Rajasthan High Court - Jaipur
Shriram Rayons vs The Regional Provident Fund ... on 3 May, 2019
Author: Narendra Singh Dhaddha
Bench: Narendra Singh Dhaddha
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Special Appeal (Writ) No. 646/2019
With
D.B. Civil Misc. Stay Application No.6739/2019
In
S.B. Civil Writ Petition No.6055/2019
Shriram Rayons, A Unit Of DCM Shriram Industries Ltd. Having
Its Registered Office At Kanchunjunga Building, Barakhamba
Road, New Delhi Through Its Authorized Signatory Mr. V.K. Jaitly
S/o Shri B.L. Jaitly, Aged 63 Years, R/o Karuna, E-213,
Shrinathpuram, Sector-E, Kota, Rajasthan, Kota.
----Appellant
Versus
The Regional Provident Fund Commissioner, Nidhi Bhawan,
Vigyan Nagar, Kota.
----Respondent
For Appellant(s) : Mr. Shivangshu Naval with
Ms. Palak Saxena
For Respondent(s) : Mr. R.B. Mathur with
Ms. Tanvi Sahai and
Mr. Hitesh Mishra
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE NARENDRA SINGH DHADDHA
Judgment
//Reportable//
Per Hon'ble Mr. Justice Mohammad Rafiq, Actg. CJ. 03/05/2019 This appeal seeks to challenge the judgment of learned Single Judge dated 02.04.2019 by which the writ petition filed by the appellant was dismissed in limine.
The appellant approached the learned Single Judge challenging the order dated 06.03.2019 of the Central Government Industrial Tribunal, Jaipur (constituted as the Employees' Provident Fund Appellate Tribunal, Jaipur, which hereinafter shall be referred to as 'the Appellate Tribunal'). The (Downloaded on 28/06/2019 at 11:42:05 PM) (2 of 6) [SAW-646/2019] Regional Provident Fund Commissioner by the aforesaid order relying on the report submitted by the Employees' Provident Fund Organization, Regional Office, Kota, in exercise of power conferred upon him under Section 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short, 'the Act of 1952'), assessed the amount of Rs.1,56,28,037/- (Rupees One Crore Fifty Six Lakh Twenty Eight Thousands and Thirty Seven only) as EPF and allied dues on the wages/salary paid in the name of stipend from the year 1997 to June, 2011. Before the Appellate Tribunal, the appellant prayed for stay of operation of order dated 15.01.2019 passed by the respondent under Section 7-A of the Act of 1952 and also for waiver of the amount of pre-deposit under Section 7-O of the Act of 1952. The Appellate Tribunal by the aforesaid order dated 06.03.2019 held that the requirement of 75% of the amount determined under Section 7-A of the Act of 1952 should be relaxed to a certain extent and accordingly reduced the amount of pre-deposit to only 30% of the amount determined. Considering however that the bank account had been attached even before expiry of the limitation for filing appeal, the Tribunal directed the respondent to release the attached bank account of the appellant and appellant was directed to deposit 30% of the amount so determined vide order dated 15.01.2019. Learned Single Judge held that in the factual matrix of the case, prima facie, the view taken by the Appellate Tribunal granting relaxation to the extent of 30% deposit of the amount determined under Section 7-A of the Act of 1952, cannot be faulted.
Mr. Shivangshu Naval, learned counsel for the appellant, has argued that the order passed by the Commissioner suffers from numerous illegalities inasmuch as the order does not reflect (Downloaded on 28/06/2019 at 11:42:05 PM) (3 of 6) [SAW-646/2019] application of mind. It has not dealt with the objection of the appellant that the provident fund was not payable in the case of trainees who were allowed to work with the appellant for a maximum period of three years and were only paid the stipend. There was no relationship of employer and employee between them. The order in substance, according to him, has been passed without jurisdiction. Learned counsel, in support of his arguments, has cited certain judgments on the question of coverage of the appellant for the period from 1997 to June 2011, with reference to Section 7-A of the Act of 1952. He has also submitted that show cause notice for the first time was issued to the appellant in the year 2011 to demand EPF, though EPF was demanded from 1997.
Learned counsel submitted that determination of liability is condition precedent for payment of contribution of provident fund. When the appellant has not deducted the contribution of the employees, they cannot be required to deposit their share of the contribution since it is not known that as to for whose benefit this money would be utilized by the respondent. He also submitted that apprentice cannot be considered as an employee.
Learned counsel submitted that if the court is not inclined to grant total waiver on the pre-deposit, his alternative prayer for providing bank guarantee in lieu thereof, may be considered. Learned counsel also cited judgment of the Delhi High Court in Socrus Pharmaceutical Ltd. Vs. Assistant Provident Fund Commissioner - 2012 (1) LLJ 607 and M/s. Designco Vs. Regional Provident Fund Commissioner and Another - 2015 LbLR 1143 as also the judgment of the M.P. High Court in W.P (C) No.13631/2010 - Vijay Industries Vs. Regional Provident Fund Commissioner, and argued that in the aforesaid judgments (Downloaded on 28/06/2019 at 11:42:05 PM) (4 of 6) [SAW-646/2019] those High Courts have permitted the aggrieved parties to provide bank guarantee equivalent to the extent of the reduced amount of the pre-deposit.
Mr. R.B. Mathur, learned counsel for the respondent, has submitted that the proceedings before the Commissioner were unduly delayed owing to the non-cooperation by the appellant inasmuch as matter was adjourned for more than 150 times as recorded in the impugned order of the Commissioner, of which are mostly attributed to the appellant. The appellant even approached this court by filing writ petition on the allegation of mala-fide, being S.B. Civil Writ Petition No.14042/2015 - M/s. Shriram Rayons Vs. Additional Central Provident Fund Commissioner and Others challenging the proceedings pending before the Commissioner on the ground of alleged mala-fides. The learned Single Judge of this court dismissed the said writ petition, but directed the Commissioner to expeditiously complete the enquiry and the appellant, to cooperate. It was also observed that non-cooperation may entail ex-parte proceedings.
Mr. R.B. Mathur, learned counsel for the respondent, has also referred to enquiry reports conducted by the Enforcement Officers of the Employees' Provident Fund Organization (Annexures-2, 3 and 4, respectively). He even read over some part of the enquiry reports to show that most of the persons, who are now being described as trainees, were engaged as employees and were being paid salary and also overtime allowance. Some of them were originally described as watchmen, guest house attendants, sweepers, etc., and were continued for much more than three years. But when the proceedings were initiated, their designation was sought to be changed from the employees to trainees. In fact, (Downloaded on 28/06/2019 at 11:42:05 PM) (5 of 6) [SAW-646/2019] some of these employees were subsequently regularized in service of the appellant and are being still continued.
On alternative prayer of the appellant to furnish bank guarantee, learned counsel opposed the prayer but submitted that if at all the same is ordered, the bank guarantee should be given to the satisfaction of the Regional Provident Fund Commissioner.
Having heard learned counsel for the parties and perused the impugned judgment passed by the learned Single Judge, we find that there are arguments to be made on both the sides. We however do not deem it appropriate to go into and examine the merits of the arguments lest it might prejudice the case of either party in the proceeding pending before the Appellate Tribunal. The Appellate Tribunal, it goes without saying, may examine all the issues including about legality of the order of coverage passed by the Commissioner. It goes without saying that while doing so, it shall take into consideration reports of various enquiries conducted by the Enforcement Officer of the Employees' Provident Fund Organization. In the appeal, this Court is primarily concerned with the order of the Appellate Tribunal reducing the requirement of 75% pre-deposit to 30%, which is being challenged by the appellant. In the facts of the case and considering the total period of time sought to be covered by the impugned order ranging from 1997 to June, 2011, we deem it appropriate to direct that instead of pre-deposit the appellant would furnish bank guarantee to the extent of 30% of the demanded amount within a period of four weeks from today, to the satisfaction of the Appellate Tribunal, subject to its final order.
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(6 of 6) [SAW-646/2019] With the aforesaid modification in the order of the Tribunal, the appeal is allowed in part. This also disposes of the stay application.
(NARENDRA SINGH DHADDHA),J (MOHAMMAD RAFIQ),Acting CJ //Jaiman//20 (Downloaded on 28/06/2019 at 11:42:05 PM) Powered by TCPDF (www.tcpdf.org)