Telangana High Court
Ravi High School, vs Employees Provident Fund Organisation on 3 June, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P.No.4542 OF 2024
Between:
Ravi High School, Subash Nagar, Nizamabad
... Petitioner
And
Employees Provident Fund Organization & another
... Respondents
JUDGMENT PRONOUNCED ON: 03.06.2024
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?
__________________
SUREPALLI NANDA, J
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THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P.No.4542 OF 2024
% 03.06.2024
Between:
# Ravi High School, Subash Nagar, Nizamabad
... Petitioner
And
$ Employees Provident Fund Organization & another
... Respondents
< Gist:
> Head Note:
! Counsel for the Petitioner : Mr.A.Ravi Mahender
^ Counsel for Respondents : Mr.G.Venkateswarlu
? Cases Referred:
(1) (2013) 16 SCC 1
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THE HON'BLE MRS. JUSTICE SUREPALLI NANDA
W.P. No.4542 OF 2024
ORDER:
Heard Mr.A.Ravi Mahender, learned counsel appearing
on behalf of the Petitioner and Mr.G.Venkateswarlu, learned
standing counsel appearing on behalf of the Respondents.
PRAYER:
2. The Petitioner approached the Court seeking prayer as
under :
"...to issue an appropriate Writ, Order or direction particularly
one in the nature of Writ of Mandamus challenging the orders
dated 30-01-2024 passed by Central Government Industrial
Tribunal-cum-Labour Court, Hyderabad in IA No 1 & 2/2024
EPF Appeal No. CGIT (2017) 271/2018 and also ex parte
orders dated 03-08-2017, No.TS/RO/NZB/Comp/
7-A/34057/2017-18/2922, Review orders No.TS/RO/
NZB/Compliance/7B/34057/2017/3038, dated 13-10-2017
and also consequential orders No. TS/RO/NZB/ENF(T1)/
34057/2017-18/3065, dated 06.11.2017, Recovery certificate
& demand notice RRC No. NZNZB1674/0034057/02/
04/2018/501/35/3382 & 3383 both dated 02-04-2018 passed
without hearing/notice by 1st respondent, is totally illegal,
arbitrary, unjust, discriminatory, unreasonable, without
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jurisdiction, opposed to public policy and violative of Articles
14, 21 of Constitution of India and also violative of principles
of natural justice and call for the records and set aside them
by remanding the Appeal and issue consequential directions:
a) to furnish copies of enquiry Report, Salary register given
by the then officer Mr. Nandan Singh, b) direct the 1st
respondent to give opportunity to file Written
statement/counter, documents and to lead oral evidence etc.,
if the authorities wants to proceed further after its remand,
c) to direct the authorities to adjust attached money of
Rs. 69,121.30 in the PF payments of the School and award
costs and pass such other orders..."
3. PERUSED THE RECORD.
The order impugned dated 30.01.2024 passed in
I.A.Nos.1 and 2 of 2024 in EPF Appeal
No.CGIT(2017)271/2018, in particular the relevant portion
at para 8, reads as under :
"Perusal of the record goes to reveal that Appellant has raised
debatable issues which requires consideration in the present
appeal. Therefore, Appeal is liable to be admitted. As far as
plea of the Appellant regarding complete waiver of
pre-deposit amount of 75% determined amount u/s.7-A is
concerned. I am of the opinion that the impugned order
pertains to the year 2017 and matter has been stayed since
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last 5 years, therefore, in the facts and circumstances of the
case there is no case made out for complete waiver of 75% of
the pre-deposit condition. Therefore, in the interest of justice
the appeal is admitted on the remittance of 30% of the
determined amount u/s 7-A within six weeks from the date of
passing the order and on the compliance of the said
condition. Operation of the impugned order is stayed and
Appeal admitted for consideration and hearing.
Put up on 22.03.2024 for hearing.
Ordered accordingly."
4. The case of the Petitioner, in brief, as per the
averments made by the petitioner in the affidavit filed in
support of the present writ petition, are as follows:
i) The Petitioner on an earlier occasion approached
the Court by filing W.P.No.1873/2018 with prayer as under :
"Challenging the impugned order dated 03.08.2017
No.TS/RO/NZB/Comp/7A/34057/2017-18/2922 served copy
on 09.08.2017 determined dues as Rs. 11,40,774/- towards
Provident plus Pension plus Deposit linked insurance Fund
Administrative charges for the period from 03/2015 to
11/2016 without hearing and without furnishing Inspection
Report and Salary Register submitted by the then
enforcement officer Mr T.N. Nandan Singh and rejected
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Review Petition by a impugned order dated 13.10.2017
No.TS/RO/NZB/Compliance/7B/34057/2017/3038 served
copy on 23.10.2017 without any notice/hearing and issued
consequential ex parte Prohibitory orders dated 06.11.2017
No. TS/RO/NZB/ENF(T1)/34057/2017-18/3065 served copy
on 13.11.2017 without notice or hearing and attached Bank
Account No. 52088989607 of management Katipally Ravinder
Reddy Education Society, lying with 4th respondent even
without waiting to expire limitation to file Appeal (60 days),
by the 1st Respondent and 3rd respondent is not hearing the
Appeal nor passing any orders since 14.12.2017 to till today
is totally illegal contrary to Law arbitrary unjust
discriminatory unreasonable without jurisdiction opposed to
Public Policy and violative of Articles 14, 21 of the
Constitution of India and also violative of Principles of Natural
Justice and call for the records and set aside the impugned
orders dated 03.08.2017, 13.10.2017, 06.11.2017 and award
costs alternatively remand the matter by directing to furnish
inspection report and Salary register submitted by the then
Enforcement officer Mr. T. N.Nandan Singh and to receive
Written Statement with records apart from oral and
documentary evidence etc, and direct the 2nd respondent to
prove that the then Enforcement officer visited petitioner
School on a particular date, time and seized Salary Register
in their presence and employees were working in the school
at relevant period 03/2015 to 11/2016 and received monthly
salaries".
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ii) The said W.P.No.1873/2018 was disposed of by
the order of this Court dated 04.07.2018 observing as under:
"This Writ Petition is filed seeking writ of mandamus
declaring the proceeding No.TS/RO/NZB/Com./7A/34057/
2017- 18, dated 03.08.2017 issued by the 1st respondent as
illegal and arbitrary.
Heard learned counsel for the petitioner and
Sri B. Narsimha Sharma, learned Standing Counsel for 3rd
respondent.
It is the case of the petitioner that against impugned
orders dated 03.08.2017 and 13.10.2017 petitioner filed
appeal US (SR) No.544/2017 before the 3rd respondent on
09.11.2017 along with Stay Petition under Section 7A of the
Employees' Provident Funds and Miscellaneous Provisions Act,
1952 (for short 'the Act of 1952') but no orders are passed on
the same. In pursuance to impugned orders, the respondents
are taking coercive steps against the petitioners. Aggrieved
by the same, present writ petition is filed.
Learned Standing Counsel for 3rd respondent submits
that the petitioners have to satisfy the conditions laid down in
Section 7(O) of the Act of 1952 before entertaining appeal,
but learned counsel for petitioner submits that petitioner is
not in a position to deposit the amount, as without proper
reasons, ex parte order was passed.
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Since the appeal filed by the petitioner is stated to be
pending before the 3rd respondent, petitioner can make
application under proviso to Section 7 (O) of the Act of 1952
to the 3rd respondent for waiving the condition of pre-deposit
and the 3rd respondent may consider the same within a period
of one week from the date of receipt of a copy of this order.
Pending same, no coercive steps shall be taken. The 3rd
respondent is directed to dispose of the appeal as
expeditiously as possible preferably within a period of three
months thereafter, in accordance with law.
With the above direction, this Writ Petition is disposed
of. There shall be no order as to costs. As a sequel to the
disposal of this petition, miscellaneous petitions, if any,
pending shall stand closed."
iii) The Petitioner accordingly filed an application U/s.7(O)
of the Act of 1952 in Appeal No.CGIT 2017 (271/2018) on the file
of Employee's Provident Funds Appellate Tribunal - Central
Government Industrial Tribunal-cum-Labour Court, Hyderabad,
praying the concerned Court to waive the condition to pre-deposit
75% of due amount as determined by ex-parte orders dated
03.08.2017, 13.10.2017, Prohibitory Orders dated 06.11.2017 by
remanding the Appeal for Denova Enquiry by giving notice/hearing
at every stage in the interest of justice and equity.
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iv) Through vide impugned order dated 30.01.2024 in
I.A.Nos.1 and 2 of 2024 in EPF Appeal No. CGIT (2017) 271/2018,
the Central Government Industrial Tribunal-cum-Labour Court,
Hyderabad, rejected the request of the Petitioner to waive the
condition to
pre-deposit 75% of due amount determined against the Petitioner
observing at Para 8 of the said order as under :
"Para 8 : Perusal of the record goes to reveal that Appellant
has raised debatable issues which requires consideration in
the present Appeal. Therefore Appeal is liable to be admitted.
As far as the plea of the Appellant regarding complete waiver
of pre-deposit amount of 75% determined amount U/s.7-A is
concerned. I am of the opinion that the impugned order
pertains to the year 2017 and the matter has been stayed
since last 5 years, therefore in the facts and circumstances of
the case, there is no case made out for complete waiver of
75% of the pre-deposit condition. Therefore in the interest of
justice the Appeal is admitted on the remittance of 30% of
the determined amount U/s.7-A within 6 weeks from the date
of passing of the order and on compliance of the said
condition operation of the impugned order is stayed and
Appeal is admitted for consideration and hearing."
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Aggrieved by the said order dated 30.01.2024 passed
in I.As.No.1 & 2 of 2024 in EPF Appeal No.CGIT (2017)
271/2018 passed by CGIT the Petitioner filed the present
Writ Petition.
5. The learned counsel appearing on behalf of the
Petitioner mainly puts-forth the following submissions :
a) The impugned order dated 30.1.2024 is in violation of
the directions passed in W.P.No.1873/2018, dated 04.07.2018.
b) The authority had passed 2 ex-parte orders dated
03.08.2017, 13.10.2017 and also 2 consequential orders dated
06.11.2017, 02.04.2018 contrary to Section 7-A of the Act without
giving amply opportunity to the Petitioner to file written statement.
c) Important documents, enquiry report, salary register
copies were not furnished to the Petitioner in spite of Petitioner's
specific request made by the Petitioner to furnish the same.
d) No reasons are assigned as on what basis, dues about
Rs.12 lakhs had been determined.
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e) The Petitioner's school has been closed for 2 years due
to Covid-19 and 50% students did not turn up and there was no
means to pay 30% dues, hence precondition to deposit dues may
be waived.
f) No useful purpose will be solved if the Appeal is kept
pending since 2017 without remanding to primary authority.
g) The quasi judicial authority miserably failed to give
cogent valid reasons in passing ex-parte orders dated 03.08.2017,
13.10.2017 and consequential orders dated 06.11.2017,
08.04.2018 without giving reasons.
On the basis of the aforesaid submissions the learned
counsel for the Petitioner submits that the writ petition
should be allowed as prayed for.
6. The learned standing counsel Mr. G. Venkateswarlu
placing reliance on the averments made in the counter
affidavit filed by the Respondent submits that the Petitioner
is not entitled for relief as prayed for in the present writ
petition.
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7. Reply affidavit has been filed by the Petitioner contending
that no person shall be condemned without furnishing documents
and without assigning reasons. Dues to a tune of Rs.12 lakhs
cannot be determined without giving reasonable opportunity to the
Petitioner and hence the Petitioner is entitled for the relief as
prayed for in the present writ petition.
DISCUSSION AND CONCLUSION:
8. A bare perusal of the record indicates that the Petitioner has
preferred an Appeal before the Central Government Industrial
Tribunal-cum-Labour Court in the Employees Provident Funds
Appellate Tribunal, Hyderabad on 09.11.2017, aggrieved against
the orders dated 03.08.2017 and 13.10.2017 along with stay
petition U/s.7-I of the Employees Provident Funds and
Miscellaneous Provisions Act, 1952 and the Petitioner in pursuance
to the directions of this Court dated 04.07.2018 passed in
W.P.No.1873/2018 filed an application under Proviso to Sec.7(O) of
the Act of 1952 before CGIT seeking to waive the condition to pre-
deposit of 75% due amount as determined by ex parte orders dated
03.08.2017 and 13.10.2017, prohibitory orders dated 06.11.2017
by remanding the appeal for denova enquiry by giving
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notice/hearing at every stage, in the interest of justice and equity.
The CGIT-cum-Labour Court, Hyderabad vide its order dated
30.01.2024 in I.A.Nos.1 and 2 of 2024 in EFP Appeal No. CGIT
(2017) 271/2018, at para 8 of its order very clearly observed that
Petitioner herein had raised debatable issues which requires
consideration in the present Appeal, therefore Appeal is liable to be
admitted and as far as the plea of the Petitioner herein is concerned
regarding complete waiver of pre-deposit amount of 75%
determined amount U/s.7-A is concerned, the court observed that
since the impugned order pertains to the year 2017 and since the
matter has been stayed since the last 5 years, therefore in the facts
and circumstances of the case there is no case made out for
complete waiver of 75% of pre-deposit condition and held that the
Appeal is admitted on the remittance of 30% of determined amount
U/s.7-A within 6 weeks from the date of passing of the order and
on compliance of the said condition operation of the impugned
order is stayed and Appeal is admitted for consideration and
hearing.
9. Section 7-O of the Act, 1952 is extracted here under:
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"7-O. Deposit of amount due, on filing appeal.--No appeal by
the employer shall be entertained by a Tribunal unless he has
deposited with it seventy-five per cent of the amount due
from him as determined by an officer referred to in section
7A:
Provided that the Tribunal may, for reasons to be
recorded in writing, waive or reduce the amount to be
deposited under this section."
10. This Court is of the firm opinion that as per the Section 7-O
of the Act, 1952, 75% of the amount determined should be
deposited for admission of the appeal under Section 7-I of the Act.
However, the Tribunal was considerate to the petitioner - school
and ordered the Petitioner's school to remit 30% of the determined
amount U/s.7-A within 6 weeks from the date of passing the order.
11. Employees Provident Fund and Miscellaneous Provisions Act,
1952 (for short 'EPM Act') is a social legislation for providing the
institution for social security to the employees and workers.
12. The Apex Court in the judgment dated 18.10.2013 in
Arcot Textile Mills Ltd., vs. Regional Provident Fund,
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Commissioner & Others, reported in (2013) 16 SCC 1 and in
particular, at paras 15, 18, and 24 observed as under :
"15. On a perusal of the aforesaid provision it is evident
that an appeal to the tribunal lies in respect of certain action
of the Central Government or order passed by the Central
Government or any authority on certain provisions of the Act.
We have scanned the anatomy of the said provisions before.
On a studied scrutiny, it is quite vivid that though an appeal
lies against recovery of damages under Section 14B of the
Act, no appeal is provided for against imposition of interest as
stipulated under Section 7Q. It is seemly to note here that
Section 14B has been enacted to penalize the defaulting
employers as also to provide reparation for the amount of
loss suffered by the employees. It is not only a warning to
employers in general not to commit a breach of the statutory
requirements but at the same time it is meant to provide
compensation or redress to the beneficiaries, i.e., to
recompense the employees for the loss sustained by them.
The entire amount of damages awarded under Section 14B
except for the amount relatable to administrative charges is
to be transferred to the Employees' Provident Fund.
18. At this stage, it is necessary to clarify the position of
law which do arise in certain situations. The competent
authority under the Act while determining the moneys due
from the employee shall be required to conduct an inquiry
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and pass an order. An order under Section 7A is an order that
determines the liability of the employer under the provisions
of the Act and while determining the liability the competent
authority offers an opportunity of hearing to the concerned
establishment. At that stage, the delay in payment of the
dues and component of interest are determined. It is a
composite order. To elaborate, it is an order passed under
Section 7A and 7Q together. Such an order shall be amenable
to appeal under Section 7I. The same is true of any
composite order a facet of which is amenable to appeal and
Section 7I of the Act. But, if for some reason when the
authority chooses to pass an independent order under Section
7Q the same is not appealable.
24..... There is no cavil for the fact that it is social welfare
legislation to meet the constitutional requirement to protect
the employees. That is why the legislature has provided for
imposition of damages, levy of interest and penalty....."
13. In the affidavit filed by the petitioner it is primarily averred by
the petitioner that prescribing the condition of remittance of 30% of
the determined amount by the CGIT is in violation of the earlier
orders of the Court dated 04.07.2018 passed in W.P.No.1873 of
2018 and the main grievance of the writ petitioner is that unfair
and illegal procedure is being followed in determination of the
amount for the period in question by the Respondent authority
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which had been determined without affording reasonable and fair
opportunity of hearing to the Petitioner during the enquiry and
hence does not comply with the principles of natural justice and all
other pleas put forth by the Petitioner in the affidavit filed by the
petitioner in support of the present writ petition and the reply
affidavit filed by the petitioner, this Court opines that the issues
which have to be adjudicated and decided by the Competent
Authority in the EPF Appeal No.CGIT (2017) 271/2018, preferred by
the petitioner under Section 7-I of the EPF and MP Act, 1952,
aggrieved by the order dated 03.08.2017 passed the Respondent
Authority under Section 7(A) of the Employees Provident Fund and
Miscellaneous Provisions Act, 1952 against the Petitioner
Establishment had been infact admitted by the Tribunal vide its
order dated 30.01.2024 on the file of Central Government Industrial
Tribunal cum Labour Court at Hyderabad, in I.A.Nos.1 & 2 of 2024
in EPF Appeal No.CGIT (2017) 271/2018.
14. This Court opines that Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 is a beneficial piece of legislation
enacted by the Act of Parliament for the welfare of working class.
This social security measure is a humane homage the State pays
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under Articles 39 and 41 of the Constitution. The viability of the
fund depends on the employer duly deducting the worker's
contribution from their wages, adding his own little and promptly
depositing the sum into the fund constituted by the Act. The
mechanics of the system will suffer paralysis if the employer fails to
perform his function. The dynamics of this beneficial statute derives
its locomotive power from the funds regularly flowing into the
statutory bill. The proper implementation of various Schemes under
the Act is solely dependent upon the prompt compliance by the
establishment. Financial ups and downs are invariably an inherent
part of any business. The benefits envisaged and provided under
the Act cannot be held hostage to the vagaries of profit and loss of
establishments. Even if it is assumed that there was a loss as is
claimed, it does not justify the delay in deposit of Provident Fund
money which is an unqualified statutory obligation and cannot be
allowed to be linked with the financial position of the establishment,
over different points of time.
15. This Court opines that the judgments relied upon by
the learned counsel appearing on behalf of the Petitioner
does not apply to the facts of the present case and hence the
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pleas put-forth by the Petitioner on the basis of the said
judgments are untenable and hence rejected.
16. Taking into consideration the aforesaid facts and
circumstances of the case and duly taking into consideration
the view and the law laid down by the Apex Court in the
Judgment reported in 2013 (16) SCC Page 1, dated
18.10.2013 in "Arcot Textile Mills Ltd. V. Regional Provident
Fund Commissioner and others" (referred to and extracted
above), and duly considering that the Tribunal vide the
impugned order 30.01.2024 in I.A.Nos.1 & 2 of 2024 in EPF
Appeal No. CGIT (2017) 271/2018 had passed an interim
order reducing the amount of pre-deposit in favour of the
petitioner to 30% of the determined amount, this Court
opines that the petitioner is not entitled for grant of relief as
prayed for herein, since there is no breach of any
fundamental right of the petitioner, this Court is of the firm
opinion that when the Appeal is still pending adjudication by
the competent Court (Tribunal) as stipulated under Law, this
Court cannot entertain a writ petition on the same subject
under Article 226 of the Constitution of India, and hence, the
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Writ Petition is dismissed since the same is devoid of merits.
The petitioner is granted four (04) weeks time from the date
of receipt of the copy of the present order for deposit of the
awarded amount as per the order dated 30.01.2024 passed
in I.A.Nos.1 and 2 of 2024 in EPF Appeal No. CGIT (2017)
271/2018. However there shall be no order as to costs.
Miscellaneous petitions, if any, pending in this Writ Petition,
shall stand closed.
___________________
SUREPALLI NANDA, J
Date: 03.06.2024
Note : L.R. Copy to be marked.
B/o.Yvkr/Ktm
