Madras High Court
Employees Provident Fund vs The Presiding Officer on 2 January, 2025
2025:MHC:10
W.P.No.37603 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 28.10.2024
Pronounced on 02.01.2025
CORAM:
THE HON'BLE Ms.JUSTICE R.N.MANJULA
W.P.No.37603 of 2015
Employees Provident Fund
Organization represented by
its Regional Provident Fund commissioner,
Sub-Regional Office,SJ Plaza,
Swarnapuri,Anna Salai,
Salem 636 004. ... Petitioner
Vs.
1.The Presiding Officer
Employees Provident Fund Appellate
Tribunal, New Delhi.
2.The Shevapet urban Cooperative bank Ltd,
Rep. By its General Manager
576 Navalar Nedunchezhian Salai,
Shevapet, Salem 636 002. ... Respondents
Prayer: Writ Petition is filed under Article 226 of the Constitution of
India, praying to issue a Writ of CERTIORARI, to call for the records
pertaining to ATA No.254(13) of 2013 dated 05.08.2013 and to quash
the same.
Page No.1 of 26
https://www.mhc.tn.gov.in/judis
W.P.No.37603 of 2015
For Petitioner : Mr.P.K.Panneerselvam
For Respondents : Mr.P.Thangaraj for R2
: R1- Tribunal.
ORDER
Heard Mr.P.K.Panneerselvam, learned Counsel for the petitioner
and Mr.P.Thangaraj, learned counsel for the second respondent and
perused the materials available on record.
2.The Writ Petition has been filed challenging the order of the
Appellate Tribunal dated 05.08.2013 made in ATA No.254(13) of 2013
and quash the same.
3.The appeal in ATA No. 254(13) of 2013 has been filed by the
second respondent, the Shevapet Urban Cooperative Bank Ltd.
[hereinafter referred to as Employer/Establishment], challenging the
orders of the Regional Provident Fund Commissioner, Salem, dated
12.03.2012 passed under Section 14B of the Employees Provident Funds
https://www.mhc.tn.gov.in/judis
and Miscellaneous Provisions Act, 1952 [hereinafter referred to as Act]
by levying damages on the appellant on account of delayed remittance of
past accumulations on Employment Provident Fund dues. The authority
concerned found that the employer had defaulted in remitting EPF dues
on time and hence initiated proceedings under Section 14B of the Act
and levied damages.
4.On the appeal filed before the Tribunal by the employer, the
Tribunal had observed that the authority who conducted the enquiry
under Section 14B of the Act did not follow the essential provisions in a
proper perspective. It has further observed that the appellant has not
willfully and deliberately withheld the provident fund contribution. On
the finding that the delay in remittance of the provident fund was not
deliberate and that the beneficiaries are not identified to claim the
provident fund dues deposited by the establishment, the appeal was
allowed. Now the Employers Provident Fund Organization, represented
through its Regional Provident Fund Commissioner, has filed this Writ
https://www.mhc.tn.gov.in/judis
Petition stating that the impugned order of the 1st respondent / Appellate
Authority is without jurisdiction and fallacious.
5. One of the grounds raised by the petitioner is that the 2nd
respondent/establishment has filed the appeal before the 1st respondent
beyond the period of limitation, and the impugned order is silent about
the point of limitation and entertaining the appeal, which is barred by
limitation and hence it is illegal and without jurisdiction. The other
argument is that in civil consequences like levying of damages or
interest, the intention does not play any active role and the concept of
mens rea is applicable only in criminal proceedings.
5.1. The learned counsel for the petitioner placed reliance on the
division bench judgment of the High Court of Bombay in Siddhi
Engineering Vs. Regional Provident Fund Commissioner-II, Sub
Regional Office reported in 2024 SCC OnLine Bom 44, in support of
his contention that the jurisdiction of the High Court or the Supreme
https://www.mhc.tn.gov.in/judis
Court under Article 226 or 142 respectively cannot be exercised when
the cause of action itself is barred by limitation. To canvass the point on
the locus standi of the petitioner to file this Writ Petition, the learned
counsel for the petitioner cited the decision of this Court held in the case
of The Asst. Provident Fund commissioner Vs. The Presiding Officer,
Employees Provident Fund Appellate Tribunal Scope Minar Core -II
and Ors., in W.P.Nos.24631 to 24633 of 2017 batch., dated 04.08.2023
reported in MANU/TN/7375/2023.
5.2. On the point of mens rea in respect of civil liabilities,
reliance was placed on the Full Bench judgment of the Hon'ble Supreme
Court held in Union of India Vs. M/s Dharamendra Textiles Processors
and others reported in 2008 (13) SCC 369, which overruled the earlier
division bench judgment of the Hon'ble Supreme Court held in Dilip
N.Shroff Vs. Joint Commissioner of Income Tax, Chennai and another
reported in 2007 (6) SCC 329 and approved the division bench judgment
of the Hon'ble Supreme Court in The Chairman, Sebi vs Shriram
https://www.mhc.tn.gov.in/judis
Mutual Fund & Anr reported in 2006 (5) SCC 361.
6. The learned counsel for the second respondent submitted that
the Appellate Tribunal has passed the order only after a thorough
appreciation of the merits of the matter. He further submitted that the 2nd
respondent establishment is a co-operative bank and it is not a profit-
based organization and that co-operative institutions are very important
to nation building and hence they are distinguishable from other
establishments and corporations. In support of the above submission he
cited the judgment of the Hon'ble Supreme Court held in Mohmedalli
And Others vs Union Of India And Another, ( AIR 1964 SC 980).
6.1. It is further submitted by the learned counsel for the 2nd
respondent that the petitioner is very sensitive about his own order being
reversed by the Tribunal and hence he had chosen to challenge the same
by way of preferring this Writ Petition and that the order given on sound
reasoning by the Appellate Tribunal would bind the petitioner. To support
https://www.mhc.tn.gov.in/judis
his above argument, reliance was placed on the judgment of this Court
held in the case of The Assistant Provident Fund Commissioner,
Employees Provident Fund Organization, Coimbatore and others Vs.
Employees Provident Fund Appellate Tribunal (Ministry of Labour
and Employment, Government of India) and others, [WP.Nos.17518 of
2004 batch dated 21.06.2011]. When the order has been reversed by the
Appellate Tribunal, the order of the original authority merges with the
order of the Appellate Authority and hence, the Writ filed by the
petitioner is not maintainable.
6.2. As the 2nd respondent, Shevapet Urban Cooperative Bank Ltd,
depends on the concessions given to them it is held by this Court in RH
153, Ramanathapuram District Cooperative Spinning Mills Ltd., Vs.
Central Board of Trustees of Employees' Provident Fund Organization
reported in (2014) III LLJ 77 Mad that the waiver of damage is
permissible in respect of industries like the 2nd respondent which were
not established only with profit motive.
https://www.mhc.tn.gov.in/judis
DISCUSSION:
7. Before adverting into the point on limitation and the question of
applicability of the concept of mens rea for civil liabilities, I feel it is
fundamental to deal with the locus standi of the petitioner to file this
Writ Petition. No doubt, the order challenged before the tribunal was the
order passed the authority of the petitioner’s orgnisation itself.
8. It is contended by the petitioner that the organization is holding
the contribution paid by the employee and the employer as a trustee and
hence all care and caution has to be exercised in ensuing the funds
payable to the trust are not lost due to any erroneous orders passed by the
Appellate Tribunal, and that too when such an order has been passed
without authority.
9.In the instant case, the Appellate Authority has passed the
impugned order without dealing with the question of limitation, despite
https://www.mhc.tn.gov.in/judis
the appeal has been filed beyond the period of limitation.
10. Without any doubt, the order passed by the Appellate Tribunal
is quasi judicial in nature. Whenever an original authority's order is
challenged before the appellate Tribunal and the tribunal might either
reverse or confirm the order of the original authority and such order of
the tribunal merges with the orders of the original authority. But the
question is whether the position is the same even if the appellate tribunal
passes such an order without authority.
11. The appeal remedy is available under Section 7-I of the
Employees Provident Funds and Miscellaneous Act, 1952. The provision
under Section 7-I opens with the words 'Any person aggrieved'. For a
better clarity the said provision is extracted as below:
"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 7A, or section 7B [except an order rejecting an
https://www.mhc.tn.gov.in/judis
application for review referred to in sub-section (5) thereof], or
section 7C, or section 14B, 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. "
12.The 2nd respondent establishment has preferred an appeal
before the appellate Tribunal by challenging the orders levying damages
passed under section 14-B of the Act. The Tribunal [Procedure] Rules-
1997 would prescribe a period of 60 days under Rule 7 of the Tamil
Nadu Provident Fund Rules. And the period of limitation runs from the
date of the issue of the notification/order; however, for good reasons, the
tribunal can exercise its discretion to extend the limitation for a further
period of 60 days in view of the enabling power provided in this regard
under the proviso to Rule 7 (2) of the Rules.
13.The other condition that has to be complied by the employer for
preferring an appeal is to make a pre-deposit of 75 % of the amount due
as determined under Section 7-A of the Act. In the instant case, the order
https://www.mhc.tn.gov.in/judis
under challenge is not an assessment order made under section 7-A of the
Act, but it is the order levying damages under section 14-B of the Act.
Hence, there is no necessity to touch upon the pre-deposit for filing an
appeal challenging the order under Section 14-B of the Act. However, the
period of limitation contemplated under Rule 7(2) of the Act for
preferring an appeal before the tribunal is very much applicable to all
orders challenged on appeal and the period of limitation is 60 days. As
discretion is given to the Tribunal to relax the limitation for a further
period of 60 days, the maximum period of limitation including 60 days
condonation can be only for the maximum of 120 days.
14.The 2nd respondent establishment had chosen to prefer an
appeal before the 1st respondent with a huge delay, which had crossed
the maximum period of 120 days, and hence the 1st respondent has got
no authority to entertain the appeal even at the threshold stage.
15.The Bombay High Court had an occasion to deal with the
https://www.mhc.tn.gov.in/judis
question of limitation in Siddhi Engineering Vs. Regional Provident
Fund Commissioner-II, Sub Regional Office (supra). It is held in the
above judgment that though there is no period of limitation to prefer a
writ when a statutory remedy contemplates a period of limitation to
prefer an appeal, a party who did not abide the period of limitation to
prefer an appeal cannot be allowed to flout the Rule of Limitation by
seeking the very same remedy before the High Court or the Supreme
Court by invoking their writ jurisdiction.
16.In fact, the judgment of the Hon'ble Supreme Court held in
Assistant Commissioner (CT) LTU, Kakinada Vs. Glaxo Smith Kline
Consumer Health Care Limited reported in (2020) 19 SCC 681 , the
Hon'ble Supreme Court has held that the extraordinary jurisdiction of the
Supreme Court under Article 142 and the High Court under Article 226
of the Constitution of India cannot be exercised when the cause of action
is lapsed on account of expiry of limitation. Earlier the above dictum was
settled by a three-Judge Bench of the Hon'ble Supreme Court, in the case
https://www.mhc.tn.gov.in/judis
in Oil and Natural Gas Corporation Ltd., (ONGC), Vs.Gujarath
Energy Transmission Corporation [(2017) 5 SCC 442].
17. Now the question whether the Appellate Tribunal can entertain
an appeal which was already barred by limitation has been answered in
the negative. And the next question would be, if such an appeal is
entertained and an order is passed by the tribunal by reversing or
modifying the order of the original authority, whether the said order can
be challenged by the Employees Provident Fund Organization
18. On perusal of the order passed it appears that the tribunal has
merited the order on the point of mens rea and other aspects. But it does
not mention anything about the delay caused in filing the appeal or no
order has been passed to condone the delay. As the Tribunal has passed
an order in a matter which cause of action has already been barred by
limitation, it is reiterated that the impugned order passed by the tribunal
is without jurisdiction.
https://www.mhc.tn.gov.in/judis
19. Now coming to the point of locus standi of the organization to
file an appeal challenging any order, it is appropriate to refer the
judgment of this court held in The Assistant Provident Fund
Commissioner, Employees Provident Fund Organization, Coimbatore
and others Vs. Employees Provident Fund Appellate Tribunal
(Ministry of Labour and Employment, Government of India) and
others, decided on 21.06.2011 made in W.P.No.20938 of 2004 and
batch., reported in MANU/TN/2251/2011. In the said judgment, his
Lordship Justice K.Chandru (as he then was), had observed that the
funds of the organization have to be kept with great vigilance, as it is a
trust, and the trustees may be held responsible in case of any loss. So it is
held that in the event of any erroneous order passed without any
jurisdiction by the Tribunal, the authority of the organization can
challenge the same by filing a writ petition under Article 226 of the
Constitution of India. The relevant part of the judgment is extracted as
under:
https://www.mhc.tn.gov.in/judis
“18. Since the authorities were allowed to be represented before
the Tribunal even by engaging a legal practitioner and they were
also heard during the proceedings by the Tribunal and that order
was directed to be issued to them, certainly they have locus
standi to challenge the proceedings of the Tribunal before the
High Court. The finality that is attached to the Tribunal's order
under Section 7L(4) of the PF Act will not apply to the
proceedings initiated under Article 226. It must also be noted
that that the PF authorities are holding the amount collecting
from the employee and employer in Trust and therefore, as
Trustees, they are bound to maintain the funds of the Trust with
greater vigil and for any loss caused to the funds of the Trust as
Trustees, they may be held responsible. Therefore, if any order of
the Tribunal is manifestly erroneous or passed without
jurisdiction, the authority can challenge the same in a writ
petition under Article 226 of the Constitution. ”
20. However, the respondents raised a contention that in a later
judgment of this Court held in W.P.Nos.24631 to 24633/2017 and batch.,
it is held that the order of the Appellate Authority cannot be challenged
by the Employees Provident Fund Organization. On a comprehensive
reading of the above judgment rendered on 04.08.2023 by His Lordship
https://www.mhc.tn.gov.in/judis
Justice M.Dhandapani, it only conveys that ordinarily writ petitions
cannot be filed challenging the orders of the Appellate tribunal by the
original authority. However, an exception is carved out by holding that if
the order of the Appellate Tribunal has been passed without jurisdiction,
the authority can challenge the said order by getting proper authorization
from the central government. The relevant part of the judgment holding
the above view is given as under:
“26. Further, as evidenced above, sub-section (4) of Section 7-
L makes the order passed by the Tribunal a finality, which could
not be questioned in any court of law. True it is that the order of
the Tribunal can be put in issue before this Court under Article
226 of the Constitution, as this Court exercises extraordinary
jurisdiction. However, the only interpretation that could be given
harmoniously to sub-section (4) of Section 7-L is that the
authority, who had passed the order, being an authority lower in
hierarchy to the Tribunal, is bound to accept the order passed by
the Tribunal and is estopped from questioning the said order by
filing appeal, except where the order passed is without
jurisdiction and that too only if the authority has proper
authorisation from the Central Government.
27. However, the other party to the lis, viz., the individual, cannot
be estopped from taking the same on appeal before a higher
https://www.mhc.tn.gov.in/judis
judicial forum. Meaning thereby, the order passed by the Tribunal
in an appeal by the employer, could at best be challenged only by
the employer, if it is against the employer and the authority, who
passed the original order is bound to act on the basis of the order
passed by the Tribunal as the Tribunal is the final arbiter under
the statute insofar as the authority is concerned. Further, it
should be pointed out that the order passed by the original
authority merges with the appellate order and the original
authority is bound by the order passed by the appellate authority.
Any other construction, if given to Section 7-L (4) would render
the appeal remedy an empty formality as every time, the order of
the original authority is interfered with by the appellate authority,
the original authority, if permitted to rush before the higher
judicial forum, including the High Court under Art. 226, then it
would defeat the very intent of the Parliament in
including Section 7-L (4). Only to put a stop to further litigative
process, more specifically by the original authority, sub-section
(4) to Section 7-L had put shackles on the original authority by
making the order passed by the Tribunal a finality. The order
could be challenged by the authority by way of a writ petition
only when the authority is clothed with authorisation by the
Central Government or Board of Trustee to prefer appeal against
the order passed by the appellate authority. In the absence of any
power granted by the Central Government or Board of Trustee to
https://www.mhc.tn.gov.in/judis
the authority to file appeal assailing the order passed by the
appellate authority, not only the original authority is barred from
filing a writ petition, but any writ petition, if entertained would
be against the statute, which is not the intent of the law makers.
Further, it is to be pointed out that the only situation in which the
original authority could put in issue an order in appeal is when
the authority who had passed the order is not vested with
jurisdiction. In all other scenarios, the original order merges with
the appellate order and the appellate order becomes final and the
original authority is bound by the order of the appellate
authority.”
21. Though it is claimed by the learned counsel for the 2nd
respondent that the later order of his Lordship M. Dhandapani is in
conflict with the earlier order of his Lordship Justice K.Chandru (as he
then was), I find both the orders do not contradict with each other on
principle. Both the orders approve the exception when the appellate
authority passes an order without jurisdiction.
22. But it appears from the discussion of the orders of His
Lordship Justice M.Dhandapani, that he has predominantly dealt the
https://www.mhc.tn.gov.in/judis
right to prefer an appeal under Section 7-I of the EPFMA Act. The order
does not speak about the lack of locus standi on the part of the authority
to maintain a writ Petition but to prefer an appeal under Section 7-I of the
Act. Under paragraph No.16 of the order, the earlier order passed by his
Lordship Justice K.Chandru (as he then was) has been referred and
discussions were made as to whether the above judgment of his
Lordship Justice K.Chandru (as he then was), can be taken as a binding
precedence. Both the judgments have held that the original authority has
to accept the order of the appellate Authority and the exception is only
when the Appellate Authority has passed an order without jurisdiction.
23. So far as the lack of jurisdiction on the part of the appellate
tribunal is concerned, both the orders do not make any distinction as to
the locus standi of the organization to prefer a writ petition. But an
addition made in the later judgment of his Lordship Justice M.
Dhandapani, is to get proper authorization from the Central Government.
24.However, it is learnt that the later judgment of his Lordship
https://www.mhc.tn.gov.in/judis
Justice M.Dhandapani, has been stayed by a Division Bench judgment of
this Court through an order passed in W.A.No.2606, 2616 and 2635 of
2024. As on today, the position of law on this vital point is only as per
the dictum laid down by his lordship Justice K.Chandru (as he then was).
Hence the organizations can maintain a writ petition in case the appellate
authority lacks jurisdiction and passes an order without jurisdiction.
25. There cannot be any dispute that there is a limitation of 60 days
contemplated under Rule 7(2) for preferring an appeal before the
Tribunal and further relaxation of 60 days can be given at the discretion
of the tribunal, in case it finds sufficient reasons to its satisfaction. So the
maximum period, including the period that can be condoned, is only 120
days, and any appeal filed beyond 120 days is not even entertainable by
the appellate tribunal and the appellate tribunal does not have any
jurisdiction to take up the same.
26. It is reiterated that the Hon'ble Supreme Court has settled down
the above preposition of law in Oil and Natural Gas Corporation
https://www.mhc.tn.gov.in/judis
Ltd., (ONGC), Vs. Gujarath Energy Transmission Corporation
(supra) that the High Court and the Supreme Court cannot disregard the
statutory limitation and entertain the writ petitions as a matter of routine,
just because the appeal before the Tribunal is barred by limitation. In a
later judgment held by the Bombay High Court in Siddhi Engineering
Vs. Regional Provident Fund Commissioner-II, Sub Regional Office
(supra), it was held that entertaining such writ petitions will be in
violation of the dictum laid down by the three-Judge Bench of the
Hon'ble Supreme Court in Oil and Natural Gas Corporation Ltd.,
(ONGC), Vs. Gujarath Energy Transmission Corporation (supra).
27. In the instant case, the order of the Appellate Tribunal does not
state anything about the period of limitation and whether the appeal filed
beyond the period of limitation is maintainable in the first instance. The
petitioner who filed a counter in the appeal before the tribunal has also
raised the point of limitation. It is stated in the counter that the 2nd
respondent has taken up the issue to the tribunal after a gap of one year
https://www.mhc.tn.gov.in/judis
and that too without any valid grounds. The objection raised by the
petitioner would also reveal that the second respondent employer has
filed a petition to condone the delay and that has been stoutly opposed by
the petitioner. Unfortunately, in the impugned order of the 1st respondent
dated 05.08.2013, nothing has been stated about the point of limitation.
As the 2nd respondent has approached the tribunal after one year, no
doubt it exceeds the maximum limit of 120 days, including the limit of
discretionary condonation that can be given by the tribunal, and so the
appeal is seen to be barred by limitation.
28. But still the question of limitation can also be a mixed question
of law and fact, in case the person who files the appeal pleads that he
came to know about the impugned order itself after a delay and that he
has filed the appeal within the period of limitation from the date of
acquiring the knowledge. In this case, in the appeal preferred by the 2nd
respondent establishment, it has been clearly stated that the appeal is
filed with the delay of 395 days and that the delay should be condoned.
https://www.mhc.tn.gov.in/judis
When both the 2nd respondent, who was the appellant and the petitioner,
who was the respondent before the 1st respondent appellate tribunal,
have made a specific point on limitation by clearly admitting that the
statutory limitation has also been barred, the 1st respondent is either
expected to reject the appeal as not maintainable in view of the expiry of
limitation or to give reasons as to why he had chosen to admit the appeal
despite it has been filed after the expiry of the period of limitation. The
impugned order of the 1st respondent does not speak anything on this
aspect. On the face of it, the order only shows that the 1st respondent has
taken the appeal without jurisdiction, and hence the petitioner has got the
exceptional ground to maintain a writ petition.
29.So far as the question of mens rea is concerned, it is on the
merits of the appeal, which can be a subject matter of consideration only
if the appeal is held to be maintainable. But here is an appeal that was
found to be barred by limitation, and on which the 1st respondent himself
is not expected to exercise its jurisdiction. Hence, I feel it is unnecessary
https://www.mhc.tn.gov.in/judis
to take up the concept of mens rea, though it cannot be denied that the
Hon'ble Supreme Court has settled down the law on mens rea in the case
of Union of India Vs. M/s Dharamendra Textiles Processors and
others (supra) that as far as the penalty inflicted under a statute is a civil
liability, the mens rea is not an essential element. In fact, the above
judgment has overruled the earlier division bench judgment of the
Hon'ble Supreme Court held in Dilip N.Shroff Vs. Joint Commissioner
of Income Tax, Chennai and another, reported in 2007 (6) SCC 329 and
approved the division bench judgment of the Hon'ble Supreme Court in
The Chairman, Sebi vs Shriram Mutual Fund & Anr reported in 2006
(5) SCC 361.
30. As the petitioner has approached this Court only because the
tribunal has exercised its undue jurisdiction over a cause of action which
has already been barred by limitation, the writ petition filed by the
petitioner is maintainable and the order passed by the 1st respondent
dated 05.08.2013, is liable to be set aside.
https://www.mhc.tn.gov.in/judis
In the result, the Writ Petition is allowed. The impugned order
passed by the 1st respondent in ATA No.254(13) of 2013 dated
05.08.2013 is quashed. No costs. Consequently, the connected
miscellaneous petition if any, is closed.
02.01.2025
Index : Yes
Internet : Yes
Speaking order
Neutral Citation : Yes
jrs
To
The Presiding Officer
Employees Provident Fund Appellate
Tribunal, New Delhi.
2.The Shevapet urban Cooperative bank Ltd,
Rep. By its General Manager
576 Navalar Nedunchezhian Salai,
Shevapet, Salem 636 002.
https://www.mhc.tn.gov.in/judis
R.N.MANJULA, J.
jrs
02.01.2025
https://www.mhc.tn.gov.in/judis
