Punjab-Haryana High Court
Central Board Of Trustees, Employees ... vs M/S Hari Darshan Singh Bko on 4 May, 2018
Author: P.B. Bajanthri
Bench: P.B. Bajanthri
CWP-9227-2015 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
222 CWP-9227-2015(O&M)
Date of decision:04.05.2018
Central Board of Trustees, EPF Organization
...Petitioner
Versus
M/s Hari Darshan Singh BKO (Brick Kiln Owner)
.... Respondent
CORAM: HON'BLE MR. JUSTICE P.B. BAJANTHRI
Present: Mr. Rajesh Hooda, Advocate for the petitioner.
Mr. Vivek Salathia, Advocate for the respondent.
P.B. BAJANTHRI, J. (ORAL)
In the present petition, petitioner has challenged the validity of the order dated 12.05.2014 (Annexure P-3) passed by the Employees Provident Fund Appellate Tribunal, New Delhi (for short 'EPFAT'). Respondent-M/s Hari Darshan Singh BKO (Brick Kiln Owner) was issued EPF code in the year 2001. For not remitting EPF contribution, petitioner was stated to have issued summons to appear on 29.08.2006 by communication dated 03.08.2006. Since there was no response further notice was issued on 29.06.2007 for which also there was no response. Consequently, Enforcement officer had visited the respondent-company and prepared a report dated 16.06.2008 and report was forwarded to the respondent. Even then there was no response. Consequently, competent 1 of 8 ::: Downloaded on - 13-05-2018 09:36:59 ::: CWP-9227-2015 (O&M) 2 authority proceeded to initiate 7-A proceedings under the EPF Act for the assessment period from May, 2001 to May, 2008. Even while conducting 7- A proceedings sufficient notice was given to the respondent for which there was no response. Thus, competent authority proceeded to hold ex-parte proceedings on 09.09.2008 (Annexure P-1) since respondent had been complied with 7-A proceedings relating to determination of EPF amount further action was taken while issuing warrant of arrest on 05.08.2010. After receipt of the warrant of arrest respondent seems to have applied for copy of 7-A proceedings dated 09.09.2008 and it was furnished to respondent on 13.08.2010. With reference to communication dated 13.08.2010 in respect of furnishing 7-A proceedings respondent proceeded to file appeal before the EPFAT in the month of August, 2010. Appeal was decided on 12.05.2014. EPFAT set aside 7-A proceedings while allowing the appeal. Hence the present petition.
2. Learned counsel for the petitioner submitted that despite giving sufficient notice and information relating to remittance of EPF contribution there was no response. Thus, petitioner department has taken each and every step like issuance of summon on 03.08.2006 followed by notice on 29.06.2007. Further furnishing copy of the enforcement officer's report dated 16.06.2008. Thereafter, 7-A proceedings has been concluded with reference to Enforcement Officer's Report read with District Food and Supplies Controller's report since there was no co-operation from the respondent. Even in the 7-A proceedings more than a dozen time respondent was given opportunity and it was not utilized by him in assisting 2 of 8 ::: Downloaded on - 13-05-2018 09:37:00 ::: CWP-9227-2015 (O&M) 3 to decide 7-A proceedings with reference to documents which were available with the respondent. The respondent has opened his eye only as and when warrant of arrest was issued on 05.08.2010. It was further submitted that in the appeal before the EPFAT, respondent has not questioned the validity of 7-A proceedings dated 09.09.2008. What has been challenged is communication dated 13.08.2010 which is relating to covering letter/order dated 13.08.2010. EPFAT proceeded to decide the appeal as if respondent has questioned the validity of order dated 09.09.2008, even though there is no challenge to 09.09.2008 proceedings before the EPFAT. Learned counsel for the petitioner relied on division bench decision of the Supreme Court reported in 2005 LIC 1998 titled as Regional Provident Fund Commissioner Versus Lux Hosiery Industries Ltd. (paras 12 to 15) and Saraswati Construction Company Versus Central Board of Trustees and another reported in 2010(171) DLT 3 (paras 10 and 11).
3. Per contra, learned counsel for the respondent submitted that respondent has not received summons and further notice so also copy of the Enforcement Officer's Report dated 16.06.2008. Further he has also not received any notice from the authority under Section 7-A proceedings which is mentioned in the order to the extent that matter was heard on various dates from 29.08.2006 to 13.08.2008. It was further contended that the entire 7-A proceedings has been drawn with reference to Enforcement Officer's Report read with District Food & Supply Controllers report. In other words, author of the 7-A proceedings was required to identify the 3 of 8 ::: Downloaded on - 13-05-2018 09:37:00 ::: CWP-9227-2015 (O&M) 4 beneficiaries and he should have summon the records. After due consideration of records then only he was required to draw 7-A proceedings. In the absence of identifying beneficiaries and records made available for the purpose of determining 7-A proceedings, 7-A proceedings drawn by the competent authority dated 03.09.2008 is illegal. It was further contended that he could not exhaust remedy under sub-Section 4 of Section 7 since it was time barred. Therefore, he had approached the EPFAT. In support of the contention relating to identifying all beneficiaries by author of 7-A proceedings learned counsel for the respondent relied on the following decisions:-
1. (1990) 1 Supreme Court Cases 68 titled as Food Corporation of India versus Provident Fund Commissioner and ors. (para 7)
2. 2000(10) JT 457 titled as M/s Ramala Sahkari Chini Mills Ltd. versus Employee's Provident Fund Appellate Tribunal
3. 2008 (2) SCT 724 titled as H.P.State Forest Corporation versus Regional Provident Fund Commissioner
4. Heard the learned counsel for the parties.
5. When respondent has been given the EPF code in the year 2001 it was his bounden duty to deposit EPF contribution from time to time. He has not questioned to the extent that is he covered under EPF Act or not? When he admits it was bounden duty of the respondent to remit EPF contribution from July 2001 onwards respondent has been alerted by issuing summons, notice and so also furnishing Enforcement Officer's report for which there 4 of 8 ::: Downloaded on - 13-05-2018 09:37:00 ::: CWP-9227-2015 (O&M) 5 was no response from him. Even in the 7-A proceedings matter was heard on more than dozen time for which there was no response from him.
Contention of learned counsel for the respondent is that summons, notice, Enforcement Officer's Report and further notice while hearing the 7-A proceedings have not been communicated to him and so also it has not been received by him. In this regard, he has not stated anywhere after 05.08.2010 when warrant arrest notice was issued. Instead that what has been sought by the petitioner is only for furnishing copy of 7-A proceedings. That apart, he has not questioned 7-A proceedings dated 03/09.09.2008 as is evident from the memorandum of appeal before the EPFAT particularly para 3(i) to (iv) which reads as under:-
"3. Particulars of the order/notification against which appeal is made. The appeal is against the following order/notification:-
(i)Order No.PN/11081/C-I/11580 dated 13.08.2010 passed u/s 7-A of the Employees Provident Fund & Miscellaneous Provision Act, 1952 (in short "the Act") annexed as Annexure A/1.
(ii)Dated- 13.08.2010.
(iii)Passed by Sh.Narsi Singh, Assistant Provident Fund Commissioner.
(iv)Subject in brief: The appellant along with Pankaj Kumar Dadwal, were admitted as partners in brick kiln being run under the name and style of M/s Hari Darshan Singh BKO by Deepak Kumar Garg & Smt. Sawtanter Garg on 17th day of October 2008.
5 of 8 ::: Downloaded on - 13-05-2018 09:37:00 ::: CWP-9227-2015 (O&M) 6 A copy of the Partnership Deed is annexed as Annexure A/2. The impugned order (Annexure A/1) is an ex-parte ad-hoc assessment of PF dues for the period May 2001 to May 2008."
6. The EPFAT without examining what is under challenge in the appeal proceeded to hold that as if the appellant has challenged 7-A proceedings dated 09.08.2008. Thus, EPFAT has committed error in not noticing to the extent whether respondent has challenged validity of 7-A proceedings dated 03/09.09.2008 or not. What has been challenged is covering letter dated 13.08.2010 by which EPF authorities have furnished copy of EPF proceedings dated 03/09.09.2008 on the demand made by the respondent. In view of these facts and circumstances, proceedings dated 09.09.2008 passed under Section 7-A has attained finality. EPFAT has exceeded its jurisdiction to the extent of quashing 7-A proceedings in the absence of challenge to the 7-A proceedings dated 03/09.09.2008 before it. Faced with these factual aspects consideration of respondent's contention to the extent that 7-A proceedings, authority have not examined the identifying beneficiaries are concerned and so also judgment in support of the same cited (supra) are distinguishable for the simple reason that in all the cited decisions on behalf of the respondent relates to not ex-parte proceedings. So as to 7-A proceedings, authority had an opportunity to examine the records so also identifying the beneficiaries. In other words, respondent remained ex-parte if respondent had appeared and produced necessary documents. In that event the respondent's contention could have been appreciated to the extent of identifying beneficiaries and other issues 6 of 8 ::: Downloaded on - 13-05-2018 09:37:00 ::: CWP-9227-2015 (O&M) 7 are concerned. That apart, respondent had remained ex parte. Insofar as 7- A proceedings are concerned, the same has not been challenged. Insofar as identifying beneficiaries are concerned by the 7-A proceedings there is statutory provision namely sub-Section 3(a) of Section 7-A which reads as under:-
"[(3-A) Where the employer, employee or any other person required to attend the inquiry under sub-Section (1) fails to attend such inquiry without assigning any valid reason or fails to produce any document or to file any report or return when called upon to do so, the officer conducting the inquiry may decide the applicability of the Act or determine the amount due from any employer, as the case may be, on the basis of the evidence adduced during such inquiry and other documents available on record.]
7. Aforesaid provisions and circumstances is not warranted for the 7-A proceedings authority in the present case to examine identifying of beneficiaries. 7-A proceedings have been drawn with reference to Enforcement Officer's Report and District Food & Supplies Controllers for the reasons that respondent remained ex-parte Had he appeared and produced necessary records in that event competent authority would have examined. Therefore, contention of the respondent in respect of not identifying beneficiaries issues have not been considered by the competent authority and could not be taken into consideration for the purpose of deciding the 7-A proceedings. Moreover looking at the respondent conduct throughout there is no co-operation in respect of determining PF 7 of 8 ::: Downloaded on - 13-05-2018 09:37:00 ::: CWP-9227-2015 (O&M) 8 contribution. That apart after receipt of arrest warrant notice no where respondent contended that he had not received summons, notice and hearing dates fixed for deciding 7-A proceedings. Due to respondent's negligence it was ex-parte 7-A proceedings. Even such proceedings have not been challenged before EPFAT.
8. In view of these facts and circumstances, there is no infirmity in the 7-A proceedings whereas EPFAT exceeded its jurisdiction in respect of interference to the 7-A proceedings. Accordingly, order dated 12.05.2014 (Annexure P3) is set aside while upholding 7-A proceedings subject matter before the EPFAT as is evident from the memorandum of appeal
9. At this stage, learned counsel for the respondent pointed out from paras 9 and 10 of the memorandum of appeal to contend that he had challenged the 7-A proceedings dated 03/09.09.2008. Perusal of paras 9 and 10 it is evident that what has been challenged is Annexure A1. Annexure A1 is reference to order dated 13.08.2010 in para 3. In other words, there is no challenged to 7-A proceedings dated 03/09.09.2008.
( P.B.BAJANTHRI)
04.05.2018 JUDGE
pooja saini
Whether speaking/reasons Yes/No
Whether Reportable: Yes/No
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