Kerala High Court
M/S. Kerala Feeds Limited vs The Regional Provident Fund ...
Author: C.K. Abdul Rehim
Bench: C.K.Abdul Rehim
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
THURSDAY, THE 3RD DAY OF OCTOBER 2013/11TH ASWINA, 1935
WP(C).No. 34628 of 2011 (C)
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PETITIONER :
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M/S. KERALA FEEDS LIMITED
KALLETTUMKARA
TRICHUR-680683.
REPRESENTED BY ITS MANAGING DIRECTOR
MR. DR. M. SURESH KUMAR.
BY ADVS.SRI.E.K.NANDAKUMAR
SRI.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.P.BENNY THOMAS
SRI.P.GOPINATH
RESPONDENT(S) :
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THE REGIONAL PROVIDENT FUND COMMISSIONER
EMPLOYEES PROVIDENT FUND ORGANIZATION
SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, KALOOR
KOCHI-682017.
BY SENIOR ADVOCATE DR.S.GOPAKUMARAN NAIR, SC
BY ADV. SRI.A.RAJASIMHAN,SC, EPF ORGANISATION
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03-10-2013,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Mn
...2/-
WP(C).No. 34628 of 2011 (C)
APPENDIX
PETITIONERS' EXHIBITS :
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EXT.P1 TRUE COPY OF THE NOTICE ISSUED BY THE RESPONDENT
DATED 25-3-2011 FIXING THE HEARING ON 7-4-2011.
EXT.P2 TRUE COPY OF THE LETTER DATED 4-4-2011 SUBMITTED BY
THE PETITIONER TO THE RESPONDENT.
EXT.P3 TRUE COPY OF THE MINUTES OF THE PROCEEDINGS HELD
ON 7-4-2011.
EXT.P4 TRUE COPY OF THE STATEMENT DATED 18-4-2011 FILED BY
THE PETITIONER BEFORE THE RESPONDENT.
EXT.P5 TRUE COPY OF THE STATEMENT WITH REQUEST DATED 9-5-
2011 FILED BY THE PETITIONER BEFORE THE RESPONDENT
ALONG WITH THE NAMES OF THE CONTRACTORS.
EXT.P6 TRUE COPY OF THE REQUEST DATED 31-5-2011 FILED BY THE
PETITIONER BEFORE THE RESPONDENT ALONG WITH ITS
ENCLOSURE.
EXT.P7 TRUE COPY OF THE ORDER DATED 30-11-2011 ISSUED BY THE
RESPONDENT.
RESPONDENTS' ANNEXURES :
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ANNEXURE R1(a) COPY OF JUDGMENT IN WA NO. 1721/2007 DATED 16-7-2007
//TRUE COPY//
P.S. TO JUDGE
Mn
C.K. ABDUL REHIM, J.
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W.P.(c) No. 34628 OF 2011-C
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DATED THIS THE 3rd DAY OF OCTOBER, 2013.
J U D G M E N T
Exhibit P7 proceedings issued by the respondents under Section 7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for short 'the Act') is under challenge in this writ petition. At the very outset it is to be noticed that the petitioner has got a statutory remedy of appeal as provided under the Act. In view of the effective remedy available, the challenge cannot be entertained in this writ petition filed under Article 226.
2. On behalf of the respondent Annexure R1 (a) judgment (judgment in W.A No.1721/2007 dated 16-07- 2007) is produced to content that the Appellate remedy provided in the Act is not only effective but also an efficacious remedy, and bypassing such remedy the petitioner could not approach this court. In Ext.R1 (a) judgment the Hon'ble Division Bench observed that a writ petition would lie only if the order passed by the authority would affect the fundamental rights of a citizen or in a case W.P.(c) No.34628/2011 -2- where the authority had exceeded its jurisdiction. Since none of these elements are present in this instant case the writ petition cannot be entertained, is the contention raised by the respondent.
3. Per contra, learned counsel for the petitioner had pointed out that existence of an alternate remedy is not a bar to entertain a writ petition, if there is violation of principles of natural justice. It was also contended that disposal of a writ petition after its admission, after a long lapse of time, on the ground of availability of alternate remedy is not proper. He had placed reliance on a decision in Thressiamma V. Union of India (1999 (2) KLT
683).
4. On the facts, the impugned proceedings was initiated based on the inspections conducted at the establishment of the petitioner on 10-08-2010, 02-09-2010 and 12-10-2010, by the Enforcement officer. Allegation was that the petitioner had not subjected the gross salary paid/payable to the employees in the establishment, for the W.P.(c) No.34628/2011 -3- purpose of recovery of contributions payable to the Provident Fund. Dispute is about the contributions with respect to workers engaged by labour contractors. During inspection it was detected that, the employer has not taken the wages as reported through the statement submitted by contractors, for the purpose of calculating the PF contributions. The petitioner had failed to produce any proper registers regarding the wage disbursement with respect to those contract employees. Therefore the Inspecting officer adopted the wage particulars furnished in the ledger printouts of the respective contractors and the difference was worked out and the petitioner was required to pay the difference in the amount of contributions. On the basis of inspection report an enquiry as contemplated under Section 7A was initiated. Representatives of the petitioner had participated in the enquiry on several occasions. Wage registers of different contractors and the list of contractors were furnished. During the enquiry respondent found that employees engaged by the contractors were already W.P.(c) No.34628/2011 -4- enrolled to EPF. But the contractors have paid EPF only on a minuscule portion of the actual wages paid to the workers. The employer has not taken its responsibility in ensuring that eligible benefits are given to those employees. It was observed that proper wage registers were not maintained and certain wage registers prepared and produced were lacking arithmetical accuracy. It was also found that the meager wages splited up by the contractors, described as basic wages, was only for payment of contributions. Therefore the respondent found that, the dues calculated by the Enforcement officer is correct and convincing. Therefore the determination order was issued against the petitioner for payment of the difference in contributions for the period from 1/06 to 8/10. A total sum of Rs.34,67,485/- was directed to be deposited through Ext.P7 order. It was also informed that penal damages leviable under Section 14B of the Act and interest payable under Section 7Q of the Act will also be determined and will intimated separately.
W.P.(c) No.34628/2011 -5-
5. Contention of the petitioner is that in response to notice issued intimating enquiry under Section 7A the petitioner had submitted Ext.P3 objections explaining that the basic wages adopted for payment of contribution with respect to contract employees engaged in various departments are correct and reasonable. They have produced documents such as, ledger printouts made to contractors, copy of the cash books and attendance register, Form-V, copy of 12A return etc. It is stated that a further representation as per Ext.P5 was produced before the respondents, in which it was clarified that EPF contributions with respect to contract workers were paid based on the monthly wage statement submitted by each of the contractors and the workers have not disputed payment of such contributions. Therefore it is contended that, if at all the authority is proceeding with the matter, the burden is on the side of the contractor. Hence it is requested that if at all any enquiry is to be proceeded, the contractors, who are the real employers and necessary parties, should be W.P.(c) No.34628/2011 -6- impleaded in the proceedings. The petitioner had furnished details of such contractors before the respondent. Through Ext.P6 the petitioner had once again requested the respondents to implead the contractors in the proceedings and to serve notice upon them. The impugned order is assailed on the basis that, despite the specific request made by the petitioner, the respondent had failed to implead the contractors or to issue notice to those contracts. Hence it is contended that there is clear denial of natural justice warranting interference of this court.
6. According to learned Senior Counsel appearing for the petitioner, the impugned order is vitiated for lack of proper exercise of jurisdiction. Non-consideration of the request to implead the contractors and non-affording of opportunities to get the required details from the contractors, will vitiate the order, is the contention. In support counsel for the petitioner had placed reliance on a decision of the Hon'ble Supreme Court in Food Corporation of India V. Provident Fund Commissioner W.P.(c) No.34628/2011 -7- and others (1989 (II) LLN 987). It is held therein that the Commissioner should exercise all powers to collect all the evidence and collect all materials before coming to proper a conclusion, which is the legal duty of the Commissioner. It will be a failure to exercise the jurisdiction, particularly when a party to the proceedings requests for summoning of evidence from any particular person. On the facts of the said case the employer urged that the contractors are in possession of the relevant lists and the Commissioners had not given notice to contractors nor made them parties to the proceedings, inspite of repeated requests. Learned Senior counsel contended that an exactly identical situation prevails in the case at hand. Hence it is contended that there is clear denial of natural justice in arriving determination of contribution payable.
7. As observed above, entertainment of this writ petition filed bye-passing the efficacious alternate remedy of statutory appeal is questionable. But in view of the fact that this writ petition remained admitted since the year W.P.(c) No.34628/2011 -8- 2011 onwards, I am constrained to examine sustainability of the impugned order on its merits. Specific allegation raised is that the contribution with respect to the contract employees were paid only at a lower rate, shown as basic wages in the statement furnished by the contractors. Whereas the basic wages were shown reduced in such statements inorder to avoid payment of real benefits due to such workers, is the allegation. The Inspecting officers unearthed the materials from the ledger extracts with respect to payment of amounts to the contractors. The difference in payment of wages made to the contractors was taken for the purpose of determining the actual amount of contributions payable. There is no dispute that the contract workers were enrolled under the petitioner in the EPF scheme and the petitioner was making payment of the contributions with respect to those workers. The employer, for the purpose of EPF, is the petitioner establishment and the workers in question are considered as registered employees of the petitioner. Therefore there is no meaning W.P.(c) No.34628/2011 -9- in contending that the contractors are the real employees. It is the duty and obligation of the petitioner to ensure that proper contribution is paid with respect to workers engaged both directly and through contractors. Defence put forth by the petitioner is to the effect that contributions were paid only in accordance with the statement furnished by the contractors. But the allegation was that there was under
reporting of basic wages and evasion of statutory contributions towards EPF. The Enforcement Officer found that the employer has remitted EPF with respect to total payments given to contract workers engaged for loading and unloading works. But the same pattern was not been followed in the case of other type of contract employees. The determining authority had categorically found that, the wage registers produced at the time of hearing with respect to different contractors appears to be prepared only for the purpose of producing before the authority. But it did not reflect the true and correct details of the wages paid to the employees through the contractors. Therefore the W.P.(c) No.34628/2011 -10- Enforcement Officer calculated the actual payment of wages from the original ledger account maintained by the petitioner. On behalf of the respondents it is contended that contributions are payable on the basis of basic wages which include all emoluments as per the definition contained in section 2(b) of the Act. Since it is proved that the basic wages including all emoluments, is not adopted for fixing the quantum of contribution, determination made is purely legal and sustainable.
8. Under section 8(a) of the Act the principal employee is empowered to recover contributions from the contractor either by deduction from the amount payable to the contractor or under any contract debt payable to the contractor. Any agreement entered in between the principal employer and contractor contrary to or inconsistent with the statutory provisions cannot have any bearing. Therefore the petitioner herein is absolutely liable under the Act to ensure that complete records with respect to the contract employees engaged by them are maintained W.P.(c) No.34628/2011 -11- and has produced before the statutory authority. Being the principal employer it is the responsibility of the petitioner to ensure that all the eligible benefit under the EFP is extended to the employees. Therefore the contentions based on non impleadment of the contractors has no relevance, is the stand taken by the respondents.
9. From the rival contentions the question mooted for decision is as to whether impleadment of the contractors on the basis of the request made by the petitioner was essential for a proper determination under section 7(a). In other words, whether the non impleadment of the contractors or non summoning of the contractors for the purpose of taking evidence had caused any prejudice to the petitioner. As contended, being the principal employer and the establishment under the EPF Act, it was the duty of the petitioner to ensure that proper contributions are made with respect to the contract employees. If the authority has detected materials to arrive at a conclusion that contribution was made only on the basis of diminished W.P.(c) No.34628/2011 -12- wages (under reported wages), it is the liability of the petitioner to make good the difference in payment of the contributions. The petitioner cannot evade the liability by merely contending that the contributions were paid only as per the statements furnished by the contractors. The wage registers produced by the petitioner before the determining authority have not been believed as true and correct. Since the statement filed by the contractors as well as the wage registers alleged to have been maintained by the contractors have already been produced, the petitioner cannot aspire for summoning any further document from the custody of the contractors. Mere request for impleading those contractors need not be considered, as the contractors are not statutory employers for the purpose of payment of EPF contribution. Hence it cannot be held that non impleadment of the contractors or non summoning of them for the purpose of taking any evidence had in any manner vitiated the impugned order.
W.P.(c) No.34628/2011 -13-
10. If the petitioner has got any case that the quantum of difference determined on the basis of materials available with the Enforcement Officer, is not true and correct, it is not a matter which can be agitated before this court in a proceedings under Article 226 of the Constitution of India. Hence non resorting to the statutory remedy of appeal, even if had caused any prejudice to the petitioner, the same cannot be remedied through granting any relief in this writ petition.
11. Under the above mentioned circumstances the writ petition fails and the same is accordingly dismissed.
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C.K. ABDUL REHIM JUDGE AMG/Pmn True copy P.A. to Judge