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2016 DIGILAW 264 (KER)

Baileys Resort Private Limited Represented By Managing Director, Smt. Mariya Bailey. v. Assistant Provident Fund Commissioner, Thiruvananthapuram

2016-03-04

K.HARILAL

body2016
JUDGMENT : K. Harilal, J. The petitioner is an establishment covered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for short,'the Act') with effect from 01.10.2004, according to Ext.P2 order passed by the 1st respondent. The Act was made applicable to the establishment, consequent on the report of the Enforcement Officers, who visited the establishment and recommended that the Act is applicable to the establishment with effect from 01.10.2004. The enforcement squad visited the establishment on 10.10.2006. As per the report of the Enforcement Officers, the employer failed to produce the records and the person available at the office informed that all the records are kept with the Auditor. On further investigation, the squad could obtain the entry and exit record maintained in loose register from the Security. As per the list, 35 employees were on duty and the squad attempted to obtain a detailed list with signatures of the employees and prepared a mahazar, which was submitted before the Enquiry Authority. It was further reported that during the course of collecting investigation, some of the employees, whose names are entered in the entry record were disappeared at the instances of the management. The squad could obtain the signatures of 15 employees and another list of nine employees on duty. Thus, the records submitted by the squad shows more than 50 employees engaged in the holiday resort and in massage centre, adjacent to it. After the issuance of coverage notice and having noticed that the employer of the establishment had not complied with the Act, an enquiry was contemplated under Section 7A was initiated. The employer, the petitioner herein, contended that the establishment was started in the year 1996. In October, 2006, there were 11 permanent employees and the rest were daily rated workmen or trainees send by catering institutes, to acquire experience to whom only stipend was paid. Out of 20, 11 are permanent employee. The rest are daily rated employees, who are employed for six months. Even the persons employed may not be same through out the six months, as catering institutes withdraw them and send different persons according to the need of the situation. After reaching the coverage stage, on 01.10.2006, contributions were regularly paid. Chellan and other registers were produced before the officers under the 1st respondent for a period from 2006-08 in Form 12A with Ext. P1 covering letter on 24.03.2008. After reaching the coverage stage, on 01.10.2006, contributions were regularly paid. Chellan and other registers were produced before the officers under the 1st respondent for a period from 2006-08 in Form 12A with Ext. P1 covering letter on 24.03.2008. After the establishment reached the covering stage, an inspection was held on 10.10.2006 by a team of officers led by the Enforcement Officer, 'Mr. Varghese K. Daniel', who subsequently passed Ext. P2 order, fastening the liability on the petitioner. By Ext. P2, the petitioner was directed to pay employees' contribution even for a period from 01.10.2004 based on the inspection held on 10.10.2006 by the officer who issued Ext. P2 order. The order doesn't contain any details, as to the number of employees working there from 2004-06. 2. The 1st respondent passed Ext.P2 order without considering the materials on record adduced by the petitioner in its correct perspective. So also, the person who collected evidence against the petitioner by conducting the surprise inspection himself evaluated the evidence which he had collected earlier and passed the impugned order. In short, the 1st respondent acted as a Prosecutor and Judge. 3. Aggrieved by Ext.P2, though the petitioner preferred statutory appeal before the Appellate Authority, that authority also miserably failed to appreciate the bias caused to the petitioner, by Ext.P2. Thus, the legality and propriety of the reasonings and circumstances, whereby the respondents 1 and 2 found the petitioner liable to pay Rs.9,31,307.70/- as arrear of contribution from 1.10.2004 to 1.2.2007, are under challenge in this writ petition. 4. Though this writ petition was filed on various grounds challenging the findings in Exts.P2 and P3, the main thrust of the arguments advanced by the learned counsel for the petitioner is that the authority under Section 7A was biased as he was the leader of the team that inspected the shop and collected the materials. Thus, the officer who passed Ext.P2 has initiated the case against the petitioner and there is every likelihood of the petitioner entertaining a feeling that he may be biased. It is also contended that Ext.P2 contains certain observation as regards the sequence of events, when the 1st respondent conducted the surprise inspection, which culminated in Ext.P2. But, that sequence of events does not find a place in Ext.R1(d) Mahazar prepared by the 1st respondent himself at the time of surprise inspection. It is also contended that Ext.P2 contains certain observation as regards the sequence of events, when the 1st respondent conducted the surprise inspection, which culminated in Ext.P2. But, that sequence of events does not find a place in Ext.R1(d) Mahazar prepared by the 1st respondent himself at the time of surprise inspection. That apart, the learned counsel for the petitioner advanced arguments pertaining to the materials collected during the course of surprise inspection and the appreciation of the same by the respondents 1 and 2. 5. Per contra, the learned Standing Counsel for the respondents advanced arguments to justify the reasonings whereby the petitioner was found liable to pay contribution from 1.10.2004 to 1.2.2007. According to the learned Standing Counsel, there is no material to substantiate any kind of bias shown by the 1st respondent while sitting in judgment to pass Ext.P2 order. So also, there is no material to show that the 1st respondent had any personal enmity or vengeance against the petitioner. The inspection was made by a squad of several officers. So the action of the 1st respondent or his observation was not final one and the materials were collected by the squad and not by the 1st respondent. So, no way, the 1st respondent was biased. It is also contended that the burden is on the petitioner to prove that sufficient employees were not employed in the establishment during the relevant period. But, the petitioner has not adduced sufficient evidence to establish his contention that eleven permanent employees were employed and the rest are either daily represented workmen or sent by the Catering Institute. 6. In view of the rival pleas raised at the Bar, this Court is of the opinion that the legality and sustainability of Ext.P2 has to be considered at first, in view of the contention that the 1st respondent has collected the evidence by a surprise inspection and subsequently he himself evaluated the said evidence and passed Ext.P2 order. Going by Exts.P2 and P3, it stands undisputed that the petitioner has raised the issue of bias before the 1st respondent himself at the enquiry stage and subsequently the same was reiterated before the 2nd respondent at the appellate stage. But, neither the 1st respondent nor the 2nd respondent addressed the issue in its correct perspective. It is an elementary principle that no man can be a Judge of his own cause. But, neither the 1st respondent nor the 2nd respondent addressed the issue in its correct perspective. It is an elementary principle that no man can be a Judge of his own cause. In other words, one cannot be a Prosecutor as well as Judge at a time. But, in the instant case, it is not disputed that an Enforcement Squad led by Sri.Varghese K. Daniel conducted the inspection on 10.10.2006 and collected materials under Ext.R1(d) Mahazar and the entire proceedings were initiated on the basis of the materials collected in that surprise inspection. Ext.R1(d) Mahazar is seen prepared in the presence of Sri.Varghese K. Daniel, who passed Ext.P2 order, fixing the liability on the petitioner establishment. It is a fundamental principle that 'justice must not only be done, but also it must be seen to be done. I am of the opinion that there are enough circumstances which would cause apprehension in the mind of the petitioner that the said Varghese K. Daniel has not appreciated the evidence adduced by him in its correct perspective, particularly, when he relied on the evidence collected by himself. In other words, there is every likelihood of the petitioner entertaining a feeling that the said Varghese K.Daniel may be biased. It need not be proved that he is biased. But, the bona fide apprehension that arose in the mind of the petitioner is sufficient to reject Ext.P2, the basic order passed by the 1st respondent. Fair trial is a right guaranteed under the Constitution of India. As rightly submitted by the learned counsel for the petitioner, in Ext.P2, there is an observation that 35 persons, who were found employed during the course of surprise inspection, were later found disappeared, at the instance of the petitioner. But, such an observation does not find a place in Ext.R1(d) Mahazar prepared at the time of surprise inspection. It gives rise to an inference that the 1st respondent, who passed Ext.P2, was carried away by the assumptions or conjectures, which he had assumed at the time of surprise inspection, though that do not find a place in the materials on record. I find force in the argument that there is every possibility of bias and prejudice in the appreciation of evidence, when the person who collected the evidence himself sits in judgment, over such evidence collected by himself. 7. I find force in the argument that there is every possibility of bias and prejudice in the appreciation of evidence, when the person who collected the evidence himself sits in judgment, over such evidence collected by himself. 7. In the above analysis, I find that Exts.P2 and P4 are vitiated by the violation of the principles of natural justice. Consequently, Exts.P2 and P4 will stand set aside and the matter is remitted back to the 1st respondent for fresh consideration. Needless to say, an order shall be passed afresh, at the earliest, by an officer, who was not present in the enforcement squad, which conducted surprise inspection and collected evidence. 8. This writ petition is disposed of accordingly.