Madhya Pradesh High Court
M/S The Center For Entrepreneurship ... vs Regional Provident Commissioner ... on 24 April, 2024
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VINAY SARAF
ON THE 24 th OF APRIL, 2024
MISC. PETITION No. 1836 of 2024
BETWEEN:-
M/S THE CENTER FOR ENTREPRENEURSHIP
DEVELOPMENT THROUGH ITS SECRETARY JOHON
EPPON S/O SHRI LATE SHRI EOPPEN, AGED ABOUT 60
YEARS, OCCUPATION AT PRESENT SECRETARY, R/O
C.E.D. MAP - 16 A, ARERA HILLS, BHOPAL, DISTRICT
BHOPAL (MADHYA PRADESH)
.....PETITIONER
(BY SHRI RAJESH KUMAR SONI - ADVOCATE)
AND
REGIONAL PROVIDENT COMMISSIONER, EMPLOYEE
PROVIDENT FUND ORGANIZATION, REGIONAL OFFICE,
59, ARERA HILLS, BHOPAL (MADHYA PRADESH)
.....RESPONDENT
(BY SHRI ABHISHEK ARJARIA - ADVOCATE)
This petition coming on for admission this day, th e court passed the
following:
ORDER
Petitioner has assailed the orders dated 03.01.2024 and 29.02.2024 passed by the Central Government Industrial Tribunal cum Labour Court, Jabalpur (in short 'CGIT) in Case No.CGIT/LC/EPFA/31/2023 in appeal preferred by the present petitioner under Section 7(I) of Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (in short 'Act, 1952'), whereby the interim relief was granted to the petitioner and the recovery of the amount was stayed, subject to the condition of deposition of 40% of the amount with Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 2 the respondent, within 30 days from the date of order. The petitioner has challenged the condition imposed by the CGIT for staying the order passed by the Regional Provident Fund Commissioner-II, Regional Office, Bhopal.
2. The short facts of the case are that, petitioner M/s. Center for Entrepreneurship Development, Bhopal is covered under the purview of Act, 1952 and Code No.MP/753 has been allotted to the petitioner. However, the petitioner failed to remit the contribution amount from 01.04.2022 to 26.09.2023 and therefore, notice was issued to the petitioner on 29.09.2023 with a direction to appear through video conferencing in the hearing fixed for 13.10.2023 before Regional Provident Fund Commissioner, Regional Office, Bhopal (in short 'the Commissioner') and the petitioner/employer was granted opportunity on various dates. Later on, the authorized representative of the petitioner appeared on behalf of the Establishment and sought time to check the calculation sheet, which was granted to him but thereafter, no one appeared on behalf of petitioner/employer and therefore, after considering the facts and circumstances of the case, the Commissioner passed the order on 17.11.2023 under Section 14(B) of the Act, 1952 for the payment of damages and interest under Section 7(Q) of the Act and raised the total demand Rs.18,35,609/-.
3. The order passed by the Commissioner was challenged by the petitioner by preferring an appeal under Section 7(I) of the Act, 1952 before CGIT, Jabalpur and prayed for stay of recovery. On 03.01.2024, CGIT stayed the recovery of the amount of damages passed under Section 14(B) of the Act, 1952, subject to the condition of deposition of 40% of the amount with the Commissioner, within 30 days from the date of order and ordered to file the compliance report. Thereafter, the petitioner moved an application for review on the ground that under Section 7(O) of the Act, no order can be passed for pre-
Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 3depositing to entertain the appeal challenging the order passed under Section 14(B) of the Act, 1952 and therefore, at the time of staying the impugned recovery order, CGIT was not empowered to impose the condition of deposition of 40% of the amount. It was further stated in the application that order dated 03.01.2024 was challenged before this Court in M.P. No.325/2024, which was disposed of by order dated 06.02.2024 with a liberty to file a review before CGIT and therefore, the order passed on 03.01.2024 was liable to be reviewed.
4. After hearing the parties, the application preferred for review was dismissed by CGIT. At the time of passing the impugned order dated 29.02.2024, CGIT considered the judgment rendered by Madras High Court in the case of M/s Madhuranthagam Agricultural Producers Cooperative Marking Society Ltd. vs. Regional Provident Fund Commissioner passed in W.P. No.22860 of 2023 dated 03.08.2023 and judgment passed by Delhi High Court rendered in the matter Ascot Hotels & Resorts Pvt. Ltd vs. Assistant Provident Fund Commissioner, 2018 SCC OnLine Del 7464 and after considering the judgments of the Madras High Court and Delhi High Court, CGIT held that, no order was passed under Section 7(O) of the Act, 1952 as condition of pre-deposit for the purpose of entertaining the appeal and the order was passed as a condition for staying the recovery part of the order under challenge. By order dated 29.02.2024, CGIT dismissed the review petition.
5. Learned counsel for the petitioner submits that provision of Section 7(O) of the Act, 1952 are not applicable to an appeal preferred for challenging the order passed under Section 14(B) and therefore, the order passed by CGIT as Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 4 a condition for pre-deposit to stay the recovery proceeding, is without jurisdiction and liable to be set aside. He heavily relied upon the judgment passed by the Madras High Court in the matter of M/s. Madhuranthagam (supra), wherein the Madras High has held that, against the 14(B) damages order, if an appeal is preferred before CGIT under Section 7(I) of the Act, 1952, CGIT cannot pass conditional order directing the appellant to pay any sum for entertaining the said appeal. He further relied on the judgment of Apex Court reported as (2016) LabLR 55 (Shiv Harbal Res. Laboratory vs. Assistant P.F. Commissioner) , whereby the Apex Court has reduced the amount from 50% to 25% and judgment of Division Bench of this Court passed i n Writ Appeal No.289/2022 (M/s. Nav Bharat Press, Bhopal vs. Employee Provident Fund Organization) on 13.06.2022, whereby the Division Bench modified the condition of deposition of 35% amount to Rs.10.00 lakh as a pre-deposit for grant of interim relief. In alternative, he prays for reducing the amount of 40% to 25% on the strength of the judgment of Apex Court and the Division Bench of this Court considering the poor financial condition of the petitioner.
6. Per contra, learned counsel appearing on behalf of respondent/Regional Provident Fund Commissioner, submits that the order passed by the Commissioner is having the character of money decree and the petitioner prayed for staying the recovery before CGIT and for the purposes of staying the recovery proceeding, CGIT imposed a condition to deposit 40% of the recoverable amount, therefore, no illegality or irregularity committed by CGIT and order is not liable to be interfered. He relied on the judgment of Delhi High Court rendered in the matter of Ascort Hotels (supra), whereby Delhi High Court has clarified that, the order was not passed under Section 7(O) of the Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 5 EPF Act, 1952 by the Tribunal and it was a conditional order of stay of impugned order and the Tribunal was empowered to pass the said order. The relevant paras of the judgment of Delhi High Court are extracted herein below:-
14. By impugned order, the Tribunal has granted interim relief to the petitioner during the pendency of the appeal subject to the petitioner depositing the amount assessed under Section 7-Q of EPF Act and Rs.
20,00,000/- with the respondent within four weeks. The Tribunal directed that subject to this deposit no coercive steps shall be taken against the petitioner.
15. The order impugned before the Tribunal was not under Section 7-A of the EPF Act but under Section 14-B and 7-Q of the EPF Act and therefore the question of pre-deposit as mentioned in section 7-O of the EPF Act does not arise. It is Section 7-O of the EPF Act which puts an embargo on the entertainment of the appeal by the Tribunal by requiring 75% of the amount due as determined under Section 7-A of the EPF Act to be deposited, with a power vested in the Tribunal to waive or to reduce such amount to be deposited. This embargo to entertain the appeal is not attracted in the present case as the order impugned before the Tribunal was under Section 14-B and 7- Q of the EPF Act. The petitioner company having felt aggrieved by the composite order passed under Section 7-Q and 14-B of the EPF Act prayed for an interim relief during the pendency of the appeal before the Tribunal which was empowered to pass a conditional order of stay. The impugned order is not passed under Section 7-O of the EPF Act by the Tribunal. It is a conditional order of stay of impugned order before the Tribunal which the Tribunal was empowered to pass. Therefore, I do not find any merit in the writ petition. The same is hereby dismissed with no order as to costs.
7. Learned counsel for respondent prays for dismissal of the present petition.
8. The core question emerges for consideration and decision in the present petition is -
"Whether at the time of staying the recovery proceeding, CGIT has powers to imposed any condition for deposition of any part of the recoverable amount as ordered under Section 14(B) of the Act, 1952 or not".
It is apposite to reproduce the relevant provision, which are as under:-
Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 614B. Power to recover damages.--Where an employer makes default in the payment of any contribution to the Fund 3[, the 2[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 4[or sub-section (5) of section 17] or in the payment of any charges payable under any other provision of this Act or of 5[any Scheme or Insurance Scheme] or under any of the conditions specified under section 17, 6[the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf] may recover 7[from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme:] 8[Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard]: 9[Provided further that the Central Board may reduce or waive 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,subject to such terms and conditions as may be specified in the Scheme.] 7-I. Appeals to Tribunal .--(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 (4), of section 1, or section 3, or sub- section (1) of section 7A, or section 7B [except an order rejecting an application for review referred to in sub-section (5) thereof], or section 7C, or section 14B, 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 be accompanied by such fees, as may be prescribed.
7-O. Deposit of amount due, on filing appeal.--No appeal by the employer shall be entertained by a Tribunal unless he has deposited with it seventy-five per cent. of the amount due from him as determined by an officer referred to in section 7A:
Provided that the Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section.
8. Mode of recovery of moneys due from employers.--Any amount due--
(a) from the employer in relation to 2[an establishment] to which any 3[Scheme or the Insurance Scheme] applies in respect of any contribution payable to 4[the Fund or, as the case may be, the Insurance Fund], damages recoverable under section 14B, Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 7 accumulations required to be transferred under sub-section (2) of section 15 5[or under sub-section (5) of section 17] or any charges payable by him under any other provision of this Act or of any provision of the 3[Scheme or the Insurance Scheme]; or
(b) from the employer in relation to an exempted 6[establishment] in respect of any damages recoverable under section 14B or any charges payable by him to the appropriate Government under any provision of this Act or under any of the conditions specified 7[under section 17 or in respect of the contribution payable by him towards the 8[Pension] Scheme under the said section 17], may,if the amount is in arrear, 9[be recovered 10[in the manner specified in sections 8B to 8G].
9. Section 14(B) of the Act, 1952 empowers the Commissioner to recover the damages from an employer who makes default in the payment of any contribution to the Fund or in the transfer of accumulation required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17.
10. Against the order passed under Section 14(B) of the Act, 1952, an appeal lies to the Tribunal under Section 7(I) of the Act, 1952. There is no provision for staying the order of recovery during the pendency of appeal by the tribunal. However, Tribunal exercises its discretionary power to stay the recovery initiated under Section 14(B) of the Act, 1952. If an authority is having discretion to stay the recovery initiated upon the order under challenge before the authority, the authority is also having discretion to stay the same on any condition or stay the order in absolute or in part. In the absence of any specific provisions, when the authority can exercise the discretion for staying the order, the authority can also exercise the discretion for imposing any condition and same cannot be objected by the employer, who is enjoying the stay granted by the CGIT.
11. Section 7(O) of the Act, 1952 is a different provision, which provides that Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 8 if the appeal is preferred against the order passed under Section 7(A), then the Tribunal shall not entertain the appeal unless the employer has deposited 75% of the amount due. That is a pre-condition for entertaining the appeal, whereas in the present matter no such condition was imposed by impugned order passed by CGIT and therefore, the argument advanced by the learned counsel for petitioner are misconceived and not acceptable. Section 7(O) of the Act, 1952 puts an embargo for entertainment of the appeal by the Tribunal and requires deposition of 75% as pre-condition, if the appeal is preferred against the order passed under Section 7(A) of the Act, 1952. However, in the present matter, the Tribunal has passed the order as a condition for staying the order of recovery and therefore, the same cannot be assailed on the ground that under Section 7(O) of the Act, 1952 no condition can be imposed in respect of the order under challenge was passed in Section 14(B) of the Act, 1952. The judgment passed by the Madras High Court is not helpful to the petitioner and the judgment delivered by Delhi High Court is directly applicable to the present case. However, Apex Court in the matter of Shiv Herbal Res. Laboratory (supra) and Division Bench of this Court in the matter of M/s. Nav Bharat Press, Bhopal (supra), after considering the fact that orders under challenge were passed for staying the recovery under Section 14(B) of the Act, 1952, reduced the amount to be deposited for grant of stay. The Division Bench in the matter of M/s. Nav Bharat Press (supra) has held that the Tribunal has discretion to impose such a condition for staying the recovery proceedings and looking to the poor financial condition of the appellant therein, the pre-condition of depositing 35% of amount was reduced to Rs.10.00 lakh.
12. In view of above discussion, the question is answered as that though the provision of Section 7(O) of the Act, 1952 are not applicable to an Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM 9 appeal preferred challenging the order passed under Section 14(B) of the Act, 1952 and no pre-condition can be imposed upon the appellant to deposit any amount for entertaining the appeal, but the Tribunal is having discretion to stay the recovery initiated by the Commissioner upon any condition as it deem fit including the condition of depositing a part of the amount and the same is permissible.
13. Considering the fact that CGIT is not committed any illegality or irregularity or any jurisdictional error in passing the order dated 03.01.2024 and 29.02.2024, by imposing the condition of deposit of 40% of the amount, there is no scope for interference in the orders under challenge. However, looking to the poor financial condition of the petitioner/employer/establishment, in view of the order passed by Apex Court in the matter of Shiv Harbal (supra) and Division Bench of this Court in the matter of M/s. Nav Bharat Press (supra), the condition of depositing 40% of the amount is reduced to 25% and the petitioner is directed to deposit 25% of the recoverable amount with the respondent, within 30 days from today and file a compliance report before CGIT.
14. With the aforesaid, order dated 03.01.2024 and 29.02.2024 are modified to the above extent and the present petition is disposed of. No order as to costs.
(VINAY SARAF) JUDGE irfan Signature Not Verified Signed by: MOHD IRFAN SIDDIQUI Signing time: 4/29/2024 10:11:56 AM