Madhya Pradesh High Court
Gwalior Mansik Arogyashala Thr. vs Employees Provident Fund Organisation on 9 January, 2020
Author: Vishal Mishra
Bench: Vishal Mishra
1 WP-28862-2019
The High Court Of Madhya Pradesh
WP-28862-2019
(GWALIOR MANSIK AROGYASHALA THR. Vs EMPLOYEES PROVIDENT FUND ORGANISATION AND
OTHERS)
3
Gwalior, Dated : 09-01-2020
Shri D.K. Agarwal, Advocate for the petitioner.
SHri R.K. Goyal, Advocate for respondents no. 1 and 3.
With the consent of parties matter is finally heard. The present petition has been filed seeking the following reliefs:-
1. Impugned orders dated 12.12. 2019 ( Annexures P/1 and P/2) may kindly be ordered to be kept in abeyance till hearing of the statutory appeal to be filed by the petitioner on availability of the Presiding Officer, CGIT, Lucknow and,
2. The respondents No. 1, 2 and 3 be restrained from taking any coercive action for recovery of the amount of Rs. 9,07,458/- involved in the impugned orders dated 12.12. 2019 (Annexures P/1 and P/2) till any order on the appeal to be filed by the petitioner on availability of the Presiding Officer GST, Lucknow and,
3. The CGIT, Lucknow has become dysfunctional from 04.09. 2019 and, there is no Presiding Officer appointed by the Central Government by issuance of any notification and the Presiding officer appointed at CGIT, Jabalpur is not competent to officiate/ hold charge temporarily at CGIT, Lucknow, and, therefore, in view of no chance of hearing of appeal on 20.01. 2020 at CGIT, Lucknow, the recovery of the amount 9,07,458/- against the orders dated 12.11. 2019 (Annexure P/1 and P/2) passed by the Respondent No. 2 may kindly be stayed till hearing of the Appeal by the duly appointed competent authority/ presiding officer in terms of order dated 13.11. 2019 passed by the Hon'ble Supreme Court in Rojer Mathew ( supra) in Civil Appeal No. 8588/2019, the Respondent No. 1, 2 and 3 be restricted from taking coercive action or recovery of alleged
2 WP-28862-2019 amount and,
4. Any other relief in favour of the Petitioner may also be granted, if the facts and circumstances of the case permit in the interest of justice.
It is submitted that Constitutional Bench of the Hon'ble Supreme Court of India in Rojer Mathew Vs. South Indian Bank Ltd. and Ors in Civil Appeal No. 8588/2019 with W.P. (C) No. 279/2017 and order dated 27.02. 2012 passed by Division Bench in W.P. No. 979/2012 and the order dated 25.03. 2004 passed by Hon'ble Division Bench of Punjab High Court in CPW No. 331/2004 Arihant Threads Ltd. V/s. Union of India has considered the aspect of non-functioning of the Central Government Industrial Tribunal and has entertained the writ petition and granted relief in favour of the petitioner. IN the present case also CGIT Lucknow is not functioning due to retirement of presiding officer and therefore the CGIT, Jabalpur is holding additional charge from 5.9. 2019 and CGIT, Lucknow is due for sitting between 20.01. 2020 to 30.01. 2020 as per the tentative programme. The petitioner has prayed that till 30.12. 2020 the relief regarding restraining respondents no. 1, 2 and 3 from taking any coercive action of recovery of the amount of Rs. 9,07, 458/-. It is submitted that in identical circumstances several orders have been passed by the Hon'ble courts including constitutional bench judgment wherein due to functioning of the Tribunal, the petitioner cannot be found at fault and interim relief was granted. He has prayed for similar relief being granted to him.
Per contra, counsel for respondents no. 1, 2 and 3 have serious objections regarding maintainability of the petition seeking relief as claimed by the petitioner.
It is contended that till date no appeal is being filed by the present petitioner. It is further contended that Registry is functioning and regular appeals are being filed but the present petitioner has not even chosen to file appeal before CGIT. Thus, in such circumstances the petitioner seeking relief is not maintainable. It is further contended that no appeal is 3 WP-28862-2019 maintainable against the order passed under Sec. 7-Q of the Employees Provident Fund & Miscellaneous Provisoins Act 1952 (hereinafter referred to as the 'Act'). He has drawn attention of this court to order dated 20.12. 2019 passed in Appeal No. 53/2019 in the case of M/s. Sumedha Vehicles v. APFC, Gwalior and in the case of M/s. Rai Enterprises V. APFC Gwalior decided on 20.12. 2019 whereby relying upon orders passed by Hon'ble Supreme Court, the learned CGIT cum Tribunal Lucknow has considered the aspect that two separate orders have been passed under Sec. 47-B and 7 (Q) of the Act. The facts of the case do not show that they are similar to the case in hand, therefore, appeal is admitted for hearing only against order under Sec. 14-B of the Act of 1952 and was held to be not maintainable as against the order passed under section 7-Q of the Act. It is submitted that in the present case also there are two orders being passed by the authorities on the same date i.e. on 12.12. 2019 under section 14-B of the Act and under Section 7 (Q) of the Act but as both are separate orders having no similarity, therefore, the appeal against the order passed under section 7 (Q) of the Act of 1952 will be not be maintainable. In such circumstances, no relief as claimed with respect to order passed under section 7 (Q) of the Act can be granted to the petitioner. He has prayed for dismissal of the writ petition. As to maintainability of writ petition under Article 226 of the Constitution of India the Hon'ble Supreme Court in the case of Rojer Mathew v. Sought Indian Bank Ltd. and Ors. (Civil Appeal No 8588 of 2019) has held as under:-
Therefore, I am of the view that in whichever State/Union Territory the bench of a particular tribunal is not established or functioning, the litigants of that State will have a right to invoke the extraordinary writ jurisdiction of the jurisdictional High Court under Article 226 of the Constitution for redressal of their grievances.
Counsel for the petitioner has drawn attention of this court to the
4 WP-28862-2019 notice which has been issued by the respondent authorities and has argued that it is a composite notice which was issued on 21st June, 2018 indicating the total liability amounting to the tune of Rs. 9,07,458/- on the petitioner's establishment for the period 12. 10. 2013 to 21. 3. 2018. Counsel for the petitioner has drawn attention of this court to the provisions of section 7- I of the Act which deals with appeals to Tribunal and reads as under:-
(1) Any person aggrieved by a notification issued by the Central Government, or an order passed by the Central Government or any authority, under the proviso to sub-section (3) or, sub-Section (1) of Section 7-A or Section 7-
B [ except an order rejecting an application for review referred to in sub-section (5) thereof] or Section 7-C, or Section 14-B, may prefer an appeal to a Tribunal against such notification or order (2) Every appeal under sub-section (1) shall be filed in such form and manner, within such time and accompanied by such fees, as may be prescribed."
He has further drawn attention of this court to the provisions of sub- section (i) of section 7-A. He has further read over provisions of Section 7 (Q) which deals with interest payable to the employer which reads as under:-
7-Q Interest payable by the employer- The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the Scheme on any amount due from him under this Act from the date on which the amount has become so due till the date of its actual payment:
Provided that higher rate of interest specified in the scheme shall not exceed the lending rate of interest charged by any scheduled bank. He has further drawn attention of this court to the provisions of Sec. 14-B; which reads as under:-
"14-B. Power to recover damages.-- Where an
5 WP-28862-2019 employer makes default in the payment of any contribution to the Fund [the pension] Fund or the Insurance Fund] or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 [ or sub-section (5) of section 17] or in the payment of any charges payable under any other provision of this Act or of any scheme or Insurance scheme or under any of the conditions specified under section 17, the Central Provident Fund Commissioner or such other officer as may be authorized by the Central Government , by notification in in the Official Gazette, in this behalf may recover from the employer by way of penalty such damages, not exceeding the amount of arrears as may be specified in the Scheme.
[Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard.] [ Provided further that the Central Board my reduce or waived the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under Section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), subject to such terms and conditions as may be specified in the Scheme]"
Section 14-B of the Act which deals with power to recover the damages. It is submitted that as it was the composite notice being issued on 21st of June 2018 indicating the total liability. In such circumstances, the appeal is maintainable before the CGIT. He has drawn attention of this court to the judgement passed by the Hon'ble court in the case of M/s. Arch Pharma Labs Limited, Mumbai vs. Regional Provident Fund Commissioner, Thane, order dated 20th of August, 2019 passed in case number CGIT-2/EPFA/95 of 2019, wherein the Tribunal has held as under:-
4. Here in this case it appears from the record
6 WP-28862-2019 that the notice was issued under Sec. 7-Q of the Act vide summon No. TH/THII/PDC44019/32 dated 24.4. 2019. Similarly, notice u/s. 14B of the Act was issued by the said summons. So it appears that notice has been issued in exercise of the powers u/s. 7Q and 14B together under the same summon and is not an independent action for determining the damages and interest though separate orders came to be passed u/s. 7Q and 14B on the basis of same notice, same proceedings of the enquiry and both orders are replica of each other except that one order is passed in the matter of proceedings u/s. 7Q and another order is passed in the matter of proceedings u/s. 14B. Both the orders are of same date ie. 17.7. 2019. In view of this it can be said that this is a composite order u/s. 7Q and 14B and therefore the order u/s. 7Q is appealable.
6. But then the fact remain that if notice has been issued in exercise of the power u/s. 7Q and 14B together and it is not an independent action u/s. 7Q then it becomes a composite order and appeal against the order u/s. 7Q is maintainable. and the orders were held to be appealable.
Similarly in Case No. CGIT-2/EPFA/51 of 2019. wherein the Tribunal has has held as under
4. Here in this case it appears from the record that the notice was issued u/s. 7Q of the Act vide summon No. TH/VSH/1334/000/ENF/501/DAMAGES/1437 dated 5/8-8-15. Similarly, notice u/s. 14B of the Act was issued vide same summon No. TH/VSH/1334/000/ENF/501/DAMAGES/1437 dated 5/8-8-15. So it appears that notice has been issued in exercise of the powers u/s. 7Q and 14B together under the same summon and is not an independent action for determining the damages and interest though separate orders came to be passed u/s. 7Q and 14B on the basis of same notice, same proceedings of the enquiry and both orders are replica of each other except that one order is passed in the matter of
7 WP-28862-2019 proceedings u/s. 7Q and another order is passed in the matter of proceedings u/s. 14B. Both the orders are of same date ie. 18.3. 2019. In view of this it can be said that this is a composite order u/s. 7Q and 14B and therefore the order u/s. 7Q is appealable.
6. But then the fact remain that if notice has been issued in exercise of the power u/s. 7Q and 14B together and it is not an independent action u/s. 7Q then it becomes a composite order and appeal against the order u/s. 7Q is maintainable. Counsel for the petitioner has further drawn attention of this court on the case being Case No. C.W.P. No. 3331/2004 whereby division bench of the Hon'ble High Court had an occasion to consider the similar issue wherein under similar circumstances when the CGIT was not functioning has disposed of the writ petition with the following observations:-
On the basis of the statements made on behalf of the respondents, we dispose of this writ petition with directions that the petitioner can file appeal (s) accompanied by a stay application, if not already filed, within two weeks from today. If such appeal (s) are filed, proof thereof is shown to the Recovery officer, then said officer would not effect recovery of the demand issued under Section 7-A of the Act till decision of the stay application, as stated by the learned counsel appearing for the respondents. We make it clear that the direction would obviously operate only till disposal of the stay application by the competent authority. It is submitted that case of the petitioner is exactly identical to the aforesaid case (CWP No. 3331 of 2004) and the petitioner is ready to prefer appeal before CGIT Lucknow, but the CGIT is due to sit between 20.01. 2020 and 30.01. 2020. He has prayed for limited interim relief to the effect that no coercive action and no recovery be made against the petitioner till 30th of January 2020. He undertakes to file appeal before CGIT along with application for interim relief with the prayer that the same shall be 8 WP-28862-2019 considered and decided by the authorities between 20th of January, 2020 and 30th of January 2020. Counsel for the petitioner argued that the pre-condition of depositing the amount for hearing of the appeal is not required in the light of order passed in the case of Arihant threads v. Union of India (CWP No. 3331/2004).
Hon'ble Supreme Court in the case of Maharashtra State Co- operative bank Ltd. v. Assistant Provident Fund Commissioner and O r s reported in 2009 (10) SCC 123 has considered the aspect of expression " any amount due from employer" appearing in section 11 (2) of the Act and has held as under:-
67. The expression any amount due from an employer appearing in sub-section (2) of Sec. 11 has to be interpreted keeping in view the object of the Act and other provisions contained therein including sub-section (1) of Section 11 and Sections 7-A, 7-Q, 14-B and 15 (2) which provide for determination of the dues payable by the employer, liability of the employer to pay interest in case the payment of the amount due is delayed and also pay damages, if there is default in making contribution to the Fund. If any amount payable by the employer becomes due and the same is not paid within the stipulated time, then the employer is required to apply interest in terms of the mandate of Section 7-Q. Likewise, default on the employer's part to pay any contribution to the Fund can visit him with the consequence of levy of damages.
68. As mentioned earlier, sub-section (2) was inserted in Section 11 by Amendment Act 40 of 1973 with a view to ensure that payment of provident fund dues of the workers are not defeated by the prior claims of the secured and/or of the unsecured creditors. While enacting sub-section (2), the legislature was conscious of the fact that in terms of existing Section 11 priority has been given to the amount 9 WP-28862-2019 due from an employer in relation to an establishment to which any scheme or fund is applicable including damages recoverable under Section 14-B and accumulations required to be transferred under Section 15 (2). The legislature was also aware that in case of delay the employer is statutorily responsible to pay interest in terms of Section 17. Therefore, there is no plausible reason to give a restricted meaning to the expression any amount due from the employer and confine it to the amount determined under Section 7-A or the contribution payable under Section 8.
69. If interest payable by the employer under Section 7-Q and damages leviable under Section 14 ( sic Section 14-B) are excluded from the ambit of expression any amount due from an employer every employer will conveniently refrain from paying contribution to the Fund and other dues and resist the efforts of the authorities concerned to recover the dues as arrears of land revenue by contending that the movable or immovable property of the establishment is subject to other debts. Any such interpretation would frustrate the object of introducing the deeming provision and non obstante clause in Section 11 (2). Therefore, it is not possible to agree with the learned Senior Counsel for the appellant Bank that the amount of interest payable under Section 7-Q and damages leviable under Section 14-B do not form part of the amount due from an employer for the purpose of Section 11 (2) of the Act.
The question regarding maintainability of appeal against order passed under Sec. 7-Q of the Act of 1952 was considered by the Hon'ble Supreme Court in the case of Arcot Textile Mills Ltd. V. Regional Provident Fund Commissioner and Ors. reported in (2013) 16 Supreme Court Cases 1
20. On a scrutiny of Sec. 7-I, we notice that the language is clear and unambiguous and it does not provide for an appeal against the 10 WP-28862-2019 determination made under Section 7-Q. It is well settled in law that right of appeal is a creature of statute, for the right of appeal inheres in no one and therefore, for maintainability of an appeal there must be authority of law. This being the position a provision providing for appeal should neither be construed too strictly nor too liberally, for if given either of these extreme interpretations, it is bound to adversely affect the legislative object as well as hamper the proceedings before the appropriate forum. Needless to say, a right of appeal cannot be assumed to exist unless expressly provided for by the statute and a remedy of appeal must be legitimately traceable to the statutory provisions. If the express words employed in a provision do not provide an appeal from a otherwise, an appeal for its maintainability must have the clear authority of law and that explains why the right of appeal is described as a creature of statute (see Ganga Bai v Vijay Kumar, Gujarat Agro Industries Co. Ltd. v. Municipal Corpn. Of the City of Ahmedabad, State of Haryana v. Maruti Udyog Ltd, Super Cassettes Industries Ltd. v. State of UP, Raj Kumar Shivhare v. Directorate of Enforcement, Competition of Commission of India v. SAIL)
21. At this stage, it is necessary to clarify the position of law which does arise in certain situations. The competent authority under the Act while determining the monies due from the employee shall be required to conduct an inquiry and pass an order. An order under Section 7-A is an order that determines the liability of the employer under the provisions of the Act and while determining the liability the competent authority offers an opportunity of hearing to the establishment concerned. At that stage, the delay in payment of the dues and component of interest are determined. It is composite order. To elaborate, it is an order passed under Section 7-A and 7-Q together. Such an order shall be amenable to appeal under Section 7-I. The same is true of any composite order a facet of which is amenable to appeal and Section 7-I of the Act. But, if for 11 WP-28862-2019 some reason when the authority chooses to pass an independent order undr Section 7-Q the same is not appealable.
In the case of Old village Industries Ltd. v. Assistant Provident Fund, Commissioner, Employees' Provident Fund Organization and another reported in 2005 (3) LLN 572 relying upon order passed in the case of Arihant threads v. Union of India passed by the Division Bench of Punjab and Hariyana High Court, the case was disposed of by Delhi High Court. Counsel for the petitioner has argued that the precondition regarding deposition of 40% of the amount for hearing of the appeal. The aforesaid is not held to be mandatory condition as held by the Hon'ble High Court in W.P. No. 979/2012 (M/s. Rai Enterprises v. E.P.F. Appellate Tribunal ), this court while considering the aforesaid preposition has held as under:-
4. In this view of the matter, in our opinion, the order passed by respondent No. 1, E.P.F. Appellate Tribunal, to deposit 40% of the amount as assessed by the E.P.F. Authority vide order, Annexure P-2, is contrary to law.
5.Consequently, the petition is allowed.
Impugned order, Annexure P-1 is hereby quashed. The E.P.F. Appellate Tribunal is directed to hear the appeal on merits without insisting the petitioner to deposit the amount of Rs. 09,07, 577/- No order as to costs.
Thus, it is argued that there is no requirement of predeposition of 40% of the amount. It is submitted that he undertakes to file an appeal between 20th of January 2020 and 30th of January 2020 as the Tribunal is functioning in the aforesaid intervening period at Lucknow.
It is seen from the record that composite notice was issued to the petitioner on 21.6. 2018 and two separate orders have been passed by the authority on 12.12. 2019 and on 22.11. 2019 one under Sec. 14-B of the Act of 1952 wherein the assessment of levy of damage was done to the tune of Rs. 5,29, 301/- for the period from 03/2014 to 11/2017 and another order has 12 WP-28862-2019 been passed on 22.11. 2019 which was was delivered on 12.12. 2019 and another order was passed under Sec. 7-Q of the Act of 1952 whereby composite interest has been levied against the petitioner. Interest have been levied under Sec. 7-Q of the Act of 1952 to the tune of Rs 3,78,157/-, both are separate orders although passed on the same day as pointed out by the counsel for the respondent that due to retirement of the presiding officer the functioning of the Tribunal was not regular but he has drawn attention of this court to the fact that registry is regularly functioning and the petitioner has not even filed appeal to show his bonafides merely by taking advantage of not filing of appeal under Sec. 7-I of the Act. Even otherwise as held by the Hon'ble Supreme Court in the case of of (2013) 16 SCC the appeal is held to be not maintainable if the separate order is passed under Sec. 7-Q. In such circumstances as there is separate orders under Sec. 1952 Act and the petitioner has not even preferred appeal to the CGIT. This court has no hesitation to hold that against the composite order the appeal under Sec. 7-I of the Act is maintainable but if there is distinct order as in the present case, no appeal is maintainable against the order passed under Sec. 7-Q of the Act of 1952 in terms of the law laid down in the aforesaid cases.
Accordingly, as the petitioner has not even preferred appeal, this court refrains from entertaining writ petition and for granting any interim relief to the petitioner.
Accordingly, the petition is dismissed.
Meanwhile the authority may take recourse of law.
(VISHAL MISHRA) JUDGE ar Digitally signed by ABDUR RAHMAN Date: 2020.01.16 14:46:02 +05'30'