Manvish Info Solutions Private Ltd. v. Employees' Provident Fund Organization

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **THURSDAY, THE 14TH DAY OF SEPTEMBER 2017/23RD BHADRA, 1939** ## **WP(C).No. 29255 of 2017 (F)** **----------------------------** **PETITIONER: ------------M/S.MANVISH INFO SOLUTIONS PRIVATE LTD. DOOR NO.VIII/560/1+560/4 2ND FLOOR, PAYYAPPILLY BUILDING HIGH ROAD, ALUVA 683 101 REPRESENTED BY MANAGING DIRECTOR, MOHANAN THAMPURAN.** **BY ADV. SRI.P.SANKARANKUTTY NAIR RESPONDENT(S): -------------1. EMPLOYEES PROVIDENT FUND ORGANIZATION REPRESENTED BY EMPLOYEES PROVIDENT FUND COMMISSIONER, SUB REGIONAL OFFICE, 36/685/A, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI 682 017. 2. ASSISTANT P.F. COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, 36/685/A, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI 682 017.** **BY SRI.S.PRASANTH, SC, EMPLOYEES PROVIDENT FUND ORGAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14-09-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sdr/-** ## **WP(C).No. 29255 of 2017 (F)** **----------------------------** ## **APPENDIX** **-----------------** **PETITIONER(S)' EXHIBITS ------------------------------------** **EXHIBIT P1 TRUE COPY OF THE SHOW CAUSE NOTICE NO.KRKCH0027919000/501/KRKCH14419 DATED 11/2/2016 ISSUED BY THE 2ND RESPONDENT** **EXHIBIT P2 TRUE COPY OF THE LETTER DATED 26/4/2016 SUBMITTED BY THE PETITIONER** **EXHIBIT P3 TRUE COPY OF THE ORDER UNDER SECTION 7 A OF THE EPF ACT DATED 23/5/2016** **EXHIBIT P4 TRUE COPY OF THE REVIEW PETITION DATED 29/8/2016 FILED BY THE PETITIONER** **EXHIBIT P5 TRUE COPY OF THE ORDER DATED 12/4/2017 PASSED BY THE 2ND RESPONDENT** **RESPONDENT(S)' EXHIBITS NIL** **-------------------------------------------** **/TRUE COPY/** **PA TO JUDGE** **sdr/-** ## **C.R.** **K. VINOD CHANDRAN, J. ---------------------------------W.P(C). No.29255 of 2017 [F] ---------------------------------Dated this the 14[th] day of September, 2017** ## **JUDGMENT** The petitioner is aggrieved with Ext.P5 order passed in an application filed under Section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 [for brevity, the EPF & MP Act]. The petitioner was issued with a notice by Ext.P1 under Section 7A of the EPF & MP Act. An order was passed at Ext.P3 assessing the contributions and determining the wages evaded from the ambit of the contribution payable under the Act. A review was filed as per Ext.P4, which was rejected by Ext.P5. The petitioner has challenged the impugned order mainly on two _W.P(C). No.29255 of 2017 [F]_ **2** grounds; one, an opportunity of hearing having not been granted and none of the objections having been considered. There is total non application of mind, since Ext.P5 indicates no reasons having been stated for rejection of the order, is the argument. 2. The petitioner relies on three decisions; **St.Barnabas Hospital v. The Assistant Provident Fund Commissioner & Others** [WP(C) No.2954 of 2004] by the High Court of Jharkhand, **Deccan Education Society v. Union of India & Others** [WP(C) No.202675 of 2015] by the High Court of Karnataka and **Ashmit Motors Private Limited v. The Assistant Provident Fund Commissioner, Sub Regional Office, Satpur, Nashik** [WP(C) No.9676 of 2016] by the High Court of Bombay [Aurangabad Bench]. 3. The learned Standing Counsel for the EPFO _W.P(C). No.29255 of 2017 [F]_ **3** points out Section 7B(3), wherein there is no stipulation for granting oral hearing. It is stated that Section 7B(4) specifically speaks of a notice and hearing of any aggrieved party, if the review petition is being allowed and in the context of rejection, what is contemplated is only consideration of the grounds stated in the application for review. 4. The learned counsel while reiterating the contention on violation of principles of natural justice, specifically _audi alteram partem,_ asserts that there is also no consideration of the grounds raised by the petitioner in the impugned order. The petitioner has specifically contended that the wages and dues determined as evaded were incentives and HRA granted to the employees, which even by the statutory prescription is not coming withing the ambit of _W.P(C). No.29255 of 2017 [F]_ **4** the contributions prescribed under the Act. It is also submitted that the petitioner had produced two salary bills showing such incentives and HRA and also undertaken to produce the entire salary bills of the employees for the period before the authority at the time of hearing. 5. The decisions cited by the learned counsel for the petitioner are with respect to the absence of a hearing under Section 7B(3). **Deccan Education Society** does not help the petitioner since the order under Section 7B was set aside since it was not passed by the officer who passed the order under Section 7A. **Ashmit Motors Private Limited** is clearly on point. The Court compared the language of Order XLVII of the Civil Procedure Code and that of Section 7B, and found it to be identical; without an express provision for hearing, if there is a rejection of the _W.P(C). No.29255 of 2017 [F]_ **5** review made. A review under the CPC necessarily contemplates the hearing of the review petitioner if the same is rejected and if it is to be allowed it can only be with notice to and hearing of the opposite party; is the settled position, was the finding. **St.Barnabas Hospital** was also in similar circumstances when the review was rejected without notice and hearing of the review petitioner. The Court found that the principles of natural justice, fair adjudication and equity warrant a reasonable opportunity of hearing before an adverse order is passed. This Court is inclined to agree with the judgments of the various High Courts as placed before this Court, in which it has been held that affording a reasonable opportunity of hearing is a necessary concomitant of the principles of natural justice, which even if absent in the statute, shall be _W.P(C). No.29255 of 2017 [F]_ **6** necessarily afforded. A specific requirement for notice on and hearing of, the opposite party, before a review is allowed is only as an abundant caution and an opportunity of hearing to the review petitioner is an imperative aspect which has to be read into any provision contemplating a judicial or quasi-judicial proceeding. 6. Apposite here would be remembering **Indira Nehru Gandhi Vs. Raj Narain [1975 Supp. SCC 1]** and **Mohinder Singh Gill Vs. Chief Election Commissioner [1978 (1) SCC 405].** In the former, K.K. Mathew. J held so: _“If the amending body really exercised judicial power, that power was exercised in violation of the principles of natural justice of audi alteram partem. Even if a power is given to a body without specifying that the rules of natural justice should be observed in exercising it, the nature of the power would call for its observance.” (para 303)_ In the latter V.R. Krishna Iyer, J. following _W.P(C). No.29255 of 2017 [F]_ **7** ## Mathew. J, held so: _“Indeed, natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. It has, many colours and shades, many forms and shapes and, save where valid law excludes it, applies when people are affected by acts of authority. It is the hone of healthy government, recognised from earliest times and not a mystic testament of Judge-made law. Indeed, from the legendary days of Adam — and of Kautilya’s Arthasastra — the rule of law has had this stamp of natural justice which makes it social justice. We need not go into these deeps for the present except to indicate that the roots of natural justice and its foliage are noble and not newfangled. Today its application must be sustained by current legislation, case-law or other extant principle, not the hoary chords of legend and history. Our jurisprudence has sanctioned its prevalence even like the Anglo-American system.” (para 43)_ ## It was also held so in paragraph 77: “ _We have been told that wherever the Parliament has intended a hearing it has said so in the Act and the Rules and inferentially where it has not specificated it is otiose. There is no such sequitur. The silence of a statute has no exclusionary effect except where it flows from necessary implication. Article 324 vests a wide power and where some direct consequence on candidates emanates from its exercise we must read this functional obligation.”_ ## 7. The absence of a mandate for hearing if _W.P(C). No.29255 of 2017 [F]_ **8** the review is rejected hence does not provide a total exclusion of the principles of natural justice. It is also to be noticed that an order rejecting a review is not appealable and there can only be a challenge before this Court under Article 226 of the Constitution of India. It is also pertinent that the order does not disclose any reason and hence is also vitiated by total non-application of mind. 8. Considering the law and the afore-stated circumstances, it is only proper that a reconsideration be made and to facilitate that Ext.P5 is set aside. The petitioner shall be present before the Assistant Provident Fund Commissioner on 09.10.2017 either by himself or through his authorised representative. The hearing shall be fixed on any day within two weeks thereafter, the notice of which shall be _W.P(C). No.29255 of 2017 [F]_ **9** personally served on the petitioner or his authorised representative on the date of appearance and acknowledgment taken. The petitioner would be entitled to file a written submission with supporting documents, if any, on or before 09.10.2017. Copies of the substantiating documents shall be produced on or before 09.10.2017. The petitioner shall produce originals of the supporting documents at the time of hearing for verification. The writ petition is allowed with no order as to costs. Sd/- **K. VINOD CHANDRAN, JUDGE.** //True Copy// P.A. to Judge sp/15/09/17