Delhi High Court
M/S Wear Well India Pvt. Ltd. vs Regional Provident Fund ... on 29 August, 2019
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 29.08.2019
+ W.P.(C) 8826/2019 & C.M. No.36490/2019
M/S WEAR WELL INDIA PVT. LTD. ..... Petitioner
Through: Mr. S.K. Khanna, Advocate.
versus
REGIONAL PROVIDENT FUND COMMISSIONER, AND ANR.
..... Respondents
Through: Mr. Shivanath Mahanta, Advocate with
Mr. Saurabh Kumar, Regional P.F.
Commissioner-II.
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
REKHA PALLI, J. (ORAL)
W.P.(C) 8826/2019 & CM No.36490/2019 (for stay)
1. The present petition under Articles 226 and 227 of the
Constitution of India seeks quashing of the show-cause notice dated
19.07.2018 as also the order passed by the respondents under Section
7Q of the Employees' Provident Funds & Miscellaneous Provisions
Act, 1952 ('the PF Act' for short) on 16.01.2019 whereby the petitioner
has been directed to pay a sum of Rs.46,32,737/- as penal interest for
the period 19.01.2014 to 02.06.2018. The petitioner also seeks
quashing of the consequential attachment order dated 13.06.2019
issued by the respondent no.2.
2. Learned counsel for the petitioner submits at the outset that the
petitioner is giving up his challenge to the show cause notice, and is
pressing the present petition only to seek quashing of the order dated
16.01.2019 and the consequential notice of attachment dated
13.06.2019.
3. He submits that on 19.07.2018, the petitioner was served with a
show cause notice proposing to impose damages and interest on it for
the alleged delay in making the requisite deposit in terms of the Act. In
response thereto, the petitioner had given a detailed reply on
01.08.2018 making the following submissions:
"1. On checking, it is found that period upto 02/2014
has already been assessed and charged by the Asst.
PF Commissioner Sh. Ashvani Kumar vide its order
No.DS/NHP/24715/000/ENF501/damages/7404 dt.
25/02/2015. Hence the correction may please be
effected in the sheet from 03/2014 onwards and
revised sheet may please be issued accordingly.
2. It is noticed that 05/2014 contribution was
deposited on 30/01/2015 instead of 04/02/2015.
Hence may please be corrected (Copy of the challan
attached herewith for ready reference).
3. It is noticed that 06/2014 contribution was
deposited on 04/03/2015 instead of 05/03/2015 (Copy
of the challan attached herewith for ready reference).
4. It is further noticed that 10/2015 contribution was
deposited on 23/04/2016 instead of 25/04/2016 (Copy
of the challan attached herewith for ready reference)
hence correction may please be effected."
4. Learned counsel for the petitioner submits that though the
respondents had granted personal hearings to the authorized
representative of the petitioner, the respondents have not dealt with any
of the petitioner's submissions as made in its detailed written
representation, while passing the impugned order. By placing reliance
on the order dated 09.02.2017 passed by a coordinate Bench of this
Court in M/s. Adigear International vs. Central Board of Trustees
[WP(C) No. 12257/205], he submits that such an order is not
sustainable and therefore, prays that the same be quashed.
5. On the other hand, learned counsel for the respondents, on
instructions from Mr. Saurabh Kumar, Regional Provident Fund
Commissioner-II who is present in court, submits that since the
petitioner had been granted adequate opportunities to be heard during
which they did not produce any sufficient and relevant material in
support of their claim, the respondents have acted bonafidely and
strictly in accordance with the scheme of the Act while passing the
impugned order. He, therefore, prays that the writ petition be
dismissed.
6. I have heard the learned counsel for the parties and with their
assistance perused the record.
7. A bare perusal of the impugned order dated 16.01.2019 shows
that the respondents, after reiterating the facts of the case as set out in
the show cause notice, have thereafter merely referred to the personal
hearings granted to the petitioner. Evidently, without even dealing with
any of the contentions raised by the petitioner, the impugned order
simply states that under exercise of powers conferred upon the
respondents under Sections 14B and 7Q of the Act the petitioner was
liable to pay the penal interest as determined under the order.
8. The impugned order is not only wholly unreasoned but also
violates the principles of natural justice. Once the petitioner had given a
detailed reply to the show cause notice, it was incumbent upon the
respondents to deal with those contentions howsoever briefly while
passing the order, which in essence fastens a huge financial liability
upon the petitioner. In my view, the order ought to contain at least the
basic reasons for not accepting the petitioner's explanation. On this
ground alone, the impugned order is liable to be set aside. I am
fortified in my aforesaid conclusion by the decision of this court in
M/s. Adigear International vs. Central Board of Trustees (supra)
upon which reliance has been placed by the learned counsel for the
petitioner.
9. Accordingly, the writ petition is allowed. The impugned order
dated 16.01.2019 and the consequential attachment order dated
13.06.2019 are quashed and the matter is remanded back to the
respondent.
10. The petitioner will appear in the office of the respondent on
05.09.2019 at 3 pm at RO, Delhi (E), on which date the respondents
will give a personal hearing to the petitioner. The petitioner is also
permitted to file a brief of its submissions with the respondents. The
respondents will thereafter pass a fresh reasoned order dealing with all
the contentions of the petitioner within a period of eight weeks.
11. Needless to say, if the petitioner is aggrieved by the fresh order
passed by the respondents, it will be open for it to take legal recourse as
permissible under law.
12. At this stage, learned counsel for the petitioner submits that the
respondents have already recovered a sum of Rs.15,94,952/- and
therefore, prays that the respondents be directed to refund back the said
amount.
13. In my view, since the matter is being remanded back to the
respondents with direction to pass a fresh reasoned order within eight
weeks, no case is made out for directing any refund of the said amount.
It is, however, made clear that in case it is found that the petitioner was
not liable to pay any amount towards interest, the amount already
recovered by the respondents will be refunded back to the petitioner
with interest @ 8 % per annum.
14. The writ petition is disposed of along with the pending
application in the aforesaid terms.
REKHA PALLI, J.
AUGUST 29, 2019
'AA'
