R K M Technical Institute vs The Employees Provident Fund ...
2023 Latest Caselaw 631 Guj

     C/SCA/22605/2019                             JUDGMENT DATED: 23/01/2023




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/SPECIAL CIVIL APPLICATION NO. 22605 of 2019


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE A.Y. KOGJE                                    Sd/-

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1     Whether Reporters of Local Papers may be allowed                 NO
      to see the judgment ?

2     To be referred to the Reporter or not ?                          NO

3     Whether their Lordships wish to see the fair copy                NO
      of the judgment ?

4     Whether this case involves a substantial question                NO
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

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                       R K M TECHNICAL Institution
                                Versus
             THE EMPLOYEES' PROVIDENT FUND ORGANIZATION
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Appearance:
MR K.M.PATEL, SR.ADVOCATE with MR CP CHAMPANERI, ADVOCATE
for the Petitioner(s) No. 1
MR AV NAIR(5602) for the Respondent(s) No. 1
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    CORAM:HONOURABLE MR. JUSTICE A.Y. KOGJE

                              Date : 23/01/2023

                             ORAL JUDGMENT

1. This petition under Article 226/227 of the Constitution of India is filed for the following reliefs :

C/SCA/22605/2019 JUDGMENT DATED: 23/01/2023

"(A) The impugned orders passed by the respondent authority are arbitrary, ex facie illegal, perverse, erroneous, contrary to the provisions of law and bad at law hence, the same deserves to be quashed and set aside.

(B) The petitioner submits that the entire issue is cropped up due to non-speaking order dated 23.4.2018 i.e. Annexure C wherein the respondent authority has without considering the submissions made by the petitioner passed an impugned order.

(C) The petitioner submits that the order is passed ex parte which is evident from the perusal of the order. On one occasion of the representative had also remained present however proceedings were concluded ex parte. Even the authority has not assigned any reason to direct the penal damage and interest both as mentioned in the show cause notice itself. This in itself shows that the said order is passed without any application of mind, without following principles of natural justice and without giving any reason and therefore, the same is liable to be quashed and set aside...."

2. At the outset, learned senior advocate appearing for the petitioner has prayed for remanding the matter to the Provident Fund Commissioner under the provisions of the Employees' Provident Funds & Miscellaneous Provisions Act, on the ground that at no stage the case of the petitioner has been examined on merits.

C/SCA/22605/2019 JUDGMENT DATED: 23/01/2023

3. It is submitted that the petitioner is an educational institution which was undergoing a bad face where the total staff/employees were reduced to 7 at one stage and, therefore, the petitioner Institution was virtually closed down.

4. It is submitted that though initially the petitioner Institution was served with the notice of the proceedings before the Provident Fund Commissioner, however, as the administration was not able to attend the proceedings vigilantly, and that too, for the reasons that the Institution had virtually closed down, the first order dated 23 rd April 2018 came to be passed against the petitioner Institution and it has been observed in the order that the establishment has been served but has not appeared.

5. Learned senior advocate has further submitted that the petitioner Institution is now crawling back into regular functioning, and in its efforts to comply with the order of the Provident Fund Commissioner including the notices for recovery, substantial amount has been deposited at various stages.

6. It is submitted that the absence from the proceedings was inadvertent due to lack of a responsible person to handle the management of the Institution. But, now the Institution has shown sufficient bona fide by depositing a substantial amount, and that too, when the petitioner Institution became aware of such proceedings when the bank accounts of the establishment were freezed.

C/SCA/22605/2019 JUDGMENT DATED: 23/01/2023

7. It is, therefore, submitted that a fair chance be given to the petitioner Institution to contest its case on merits.

8. As against this, learned advocate for the respondent has opposed the petition on the ground that Section 14B of the Employees' Provident Funds & Miscellaneous Provisions Act is mandatory and, therefore, even if any grounds with regard to non-appearance are accepted by the authority, still the statutory liability of the petitioner Institution would remain. He has relied upon the decision of the Apex Court in the case of Horticulture Experiment Station Gonikoppal, Coorg vs. The Regional Provident Fund Organization (Civil Appeal No.2136 of 2012 decided on 23.2.2022), more particularly paragraph 11, and submitted that the proceedings before the Commissioner has been in accordance with law and the calculation regarding imposition of damages is as per the statutory provisions and, therefore, there is no scope for deviating therefrom.

9. This Court, while issuing the notice vide order dated 19.12.2019 and observing the conduct of the petitioner Institution, had ordered not to take any coercive action against the Trustees pursuant to the notice issued as a result of the proceedings under the Employees' Provident Fund Act.

10. Having considered the rival submissions of the parties and having perused the documents on record, it appears that the petitioner is an educational institution which went into a rough weather where the number of employees had gone far below the

C/SCA/22605/2019 JUDGMENT DATED: 23/01/2023

statutory requirement of workers to apply the provisions of the Employees' Provident Fund Act and where the petitioner Institution failed several attempts to pay the amount demanded under the provisions of the Act.

11. From the record it appears that the petitioner Institution was required to deposit an amount of Rs.26,07,535=00, out of which an amount of Rs.8,60,587=00 was towards the interest under Section 7Q f the Act and Rs.17,46,948=00 was towards the damages under Section 14B of the Act. However, till date, an amount to the tune of Rs.18 lakhs and odd has been paid by the petitioner Institution from time to time, and in this background, the Court deems it fit to give an opportunity to the petitioner Institution to contest the proceedings before the Provident Fund Commissioner, Ahmedabad, on merits.

12. Accordingly, the matter is relegated back to the respondent authority, where the respondent authority shall issue a notice afresh to the petitioner Institution and grant it an opportunity of hearing and decide the issue afresh in accordance with law.

13. The petitioner Institution shall also fully cooperate with the proceedings without resorting to any dilatory tactics or praying for unnecessary adjournments.

14. Such proceedings afresh shall be concluded expeditiously preferably within a period of one year from today. In the mean time, no further coercive steps be taken.

C/SCA/22605/2019 JUDGMENT DATED: 23/01/2023

15. It is, however, observed that all the proceedings initiated so far shall now be governed by the fresh decision that the respondent authority would take pursuant to the directions issued by this Court.

16. Petition stands disposed of accordingly.

(A.Y. KOGJE, J.) /MOINUDDIN