Kerala High Court
The Manager vs Regional Provident Fund Commissioner ... on 14 June, 2022
Author: Amit Rawal
Bench: Amit Rawal
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE AMIT RAWAL
TUESDAY, THE 14TH DAY OF JUNE 2022 / 24TH JYAISHTA, 1944
WP(C) NO. 9325 OF 2022
PETITIONER/S:
1 THE MANAGER
M/S. GRANBY ESTATE, VANDIPERIYAR P.O, IDUKKI - 685533.
2 M/S POABS ENTERPRISES PRIVATE LIMITED.
REPRESENTED BY MANAGING DIRECTOR JOSEPH JACOB, KUTTOOR
P.O 686001, THIRUVALA, PATHANAMTHITTA DISTRICT.
BY ADVS.
N.JAMES KOSHY
MIDHUN R.
RESPONDENT/S:
1 REGIONAL PROVIDENT FUND COMMISSIONER -II
EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB - REGIONAL
OFFICE, ADITHYA SHABARI TOWER, POST OFFICE ROAD,
THIRUNAKKARA, KOTTAYAM - 686001.
2 M/S REM BAHADUR THAKUR LIMITED (MMS GROUP)
REPRESENTED BY ITS DIRECTOR, SRI. MANISH MOHAN SHARMA,
SIDHARTHA BUILDING, 2ND MAIN ROAD, WILLINGTON ISLAND,
KOCHI - 682003.
BY ADV JOY THATTIL ITTOOP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
14.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 9325 OF 2022
2
JUDGMENT
Orders Exts.P15 and P16 dated 14.2.2022 of the first respondent imposing the liability of damages under Section 14 and interest under Section 7Q of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 have been assailed primary on the ground that no effective opportunity of hearing was granted. The facts in brief are that the petitioner is a tea estate owned by M/s Ram Bahadur Thakur, a Limited Company registered under the Companies Act. Since 2000, owing to the financial difficulty there was a default for payment of the provident fund contribution as the property of the company was sold in public auction by the State of Kerala. By virtue of the sale held on 22.5.2008 the EPF organization obtained Rs.161077400/- was appropriated towards the EPF dues and 7Q interest. The first respondent issued notices dated 23.4.2014 demanding penalty and interest from 28.3.2000 to 23.4.2014, Ext.P7 and P8.
Reply Exts.P9, P10 and P11 were filed but of no avail.
2. Learned counsel appearing on behalf of the petitioners submitted that the orders impugned would reveal that no effective opportunity of hearing was afforded to the petitioners while causing the hearing in response to the show cause notices by the competent authority. WP(C) NO. 9325 OF 2022 3 Attention of this Court has been drawn to the order Ext.P15 whereby it has been written that the adjournment notice of virtual hearing was issued on 30.12.2021 along with the revised statement but there was no representation and noticing that sufficient opportunities were given, the case was decided in the absence of the petitioner. He submits that the authority at the helm of affairs did not notice the number of the opportunities accorded and thus passed a mechanical and unreasoned order, purporting to have complied with the principal of natural justice which is totally alien to the record of the proceedings. Noticing this facts, this Court on 21.3.2022 while issuing notice before admission had passed the following order:
Inter alia alleges that Exts.P15 and P16 pertaining to proceedings under Section 14B and 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 have been passed without hearing the petitioners. Thus the writ petition would be maintainable. Attention of this Court has been drawn to the orders whereby prima facie it appears that no effective opportunity of hearing of the proceedings through virtual was given to the petitioners.
Issue notice before admission. In the meantime, there shall be interim stay qua implementation of the orders.
3. Counsel appearing for the respondent submitted that the petitioners are intentionally attempting to delay the matter in warding off the liability as the proceedings under Section 14B and 7Q are sine qua non in case of default in respect of the amount under Section 7Q. The process of WP(C) NO. 9325 OF 2022 4 virtual hearing was initiated owing to the COVID pandemic. No concrete material has been placed on record to show that service of the notice and no appearance through virtual hearing, thus do not have a cause of action to espouse the grievance as there is an alternative remedy in challenging the order particularly, Ext.P15 passed under Section 14B of the EPF Act.
4. I have heard the learned counsel for the parties and appraised the paper book. The facts noticed above are not in dispute. The only question to be pondered in this case is whether in the proceedings initiated by notice for ascertaining the liability under Section 14B and 7Q, the petitioners were given effective opportunity of hearing or not. I would be failing in my duty in not extracting the relevant portion of the order of Provident Fund Commissioner, Ext.P15 reflecting the alleged compliance of the principle of natural justice.
On verification it was confirmed that the remittances made in Account No.10, mentioned in the demand notice dated 06-05- 2014 for the period between 07/1997 to 01/2014 were of non- Family Pension Scheme members for their becoming eligible under the Employees Pension Scheme, 1995. Hence a revised Statement was prepared excluding the said remittances for the Wage months 08/2004, 10/2004, 11/2004, 01/2005, 03/2005,07/2005,08/2005,09/2005,10/2005,12/2005,01/2006,02/20 06,03/2006,05/2006,08/2006,11/2006,12/2006 and 03/2007 and also the remittances made in Account No. 10 dated 03/03/2003, 06/06/2005,07/06/2006 and 25/07/2006, which were not relating to the establishment KR/268. Further, the contentions raised by the establishment regarding the slight variation in the date of presentation of the challans stated in the demand notice dated 06- 05-2014 was verified with the challans produced by the WP(C) NO. 9325 OF 2022 5 establishment and was corrected from the Demand notice dated 06-05-2014 while preparing the Revised Statement. The Revised Statement was forwarded to the employer along with adjournment notice dated 08-11 2017 for the hearing on 13-11-2017 towards Penal Damages for the period from 07/1997 to 09/2010 and 11/2010 to 01/2014 for a sum amounting to ₹90770/- and interest for the said period amounting to 106376/- with the combined total being Rs.197146/- under Section 14B & 7Q of the EPF & MP Act, 1952. The adjournment notice was acknowledged by the employer. None representing the establishment attended the hearing on 13- 11-2017, which was again adjourned to 28-12-2017. The adjournment notice was acknowledged by the employer. Due to certain administrative reasons and due to the rise of the Pandemic the final hearing was posted on 30-12-2021. The Adjournment notice for the Virtual hearing on 30-12-2021 alongwith the Revised Statement was sent to the establishment vide Adjournment Notice No. KR/KTM/268/Penal Damage/Adj/14B & 7Q/2021-22/2576 dated 27-12-2021. None representing the establishment appeared for the hearing. It is observed that sufficient opportunities were given to the employer. Hence, the case was concluded based on the records available.
Aforementioned order do not reflect the compliance of the principles of natural justice in letter and spirit. The officers who are competent to pass orders by drawing the power under the provisions of the 1952 Act are legitimately expected to strictly comply with the procedure of natural justice except reference to one notice of virtual hearing, there is no other reference whether any further notices were issued except the notice on previous date ie., 13.11.2017. There was a gap of almost 4 years from the previous date to the adjourned date ie., 27.12.2021. In these circumstances the authorities ought to have taken more and reasonable/effective measures in serving upon the petitioner the notice of hearing. Thus the the order impugned in WP(C) NO. 9325 OF 2022 6 my view cannot stand the scrutiny of this Court while exercising the power under Article 226 of the Constitution of India. Accordingly, the impugned orders Ext.P15 and P16 are hereby quashed. The matter is remitted back to the concerned authority to pass the order after the effective and proper opportunity of hearing to the petitioner in accordance with law. Let this exercise be undertaken within a period of three months from the date of receipt of a certified copy of the judgment.
Sd/-
sab AMIT RAWAL
JUDGE
WP(C) NO. 9325 OF 2022
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APPENDIX OF WP(C) 9325/2022
PETITIONER EXHIBITS:
Exhibit P1 TRUE COPY OF THE ORDER DATED 19.08.1999 IN C.P
56/1996 OF THE COMPANY LAW BOARD NEW DELHI.
Exhibit P2 TRUE COPY OF THE ATTACHMENT ORDER ISSUED BY THE
EMPLOYEES PROVIDENT FUND ORGANIZATION DATED 04.09.2001 INCLUDING THE PROPERTIES OF GRANBY ESTATE.
Exhibit P3 TRUE COPY OF THE DETAILS OF AUCTION SALE DATED 26.05.2008 BY EPF.
Exhibit P4 TRUE COPY OF THE ORDER OF THE PF COMMISSIONER DATED 01.03.2011 STATING THE DETAILS OF THE AMOUNT OBTAINED AND ITS RECOVERY.
Exhibit P5 TRUE COPY OF THE CERTIFICATE ISSUED BY THE DEPUTY LABOUR OFFICER PERUMEDU DATED 29.06.20090.
Exhibit P6 TRUE COPY OF THE CERTIFICATE ISSUED BY THE INSPECTOR OF PLANTATION PERUMEDU TOT HE EFFECT THAT GRANBY ESTATE IS CLOSED FROM 2001 TO 2008 JUNE DATED 01.07.2009.
Exhibit P7 TRUE COPY OF THE NOTICE DEMANDING DAMAGES DATED 23.04.2014.
Exhibit P8 TRUE COPY OF THE NOTICE DATED 23.04.2014 DAMAGING INTEREST FOR THE PERIOD FROM 28.03.2000 TO 23.04.2014.
Exhibit P9 TRUE COPY OF THE REPLY FILED BY THE 2ND PETITIONER DATED 02.06.2014.
Exhibit P10 TRUE COPY OF THE OBJECTION DATED 02.06.2014 FILED BY THE 2ND PETITIONER.
Exhibit P11 TRUE COPY OF THE ADDITIONAL OBJECTION DATED 22.09.2016 FILED BY THE 2ND PETITIONER.
WP(C) NO. 9325 OF 2022 8 Exhibit P12 TRUE COPY OF THE DAILY ORDER SHEET OF THE CASE DATED 11.10.2017.
Exhibit P13 TRUE COPY OF REVISED CALCULATION WORKSHEET OF 14B DEMAND AND 7Q INTEREST SENT TO THE PETITIONER ON 07.10.2017.
Exhibit P14 TRUE COPY OF THE OBJECTION FILED BY THE 1ST PETITIONER AGAINST REVISED WORKSHEET DATED 28.12.2017.
Exhibit P15 TRUE COPY OF THE PROCEEDINGS ISSUED BY THE 1ST RESPONDENT DATED 14.02.2022 UNDER SECTION 14(B) OF THE PF ACT FIXING THE LIABILITY OF THE PETITIONER AS RS. 90,770/-
Exhibit P16 TRUE COPY OF THE PROCEEDINGS ISSUED BY THE 1ST RESPONDENT DATED 14.02.2022 UNDER SECTION 7Q OF THE PF ACT FIXING THE LIABILITY OF THE PETITIONER AS RS. 106,376/-.
Exhibit P17 TRUE COPY OF THE SALE CERTIFICATE BY THE EPF ORGANISATION DATED 18.09.2008 IN RESPECT OF THE ENTIRE 655 ACRES OF GRANBY ESTATE IN FAVOUR OF THE PETITIONERS.
Exhibit P18 TRUE COPY OF THE ORDER DATED 18.01.2010 PASSED BY THE 1ST RESPONDENT U/S/ 7A OF THE ACT IN RESPECT OF GRANBY ESTATE.
RESPONDENT EXHIBITS Exhibit R1 A THE TRUE COPY OF THE EMAIL DTD. 27/12/2021 ALONGWITH ATTACHMENTS ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER