Madras High Court
A & F Overseas Trade Ltd vs Unknown on 31 July, 2023
W.A. No.2459 of 2011
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 31.07.2023
CORAM:
THE HON’BLE MR. JUSTICE S. VAIDYANATHAN
and
THE HON’BLE MR. JUSTICE K. RAJASEKAR
W.A. No. 2459 of 2011 & M.P. No.1 of 2011
A & F Overseas Trade Ltd.
No.96, 3-B, III Floor
II Main Road
Gandhi Nagar
Adyar
Chennai 600 020 Appellant
v
The Regional Provident Fund Commissioner
Employees' Provident Fund Organisation
37 Royapettah High Road
Chennai 600 014 Respondent
Writ Appeal filed under Clause 15 of the Letters Patent challenging the
order dated 05.08.2011 passed in W.P. No.11733 of 2004.
For appellant Mr. Anand Gopalan
for M/s. T.S. Gopalan & Co.
For respondent Mr. P.K. Panneerselvam
JUDGMENT
(delivered by S. VAIDYANATHAN, J.)
To avoid verbosity, the parties are adverted to as per their rank in this writ
appeal.
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
2 The appellant employer is covered by the Employees Provident Funds
and Miscellaneous Provisions Act, 1952 (for brevity “the Act”) under Code
No.PC/364. They failed to remit the Provident Fund, Pension Fund and Insurance
Fund contributions and administrative charges in respect of trainees. The appellant
employer was afforded an opportunity by the Provident Fund authorities and the
enquiry was posted to 14.06.2002, 08.07.2002 and 27.06.2002. There were no
standing orders applicable and the appellant employer was afforded an opportunity
to produce the Certified Standing Orders for perusal on 26.07.2002, but, the same
was not produced. There was an amendment to Section 2(f) of the Act effective
01.08.1988 and the said amendment reads thus:
“Employee” means any person who is employed for wages in any kind
of work, manual or otherwise in or in connection with the work of an
establishment, and who gets his wages directly or indirectly from the employer
and includes any person:
1) employed by or through a contractor in or in connection with
the work of the establishment
2) engaged as an apprentice, not being an apprentice engaged
under the Apprentices Act, 1961 (52 of 1961) or under the Standing Orders of
the establishment.
Within 6 months from the date of applicability of the Act, the establishment has to
submit the draft standing orders for certification in terms of Section 3 of the
Industrial Employment (Standing Order) Act, 1946. The appellant employer did
not submit the draft standing orders even after a period of 10 years. The stipend
given to the trainees is termed as “basic wages” in terms of Section 2(b) of the Act
which reads thus:
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
(b) “basic wages” means all emoluments which are earned by an employee
while on duty or on leave or on holidays with wages in either case in accordance
with the terms of the contract of employment and which are paid or payable in cash
to him, but does not include—
(i) the cash value of any food concession;
(ii) any dearness allowance (that is to say, all cash payments by whatever
name called paid to an employee on account of a rise in the cost of living), house-
rent allowance, overtime allowance, bonus, commission or any other similar
allowance payable to the employee in respect of his employment or of work done in
such employment;
(iii) any presents made by the employer;
3 Since trainees have to be enrolled into the Provident Fund from the
date of engagement in the establishment, the respondent authority has passed an
order dated 17.09.2002 under Section 7-A of the Act ordering that belated
remittances will attract penal damages in terms of Section 14-B of the Act. Section
7-A of the Act reads thus:
"7-A. Determination of moneys due from employers.—
(1) The Central Provident Fund Commissioner, any Additional Central
Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any
Regional Provident Fund Commissioner, or any Assistant Provident Fund
Commissioner may, by order,—
(a) in a case where a dispute arises regarding the applicability of this Act
to an establishment, decide such dispute; and
(b) determine the amount due from any employer under any provision
of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the
case may be, and for any of the aforesaid purposes may conduct such inquiry as he
may deem necessary.
(2) The officer conducting the inquiry under sub-section (1) shall, for
the purposes of such inquiry, have the same powers as are vested in a court under
the Code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the
following matters, namely:—
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
(a) enforcing the attendance of any person or examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination of witnesses,
and any such inquiry shall be deemed to be a judicial proceeding within the meaning
of sections 193 and 228, and for the purpose of section 196, of the Indian Penal
Code (45 of 1860).
(3) No order shall be made under sub-section (1), unless the employer
concerned] is given a reasonable opportunity of representing his case.
(3-A) Where the employer, employee or any other person required to attend
the inquiry under sub-section (1) fails to attend such inquiry without assigning any
valid reason or fails to produce any document or to file any report or return when
called upon to do so, the officer conducting the inquiry may decide the applicability
of the Act or determine the amount due from any employer, as the case may be, on
the basis of the evidence adduced during such inquiry and other documents
available on record.
(4) Where an order under sub-section (1) is passed against an employer
ex parte, he may, within three months from the date of communication of such
order, apply to the officer for setting aside such order and if he satisfies the officer
that the show-cause notice was not duly served or that he was prevented by any
sufficient cause from appearing when the inquiry was held, the officer shall make an
order setting aside his earlier order and shall appoint a date for proceeding with the
inquiry:
Provided that no such order shall be set aside merely on the ground that
there has been an irregularity in the service of the show-cause notice if the officer is
satisfied that the employer had notice of the date of hearing and had sufficient time
to appear before the officer.
Explanation.—Where an appeal has been preferred under this Act against an order
passed ex parte and such appeal has been disposed of otherwise than on the ground
that the appellant has withdrawn the appeal, no application shall lie under this sub-
section for setting aside the ex parte order.
(5) No order passed under this section shall be set aside on any
application under sub-section (4) unless notice thereof has been served on the
opposite party.”
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
4 Aggrieved, the appellant employer preferred a review under Section 7-
B of the Act. Section 7-B of the Act reads thus:
"7-B Review of orders passed under Section 7-A:
(1) Any person aggrieved by an order made under sub-section (1) of
section 7-A but from which no appeal has been preferred under this Act, and who,
from the discovery of new and important matter or evidence which, after the
exercise of due diligence was not within his knowledge or could not be produced
by him at the time when the order was made, or on account of some mistake or
error apparent on the face of the record or for any other sufficient reason, desires
to obtain a review of such order may apply for a review of that order to the officer
who passed the order:
Provided that such officer may also on his own motion review his order if
he is satisfied that it is necessary so to do on any such ground.
(2) Every application for review under sub-section (1) shall be filed in
such form and manner and within such time as may be specified in the Scheme.
(3) Where it appears to the officer receiving an application for review
that there is no sufficient ground for a review, he shall reject the application.
(4) Where the officer is of opinion that the application for review
should be granted, he shall grant the same:
Provided that,--
(a) no such application shall be granted without previous notice to all
the parties before him to enable them to appear and be heard in support of the
order in respect of which a review is applied for, and
(b) no such application shall be granted on the ground of discovery of
new matter or evidence which the applicant alleges was not within his knowledge
or could not be produced by him when the order was made, without proof of such
allegation.
(5) No appeal shall lie against the order of the officer rejecting an
application for review, but an appeal under this Act shall lie against an order passed
under review as if the order passed under review were the original order passed by
him under section 7-A.”
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
5 The reviewing authority passed a detailed order dated 02.04.2004
rejecting the request of the appellant employer and the relevant paragraphs are
scanned below:
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
6 From the above discussion of the reviewing authority, it is crystal clear
that the appellant employer has avoided to pay the Provident Fund amount due to
the trainees even though they are covered by the definition of Section 2(f) of the
Act. That apart, against the order of the reviewing authority under Section 7-B of
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
the Act, the appellant employer has got an alternative remedy of appeal under
Section 7-I of the Act.
7 Since the matter has been pending for nearly two decades, we are not
inclined to remit the matter on the ground of availability of alternative remedy,
more so, when it is the admitted case that the appellant employer has failed to
comply with the mandatory provisions.
8 In such view of the matter, we hold that the order of the Single Bench
confirming the order of the respondent/original authority passed under Section 7-A
of the Act and the order of the reviewing authority passed under Section 7-B of the
Act is perfectly in order warranting no interference.
9 Further, a Single Bench of this Court had an occasion to deal with a
similar issue in The Managing Director, A & F Overseas Trade Ltd. v The
Regional P.F. Commissioner, Puducherry and others [(2020) 1 LLJ 185
(Mad)], wherein also, incidentally, the appellant is none other than the appellant
employer herein, the difference being, the issue involved therein is for the
subsequent period. Even in the said judgment, the Single Bench has held against
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
the employer and also observed that the employer has not availed of the appellate
remedy.
In view of the foregoing, this writ appeal stands dismissed, however, sans
costs. The appellant employer is expected to comply with the order passed by the
respondent/original authority within a period of four months from the date of
receipt of a copy of this judgment. Connected M.P. stands closed.
(S.V.N., J.) (K.R.S., J.)
31.07.2023
cad
https://www.mhc.tn.gov.in/judis
W.A. No.2459 of 2011
S. VAIDYANATHAN, J.
and
K. RAJASEKAR, J.
cad
To
The Regional Provident Fund Commissioner
Employees' Provident Fund Organisation
37 Royapettah High Road
Chennai 600 014
W.A. No. 2459 of 2011
31.07.2023
https://www.mhc.tn.gov.in/judis
