M/S International Lime Industry vs Employees Provident Fund ...
2023 Latest Caselaw 2154 UK

  HIGH COURT OF UTTARAKHAND
         AT NAINITAL

   Writ-Petition (M/S) No.1823 of 2011
M/s International Lime Industry                   ... Petitioner

                                Vs.

Employees      Provident     Fund     Appellant    Tribunal     and
Another
                                                  ... Respondents

                        Connected with

   Writ-Petition (M/S) No.1822 of 2011
M/s Bhartiya Chemicals                            ... Petitioner

                                Vs.

Employees      Provident     Fund     Appellant    Tribunal     and
Another
                                                  ... Respondents


Advocate:   Mr. Siddhartha Singh, learned counsel for the petitioner.
            Mr. Bhupendra Singh Bisht, learned counsel vice Mr. D.S.
            Patni, learned Senior Counsel for respondents.


Hon'ble Sharad Kumar Sharma, J.

This Court is anguished to remark that, in fact, no assistance has been provided by the learned counsel for the respondents as upon being called upon to answer the argument as it has been extended by the learned counsel for the petitioner, he rather submits that the matter may be remitted back so that it may be decided afresh.

2. In fact, this conduct of the counsel for the respondent, in itself is unbecoming of an officer of Court and, particularly, when the respondent is defending a cause of an organization.

3. In Writ-Petition No.1823 of 2011, the petitioner, which is a small scale proprietorship firm in the business of lime stone, has put a challenge to the order dated 14.07.2011 passed by Employees' Provident Fund Appellate Tribunal, New Delhi in A.T.A. No.317(14)2006 under Section 7 I of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (For short "the Act of 1952"); order dated 13.12.2005; and 19.04.2006 passed by Assistant Provident Fund Commissioner, EPFO, Dehradun under Section 7-A and 7-B respectively of the Act of 1952, which are enclosed as annexure No.1, 2 and 3 respectively to the writ-petition.

4. In Writ-Petition No.1822 of 2011, the petitioner, which is a small firm doing business of lime stone, has put a challenge to the order dated 06.06.2011 passed by Employees' Provident Fund Appellate Tribunal, New Delhi in A.T.A. No.318(14) 2006 under Section 7 I of the Employees' Provident Fund and Miscellaneous Provisions Act 1952; order dated 13.12.2005; and 19.04.2006 passed by Assistant Provident Fund Commissioner, EPFO, Dehradun under Section 7-A and 7-B respectively of the Act of 1952, which are enclosed as annexure No.1, 2 and 3 respectively to the writ-petition.

5. The arguments of the learned counsel for the petitioner in these writ-petitions are that the provisions of the Act of 1952 would only apply to the organizations where there are more than 20 employees, who are established to be working, in order to enable and make the employers to contribute its contribution towards their employment.

6. Learned counsel for the petitioner submits that the instant proceedings under the Act are governed by the provisions as contained under Section 7(A) 2 of the Act, which provides, for that for the purpose of conducting an inquiry in order to arrive at a logical conclusion as to whether an organization is covered under the provisions of the Act or not, the Prescribed Authority is vested with ample of powers by drawing certain portions of the provisions of the C.P.C., which has been made applicable by Section 7(A) 2 of the Act, which is extracted hereunder:-

"Section 7A(2) in The Employees' Provident Funds and Miscellaneous Provisions Act, 1952

(2) The officer conducting the inquiry under sub-section (1) shall, for the purposes of such inquiry, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), for trying a suit in respect of the following matters, namely:--

(a) enforcing the attendance of any person or examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavit;

(d) issuing commissions for the examination of witnesses, and any such

inquiry shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860)."

7. The grievance of the present petitioner is that despite of having led sufficient evidence and having placed sufficient material to show that, in fact, they are not the employees of the units belonging to either of the petitioners, despite of the fact, that having led voluminous evidence which was preferred before the Prescribed Authority to establish, that the notices issued to them are bad in the eyes of law, but none of the documents have been considered by the Prescribed Authority while passing an order under Section 7(A) of the Act thereby imposing liability on the present petitioner with regards to the dues to be paid under the provisions of the Employees Provident Fund Act.

8. It is contended by the learned counsel for the petitioner, that even a survey was conducted on 10.03.2005 by the Employees Provident Fund Organization, through its Enforcement Officers and they have submitted their report in relation to the strength of employment in the two units i.e. M/s International Lime Industry and M/s Bhartiya Chemicals for which learned counsel for the petitioner submits, that they are the different legal entities, which are separately registered by the Registrar of Companies and they have got their different operational activities, though may be that

end product of both the industries may be the same and that may be that they may be engaged in the similar nature of business.

9. He submits that no part of the report dated 10.03.2005, could be taken into consideration, which has been taken as the basis of proceedings, for the reason being that the report, which was submitted with regards to the two industries, some of the names of the workmen, who were working with the two units have been commonly shown to be working in both the units, which is practically impossible, and it doubts the sanctity of the report itself, coupled with the fact, that some of the names have been shown with the changed names in the list of the other odd units in order to excel the number of 20, which is required as a cut off under the Act of 1952.

10. For example, that of the employees, who have been mentioned at Serial No.2 and 21 of the report of 10.03.2005. It's that based on the aforesaid report submitted by the Enforcement Officer, the notice was issued to the petitioner on 12.05.2005, whereby he was called upon by the Employees Provident Fund Organization to submit his reply with regards to the number of employees working in the units with the Department, in accordance with the reports, which were submitted by the Enforcement Officer on 10.03.2005, which

finds reference in the notice issued by the respondent.

11. The notice was replied to and in order to further substantiate the reply submitted by the petitioner, the petitioner had led his evidence by filing the respective affidavits of the employees working in the organization, who have specifically made the statement, that the report which was thus submitted by the Enforcement Officer, cannot be read for the purpose of drawing the proceedings under Section 7(A) of the Act of 1952 and, apart from it, in the reply which was submitted by the petitioner on 07.06.2005 before the Assistant Provident Fund Commissioner, he has given the details of the employees working in the organization and has made a specific statement that, at no point of time, more than 18 workmen have been working in the organization and, thus contended that the provisions of the Act would not be applicable and, hence, he would not be entitled to deposit his contribution for the period from 10.03.2005 to 31.05.2005, as it was an amount, which was claimed to be deposited by 15.06.2005.

12. The reply thus submitted by the petitioner on 07.06.2005, was accompanied with the affidavit of one of the workmen - Pappu, who had specifically denied the contents of the notice and his status of functioning in either of the two organizations and further it was supported by an

affidavit which was filed by Saheed, who was one of the workmen, as well as, that of Ram Suchit, whose name was shown in list of both the industries to be working as a workmen for them.

13. The matter proceeded and the learned Assistant Provident Fund Commissioner had proceeded to decide the matter against the applicant by an order of 12.12.2005, thereby directing that the establishment of the petitioner would be treated to be covered under the provisions of the Act w.e.f. 10.03.2005 and he would be liable to pay the amount of their contribution as per the provisions of the said Act.

14. But, however, the logic which has been assigned by the judgment of the Assistant Provident Fund Commissioner dated 12.12.2005, it was, on the ground, that since the two establishments, as they were working within one geographical proximity or in one geographical area they have been based on that treated as to be a single unit, for the purpose of treating the workmen of both the organizations, as to be the figure, which crosses the number of figure of 20 workmen provided under the Act of 1952.

15. Learned counsel for the petitioner had submitted that, in support of his contention, apart from the reply submitted by him to the notices, he has also placed the balance sheet, the gazette, the

attendance register and the salary register before the Assistant Provident Fund Commissioner, that the same was not considered by the Assistant Provident Fund Commissioner, while drawing the conclusion that the employees' strength of the petitioner-organization was over 20 and these material were not even discussed in the impugned order and hence, they come within the purview of the Act of 1952 for the purpose of enforcing upon them the liability of extending their contribution under the Act of 1952.

16. Before the Assistant Provident Fund Commissioner, apart from the reply submitted by them, they had taken a specific plea with regards to the procedure as prescribed under Section 7(A) (3) of the Act, which was to be resorted to for the purpose to come to the logical conclusion as to what is the strength of the employees working in the organization. But, despite of the specific plea taken by the petitioner and, despite of adducing the evidence, a contrary view has been taken by the Assistant Provident Fund Commissioner and that too is solitary based upon the following grounds:-

(i) that since both the units are working allegedly as one organization.

(ii) that since the family lineage of both the units and their ownership belongs to the same family clan would be

treated as one, which is contrary to records.

(iii) that since the workers of the two organizations frequently visit and they are working together in one another's organization, the Assistant Provident Fund Commissioner had brought the units of the petitioner as to be under the provisions of the Act of 1952.

17. What is surprising is that the order of the Assistant Provident Fund Commissioner, does not even take into consideration the evidence, which were adduced by the petitioner, by filing the affidavit of the workmen showing that they are not the employees of both the organizations as depicted in the report submitted by the Enforcement Officer but, the Assistant Provident Fund Commissioner, for the reason best known to him, has not recorded any finding in relation to the evidence adduced by the present petitioner; before coming to the conclusion by the judgment of 12.12.2005 about bringing the establishment of the petitioner within the ambit of the provisions of the Act of 1952.

18. The said judgment, which was rendered on 12.12.2005, had accordingly observed that in pursuance of the notice when the proceedings were started it has observed, that the provisions of the

Act would apply and, hence, the petitioner would be liable to pay its contribution towards its workmen.

19. The said order was put to challenge by the petition in an appeal. The appellate court too, in an appeal referred, being Appeal No.80 of 317 (14 of 2006), by the judgment of 14.07.2011, had affirmed the judgment of Assistant Provident Fund Commissioner observing therein, that the employees, as engaged in the organization of the petitioner, since it exceeded the number 21, in accordance with report of the Enforcement Officer. But the Appellate Court too, surprisingly, while recording its findings and concurring with the judgment of Assistant Provident Fund Commissioner, has observed that the present appellant has not led any evidence, in support of his contention, to establish that in his organization the number of workmen never exceeded 17.

20. This finding recorded by the Appellate Authority is absolutely perverse to the case, as built-up and proved by documents by the petitioner in the instant writ-petition, which stand substantiated by his reply and the supporting affidavits of the workmen and thus, the view drawn by the Appellate Court, that the petitioner has not adduced any evidence to the contrary, is perverse because of the finding as recorded by the Assistant Provident Fund commissioner, which only made reference to the documents relied upon by the

petitioner in support of his contention. But no finding has been recorded, as such either by the Assistant Provident Fund Commissioner or by the Appellate Authority with regards to the evidence adduced by the petitioner to show that the number of workmen working with the petitioner was less than 20, as prescribed under the Act.

21. The judgment of the Appellate Authority was later on subjected to review preferred under Section 7(B) of the Act and the review too, has been dismissed by the Regional Provident Fund Commissioner by the judgment of 19.04.2006.

22. In fact the concurrent judgments, as rendered by the authorities in a proceedings initiated under Section 7A of the Act, are perverse and contrary to the very evidence adduced by the petitioner, as none of the authorities has considered the evidence adduced by the present petitioner and its impact on the issue nor has even dealt with his argument extended in the light of the provisions contained to Section 7(A)(3) of the Act. It would rather render the judgment to have been rendered without any application of mind and without even dealing with the evidence adduced by the petitioner.

23. In view of the aforesaid, the impugned judgments cannot be sustained they are hereby quashed. The matter is relegated back to the Court

of Assistant Provident Fund Commissioner, to initiate the proceedings de nova and pass an appropriate order in accordance with law.

(Sharad Kumar Sharma, J.) 09.08.2023 Sukhbant/