Gujarat High Court
Shingar Limited vs Employees Provident Fund Organisation on 28 November, 2025
NEUTRAL CITATION
C/SCA/270/2025 ORDER DATED: 28/11/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 270 of 2025
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SHINGAR LIMITED
Versus
EMPLOYEES PROVIDENT FUND ORGANISATION & ORS.
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Appearance:
MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1
MR PATHIK M ACHARYA(3520) for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
Date : 28/11/2025
ORAL ORDER
1. Present petition is filed by the petitioner under Articles 14, 21 and 226 of the Constitution of India read with the provision of Sections 14B, 7Q and 8F of the Employees Provident Fund and Miscellaneous Provisions of 1952 against the impugned orders dated 7.10.2024 and 29.11.2024 passed by the respondent authorities.
2. The brief facts giving rise to present petition are that in present petition, the petitioner, who is a company engaging in the business of manufacturing cosmetics products has challenged illegal and unjustified actions on the part of the respondents inasmuch as the petitioner's request for waiver and/or reduction of damages has remained undecided despite repeated reminders. Without deciding the petitioner's request, coercive recovery action has been initiated which has resulted in serious financial hardship to the petitioner.
Page 1 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined 2.1 When a further reminder was sent, the petitioner was informed that the request for reduction of damages has been turned down, that too without granting an opportunity of hearing, without following due procedure of law and without even communicating the decision to the petitioner.
2.2 The respondent initiated inquiry for the period from April 1998 to March 2013. Though summons were issued in the year 2013, a fresh Diary Number came to be registered in 2018 and the matter was thereafter taken up for hearing only in 2022.
2.3 On 05.05.2022, despite contest on merits by the petitioner, an order came to be passed mechanically by merely recording that the petitioner is willing to pay the dues if instalment facility is granted, and full damages were levied without assigning adequate reasons. On the same day, another notice was issued for the period April 2014 to 31.03.2022. Upon noticing discrepancies, the period was revised and made from July 2012 to February 2022 and registered as Diary No. 89 of 2022.
2.4 On 06.06.2022, the respondent No.1 passed an order without considering the facts and mitigating circumstances raised by the petitioner. Separate orders under Section 14B of the Act came to be passed on both occasions. As regards Section 70, the petitioner had Page 2 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined already raised dispute and requested for instalments and thereafter paid the entire dues under Section 7Q of the Act.
2.5 On 25.11.2022, the petitioner filed an appeal before respondent No.3 through respondent No.1 under Section 14B read with Para 32B of the Employees' Provident Funds & Miscellaneous Provisions Act and Scheme, seeking waiver/reduction of damages. However, the request remained pending and no decision was taken by respondent No.3 despite several reminders.
2.6 During pendency of the appeal, the respondent No.1 issued notices under Section 8F and attached the bank account of the petitioner on 21.04.2023. Though a reply was submitted by the petitioner on 09.05.2023, the bank account was attached without affording any notice or hearing on 27.07.2023. After intervention by the petitioner and pointing out the pendency of appeal and the ongoing monthly payments of Rs. 5.00 lakh towards Section 7Q dues, the bank account was de-freezed. Ultimately, on 21.02.2024 the entire payment under Section 7Q was completed.
2.7 On 19.06.2024, notice for the period April 2022 to June 2024 was issued. Thereafter, on 29.07.2024, an order was passed in an absolutely mechanical manner without hearing the petitioner and without granting Page 3 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined reasonable opportunity by merely recording that one Shri Hitesh Patel appeared and stated that he had nothing to object. On 07.10.2024, coercive action was again taken under Section 8F of the Act in connection with the earlier pending dues under Section 14B of the Act and attachment was issued even in respect of the Cash Credit account of the petitioner. On 29.11.2024, the petitioner was informed that the request for waiver and/or reduction of damages has been rejected by the Zonal Office. No reasons have been assigned, no speaking order has been passed, and the petitioner has not been granted any opportunity of hearing. Thus, the petitioner's appeal/representation under Para 32B read with Section 14B has been rejected without following due procedure and in complete violation of the principles of natural justice.
2.8 Since the so-called decision has been taken without hearing the petitioner, without assigning reasons and in violation of settled legal principles, the petitioner has approached this Court by way of present petition.
3. Heard Mr. Dipak R. Dave, learned counsel for the petitioner and Mr. Pathik M. Acharya, learned counsel for the respondents.
4. Mr. Dave, learned counsel for the petitioner has submitted that the impugned actions of the respondents Page 4 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined are wholly arbitrary, illegal and violative of the principles of natural justice. He has submitted that despite repeated written reminders and detailed representations made by the petitioner seeking waiver and/or reduction of damages under Section 14B read with Para 32B of the EPF Scheme, the respondents have neither decided the request in a lawful manner nor communicated any reasoned decision to the petitioner and instead, coercive steps for recovery were initiated and continued, causing severe prejudice and financial distress to the petitioner.
4.1 Mr. Dave, learned counsel for the petitioner has submitted that the petitioner has not defaulted deliberately, nor has there been any willful or malafide failure to comply with statutory obligations. He has submitted that the delay occurred was due to compelling circumstances, which were duly brought on record and the petitioner has always shown bona fides and good financial conduct by requesting instalments and by clearing the entire dues under Section 7Q. He has submitted that the final payment under Section 7Q was completed on 21.02.2024, which itself is proof of the petitioner's intention to comply with the law.
4.2 Mr. Dave, learned counsel for the petitioner has submitted that the first order dated 05.05.2022 and the subsequent order dated 06.06.2022 imposing full damages were passed without assigning adequate Page 5 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined reasons and without considering mitigating circumstances. He has submitted that the observation that the petitioner is willing to pay the dues, and therefore full damages must be levied, is unsustainable in law. It is further submitted that, during pendency of the statutory appeal under Section 14B read with Para 32B, respondent No.1 issued notices under Section 8F, attached the bank accounts and even attached the Cash Credit account, without holding any hearing and without evaluating the effect of the pending appeal. He has further submitted that the coercive recovery during pendency of the appeal is not only contrary to law but also renders the appeal itself meaningless.
4.3 Mr. Dave, learned counsel for the petitioner has submitted that the impugned order dated 29.07.2024 has been passed without granting any opportunity of hearing to the petitioner. He has further submitted that on 29.11.2024, the petitioner was informed that the request for waiver/reduction of damages has been rejected by the Zonal Office as no speaking order has been passed, no reasons have been supplied, and the petitioner has never been heard in person. He has submitted that it is well settled that coercive recovery cannot be resorted to during pendency of proceedings, especially when the petitioner is regularly complying with instalments and has paid the entire principal dues. It is therefore Page 6 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined submitted that the impugned actions and orders under Section 14B, the coercive attachment under Section 8F, and the subsequent communication rejecting the request for waiver/reduction of damages are unsustainable in law, inasmuch as they are (i) without jurisdiction, (ii) in violation of statutory rights, (iii) passed without following the mandatory procedure, and (iv) in utter breach of the principles of natural justice.
4.4 Mr. Dave, learned counsel for the petitioner, has referred to and relied upon the decision of the Hon'ble Apex Court in K.I. Shephard vs. Union of India, reported in (1987) 4 SCC 431, wherein the Hon'ble Apex Court has held that if an authority proposes to pass an order which affects the civil rights of an applicant and results in adverse civil consequences, then the authority must afford an opportunity of hearing to the concerned applicant before passing such an order. Mr. Dave, learned counsel for the petitioner has also relied upon the decision of the Hon'ble Apex Court in Kranti Association Pvt. Ltd. and Anr. v. Masood Ahmed Khan and Others, reported in [2010] 9 SCC 496, the decision of Hon'ble High Court of Bombay in the case of Kanaiyalal Prabhudas Maru vs. Regional Provident Fund Commissioner, Maharashtra and Goa reported in 2001 LawSuit (Bom) 579, the decision of this Court in case of Bank of Baroda vs. Regional Provident Page 7 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined Fund Commissioner and Ors. reported in 2010 LawSuit (Guj)j 1636, the decision of Hon'ble Apex Court (From Calcutta) in the case of Secretary and Curator, Victoria Memorial Hall vs. Howrah Ganatantrik Nagrik Samity and ors. reported in 2010 LawSuit (SC) 212 and submitted that appropriate opportunity may be given to the petitioner and matter may be remanded to the concerned authority for taking the decision in the representation after giving proper and full opportunity to the petitioner to make his submission legally available in the eye of law.
5. On the other hand, Mr. Pathik Acharya, learned counsel appear on behalf of the respondents authorities has submitted that the order dated 05.05.2022 as well as the subsequent order dated 06.06.2022 are reasoned and speaking orders and the competent authority has recorded the facts of each case and quantified the damages in accordance with the statutory guidelines and only because the damages are not in favour of the petitioner, it cannot be said that the orders are mechanical or passed without application of mind.
5.1 Mr. Acharya, learned counsel for the respondents also submitted that an adequate opportunities were granted, proper notices were served and the petitioner was fully aware of the proceedings and even during the hearing held on 29.07.2024, the representative of the petitioner Page 8 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined remained present and submitted that he had nothing to object and therefore, the petitioner cannot now allege that the order was passed without hearing.
5.2 Mr. Acharya, learned counsel for the respondents has submitted that after considering the representation of the petitioner and after going through the facts of the representation, the authority has rightly passed the order and there is no infirmity in the order and therefore, there is no interference is required to be called for in the present petition.
6. I have gone through the relevant materials and documents produced on record. I have also perused and examined the impugned order passed by the concerned Authority. It appears that when this Court put a querry upon Mr.Acharya, learned counsel for the respondent about the detailed order dated 7.1.2025 passed by the Co- ordinate Bench of this Court while issuing notice, Mr. Acharya, learned counsel for the respondents is unable to controvert the facts mentioned in the said order. Under such circumstance, this Court is of the opinion that present petition deserves consideration and the same is remanded bach to the concerned authority for fresh decision.
7. It also appears from bare perusal of the order under challenge that without assigning any cogent reasons, the Page 9 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined authority has passed the order rejecting the representation of the petitioner. In fact, considering the facts of the present case and considering the provisions of Section 7Q read with Section 14B of the Act, 1952, the provisions of Section 6(A) (B) & (C) are required to be taken into consideration and under that circumstances, the order passed by the authority cannot sustain as it was observed by the Hon'ble Apex Court in Kranti Association Pvt. Ltd. and Anr. v. Masood Ahmed Khan and Others, reported in [2010] 9 SCC 496. This Court had dealt with the said contention of the respondent and after considering the judgment of the Hon'ble Apex Court, the Co-ordinate Bench had allowed the petition and quashed and set aside the order passed by the authority. Even this Court, after considering the submissions in the case of Aaram Services vs. Regional Provident Fund Commissioner and another in Special Civil Application No.3792 of 2023, has quashed the impugned order passed by the authority and remanded the matter back to the concerned authority for deciding the issue afresh and therefore, this Court is of the opinion that the present petition is required to be remanded back to the concerned authority i.e. respondent No.3 for deciding the waiver application filed by the petitioner.
8. In the result, the present petition is hereby partly Page 10 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025 NEUTRAL CITATION C/SCA/270/2025 ORDER DATED: 28/11/2025 undefined allowed. The impugned order / communication dated 29.11.2024 at Annexure M is hereby quashed and set aside. The matter is remanded back to the concerned respondent authority i.e. respondent No.3 for deciding the Waiver Application filed by the petitioner. The respondent No.3 shall decide the Waiver Application filed by the petitioner in accordance with law, after giving ample opportunity of hearing to to the petitioner as expeditiously as possible.
9. At this stage, Mr. Dave, learned counsel for the petitioner submits that in view of the order dated 29.11.2024 passed by the respondent authority at Annexed at Annexure - M at page 109, the respondents are likely to initiate the coercive action against the petitioner to recover the amount of debts.
10. In view of the present order passed by this Court, the concerned respondent authorities are hereby directed not to initiate any coercive action against the petitioner until the final decision is taken on the Waiver Application filed by the petitioner, after affording an opportunity of hearing to the petitioner in accordance with law.
(HEMANT M. PRACHCHHAK,J) SURESH SOLANKI Page 11 of 11 Uploaded by SURESH SOLANKI(HC00208) on Tue Dec 09 2025 Downloaded on : Fri Dec 12 22:40:46 IST 2025