Madras High Court
M/S.Tamil Nadu Salt Corporation ... vs The Assistant Provident Fund ... on 21 October, 2024
Author: B.Pugalendhi
Bench: B.Pugalendhi
WP(MD)No.19741 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 21.10.2024
CORAM:
THE HONOURABLE MR.JUSTICE B.PUGALENDHI
WP(MD)No.19741 of 2019 and
WMP(MD)No.16231 of 2019
M/s.Tamil Nadu Salt Corporation Limited,
Mariyur Valinokkam Salt Complex,
Valinokkam Post, Sikkal (Via)
Kadaladi Taluk,
Ramanathapuram District – 623 528,
represented by its Deputy Manager (P,A &F) ...Petitioner
Vs
The Assistant Provident Fund Commissioner,
Employees Provident Fund Organisation,
Regional Office,
D.No1.Lady Doak College Road,
Chokkikulam,
Madurai – 625 002. ...Respondent
PRAYER: Writ Petitions filed under Article 226 of the Constitution of
India for issuance of a writ of certiorari calling for the records relating to the
impugned order in EPFA No.98 of 2019 dated 07.08.2019 passed by the
Presiding Officer, The Central Government Industrial Tribunal cum Labour
Court, Chennai quash the same as illegal insofar as the condition to deposit
a sum of Rs.5,00,000/- is concerned.
1/13
https://www.mhc.tn.gov.in/judis
WP(MD)No.19741 of 2019
For Petitioner : Mr.M.E.Ilango
For Respondent : Mr.V.S.V.Venkateswaran
No.2 Standing Counsel
ORDER
This writ petition is filed as against the interim order dated
07.08.2019 passed by the Central Government Industrial Tribunal cum
Labour Court, Chennai / Appellate Tribunal under the Employees
Provident Fund and Miscellaneous Provident Funds Act [herein after
shall be referred to as 'the Act'] in EPFA No.98 of 2019.
2.The petitioner a private limited company had failed to pay the
contribution towards the Employees Provident Fund, for which the
respondent has initiated proceedings under Section 14-B as well as 7-Q
of the Act and imposed damages by an order dated 01.04.2019
Challenging the damages, the petitioner filed an appeal before the
appellate Tribunal and also moved an application for stay. The appellate
Tribunal granted interim stay, however with a condition directing the
petitioner to deposit a sum of Rs.5,00,000/- before the respondent and the
said conditional order is challenged in this writ petition.
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3.The learned Counsel for the petitioner submits that this appeal is
filed under Section 7-I of the Act as against the damages levied under
Section 14-B of the Act. Section 7-O of the Act mandates pre-deposit for
entertaining an appeal filed against the determination made under
Section 7-A of the Act. No such pre-deposit is contemplated for the
appeals filed against the damages levied under Section 14-B of the Act.
While so the appellate Tribunal has passed this conditional order to
deposit a portion of the damages amount, which would amount to
conditional order for pre-deposit.
4.The learned Counsel for the petitioner has relied on the judgment
of the Hon'ble Supreme Court in Shiv Herbal Research Laboratory Vs
the Assistant P.F. Commissioner (Civil Appeal No.3001 of 2010, dated
05.04.2010). The learned Counsel has also relied on the orders passed by
this Court in Sri Naga Nanthana Mils Ltd Vs The Presiding Officer,
EPF Appellate Tribunal, reported in (2013) 5 LLN 667 and in
M/s.Madhuranthagam Agricultural Producers Co-Operative
Marketing Society Ltd Vs Regional Provident Fund commissioner,
Chennai [WP.No.22860 of 2023 dated 03.08.2023], wherein, this Court
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by referring to the orders of the Hon'ble Supreme Court in Shiv Herbal
Research Laboratory's case, has passed orders, setting aside similar
conditional order passed by the appellate authority that the appellate
authority cannot insist for pre-deposit for entertaining the appeal.
5.The learned Counsel for the respondent submits that the order
passed by the appellate Tribunal is not an order for pre-deposit to
entertain the appeal as projected by the petitioner and it is only a
conditional order for grant of stay. The petitioner has moved an
application for grant of stay for the operation of the orders passed under
Section 14-B, otherwise the authority would recover the same.
Mere pendency of appeal would not prohibit the competent authority to
recover the damages. Therefore the petitioner along with his appeal
moved an application for stay and the tribunal while exercising its
discretionary power granted an interim order with certain condition. This
cannot be termed as an order directing for pre-deposit for entertaining the
appeal.
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6.The learned Counsel for the respondent has also relied on the
judgment of a Division Bench of the High Court of Delhi in Jai Balaji
Security Services (Regd.) Vs A.P.F.C. Delhi (North) reported in (2015
SCC OnLine Del 14099) and the judgment of the High Court of Madhya
Pradesh in Center for Entrepreneurship Development through its
Secretary Johon Eppon Vs Regional Provident Commissioner reported
in 2024 SCC OnLine MP 2528.
7.This Court considered the rival submissions made and perused
the materials placed on record.
8.The petitioner company has failed to pay the EPF contribution in
time and therefore, the respondent has levied damages under Section
14-B of the Act. Challenging this order the petitioner company filed an
appeal before the appellate Tribunal under Section 7-I of the Act.
As rightly pointed out by the learned Counsel for the petitioner there is
no requirement of pre-deposit amount for filing an appeal under
Section 7-I of the Act as against the damages imposed under
Section 14-B of the Act. But the order impugned is not an order in the
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form of pre-deposit for entertaining the appeal, it is only a conditional
order for grant of stay. Pendency of the appeal would not prevent the
authority from recovering the damages. Therefore, the petitioner along
with his appeal has moved an application for grant of stay on the order
imposing damages and the tribunal exercising its discretionary power
granted the stay, however with condition.
9.In fact this Court has set aside a similar conditional order by
following the decision of the Hon'ble Supreme Curt in Shiv Herbal
Research Laboratory Vs the Assistant P.F. Commissioner. The case in
Shiv Herbal Research Laboratory vs the Assistant P.F. Commissioner,
before the Hon'ble Supreme Court, is an appeal preferred as against
similar conditional order passed by the Bombay High Court in an appeal,
which was filed as against the order passed under Section 14-B of the
Act. The Bombay High Court while entertaining the appeal, had directed
the petitioner therein to deposit a sum of 50% of the damages imposed
under Section 14-B of the Act. The Hon'ble Supreme Court while
entertaining the civil appeal has passed an interim order directing the
appellant therein to deposit a sum of 25%, instead of 50% as directed the
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appellate tribunal and the High Court. Later the same was confirmed by
the Hon'ble Supreme Court that the petitioner therein has to deposit a
sum of 25% of the damages imposed on them. The relevant portion of the
orders of the Hon'ble Supreme Court is extracted as under:
“3. Apart from the above, the provision for
preferring an appeal in respect of an order Under Section
14B is contained in Section 7-I of the above Act which
provides for appeals to the Tribunal, inter alia against
orders passed Under Section 14-B . Subsection (2) of
Section 7-I indicates that 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. There is nothing to indicate that any part of
the amount awarded Under Section 14B was required to
be deposited at the time of filing of the appeal.
4. When specific provision has been made with
regard to appeals Under Section 7A and Under Section 7-
O , a definite provision has been indicated for deposit of
75% of the awarded amount and there is no such
provision in Section 7-I , we cannot read the principles of
Section 7-O into the provisions of Section 7-I in relation
to appeals Under Section 14B of the above Act.
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5.The decisions cited by learned Counsel
appearing for the Respondent are not of any help to the
case of the Respondent, Assistant Provident Fund
Commissioner in the context of this case. We, therefore,
allow the appeal and confirm our order dated 7th July,
2008. We are informed that the said amount of 25% has
been duly deposited in the Tribunal. As directed in our
order of 7th July, 2008, the amount deposited is to be
kept in a short term fixed deposit, which is to be
renewed until the disposal of the pending appeal. The
said order shall continue till the disposal of the appeal
by the Tribunal.”
10.The High Court of Madhya Pradesh has also dealt with a
similar issue in Center for Entrepreneurship Development through its
Secretary Johon Eppon Vs Regional Provident Commissioner reported
in 2024 SCC OnLine MP 2528 and by following above of the decision
of the Hon'ble Supreme Court it has held as under:
“11. Section 7(O) of the Act, 1952 is a different
provision, which provides that if the appeal is preferred
against the order passed under Section 7(A), then the
Tribunal shall not entertain the appeal unless the
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employer has deposited 75% of the amount due. That is a
precondition 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
Nav Bharat Press, Bhopal (supra), after conside Cou g
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
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Division Bench in the matter of 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 appeal preferred
challenging the order passed under Section 14(B) of the
Act, 1952 and no precondition 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.”
11.A Division Bench of High Court of Delhi in Jai Balaji Security
Services (Regd.) Vs A.P.F.C. Delhi (North) reported in (2015 SCC
OnLine Del 14099) has held as under :
“16. But that would not mean that if an aggrieved
person, who has challenged an order under Section 7-Q
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and/or Section 14-B of the Act moves an application
before the Appellate Tribunal seeking stay of the demand
raised, the Appellate Tribunal would not be empowered to
pass a conditional order of stay. Whereas Section 7-I of
the Act creates the forum of appeal, Section 7-O puts an
embargo on the entertainment of the appeal by the
Appellate Tribunal by requiring 75% of the amount due
as determined under Section 7-A to be deposited; with a
power vested in the Appellate Tribunal to waive or reduce
the amount to be deposited. Thus, whereas an appeal has
to be entertained without insisting on any pre-deposit
concerning orders passed under Section 7- Q and Section
14-B of the Act, but the pendency of the appeal would not
prohibit the Competent Authority to effect the recovery
unless the Appellate Tribunal passes an interim order
concerning the demand. This would simply mean that the
Appellate Tribunal can pass conditional orders.”
12.Therefore this Court is of the view that the order passed by the
appellate tribunal is only a conditional order for grant of stay of the order
passed under Section 14-B of the Act. Therefore, this Court is not
inclined to interfere with the orders of the appellate tribunal and
accordingly this writ petition is dismissed.
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13.The appellate tribunal is directed to conclude the appeal
proceedings within a period of three months from the date of receipt of a
copy of this order. The appellate tribunal has permitted the petitioner to
pay the amount within a period of one month, for the stay. If the
petitioner is inclined to avail the benefit of stay, it is open to the
petitioner to pay the amount as directed by the appellate tribunal, within
a period of one month from the date of receipt of copy of this order.
No costs. Consequently connected miscellaneous petition is dismissed.
21.10.2024
Internet : Yes / No
Index : Yes / No
DSK
To
The Assistant Provident Fund Commissioner,
Employees Provident Fund Organisation,
Regional Office,
D.No1.Lady Doak College Road,
Chokkikulam,
Madurai – 625 002.
Copy to
The Presiding Officer,
The Central Government Industrial Tribunal cum
Labour Court, Chennai.
https://www.mhc.tn.gov.in/judis
B.PUGALENDHI.J.,
DSK
21.10.2024
https://www.mhc.tn.gov.in/judis
