CENTRAL BOARD OF TRUSTEES, EMPLOYEES' PROVIDENT FUND ORGANISATION v. SASTHA ENTERPRICES BEACH ROAD, KOLLAM, KERALA & EPF APPELLATE TRIBUNAL, NEW DELHI

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE EASWARAN S. ``` ``` WEDNESDAY, THE 17[TH] DAY OF JULY 2024 / 26TH ASHADHA, 1946 WP(C) NO. 17134 OF 2015 ``` ## **`PETITIONER:`** ``` THE CENTRAL BOARD OF TRUSTEES EMPLOYEES' PROVIDENT FUND ORGANISATION, REPRESENTED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER, SUB REGIONAL OFFICE, CHINNAKKADA, KOLLAM. ``` ## **`BY ADV SRI.PIRAPPANCODE V.S.SUDHIR`** ## **`RESPONDENTS:`** - **`1 SASTHA ENTERPRICES BEACH ROAD, KOLLAM, KERALA, REPRESENTED BY THE MANAGING PARTNER N.NANDAKUMAR.`** - **`2 THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL NEW DELHI.`** ``` BY ADVS. SRI.P.BENNY THOMAS SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS ``` ``` SR.ADV.E.K.NANDAKUMAR, ADV.POOJA MENON -R1 ``` ``` THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 17134 of 2015 ``` ``` 2 ``` ## **EASWARAN S., J.** ------------------------------------------------------- **W.P.(C.) No. 17134 of 2015** -------------------------------------------------------- **Dated this the 17[th] day of July, 2024** ## **JUDGMENT** The present writ petition is filed by the Central Board of Trustees of the Employees Provident Fund Organization challenging the order passed by the Appellate Tribunal in ATA No. 426 (7) 2008 dated 17.11.2014. The facts in the writ petition disclose that the 1[st] respondent employed certain retired hands for doing certain works in the establishment. On failure to remit the contribution towards the Employees Provident Fund, an inquiry under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 was initiated against the 1[st] respondent and on inquiry it was found that the 1[st] respondent was liable for a sum of Rs.68,60,023.10/-. Ext.P1 is the copy of the order dated 12.05.2008 in which the liability was cast upon the 1[st] respondent. Aggrieved by the said order, the 1[st] respondent filed an appeal before the EPF Appellate Tribunal as ATA No.426 (7) 2008, as evident from Ext. P2. The Appellate Tribunal by the order impugned as Ext.P4 had allowed the appeal on 17.11.2014 ## **`WP(C) NO. 17134 of 2015`** **`3`** entering into the merits of the claim raised by the parties and found that the 1[st] respondent was not liable to pay the contribution towards the Employees Provident Fund. Aggrieved by the aforesaid order, the petitioner has approached this Court under Article 226 of the Constitution of India. 2. I have heard Sri.Pirappancode V.S.Sudheer, learned counsel appearing for the petitioner and the learned Senior Counsel, E.K. Nandakumar, assisted by Smt.Pooja Menon appearing for the 1[st] respondent. 3. The learned counsel for the petitioner submitted that the 1[st] respondent did not appear before the authority though opportunity was granted to him on numerous occasions. Neither documentary evidence was produced nor any evidence adduced before the authority and therefore Ext.P1 Order could not have been assailed by the 1[st] respondent before the Appellate Authority. At any rate, according to the counsel for the petitioner, the Appellate Authority could not have gone into the merits of the matter in the absence of any oral evidence tendered by the 1[st] respondent. 4. On the other hand, the learned Senior Counsel Sri.E.K. ## **`WP(C) NO. 17134 of 2015`** ``` 4 ``` Nandakumar appearing on behalf of the 1[st] respondent submitted that Appellate Tribunal rightly set aside the order under Section 7A, since the report of the Enforcement Officer was not served on the 1[st] respondent establishment. He would further point out that the employees in whose favour the contribution was required to be made neither identified nor their evidence was taken. The learned Senior Counsel further relied on the judgment of the Supreme Court in **Himachal Pradesh State Forest Corporation** vs. **Regional Provident Fund Commissioner** reported in ( **2008) 5 SCC 756.** With specific reference to paragraph 5 of the aforesaid judgment, the learned Senior Counsel pointed out that in respect of those employees who are identifiable and whose entitlement can be proved on evidence alone can be brought under the purview of provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. 5. I have considered the rival submissions raised across the bar. 6. A reading of Ext.P1 order shows that opportunities were given to the 1[st] respondent to appear on multiple times. The first date of appearance was on 06.07.2005. On 06.07.2005, a clerk attached to the office of the establishment appeared and did not produce any records. After hearing, the enquiry was adjourned to 13.07.2005 and later to ## **`WP(C) NO. 17134 of 2015`** **`5`** 08.08.2005. Though it is stated that for several days almost twice a month, postings were given, none appeared for the employer and it was under those circumstances that the proceedings under Section 7A of the Act was finalized. 7. Though, the 1[st] respondent failed to appear before the Assessing Officer, the fact remains that the report of the Enforcement Officer was relied upon and it is also not clear as to whether the employees in whose favour the contributions were liable to be made by the 1[st] respondent, were identified. At any rate, this being the factual position before the authority, this Court is of the considered view though the 1[st] respondent was entitled to file an appeal before the Appellate Tribunal, the Appellate Tribunal could not have decided the matter on merits in the absence of any cogent evidence produced on behalf of the 1[st] respondent. Therefore, the petitioner is justified in invoking the provisions of Article 226 of the Constitution of India challenging Ext. P4 order. 8. Be that as it may, though this Court has found that the Appellate Tribunal could not have decided the matter on merits, this Court is not inclined to sustain Ext.P1 order, while deciding the validity of Ext.P4. The fact remains that the Enforcement Officer’s report was not ``` WP(C) NO. 17134 of 2015 ``` **`6`** served on the 1[st] respondent and thereby there is a clear violation of the principles of natural justice. Reading of Ext. P1 order does not show that the employees in whose favour the 1[st] respondent failed to remit the contributions were identified or examined while the order was passed. 9. This being the factual position, the question is whether the Tribunal could have decided the matter on merits. No doubt the appellate Tribunal is empowered to decide the case on merits. However, it is pertinent to note that in the present facts, the Tribunal could not have decided the case on merits because the 1[st] respondent failed to adduce evidence on his claim. Hence, if the Tribunal was of the view that the order impugned in the appeal was unsustainable it ought to have remanded the case back to the Commissioner. In not doing so there is clearly an abdication. Hence, Ext.P4 to the extent it decided the lis on merits has to be set aside. Therefore, the writ petition is partly allowed. Ext.P4 Order of the Tribunal to the extent it decided the case on merits is set aside. However, Ext.P4 order to the extent to which Ext.P1 order was interfered is affirmed. Consequently, this Court finds that the matter must regain the attention of the Regional Provident Fund Commissioner, Kollam. Therefore, the Regional Provident Fund Commissioner will issue notice ``` WP(C) NO. 17134 of 2015 ``` **`7`** calling the 1[st] respondent to appear before him on a date and the 1[st] respondent shall appear without any fail before the Regional Provident Fund Commissioner, Kollam. On appearance, the Regional Provident Fund Commissioner shall serve a copy of the report of the Enforcement Officer and fix a date for examination of the Enforcement Officer or any other person who has conducted the enquiry. The 1[st] respondent shall also be at liberty to adduce such evidence as may deem fit in the circumstances. The Regional Provident Fund Commissioner, Kollam shall proceed with the matter only after identification of such employees in whose favour, the 1[st] respondent is liable to make contribution. The final orders shall be thereafter passed after considering the materials on record at any rate within a period of six months from the date of receipt of a copy of the judgment. The contentions of the 1[st] respondent as raised before the Appellate Tribunal under Ext.P2 appeal are all left open. Writ petition is thus partly allowed. No order as to costs. ## **Sd/-** ## **EASWARAN S. JUDGE** sjb ``` WP(C) NO. 17134 of 2015 ``` ``` 8 ``` ## **`APPENDIX OF WP(C) 17134/2015`** ## **`PETITIONER EXHIBITS`** ``` EXHIBIT P1TRUECOPYOFTHEORDERNO. KR/1150/ENF.I(3)/2008 DATED 12-5-2008. EXHIBIT P2TRUE COPY OF THE MEMORANDUM OF APPEAL NO. ATA 426(7)/2008 FILED BEFORE THE HON'BLE EPF APPELLATE TRIBUNAL. ``` ``` EXHIBIT P3TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER KOLLAM IN EXT. P2 APPEAL. ``` ``` EXHIBIT P4TRUE COPY OF THE ORDER DATED 17-11-2014 IN ATA NO. 426(7)/2008. ``` ``` RESPONDENTS EXHIBITS :NIL ``` ``` //TRUE COPY// PA TO JUDGE ```