to be a review required to be thrown over the board without being consideration. The answer would be emphatic 'No', as the review petition clearly contains the averments, which have remained uncontroverted on the part of the petitioner. The authority, so far as its power to take suo motu action are concerned, in my considered view was not debarred from taking suo motu action, as the language of Section 7B would clearly indicate that the proviso to that Section is amply clothing the authority to initiate suo motu proceedings for the reasons for which the review could be maintained. One may submit here that the facts of the present case do indicate that Page 23 of 28 HC-NIC Page 23 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT the authority of its own motion did not initiate the action. In the instant case, the first summons issued, which was subject matter of challenge would clearly indicate the authority's satisfaction for issuance of summons and therefore, this Court has no compaction in accepting the say that there could be atleast a suo motu proceedings in a given case in which there exists no limitation. There cannot be any submission that the authority, which has a power to issue suo motu proceedings could not have issued suo motu proceedings. Assuming for the sake of examining without holding that the authority did not have power to issue suo motu, as otherwise the limitation aspect would stare on the face. The observations of the authority passed in the substantive order, which have been subject matter of challenge by way of draft amendment dated 8th June 2015 contains specific observation of the authority, which indicate that sufficient time was granted and despite that the same was not utilized in producing the documents. The respondent no.3's submission qua two balancesheets in different proceedings produced, one is company's proceedings and one is P.F.Authority, is also appreciated and therefore, if one takes that into consideration, it can well be said that the original order dated 13th June 2007 was in fact nothing but a fraudulent exercise on the part of the concerned for which there cannot be any doubt in any manner.
35. The Court is of the considered view that the fraud which has been recorded cannot be said to be in any manner permitted to be perpetuated or else it would defeat the right cause. Therefore, the observations made in paragraph no.4 to 7 of the impugned order would amply indicate that there existed ample ground for even authorities issuing suo motu notices on its own and therefore, the same in my view cannot be lack any jurisdiction and the petition would not required to be entertained.
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36. It is also required to be noted that the respondent no.3 has aptly demonstrated as to how and in what manner the earlier order dated 13th June 2007 was not tenable in law, as the averments made by the respondent no.3 in the affidavit have not been controverted by the petitioner nor has he controverted the same before the authority. Those averments are required to be setout in verbatim hereunder.
"........I say that even on merit the petition is required to be dismissed with exemplary cost. I say that I have initially filed a complaint against the petitioner employer in the year 2006 wherein the authority has issued notice against the petitioner employer and after examining the record, my complaint was disposed off. I say that at the time of disposing off my original complaint I was not granted any opportunity of hearing nor I was called by the authority to produce any documentary evidences and therefore, the order passed by the authority is ex parte, without giving me any reasonable opportunity of hearing. I say that I was not informed about the order passed by the authority u/s. 7(A) of the EPF & MP Act 1952. I say that thereafter I have submitted an application under RTI Act and I was informed by the respondent authority that my complaint was closed. Immediately, I filed the Review Application u/s. 7(B) of the EPF & MP Act 1952, pointing out several irregularities committed by the petitioner employer. I say that thereafter the authority has issued summons and after fully participating in the entire proceeding employer did not challenge Page 25 of 28 HC-NIC Page 25 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT the same but at the time of conclusion of the proceeding when the employer came to know that they will be held responsible for not paying the contribution of the Employees Provident Fund, therefore, immediately they approached this Hon'ble Court by filing Special Civil Application No. No.118/2014. I say that in the aforesaid proceeding I have filed reply wherein I have pointed out that the petitioner employer has produced false, fabricated, coocked up and manipulated documents as well as BalanceSheets too knowing fully well that they are not true, with a clear view to avoid the legal and huge liability to pay the PF Dues. I say that in the earlier proceeding I have produced the Certified copies of the BalanceSheets for the Financial year 2003 04, 200506 & 200607 which I have legally obtained by submitting proper application to the office of the Ministry of Corporate Affairs wherein the employer has produced the Balance Sheets and at the same time the BalanceSheets produced by the employer before the PF authority is entirely different. I say that the BalanceSheet produced before the authority is manipulated intentionally and deliberately with a view to avoid heavy liability of employees PF contribution and this is how this Hon'ble Court has taken view to dismiss the petition and instead of inviting order on merit the Advocate withdrew the petition........"
Thus, the order dated 13th June 2007 being not absolutely Page 26 of 28 HC-NIC Page 26 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT tenable in eye of law, the same was required to be taken in review and the Court is more than satisfied that the authority correctly exercise the power of review and therefore, there was no lack of jurisdiction in takingup the review proceedings.
37. At this stage, a question arises as to whether the ground of alternative remedy is available, the Court is of the view that when the very authority and jurisdiction of the authority is under challenge, there was no requirement of relegating the petitioner for alternative remedy and the decision cited at the bar on behalf of respondent no.3, as well as respondent nos.1 and 2, would be of no avail to them, as the Court is of the considered view that there exists a case for approaching this Court, as the substantive challenge was to the effect that there existed no jurisdiction of the authority after entertaining the review when 45 days' period was over. However, on merits, when the Court is examining this issue, it was found absolutely of no substance but that in itself would have not been sufficient for relegating the petitioner without examining this issue at all. This Court do not propose to examine the rest of the order on the aspects of merits and therefore, the Court is leaving it to the petitioner to agitate the same before the appellate authority if it so advised. But, the appellate authority now will have no ground to reopen or reexamine the issue so far as the limitation aspect of jurisdiction is concerned, as the learned advocate for the petitioner has consciously chosen not to avail the remedy and invite order of the Court on these aspects. Hence, so far as the appeal is concerned, it may be permitted to be filed only on account of the merits and not on the ground of the lack of jurisdiction of the authority, as the Court is of the considered view that the authority did have jurisdiction to entertain the review and therefore, the petition is required to be disposed of with aforesaid observations. The respondent no.3 is permitted to withdraw the amount of Rs.25,000/ deposited by the petitioner in this Court vide order dated Page 27 of 28 HC-NIC Page 27 of 28 Created On Sun Nov 08 00:11:56 IST 2015 C/SCA/6068/2015 JUDGMENT 16th April 2015. Notice discharged.
(S.R.BRAHMBHATT, J.) Rathod...
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