Telangana High Court
M/S. Atc Telecom Infrastructure Pvt Ltd vs Regional Provident Commissioner I on 30 July, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P.No.34213 OF 2023
Between:
M/s. ATC Telecom Infrastructure Pvt Ltd
... Petitioner
And
Regional Provident Commissioner -I & another
... Respondents
JUDGMENT PRONOUNCED ON: 30.07.2024
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
1. Whether Reporters of Local newspapers : Yes
may be allowed to see the Judgment?
2. Whether the copies of judgment may be : Yes
marked to Law Reporters/Journals?
3. Whether Their Lordships wish to : Yes
see the fair copy of the Judgment?
___________________________
MRS JUSTICE SUREPALLI NANDA
2
WP_34213 of 2023
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THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P.No.34213 OF 2023
% 30.07.2024
Between:
# M/s. ATC Telecom Infrastructure Pvt Ltd
... Petitioner
And
$ Regional Provident Commissioner -I & another
... Respondents
< Gist:
> Head Note:
! Counsel for the Petitioner : Sri C.V.Mohan Reddy
^ Counsel for Respondents : Sri B.Jithender Reddy,
Ld. Standing Counsel for
EPFO
? Cases Referred:
(i) (2021) 6 SCC 771
(ii) (1998) 8 SCC 1
(iii) 2021 SCC Online SC 801
(iv) (2008) 5 SCC 756
(v) (1990)1 SCC 68
(vi) Judgment dated 16.03.2022 passed in W.P.No.33763
of 2010,
(vii) (2007) 3 Bombay CR 898
(viii) ATA No.966 (12) 2004
(ix) (2006) 4 L.L.N. 468
(x) Judgment dated 03.03.1998
(xi) Judgment dated 25.01.2006
(xii) Judgment dated 26.10.1989
3
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HON'BLE MRS. JUSTICE SUREPALLI NANDA
WRIT PETITION No.34213 OF 2023
ORDER:
Heard Sri C.V.Mohan Reddy, learned counsel
appearing on behalf of the petitioner and Sri B.Jithender
Reddy, learned counsel appearing on behalf of the
respondents.
2. The petitioner approached the court seeking prayer
as under:
"To issue an order direction or writ particularly one in the
nature of mandamus declaring the action of the
Respondent Authority in passing Order dated 31.10.2023
under Sec 7-B of Employees' Provident Funds and
Miscellaneous Provisions Act 1952 and the Proceedings No.
7A Order No.TS/RO/ HYD-I(BKP)/59713/Compliance I1/
T-1/2021/2019 dated 16.09.2021 passed by the 1st
Respondent Authority as illegal perverse arbitrary and
violative of principles of natural justice and being violative
of Employees Provident Funds and Miscellaneous Provisions
Act 1952 and consequently set aside the same and pass"
3. The case of the Petitioner as per the averments
made by the petitioner in the affidavit filed by the
petitioner in support of the present Writ Petition in brief,
is as follows:
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a) It is the case of the Petitioner, that the Petitioner is a
company registered under the Indian Companies Act, 1956
having its registered office at Mumbai and branches at various
places across India, one of such Branch offices is M/s. ATC
Telecom Infrastructure Pvt. Ltd, located at 6-3-1186 and 6-3-
1186/A, 6-3-1186/A/B, 4th Floor, Flat No. 404 & 405,
Somajiguda, Raj Bhavan Road, Begumpet, Hyderabad. The
Petitioner unit at Hyderabad is covered under the EPF Act with
EPF Code number AP/59713, and the petitioner had been
remitting the EPF Contributions regularly without any default.
b) Subsequently, on 18.05.2016 an inspection was conducted
by the then Enforcement Officer and the Petitioner was directed
to produce some of the records of their establishment,
accordingly, the petitioner produced the relevant records along
with a letter dated 20.05.2016. Thereafter, the Respondent
initiated Section 7-A proceedings and summons were issued to
the petitioner to appear on 20.06.2016 as per the summons
dated 01.06.2016. In continuance to the same, several hearings
were held thereafter and, in the hearing, held on 18.07.2016,
the petitioner submitted a list of 11(O & M) Service Contracts
along with their P.F. Codes along with salary statement of inquiry
period in the form of a CD. Thereafter, the petitioner submitted
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all the relevant documents as and when directed by the
Enforcement Officer.
c) However, the Enforcement Officer, without considering the
objections of the petitioner, submitted his deposition on
25.07.2018 claiming contributions on two counts i.e.
non-enrollment of the employees engaged through contractors
the Rs.101.96 Cr (approx.) and on wages prescribed Section 2-
(b) of the EPF Act of Rs 1.88Cr approx. and thereby claimed an
amount total amount of Rs.103.84 Cr (approx.) crores on the
said two counts. The enforcement officer surprisingly has
mentioned that the said amount pertains to 1723 contractors but
failed to provide their names, their nature of contract etc.
Though the new Enforcement Officer sought time to submit the
list of the 1723 contractors in the hearings held on 14.11.2018,
11.12.2018, 22.01.2019, 22.02.2019, 23.03.2019 and also on
24.04.2019 but avoided to furnish the said details on all these
dates and finally the said details were never provided. Therefore,
the petitioner without prejudice to its rights in absence of said
details, submitted the objections to the Enforcement Officer (EO)
deposition on 23.10.2019 and a detailed reply was submitted by
the Petitioner.
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d) It is further the case of the petitioner that, on 18.12.2019
and 02.01.2020, the petitioner received an e-mail from the EO
with a list of contactors sorted out from the annexures A, B,C. &
D to seek relevant documents on sample basis vide its letters
dated 22.01.2020 and on 12.02.2020, the petitioner submitted
all the documents including invoices and agreements as
requested by the EO. In addition to the above, earlier the
petitioner also submitted the General ledger 194-C statement,
and all the Annexures supporting the case of petitioner.
However, the Enforcement Officer submitted another report on
29.04.2021 without properly considering any of the objections
raised by the petitioner in its various detailed communications
and the said report of the Enforcement Officer was without
considering the details of the registered contractors/having
independent PF Code.
e) Subsequently, the respondent authority placing reliance on
the Reports dated 29.04.2021 and 05.07.2021 of the
Enforcement Officer and without considering any of the replies of
petitioner, without answering the issues relating to the list of
1723 contractors and without even summoning any of the
registered contractor passed a final order under Section 7-A of
EPF Act on 16.09.2021. Moreover, the respondent organization
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has determined the contributions in respect of the various
contract workers without their identification and thereby claimed
an amount of Rs.105,47,17,492/- and another amount of
Rs.1,88,71,135/- was claimed on special allowance totaling to an
amount 107,35,88,627/- for the period from 04/2014 to
03/2016.
f) Aggrieved by the said proceedings dated 16.09.2021, the
Petitioner filed detailed objections dated 21.07.2021 and
01.08.2021, but there has been no response to the same.
Instead, the Enforcement Officer filed another report dated
05.07.2021 alleging that burden lies on the Petitioner to provide
the details of 1723 contractors to whom the petitioner has not
allegedly remitted the PF dues to the tune of about Rs.101
crores. Further is was clear that there is an error in the
calculations even though the Respondent agreed and recorded
that all the contractors where the petitioner was able to provide
the PF Code numbers & land/site owners, the same has been
considered but while arriving on the demand the Respondent has
inadvertently taken the same figures given in Enquiry Report
dated 29.04.2021, which actually include all the contractors
including those with independent PF code numbers and land/site
owners and out of the total demand of Rs.107 Crores, nearly
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Rs.100 Crore is on account of these contractors whose PF code
numbers were provided by the petitioner establishment, who are
independent contractors and land/site owners who were
supposed to be excluded as per the finding/observation of the
respondent in order dated 16.09.2021 under Section 7A of the
Act.
g) Thereafter, the petitioner filed a Review Application and the
same was rejected vide order dated 16.12.2021. Aggrieved by
the same, the petitioner filed W.P No. 10127 of 2022 and this
court vide order dated 26.04.2022 disposed of the case by
setting aside the order impugned dated 16.12.2021 passed
under section7-B of the Employees provident Fund and
Miscellaneous Provisions Act, 1952 and accordingly remanded
the matter for conducting enquiry afresh.
h) It is the further case of the petitioner that, the EO had
given report dated 29.03.2023 and the Petitioner
submitted its reply to the report on 14.7.2023 through
e-mail and on 18.7.2023 in person and as such, the
Petitioner was in anticipation of consideration of their
request for providing the list, as sought for. Subsequently,
the petitioner got to know from the BO that the final order
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has been passed on 31.10.2023. The respondent authority
has again passed the impugned order violating the
principles of natural justice and without considering the
submission made by the petitioners on various dates. The
respondent Authority had also failed to explain the simple
error of calculation basis which the review application
was filed and failed to provide the list of contractors
against whom this liability of PF contribution is alleged to
be calculated.
i) It is submitted that the Respondent Authority by passing
the Order dated16.09.2021 and also the Order dated 31.10.2023
is forcing the Petitioner to make the payment to non-existent/
unidentified employees, which is illegal, arbitrary and violative of
provisions of EP Act. Therefore, aggrieved by the action of the
respondent authority in passing impugned orders dated
16.09.2021 and 31.10.2023, the present Writ Petition is filed.
PERUSED THE RECORD
4. The counter affidavit filed by the 1st Respondent, in
particular para Nos. 9, 12, 13 are extracted hereunder :
"9. It is respectfully submit that vide Summons no.
TS/RO/HYD-1/C-1/T-1/7-A/59713/2022/40 dated
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09.05.2022, an opportunity was provided to the employer
to represent their case by duly fixing the date of hearing on
19.05.2022. Subsequent proceedings u/s 7B were held on
29.06.2022, 27.07.2022, 25.08.2022, 21.10.2022,
03.11.2022, 30.11.2022, 10.01.2023, 25.01.2023,
31.03.2023, 26.04.2023, 21.06.2023, 05.07.2023 and
18.07.2023.
12. It is respectfully submitted that the authority
conducting the inquiry u/s 7B, i.e., RPFC-I held that no
inconsistency was noticed in the written part as well as the
calculation part of the 7A Order as alleged by the
establishment through the Review Application. The
establishment failed in bringing out any error or mistake
apparent on the face of the record in the Order dated
29.09.2021 to sustain the Review Application dated
14.10.2021. The inquiry was concluded after giving
sufficient and reasonable opportunities to the establishment
for representing its case. Accordingly, Order
No.TS/RO/HYD-I/59713/C-I/T-1/2023/497 dated
31.10.2023 was issued rejecting the Review Application of
the establishment, filed under Section 7B of the Act. Now,
the establishment has filed a present Writ Petition against
the orders issued, as above, under Section 7A and 7B of
the Act. Without availing the alternative statutory remedy,
hence this Writ Petition not maintainable.
13. It is respectfully submit that the petitioner
establishment has not filed any appeal against the Orders
issued u/s 7A and 7B of the Act before the CGIT though
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provision for appeal is available under Section 7I of the Act.
Whereas, the establishment filed this Writ Petition before
the Hon'ble Court when there is no locus standi for
considering the issues raised in the petition under Article
226 of the Constitution, especially when there is alternative
remedy of filing appeal under Section 7-I of the Act."
5. Reply affidavit filed on behalf of the Petitioner, in
particular para No.6 is extracted hereunder :
"6. In reply to paragraph No.9-12 of the Counter
Affidavit filed by the respondents, it is respectfully
submitted that the contents therein are denied. The dates
referred to at para 9 to contend that opportunity was
provided is incorrect for the reasons elaborated in para 16
of our affidavit filed in support of the writ petition. It is
emphasized that consequent to passing of the orders by
the Hon'ble High Court, the respondent held a hearing on
30.05.2022. In the said hearing, the respondent directed
the petitioner to file written submission with all the
supporting documents. Accordingly, on 15.06.2022, the
petitioner filed their detailed written submissions. At this
juncture, the then Regional Provident Fund Commissioner
got superannuated and the hearings before the said
Authority could not be concluded. After the new incumbent
joined, a hearing was conducted on 10.01.2023. The
petitioner again submitted their arguments and for
continuation, the matter was adjourned to 25.01.2023.
However the petitioner did not receive any online meeting
link for the hearing scheduled on 25.1.2023 and wrote an
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email on same day to the Appropriate Authority that in
absence of online meeting link the hearing could not be
attended and to inform the petitioner about next date of
hearing. On 21.06.2023, the petitioner received an email
from the office of the respondent along with a reply dated
29.03.2023 of the Enforcement Officer and also the
petitioner was intimated about next date of hearing to be
on 05.07.2023. On 05.07.2023, the hearing was adjourned
to 20.07.2023 due to no availability of Inquiry Officer.
However, on the request of the Petitioner the hearing was
preponed and rescheduled for 18.07.2023 and was
conducted in person. The Petitioner submitted its reply to
the report of EO dated 29.3.2023 on 14.7.2023 through
e-mail and on 18.7.2023 in person and as such, the
Petitioner was in anticipation of consideration of their
request for providing the list, as sought for."
DISCUSSION AND CONCLUSION
6. On an earlier occasion Petitioner herein approached
the Court by filing W.P.No.10127/2022 seeking to set
aside the order passed by the 1st Respondent U/s.7-B of
the Employees Provident Fund, and Miscellaneous
Provisions Act, 1952 (for short 'the Act') bearing
No.TS/HYD-1/R.O./C-1/T-1/59713/2021/332, dated
16.12.2021.
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7. The said writ petition was disposed off vide its order
dated 26.04.2022 observing at Paras 9, 10, and 11 of the
said order as under :
9. As per sub-Clause (4) of Section 7-B of the Act,
notice should be given to all the parties to appear and they
should be heard in response to the order against which the
review is applied for. As per the contention of the
petitioner no notice was given to them and they were not
heard by the authority, who passed the impugned order.
Learned counsel for the petitioner relied upon the
judgments of this Court in Arunachala Logistics Private
Ltd. v. RPF Commissioner [WP No.20834 of 2020
dated 19.11.2020] and M/s.Choutuppal Handloom
Weavers Co-Operative Society v. RPFC, Hyderabad
[WP No.11057 of 2021, dated 26.04.2021], wherein
when no opportunity was provided to the petitioners in the
review applications filed, the impugned orders were set
aside and the matter was remanded to the respondents for
conducting fresh enquiry and to pass necessary orders
afresh in accordance with law.
10. Considering the above orders and as this Court time
and again held that the proceedings passed under Section
7-B of the Act are subject to adherence to the principles of
natural justice and no orders can be passed without
hearing the employer in the matter of review applications,
it is considered fit to remand the matter by setting aside
the impugned order for conducting enquiry afresh and to
pass necessary orders in accordance with law, after
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providing an opportunity of hearing to the petitioner. The
recovery proceedings are kept in abeyance till final orders
are passed in the Review Application filed by the petitioner.
11. Accordingly, the Writ Petition is allowed setting aside
the impugned order bearing No. TS/HYD-1/R.O./C.-1/T-
1/59713/2021/332, dated 16.12.2021 passed under
Section 7-B of the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 and the matter is
remanded for conducting enquiry afresh within 4 weeks
and to pass necessary orders in accordance with law, after
providing an opportunity of hearing to the petitioner. The
recovery proceedings are kept in abeyance till final orders
are passed in the Review Application filed by the petitioner.
No order as to costs."
8. It is specifically averred by the Petitioner at
Paragraph No.16 of the affidavit filed by the Petitioner in
support of the present writ petition as under :
"16. It is submitted that the impugned Order mentioned
that the proceedings were held on 19.05.22, 29.06.22,
27.07.22, 25.08.22, 21.10.22, 03.11.22, 30.11.22,
10.01.23, 25.01.23, 31.03.23, 26.04.23, 21.06.23,
05.07.23 and 18.07.23 and that on 18.07.2023, the
petitioner requested for conclusion of the proceedings
based on the submission already made by the petitioner on
various dates and the last re-joinder submitted on
18.07.2023 and that the same were accordingly concluded.
As stated above, after the Order dated 12.04.2022, the
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respondent has held only 19.05.22, 29.06.22, 27.07.22,
25.08.22, 21.10.22, 03.11.22, 30.11.22, 10.01.23,
25.01.23, 31.03.23, 05.07.23 and 18.07.23. The petitioner
did not receive the notice of hearing for 26.04.23 or
21.06.23. The entire facts and submission were explained
to the Respondent Authority on 30.05.2022. On
30.05.2023, the Respondent Authority asked the petitioner
to submit its written submission along with fresh
documents/evidence which they could not submit earlier.
In compliance to the proceedings dated 30.05.2022, the
petitioner submitted its written arguments on 15.06.2022
thereby explaining the apparent error in calculation
depicting through the table. Further the EO filed their reply
dated 29.03.2023 on 21.06.2023, the petitioner filed their
rejoinder dated 14.07.2023 through email on 14.07.2023
and physically on 18.07.2023. In the said rejoinder, the
petitioner has specifically demonstrated that the vendors
against whom the amount of Rs. 105,47,17,492/- was
already calculated are part of the category who are having
independent PF code (Annexure B) and further, the
petitioner has specifically stated that the Enforcement
Officer can check the list of vendors available with him or
provide us with the list of vendors against whom the
liability has been calculated, which will make very clear
that these vendors form the part of Annexure B, who have
independent PF codes and who are to be excluded. In this
background, the question of the passing final order by the
respondent authority thereby dismissing the review petition
does not arise. This crucial step to verify the contractors
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from Annexure B or to provide the list of contractors
against whom the liability has been calculated is
disregarded by the respondent. In their zest to close the
proceedings, the respondent authority has passed the order
mechanically thereby confirming the Order dated
16.09.2021."
9. It is the specific case of the Petitioner that in
pursuance to the earlier orders of this Court dated
26.04.2022 passed in W.P.No.10127 of 2022, the 1st
Respondent held an hearing on 20.05.2022 and the 1st
Respondent directed the Petitioner to file written
statement with all supporting documents. Accordingly on
15.06.2022, the Petitioner filed the written submissions.
In compliance to the proceedings dated 30.05.2022,
Petitioner submitted written arguments on 15.06.2022
explaining the apparent error in calculation depicting
through the table. Further the E.O. filed the reply dated
29.03.2023 on 21.06.2023 and the Petitioner filed the
rejoinder dated 14.07.2023 through e-mail on 14.07.2023
and physically on 18.07.2023.
10. It is further the case of the Petitioner that in the said
rejoinder the Petitioner has specifically demonstrated that
the vendors against whom the amount of
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Rs.105,47,17,492/- was already calculated are part of the
category who are having independent PF Code (Annexure
- B) and further, the Petitioner has specifically stated that
the Enforcement Officer can check the list of the vendors
available with him or provide Petitioner with the list of
vendors against whom the liability has been calculated
which will make very clear that these vendors form the
Part of Annexure - B, who have independent PF Codes and
who are to be excluded. It is specifically pleaded by the
Petitioner that the crucial step to verify the contractors
from Annexure-B or to provide the list of contractors
against whom the liability has been calculated is
disregarded by the 1st Respondent and in their zest to
close the proceedings the 1st Respondent Authority has
passed the order mechanically thereby confirming the
order dated 16.09.2021.
11. Learned Senior Designate Counsel Sri C.V. Mohan
Reddy appearing on behalf of the Petitioner mainly put-
forth the following submissions.
A) That the order impugned is in clear violation of
the orders of this Court dated 01.04.2022 passed in
W.P.No.10127 of 2022.
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B) There was no complete hearing of the case.
C) The 1st Respondent entertained the
Enforcement Officer's reply without reference to the
rejoinder of the Petitioner.
D) The Petitioner's request for providing the list of
vendors was not at all considered without which the
proceedings U/s.7-B could not have been taken to its
logical end.
E) There was flagrant violation of principles of
natural justice.
F) The entire approach of the 1st Respondent
Authority is misconceived and erroneous.
G) In spite of repeated requests of the Petitioner
to the 1st Respondent Authority to provide the list of
the alleged contractors who are covered under
Sl.No.F. The same was consistently denied by the
Petitioner.
H) The 1st Respondent Authority failed to discharge
his functions in accordance with law, and though the
Petitioner filed an IA for summoning the contractors
no effort had been made in the said direction.
I) The 1st Respondent Authority except relying on
the Enforcement Officer's statements did not make
any attempt to identify the alleged beneficiaries.
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J) The specific plea of the Petitioner that attempt
to recover the alleged contribution for non-existent
employees/beneficiaries cannot be countenanced the
same had not been considered at all.
K) The 1st Respondent Authority totally failed to
collect the relevant evidence before determining the
amount payable.
L) There has been no identification of
employee/beneficiaries which is a must before
effecting recovery and hence invocation of
proceedings under EPF Act does not arise, the
Authority failed to ensure production of the list of the
contractors against whom the subject liability of PF
contribution is alleged to be calculated.
M) The scope of the review had been enlarged by
raising new grounds to fasten the liability.
The learned senior designate counsel appearing on
behalf of the Petitioners based on the aforesaid
submissions contended that the Petitioner is entitled for
the relief as prayed for in the present writ Petition.
12. The learned counsel appearing on behalf of the
Respondents mainly put-forth the following submissions :
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i) The Petitioner has an alternative remedy of
filing Appeal U/s.7-I of the Act and instead of filing
an Appeal against the orders issued U/s.7-A and 7-B
of the Act before the CGIT though provision for
Appeal is available the Petitioner filed the present
writ petition and hence the present writ petition
needs to be dismissed.
ii) There is no violation of principles of natural
justice as alleged by the Petitioner.
iii) There is no breach of fundamental right.
iv) The 1st Respondent considered all the relevant
aspects and the relevant provisions of law and there
is no excessive jurisdiction by the 1st Respondent in
passing orders dated 16.09.2021 and 31.10.2023
under the Act.
v) The Petitioner cannot contend that though
there is an alternative and efficacious remedy the
present writ petition is maintainable.
Based on the aforesaid submissions the learned
counsel appearing on behalf of the 1st Respondent placing
reliance on the averments made in the counter affidavit
filed on behalf of the 1st Respondent contends that the
writ petition has to be dismissed.
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13. This Court opines that it is settled principle of law of
pleadings that an averment made by the Petitioner is
expected to be specifically denied by the replying party. If
there is no specific denial then such averment is deemed
to have been admitted by the Respondent. The Petitioner
made certain specific averments at para Nos. 14 to 19 of
the affidavit filed by the Petitioner in support of the
present writ petition which are relevant and material to
the present case and the entire case of the Petitioner
hinged on these paragraphs of the writ petition and it was
thus expected of the Respondents to reply these
averments specifically, in fact, to make a proper reference
to the records relevant to these paragraphs. In view of the
omission on the part of the Respondents to refer to any
relevant records and failure to specifically deny the
averments made by the Petitioner, this Court is of the
considered view that the Petitioner has been able to make
out a case for interference in view of the fact that the
counter affidavit filed on behalf of the 1st Respondent is
silent and does not specifically advert to any of the
specific pleas put-forth by the Petitioner at para Nos. 14 to
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19 of the affidavit filed by the Petitioner in support of the
present writ petition.
14. In so far as the plea of maintainability is concerned
this Court opines that the present writ petition is
maintainable and the plea of the Respondents
Organization of availability of alternative remedy is
unsustainable as per the observations of the Apex Court in
judgment dated 20.04.2021 reported in (2021) 6 SCC 771
in M/s. Radhakrishnan Industries Vs. State of Himachal
Pradesh, which referred to Whirlpool Corporation Vs.
Registrar of Trade Marks reported in (1998) 8 SCC 1 and
the said view had been reiterated in a recent full bench
judgment reported in 2021 SCC Online SC 801 in "Magadh
Sugar & Energy Ltd. Vs. State of Bihar and others". The
principles governing the exercise of writ jurisdiction by
the High Court in the presence of an alternate remedy had
been summarized in the said Judgment at para 28 and the
same is extracted hereunder:
"28. The principles of law which emerge are that:
(i) The power under Article 226 of the Constitution
to issue writs can be exercised not only for the
enforcement of fundamental rights, but for any other
purpose as well;
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(ii) The High Court has the discretion not to entertain a
writ petition. One of the restrictions placed on the power of
the High Court is where an effective alternate remedy is
available to the aggrieved person;
(iii) Exceptions to the rule of alternate remedy arise
where (a) the writ petition has been filed for the
enforcement of a fundamental right protected by
Part III of the Constitution; (b) there has been a
violation of the principles of natural justice; (c) the
order or proceedings are wholly without jurisdiction; or (d)
the vires of a legislation is challenged;
(iv) An alternate remedy by itself does not divest the High
Court of its powers under Article 226 of the Constitution in
an appropriate case though ordinarily, a writ petition
should not be entertained when an efficacious alternate
remedy is provided by law;
(v) When a right is created by a statute, which itself
prescribes the remedy or procedure for enforcing the right
or liability, resort must be had to that particular statutory
remedy before invoking the discretionary remedy under
Article 226 of the Constitution. This rule of exhaustion of
statutory remedies is a rule of policy, convenience and
discretion; and
(vi) In cases where there are disputed questions of fact,
the High Court may decide to decline jurisdiction in a writ
petition. However, if the High Court is objectively of the
view that the nature of the controversy requires the
exercise of its writ jurisdiction, such a view would not
readily be interfered with."
In the present case this Court opines that (i) and
(iii)(a)(b) extracted above are attracted, hence the
present writ petition is maintainable and the plea of
availability of alternative remedy is unsustainable, even
as per the observations of this court, at para Nos. 9, 10
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and 11 of the judgment dated 26.04.2022 passed in
W.P.No.10127 of 2022 filed by the petitioner herein on an
earlier occasion, the present Writ Petition is maintainable.
15. The Apex Court in its judgment dated 03.04.2008,
reported in (2008) 5 SCC 756 in Himachal Pradesh State
Forest Corporation vs. Regional Provident Fund
Commissioner, the relevant portion at para No. 5 observed
as under :
"We accordingly dismiss the appeals but reiterate the
recommendation that the amounts due from the
Corporation will be determined only with respect to
those employees who are identifiable and whose
entitlement can be proved on the evidence and that in
the event the record is not available with the Corporation
(at this belated stage), it would not be obliged to explain
its loss, or that any adverse inference be drawn on this
score. With this very small modification, we dismiss the
appeals."
16. The Apex Court in the judgment dated 26.10.1989,
reported in (1990)1 SCC 68 in Food Corporation of India
vs. Provident Fund Commissioner & Others at para 6 and
para No.9 dealing with an identical situation observed as
under :
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"6. We have carefully perused the Commissioner's order
and also the order of the High Court. The total amount
ordered to be payable comes to about Rs.22,48,000 in
respect of the employees of depots namely: Udaipur,
Jaipur, Ajmer, Badmer and Sawai Madhopur. The
Commissioner has also directed the Divisional Officer,
Jaipur to deposit the Provident Fund Contribution i.e. Rs.
18,72,194 to the Fund being maintained by the trustees of
the establishment. It is indeed a large amount for the
determination of which the Commissioner has only
depended upon the lists furnished by the workers, Union. It
is no doubt true that the employer and contractors are both
liable to maintain registers in respect of the workers
employed. But the Corporation seems to have some
problems in collating the lists of all workers engaged in
depots scattered at different places. It has requested the
Commissioner to summon the contractors to produce the
respective lists of workers engaged by them. The
Commissioner did not summon the Contractors nor the lists
maintained by them. He has stated that the Corporation
has failed to produce the evidence."
9. It will be seen from the above provisions that
the Commissioner is authorised to enforce
attendance in person and also to examine any person
on oath. He has the power requiring the discovery
and production of documents. This power was given
to the Commissioner to decide not abstract questions
of law, but only to determine actual concrete
differences in payment of contribution and other
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dues by identifying the workmen. The Commissioner
should exercise all his powers to collect all evidence
and collate all material before coming to proper
conclusion. That is the legal duty of the
Commissioner. It would be failure to exercise the
jurisdiction particularly when a party to the
proceedings requests for summoning evidence from
a particular person."
17. In a judgment dated 16.03.2022 passed in
W.P.No.33763 of 2010 it is observed in relation to the
issue of summoning the contractors as under:
"This Court notices that the Writ Petition is of the year
2010 and is pending for a decision on this short and simple
issue. The law on the subject is sufficiently clear. In
National Thermal Power Corporation Ltd., case, relied upon
by the learned senor counsel, the Division Bench of the
Calcutta High Court held on the facts that the petitioner
should produce all the documents that are available with
them. If the "authority" is unable to find relevant material
they should take steps to get names and addresses of the
employees and the workmen thereafter only the final order
can be passed. Hon'ble Supreme Court of India in Food
Corporation of India case clearly noticed in that case also
that the Food Corporation of India was unable to give all
the details that are necessary. The Food Corporation of
India requested the Commissioner under the Act to
summon the contractors but he did not do so. Therefore, in
paragraph 7 of the judgment the Honble Supreme Court of
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India considered the question whether the Commissioner
who is the statutory authority has exercised his powers as
necessary under the Act. After considering the provisions of
the Act, the Hon'ble Supreme Court of India held that the
Commissioner should exercise all clearly held it would be a
failure to exercise jurisdiction, particularly when the party
to a proceeding requests for summoning the evidence. To
a similar effect in the judgment of Chennai Petroleum
Corporation case (3 supra), wherein learned single
Judge also held that the respondent authority should
conduct an enquiry to determine the sum due after
impleading necessary parties to the proceedings. It
is reiterated that the Commissioner should collate all
evidence and collect all the material available.
Ultimately, in paragraph 21 of the said judgment it
was held that the authority had committed illegality
in not considering the petitioner for impleading the
contractor.
In view of the clear and categorical exposition of law
by the highest Courts of the land, this Court has no
hesitation to allow the Writ Petition.
Accordingly, the Writ Petition is allowed setting aside
the impugned order. The authority under the Act, who has
passed the impugned order, is directed to once again
consider and dispose of the application (filed by the
petitioner to implead the contractors/societies/Dwcara
groups, podhupu sangalu etc., as per the list enclosed to
the said proceedings) on its own merits in accordance with
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law. It is needless to say, in view of the long delay, the
said application should be considered and should be given
an opportunity to make his oral and legal submissions.
There shall be no order as to costs."
18. The Bombay High Court relying on the judgment of
the Apex Court in Food Corporation of India vs. Provident
Fund Commissioner & Others dated 26.10.1989 reported
in (1990) 1 SCC 68 referred to and extracted above in its
judgment dated 28.02.2006 in W.P.No.1064/2001 in
Sandeep Dwellers Pvt. Ltd., vs. Union of India reported in
(2007) 3 Bombay CR 898 observed at para Nos. 11 and 12
as under :
11. Petitioners have attempted to demonstrate that as
beneficiaries are unknown and the department itself had
doubts, recovery from any earlier date for which no
deduction has been made should not be allowed. The law in
the point is already discussed above. The beneficiaries
must be known and the amount of deductions cannot
be permitted to lie idle with the department. Hence
while finding out whether employees are covered
under the Scheme/Act or not, this issue can be
conveniently gone into by authority under section 7A
of P.F. Act and it can choose to give effect to its order
from any appropriate date as per evidence on record.
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12. The writ petitions are therefore partially allowed. The
impugned order under section 7A dt.5/3/2001 at Annex."S"
in W.P. 1164/2001 is quashed & set aside. Demands, if
any, served upon Petitioners in other petitions are also
quashed. Petitioners to file appropriate
replies/amendments to their reply if already filed, if
necessary in response to notices issued by Regional
Provident Fund Commissioner and said authority to proceed
further to hold inquiry & investigate as per provisions of
section 7A of P. F. Act. The said inquiries shall be
conducted and completed as early as possible & in
any case within period of six months from the date of
communication of these orders to respondents. Rule
made absolute accordingly. No costs.
19. The Appellate Tribunal at New Delhi in Appeal ATA
No.966 (12) 2004 between BSNL vs. Assistant Regional
Provident Fund Commissioner, Udaipur, vide its order
dated 23.03.2005 held and observed that the purpose of
Act is not to collect the money and to keep it in the coffers
of the Government and the workers have to be identified
first before the amount is assessed and recovered. The act
of determining dues by taking hypothetical percentage of
total contract value towards the wages and recovering the
same from Employer would not otherwise help the
workers who remained unidentified.
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20. The High Court of judicature at Calcutta in its
judgement dated 04.10.2005 reported in (2006) 4 L.L.N.
468 in Regional Provident Fund Commissioner, Calcutta
and Assam Biri Factories (Private Limited) and Others at
para No.43 observed as under :
Para 43: "The learned Tribunal therefore, rightly
found that the contractors need be or should be
summoned and the principal employer cannot be
asked to pay both the contributions payable by
himself in respect of the employees directly
appointed by him and also in respect of the
employees, employed by or through a contractor".
21. In the Judgment dated 03.03.1998 in
"N.T.P.Corporation Ltd. Vs. Regional Provident Fund
Commissioner and another" in particular, at para 4 it is
observed as under:
"4. Accordingly, we direct the respondent to keep the
order dated October 1, 1996 in abeyance and give the
petitioner an opportunity to produce documents and we
also direct the Corporation to produce all records and
documents which are in their possession in respect of the
contract. Thereafter, the authorities concerned if they are
unable to find out relevant material required for the
purpose of determination as indicated above, in that event,
they would take steps in the matter and further for the
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purpose of getting name and address of the employees and
the workmen each and every contractor should be
summoned and their attendance should be enforced before
the authorities concerned and after giving opportunity to all
the parties, and after hearing the matter in accordance
with law, the authorities concerned will pass a fresh order
either confirming the order or revoking and/or altering the
order that had already been passed. Steps in terms of this
order should be taken as expeditiously as possible
preferably within 2 months."
22. In the Judgment dated 25.01.2006 in "Chennai
Petroleum Corporation Ltd. Vs. Assistant Provident Fund
Commissioner" in particular, at paras 7 and 21 it is
observed as under:
"7. The learned Counsel for the petitioner would contend
that the order impugned in this writ petition is in violation
of principles of natural justice for the reason that through
the claim for payment of contribution of employees
employed by the contractors from the year 1967, notice
was issued only on October 16, 2000 directing the
petitioner to pay the contribution and therefore, the issuing
of notice after a lapse of three decades is against the
principles of natural justice.
21. Therefore, as per the principles laid down in the
decisions cited supra, when it is brought to the
notice of the respondent the available details of the
contractors, the respondent should have impleaded
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the contractors and proceeded against them for
determining the quantum of provident fund
contribution payable by them as per the provisions of
the Act. Therefore, the respondent has committed an
illegality in not considering the petition filed by the
petitioner for impleading the contractors. Therefore,
the impugned order is liable to be set aside."
23. In the Judgment dated 26.10.1989 in "Food
Corporation of India Vs. Provident Fund Commissioner and
another" held in its head note as under:
"HELD: The Commissioner, while conducting an inquiry
under Section 7A of the Employees, Provident Fund and
Miscellaneous Provisions Act, 1952 has the same powers as
are vested in a court under the Code of Civil Procedure for
trying a suit. Thus, the Commissioner is authorised to
enforce attendance in person and also to examine any
person on oath. He has the power requiring the discovery
and production of documents. This power was given to the
Commissioner to decide not abstract questions of law, but
only to determine actual concrete differences in payment of
contribution and other dues by identifying the 756
workmen. The Commissioner should exercise all his powers
to collect all evidence and collate all material before coming
to proper conclusion. That is the legal duty of the
Commissioner. It would be failure to exercise the
jurisdiction particularly when a party to the
proceedings requests for summoning evidence from
a particular person.
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In the instant case, the appellant --Corporation had
some problems in collating the lists of all workers engaged
in depots scattered at different places. It requested the
respondent--Commissioner to summon the contractors to
produce the respective lists of workers engaged by them.
However, the appellant--Commissioner did not summon the
contractors, nor the lists maintained by them. The matter
is, therefore, remitted to the Commissioner for fresh
disposal.
24. This Court opines that the judgments relied upon by
the learned counsel appearing on behalf of the 1st
Respondent do not apply to the facts of the present case.
25. In view of the fact that none of the specific pleas
put-forth by the Petitioner which have infact been
considered by various Courts under identical
circumstances, (referred to and extracted above) have
however been curiously ignored by the 1st Respondent
herein, and in view of the fact as borne on record that
neither there is any specific denial in the counter affidavit
filed by the 1st Respondent pertaining to the said specific
pleas put-forth by the Petitioner nor there is any
consideration by the 1st Respondent herein or any
discussion or any reasoning pertaining to the same even
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as per the orders impugned passed by the 1st Respondent
Authority in the present writ petition, hence, this Court is
inclined to interfere with the order impugned dated
31.10.2023 passed by the 1st Respondent Authority which
is in clear violation of the orders of this Court dated
26.04.2022 passed in W.P.No.10127/2022 in its true
spirit.
26. Taking into consideration:
(a) The aforesaid facts and circumstances of the case,
(b) The averments made in the counter affidavit filed by
the 1st Respondent,
(c) The observations of the Apex Court in the various
judgments referred to and extracted above,
(i) (2021) 6 SCC 771 in M/s. Radhakrishnan
Industries Vs. State of Himachal Pradesh, which
referred to Whirlpool Corporation Vs. Registrar of
Trade Marks reported in (1998) 8 SCC 1 and the said
view had been reiterated in a recent full bench
judgment reported in 2021 SCC Online SC 801 in
"Magadh Sugar & Energy Ltd. Vs. State of Bihar and
others",
(ii) (2008) 5 SCC 756 in Himachal Pradesh State
Forest Corporation vs. Regional Provident Fund
Commissioner,
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(iii) (1990)1 SCC 68 in Food Corporation of India vs.
Provident Fund Commissioner & Others,
(iv) The judgment dated 16.03.2022 passed in
W.P.No.33763 of 2010,
(v) The judgment dated 28.02.2006 in
W.P.No.1064/2001 in Sandeep Dwellers Pvt. Ltd., vs.
Union of India reported in (2007) 3 Bombay CR 898,
(vi) The Appellate Tribunal at New Delhi in Appeal
ATA No.966 (12) 2004 between BSNL vs. Assistant
Regional Provident Fund Commissioner, Udaipur
(vii) The High Court of judicature at Calcutta in its
judgement dated 04.10.2005 reported in (2006) 4
L.L.N. 468 in Regional Provident Fund Commissioner,
Calcutta and Assam Biri Factories (Private Limited),
(viii) The order dated 26.04.2022 passed in
W.P.No.10127 of 2022.
(ix) The Judgment dated 03.03.1998 in
"N.T.P.Corporation Ltd. Vs. Regional Provident Fund
Commissioner and another",
(xiii) The Judgment dated 25.01.2006 in "Chennai
Petroleum Corporation Ltd. Vs. Assistant
Provident Fund Commissioner",
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(xiv) The Judgment dated 26.10.1989 in "Food
Corporation of India Vs. Provident Fund
Commissioner and another"
(d) The fact as borne on record pertaining to the
omission on the part of the Respondents and failure to
specifically deny the averments made by the Petitioner in
the affidavit filed by the petitioner in support of the
present writ petition,
The Writ Petition is allowed, the order impugned
dated 31.10.2023 passed under Section 7-B of the
Employees Provident Funds & Miscellaneous Provisions
Act, 1952 is set aside and the matter is remanded to the
1st Respondent for conducting enquiry afresh duly taking
into consideration the observations of the Court in the
various judgments referred to and extracted above, within
4 weeks and pass appropriate reasoned orders in
accordance to law in conformity with principles of natural
justice after providing an opportunity of personal hearing
to the Petitioner. The recovery proceedings are kept in
abeyance till final orders are passed in the review
application filed by the Petitioner. This Court is not
inclined to interfere with the proceedings dated
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16.09.2021 passed by the 1st Respondent Authority since
the same is subject matter of the review application filed
by the Petitioner under Section 7-B. of the EPF & MP Act,
1952 seeking for review of the orders dated 16.09.2021
passed under Section 7-A of the Act.
Miscellaneous petitions, if any, pending in this Writ
Petition, shall stand closed.
______________________________
MRS. JUSTICE SUREPALLI NANDA
Date: 30.07.2024.
Note: L.R.Copy to be marked
(B/o) Yvkr
