Research › Search › Judgment

Orissa High Court · body

2017 DIGILAW 371 (ORI)

R. C. Enterprises v. Assistant Provident Fund Commissioner (Compliance), Employees Provident Fund Organization, Rourkela

2017-04-06

B.R.SARANGI

body2017
JUDGMENT : DR. B.R. SARANGI, J. 1. The petitioner, which is a proprietorship-firm, has filed this application to quash Annexure-1, the ex-parte order dated 15.03.2010 passed by the Asst. Provident Fund Commissioner (Compliance), Employees Provident Fund Organization in Case No. 7A/25/2008 under Sections 7-A and 7-Q of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short “the Act”); as well as Annexure-3, the consequential notice of demand dated 04.05.2010 issued in Certificate Case No. 54 of 2010. 2. The factual matrix of the case, in a nutshell, is that the petitioner received an ex-parte order dated 15.03.2010 passed by the Asst. Provident Fund Commissioner (Compliance) determining a sum of Rs.1,62,492/- payable towards contribution on provident fund, pension fund, insurance fund and administrative charges for the period 1/05 to 3/08 under section 7-A of the Act, and further determining an amount of Rs. 80,534/-, towards interest @ 12% per annum under Section 7Q of the Act for delay in remittance of the principal dues, the total of which comes to Rs. 2,61,938/-. In the said order, the petitioner has been directed to deposit the above amount within 15 days from the date of receipt of the order, failing which the same shall be recovered in the manner prescribed under Section 8B to 8G of the Act. 3. On receipt of order dated 15.03.2010 (Annexure-1), the petitioner filed an application for review under Section 7B of the Act but the same was rejected on the ground of limitation and others. Thereafter, the petitioner filed an application under Section 7-A(4) of the Act on or about 02.06.2010 before opposite party no.1 stating inter alia that the petitioner could not attend the office of opposite party no.1 and file the fresh evidence and written statement, as the wife of the proprietor of the petitioner firm was seriously ill and passed away on 16.03.2010 (a day after passing of ex-parte order on 15.03.2010), and prayed for setting aside the ex-parte order and sought for an opportunity for production of evidence and written statement. While such application under Section 7-A(4) of the Act was pending for consideration, Certificate Case No. 54 of 2010 was initiated against the petitioner and he received a notice of demand from the Recovery Officer-opposite party no.2 to pay a sum of Rs. While such application under Section 7-A(4) of the Act was pending for consideration, Certificate Case No. 54 of 2010 was initiated against the petitioner and he received a notice of demand from the Recovery Officer-opposite party no.2 to pay a sum of Rs. 2,43,026/- + Rs.214/- within a period of fifteen days, failing which steps would be taken for attachment, arrest of the petitioner and for appointment of receiver. The petitioner has already deposited the admitted dues towards EPF contribution on wages amounting to Rs. 99,446/-. The balance demand of Rs. 1,62,492/- relates to demand of EPF Contribution on service charges and interest of Rs. 80,534/-. The petitioner is not liable to pay any contribution towards service charges under the Act. Hence this application. 4. Mr. S. Udgata, learned counsel appearing for the petitioner contended that the impugned order dated 15.03.2010 has been passed ex-parte without complying with the principles of natural justice, inasmuch as no adequate opportunity has been given to the petitioner for hearing. Furthermore, notice issued by opposite party no.2 in Certificate Case No. 54 of 2010 is without jurisdiction, as opposite party no.1, who has passed the ex parte order under Annexure-1, and opposite party no.2, who has issued the notice for recovery under Annexure-2, is one and same person, who has acted as the prosecutor, adjudicator and executor. It is further contended that the impugned order passed under Sections 7-A and 7-Q of the Act, even though is appealable under Section 7-I of the Act and there is availability of alternative remedy under the statute, having been passed without affording any opportunity of hearing and non-compliance of principle of natural justice and the same being without jurisdiction, instead of availing the alternative remedy, the petitioner approached this Court by filing this application under Article 226 of the Constitution of India, for which there is no legal bar. 5. Mr. P.K. Mishra, learned counsel appearing for the opposite parties strenuously urged before this Court that the order passed under Section 7-A of the Act is appealable under Section 7-I of the Act and as such, Employees Provident Funds Appellate Tribunal has been constituted and the same is functioning at New Delhi. Therefore, the petitioner could have preferred an appeal under Section 7-I of the Act against the order passed under Sections 7-A and 7-Q of the Act. Therefore, the petitioner could have preferred an appeal under Section 7-I of the Act against the order passed under Sections 7-A and 7-Q of the Act. It is further contended that when adequate alternative remedy under the statute is available, instead of availing the same and exhausting the said appellate forum, the petitioner has approached this Court by invoking the extra ordinary jurisdiction under Article 226 of the Constitution of India, consequentially the writ petition is not maintainable and is liable to be dismissed. 6. On the basis of the factual matrix available, there is no dispute that the impugned order dated 15.03.2010 was passed ex parte. The opening of the order itself indicates that none had appeared on behalf of petitioner-establishment nor any written submission was filed though the employer was well aware of the day’s proceedings. As such, in the counter affidavit, it has been admitted that on the day of final hearing the petitioner did not produce any document/record to defend the establishment. Consequentially, the final order was passed on 15.03.2010. Though the petitioner filed an application under Section 7-B for review of the order dated 15.03.2010, the same was rejected on the ground of limitation and others. However, for implementation of the said order dated 15.03.2010, a certificate case was initiated and demand notice was issued on 04.05.2010. After one month of receiving the demand notice, the petitioner filed an application under Section 7-A(4) of the Act to set aside the ex-parte order on the ground that he could not appear on 15.03.2010 due to serious illness of his wife. The wife of the petitioner died on 16.03.2010, the next date to the final order passed on 15.03.2010. 7. On perusal of Annexure-2 dated 02.06.2010, wherein a request was made for setting aside the ex-parte order passed under Section 7-A of the Act, it would be evident that the petitioner had shown the cause that on 15.03.2010 his wife was seriously ill and lying on the death bed who expired on 16.03.2010. As such, the reason, for non-appearance on the part of the petitioner on 15.03.2010 in the proceeding under Section 7-A, was genuine. As such, the reason, for non-appearance on the part of the petitioner on 15.03.2010 in the proceeding under Section 7-A, was genuine. The petitioner, having been prevented from appearing in the proceeding under Section 7-A of the Act due to sufficient case, made a request to set aside the order dated 15.03.2010 passed under Section 7-A allowing him to give an opportunity to produce the fresh evidence, which could not be produced on 15.03.2010 due to his absence. The sufficient cause having been shown in application filed on 02.06.2010 under Section 7-A(4) of the Act, the same could not and should not have been rejected mechanically without application of mind and compliance of principle of natural justice. 8. Nagarjuna Construction Company Limited v. Government of Andhra Pradesh, (2008) 16 SCC 276 , the apex Court held that: “over the years by a process of judicial interpretation two rules have been evolved as representing the fundamental principles of natural justice in judicial process including therein quasi-judicial and administrative process, namely, an adjudicator should be disinterested and unbiased (nemo judex in causa sua) and that the parties must be given adequate notice and opportunity to be heard (audi alteram partem). They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair play and justice which is not the preserve of any particular race or country but is shared in common by all men.” 9. In Swadeshi Cottom Mills v. Union of India, AIR 1981 SC 818 , the apex Court held as follows: “Principles of natural justice are principles ingrained into the conscience of men. Justice being based substantially on natural ideals and human values, the administration of justice here is freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. Principles/rules of natural justice are not embodied principles/rules. Being means to an end and not an end in them, it is not possible to make an exhaustive catalogue of such rules (principles). 10. The only plea advanced by the learned counsel for the opposite parties, that due to availability of alternative remedy the writ petition is not maintainable, cannot be construed to be valid in view of the fact that no adequate opportunity was given to the petitioner and there was non-compliance of principle of natural justice. 11. 10. The only plea advanced by the learned counsel for the opposite parties, that due to availability of alternative remedy the writ petition is not maintainable, cannot be construed to be valid in view of the fact that no adequate opportunity was given to the petitioner and there was non-compliance of principle of natural justice. 11. In Himmatlal v. State of Madhya Pradesh, AIR 1954 SC 403 the apex Court held that: “There are however certain exceptions in this regard which have been well recognised by this time. In case of allegations of infringement of fundamental rights, the bar of alternative remedy does not apply. 12. In Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya, AIR 1987 SC 2186 , the apex Court held that: “Where an authority has acted wholly without jurisdiction, the High Court should not refuse to exercise its jurisdiction under Article 226 of the Constitution on the ground of existence of an alternative remedy.” 13. In State of Uttar Pradesh v. Md. Nooh, AIR 1958 SC 86 , the apex Court held as follows: “The doctrine has no application where the impugned order has been made in violation of the principles of natural justice.” 14. Applying the principles, referred to above, which have been laid down by the apex Court, this Court is of the considered view that, on the factual matrix of the case in hand, due to non-grant of adequate opportunity to the petitioner there was violation of principles of natural justice. Therefore, even if alternative remedy by way of statutory appeal is available, this Court has got jurisdiction to entertain the application under Article 226 of the Constitution of India. Furthermore, the consequential initiation of certificate proceeding is without jurisdiction, as because the person, who has passed the impugned order dated 15.03.2010, himself has issued certificate proceeding. In such circumstance, this Court can exercise the power under Article 226 of the Constitution, even if there is availability of alternative remedy, as the fundamental right of the petitioner has been infringed. Therefore, taking into consideration all the counts, this Court has jurisdiction to entertain this application under Article 226 of the Constitution of India, even if there is availability of alternative remedy under the statute. 15. Therefore, taking into consideration all the counts, this Court has jurisdiction to entertain this application under Article 226 of the Constitution of India, even if there is availability of alternative remedy under the statute. 15. Factually also it appears that sufficient cause has been shown in the application filed under Section 7-A(4) to set aside the ex-parte order passed by opposite party no.1 and the same has been mechanically rejected without application of mind. Therefore, the order dated 15.03.2010 passed in Annexure-1 and consequential notice of demand for recovery issued in Annexure-3, being not sustainable in law, are hereby quashed. The matter is remitted back to the Asst. Provident Fund Commissioner (Compliance)-opposite prty-1 to rehear and dispose of the same in accordance with law by giving adequate opportunity of hearing to the petitioner and in compliance of the principles of natural justice. 16. Needless to say that the petitioner will render all cooperation to the opposite parties for early disposal of the proceeding and will not ask for unnecessary adjournments in the matter and, as such, the opposite party no.1 shall dispose of the proceeding as expeditiously as possible, preferably within a period of four months from the date of communication of this order. If the petitioner appears on 20th April, 2017 before opposite party no.1, along with the certified copy of the order, he shall act upon the same and fix a date to proceed with the matter. In view of the aforesaid facts and circumstances, the writ petition is allowed. No order as to cost.