Bombay High Court
Shirpur Shetkari Sahakari Sakhar ... vs The Regional Provident Fund ... on 19 December, 2016
Bench: R.V. Ghuge
*1* 8.wp.12511.16
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 12511 OF 2016
SHIRPUR SHETKARI SAHAKARI SAKHAR KARKHANA LTD THROUGHITS
CHAIRMAN M A PATIL
VERSUS
THE REGIONAL PROVIDENT FUND COMMISSIONER II NASIK AND
ANOTHER.
...
Advocate for Petitioner : Shri P.M.Shah, Senior Advocate a/w Shri Bagul
D.S..
...
ig CORAM: RAVINDRA V. GHUGE, J.
DATE :- 19th December, 2016
Oral Order:
1 The Petitioner is aggrieved by the order dated 02.11.2015 by
which Respondent No.1/ Regional Provident Fund Commissioner has
assessed the unpaid provident fund contributions under Section 7-A of the
Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for
short "the EPF Act") to the tune of Rs.32,27,75,726/- (Rupees Thirty Two
Crore Twenty Seven Lac Seventy Five Thousand Seven Hundred Twenty
Six).
2 Shri Shah, the learned Senior Advocate appearing on behalf
of the Petitioner/ Sugar Factory, has addressed the Court primarily on the
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following two aspects:-
(a) There is cause for entertaining this petition directly despite
the statutory remedy under Section 7-I r/w 7-O of the EPF Act
being available by which a statutory appeal could be
preferred before the Provident Fund Appellate Tribunal at
New Delhi coupled with the liberty to seek reduction in pre-
deposit amount.
(b) The impugned order, prima facie, indicates total non
application of mind and failure on the part of Respondent
No.1 in discharging his functions as are expected of the office
while dealing with the enquiry under Section 7-A of the EPF
Act.
3 Insofar as entertaining of this petition is concerned, Shri Shah
has placed reliance upon the judgment of the Honourable Supreme Court
in the matter of the State of U.P. vs. Mohammad Nooh, AIR 1958 SC 86,
and especially paragraph 10 reproduced as under:-
"10. In the next place it must be borne in mind that there
is no rule, with regard to certiorari as there is with
mandamus, that it will lie only where there is no
other equally effective remedy. It is well established
that, provided the requisite grounds exist, certiorari
will lie although a right of appeal has been conferred
by statute, (Halsbury's Laws of England, 3rd Ed., Vol.
11, p. 130 and the cases cited there). The fact that the
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aggrieved party has another and adequate remedy
may be taken into consideration by the superior court
in arriving at a conclusion as to whether it should, in
exercise of its discretion, issue a writ of certiorari to
quash the proceedings and decisions of inferior courts
subordinate to it and ordinarily the superior court
will decline to interfere until the aggrieved party has
exhausted his other statutory remedies, if any. But
this rule requiring the exhaustion of statutory
remedies before the writ will be granted is a rule of
policy, convenience and discretion rather than a rule
of law and instances are numerous where a writ of
certiorari has been issued in spite of the fact that the
aggrieved party had other adequate legal
remedies. .........."
4 It is, therefore, contended that the learned Division Bench of
this Court in the matter of Jet Airways (India) Limited vs. Municipal
Corporation of Greater Mumbai, 2012 (3) Mh.L.J. 841, has entertained
the Writ Petition directly despite an alternate remedy being available.
5 Reliance is then placed upon the observations of the learned
Single Judge of this Court in the matter of Navyug Steel Industries, Bombay
vs. Bombay Municipal Corporation, 1991 Mh.L.J. 556, and especially
paragraph 5 which reads as under:-
"5. The preliminary objection is to the effect that the Act
vide Section 217 provides for the remedy of an appeal
to the Chief Judge of the Small Causes Court at
Bombay. Petitioners have not availed of this remedy
and have come straightway to a writ Court. There is
no excuse for the failure to avail of the statutory
remedy. In fact having regard to the disputed
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questions of facts which arise it may be necessary to
record evidence and that can be done only within the
confines of the statutory remedy of an appeal. This
petition was filed way back in the year 1984 and that
will be a factor to be taken into consideration to
appraise the contentions raised by the respondents.
Now it is true that the mere fact of the petition having
been admitted for hearing does not preclude the
respondents from taking the objection that the
petitioners have rushed to this Court without availing
of an equally speedy and efficacious remedy provided
under Section 217 of the Act. But the passage of time
and that too of 6 to 7 long years, would make a
difference. Of course if the petition gives rise to such
disputed facts which could not be resolved in a
proceeding under Article 226 of the Constitution, this
Court would have no option, but to direct the
petitioners to exercise the remedy provided under the
statute. If that remedy had been lost because of the
lapse of time, a suitable order to ignore the bar of
limitation could conceivably be passed in appropriate
cases. Alternatively, the writ Court would leave the
petitioner to suffer where there are no good reason for
his rushing to this Court instead of going by the
statutory provisions. It would all depend on the
circumstances, and the position here is that the so-
called dispute in relation to a question of facts is more
or less of a cosmetic nature. The factual position is
virtually indisputable and the quality and extent of
dispute which survives is easily soluble. What arises is
in substance a question of interpretation i.e. a
question of law. For that as also the fact that
petitioners would be put to undue expenditure and
pressure if they had to prefer repeated appeals every
time a consignment was refused exemption, I hold
that the preliminary objection raised by the BMC
must be negatived."
6 Reliance is then placed upon the judgment of the learned
Division Bench of this Court in the matter of Hero Cycles Limited vs. Union
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of India, 2009 (5) BCR 128, to support the contention that though this
Court ought to be slow in entertaining the petition which bypasses the
statutory remedy, the petition can be entertained if the order impugned,
on the face of it, is erroneous or raises a question of jurisdiction or
infringes the fundamental rights of the Petitioner. Paragraph 9 of the said
judgment reads as under:-
"9. The first question that we are called upon to consider
is, whether in the absence of impugning the original
order of assessment by preferring a statutory appeal
which was available, should this court, ought to
exercise its the extra ordinary jurisdiction. From the
averments in the Petition, it is clear that the
Petitioners have not challenged in their petition the
orders rejecting the applications for refund. The
Petitioners though had statutory remedy of an appeal
against the order of assessment, did not invoke that
remedy, but instead directly filed the applications for
refund. The law is well settled that mere statutory
remedy even of an appeal by itself, will be no bar to
the exercise of the extra ordinary jurisdiction of this
court. This court if it finds that there has been a
breach of the fundamental principles of justice, would
certainly not hesitate to issue a writ of certiorari and
the fact that the alternative remedy is available would
be no answer. See State of U.P. Vs. Mohammad Nooh,
AIR 1958 SC 86. The law has since then been
reiterated. In Champalal Binani Versus Commissioner
of Income Tax, West Bengal and Others, 76 ITR 692
(SC) though the statutory remedy was available, the
assessee chose not to avail of that remedy. While
dismissing the Petition, the court noted that where the
party feels aggrieved by an order of the authority and
has adequate alternative remedy which it may resort
to and if it does not avail of that remedy, the High
Court will require a strong case to be made for
entertaining the petition in its writ jurisdiction. The
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High Court in such cases would be slow to entertain
the petition challenging the order of the taxing
authorities which is ex facie within jurisdiction.
Having so said the court then observed as under :
"A Petition for a writ of certiorari may lie to the
High Court, where the order is on the face of it
erroneous or raises the question of jurisdiction or of
infringement of fundamental rights of the
Petitioner..""
7 Reliance is then placed upon the judgment of the learned
Division Bench in the matter of Kantilal Dharsi Desai vs. Karmala Nagar
Palika, AIR 2000 Bom. 484 : (2003) 2 Bom CR 851, in support of the
contention that where the interest of justice requires the hearing of the
petition in order to adjudicate upon the validity of an unsustainable order,
the Writ Petition can be directly entertained by this Court.
8 My attention is drawn to certain documents placed on record
in the petition paper book whereby, it is contended that for the assessment
period of March, 2003 till April, 2011, the Petitioner has paid all
contributions towards the provident fund subscription. The contributions
paid year-wise are indicated from the documents placed on record, which
are as under:-
2002-2003 : Rs.91,74,831/-
2003-2004 : Rs.5,07,231/-
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2004-2005 : Rs.43,105/-
2005-2006 : Rs.47,00,799/-
2006-2007 : Rs.67,72,694/-
2007-2008 : Rs.78,51,733/-
2008-2009 : Rs.61,48,112/-
2009-2010 : Rs.1,02,54,968/-
2010-2011 : Rs.63,80,632/-
---------------------------------------------------
Total : Rs.5,18,34,105/-
--------------------------------------------------
9 It is strenuously contended that though a detailed order has
been passed on 02.11.2015 impugned in this petition, the amounts
deposited have not been taken into account by the Provident Fund
Authorities and based on erroneous conclusions, an amount of
Rs.32,27,75,726/- has been assessed as outstanding provident fund
contributions under Section 7-A of the EPF Act.
10 Insofar as the second issue as regards the validity of the order
is concerned, Shri Shah has placed reliance upon the judgment of the
Honourable Supreme Court in Food Corporation of India vs. Provident Fund
Commissioner, 1990(1) SCC 68. Paragraph 9 of the said judgment reads
*8* 8.wp.12511.16
as under:-
"9. It will be seen from the above provisions that the
Commissioner is authorised to enforce attendance in
person and also to examine any person on oath. He
has the power requiring the discovery and production
of documents. This power was given to the
Commissioner to decide not abstract questions of law,
but only to determine actual concrete differences in
payment of contribution and other dues by identifying
the workmen. The Commissioner should exercise all
his powers to collect all evidence and collate all
material before coming to proper conclusion. That is
the legal duty of the Commissioner. It would be failure
to exercise the jurisdiction particularly when a party
to the proceedings requests for summoning evidence
from a particular person."
11 Considering the view expressed by the Honourable Supreme
Court in Food Corporation of India case (supra), Shri Shah submits that the
onus and burden lies on the Authority examining the matter under Section
7-A. The Authority has to decide all questions of facts and law and not just
abstract questions. Actual concrete difference in payment of contributions
has to be arrived at by the Authority after identifying the beneficiary
workmen as well as collate the entire documentary and oral evidence
available so as to make a proper assessment under Section 7-A.
12 Shri Shah then relies upon the judgment of the learned Single
Judge of this Court in the matter of Sandeep Dwellers Pvt. Ltd. vs. Union of
India, 2006 (6) ALL MR 736, to support his contention that unless the
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beneficiary workmen are not identified, an exercise under Section 7-A is
fruitless.
13 I have considered the submissions of the learned Senior
Advocate and have gone through the reports cited.
14 Insofar as exercising the jurisdiction of this Court in the
backdrop of a statutory remedy available is concerned, there can be no
dispute and I have no doubts that in an appropriate case where the
bonafides of the employer are visible and in order to ensure that ends of
justice are met, a petition could be entertained. The view expressed by the
Honourable Supreme Court in the State of U.P. judgment (supra), which
has been considered by the learned Division Bench of this Court in Jet
Airways Limited case (supra), would indicate that a petition could be
entertained without exhausting the statutory remedy.
15 In Navyug Steel Industries case (supra), the petition was
admitted and pending for seven years. This Court did not consider the
objections put forth for the reason that the matter was admitted and after
pendency of seven years when the matter was taken up for final hearing,
this Court felt that the objection with regard to the alternate remedy
ought not to be entertained.
*10* 8.wp.12511.16
16 In the matter of Hero Cycles Limited case (supra), this Court
has noted in paragraph 9 that this Court should require a strong case to be
made out for entertaining the petition and normally it should be slow in
entertaining petitions challenging the orders of imposition of taxes if the
said orders are ex-facie within jurisdiction.
17 In the facts of the case in hand, there is no dispute that the
Respondent Provident Fund Authorities have jurisdiction to be exercised
under Section 7-A of the EPF Act. It is the said Authority which has to
initially conclude as regards the amounts unpaid towards provident fund
contributions. In doing so, the Authorities are obliged to conduct a proper
enquiry, collect adequate material and collate the information available so
as to arrive at an exact amount of unpaid provident fund contributions. In
the impugned order, it appears that the enquiry was going on for three
years. On several dates, the Petitioner had sought adjournments.
Summons were issued on 23.11.2012. The report of the Enquiry Officer
was dated 07.10.2012. The impugned order is dated 02.11.2015 which
evidences the fact that the enquiry was conducted for three years and
after 23 hearings.
18 As has been rightly stated by Shri Shah that number of
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hearings would not be relevant as regards the business transacted in the
hearing. However, it cannot be ignored that when certain documents were
in possession of the Petitioner, the same were not produced for the reason
that the Sugar Factory was in the charge of the Dhule Nandurbar Districts
Central Cooperative Bank Limited and as such, they had no scope of
producing the documents as the entire Sugar Factory as well as the
documents were in custody of the said Bank.
Notwithstanding the above, the grievance of the Petitioner
could have been entertained if it was visible that the Petitioner was
inclined to deposit some amounts in this Court as is expected under
Section 7-I r/w 7-O of the EPF Act while preferring a statutory appeal
before the Appellate Provident Fund Tribunal. Considering the assessment
made by the Respondent Authority at Rs.32,27,75,726/-, even if the
amount deposited by the Petitioner of Rs.5,18,34,105/- is adjusted, going
by the impugned order, the outstanding amount would be
Rs.27,09,41,621/--. Shri Shah submitted, on instructions, that it would be
impossible for the Petitioner to deposit any amount since it is in great
financial crisis and it was facing the proceedings under the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 and the Petitioner factory is in custody of Respondent
No.2/ Bank as an Official Liquidator is appointed.
*12* 8.wp.12511.16
20 In my view, while considering the petition filed directly in this
Court, an impression ought not to be created by the Petitioner that the
object of filing the petition is to avoid the 75% deposit mandated by the
EPF Act under Sections 7-I r/w 7-O, which read as under:-
"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 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 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 7-A:
Provided that the Tribunal may, for reasons to be
recorded in writing, waive or reduce the amount to be
deposited under this Section."
21 Taking the contention of the Petitioner at its best that an
amount of Rs.5.18 crore approximately has been deposited, yet
there would be a shortfall of about Rs.27.09 crore approximately.
Considering this huge amount, even if an amount of Rs.5 crore could have
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been deposited by the Petitioner in this Court, I would have entertained
the petition keeping in view the law laid down by the Honourable
Supreme Court on which the Petitioner has placed reliance.
22 I cannot ignore that an FIR was registered by the EPF
Authorities against the Petitioner Factory for having deducted an amount
of Rs.24,38,852/- from the salaries of the employees towards the
provident fund contributions during the period of October, 2010 to
February, 2011 and the said amount was not deposited with the EPF
Authorities, which led to the registration of the FIR on 13.12.2012.
23 There can be no dispute that the EPF Act is a beneficial piece
of legislation involving the object of social security. When the Petitioner is
not inclined to deposit any amount in this Court and prays for a blanket
stay to the impugned order of assessment by which the Authority seeks to
recover Rs.32.28 crore approximately, I am of the view that this Writ
Petition cannot be entertained for the above reasons.
24 In the light of the above, this Writ Petition is dismissed.
Needless to state, if the Petitioner prefers an appeal under Section 7-I and
moves an application for reduction of pre-deposit in appeal under Section
7-O, the Appellate Tribunal may consider the contentions of the Petitioner
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that the amount of Rs.5.18 crore approximately was deposited during the
assessment periods of March, 2003 to April, 2011.
25 At this juncture, Shri Shah submits, on instructions from the
Petitioner, that an appeal under Section 7-I r/w 7-O of the EPF Act would
be preferred before the Provident Fund Appellate Tribunal. He prays that
the observations in this order should not come in the way of the Petitioner
while adjudicating upon the said appeal.
26 I have no hesitation to accept the said request for the reason
that my observations in this order are purely at a prima facie stage and are
set out only for the reasons which I need to assign for not entertaining this
Writ Petition. The Provident Fund Appellate Tribunal, while dealing with
the appeal if filed by the Petitioner, shall not be influenced by these
observations while considering such appeal, as well as, the application
under Section 7-O shall be considered on it's merits.
kps (RAVINDRA V. GHUGE, J.)
