Kot Kapura Bus Service Pvt. Ltd. vs Presiding Officer, Employees Provident Fund Appellate Tribunal

Tejinder Singh Dhindsa, J.—M/s. Kot Kapura Bus Service Pvt. Ltd., Moga has filed the instant writ petition impugning the order dated 13.8.2004 (Annexure P-2), passed by the Assistant Provident Fund Commissioner, Sub Regional Office, Bathinda in terms of which an amount of Rs. 1,88,003/- has been determined against the petitioner-company by exercising powers under Section 7-A of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 (herein after to be referred as the Act) on account of Provident Fund Contribution, administrative charges, Family Pension Contribution, Insurance Fund Contribution. Further challenge is to the order dated 6.5.2011 (Annexure P-1), passed by the Employees Provident Fund Appellate Tribunal, New Delhi (herein after to be referred as the Tribunal) dismissing the appeal preferred by the petitioner-company against the order dated 13.8.2004, passed by respondent No. 2. Brief facts that emerge from the pleadings on record are that the petitioner-company was running the business of Passenger Transport on the Moga-Faridkot route in j Punjab after having obtained route permits from the competent authority. Petitioner-company was covered under the Act and had been assigned Code No. PN849 and reported regular compliance under the Act till February, 1981. On account of financial constraints petitioner-company closed down its business in 1981 by disposing of all its assets. The concerned Enforcement Officer of respondent No. 2 conducted inspection of the petitioner''s establishment and filed inspection report dated 28.11.1981 (Annexure P-3), which reflected the petitioner''s establishment to have shut down and with no employee on roll. It is averred that the petitioner-company, thereafter, started operating its business afresh with three buses by obtaining new bus permits but did not report compliance under the Act as the provisions contained therein were not applicable as the employees were less than 20 in number.

The Assistant Provident Fund Commissioner, respondent No. 2 issued notice to the petitioner-company under Section 7-A(1) of the Act relating to the period April, 1981 to April, 2004 on the premise that the company had failed to remit the Provident Fund/Employees Pension Fund, Insurance Fund Contribution and administrative charges in accordance with the provisions of the Act and accordingly directed the authorized representative of the petitioner-company to appear in connection with the inquiry contemplated under the statutory, provision. In response thereto a reply dated 9.10.2003 is stated to have been filed. It has further been pleaded that the Chairman of the petitioner-company Sh. Harbans Singh had fallen ill and as such, could not attend proceedings thereafter. On 25.5.2004 the petitioner-company was proceeded ex-parte and on 13.8.2004 the impugned order at Annexure P-2 was passed ex-parte.

Petitioner-company preferred application under Section 7-A(4) of the Act within the stipulated period of three months for setting aside the order as regards ex-parte proceedings dated 25.5.2004 as well as the subsequent ex-parte proceedings which culminated in the final order dated 13.8.2004. However, such application was rejected on 19.11.2004 by treating the same to be a review application. Petitioner-company, then, preferred CWP No. 5659 of 2005 before this Court assailing the ex-parte proceedings as also the order dated 13.8.2004, passed by the Assistant Provident Fund Commissioner, Sub Regional Office, Bathinda. A Division Bench of this Court disposed of the writ petition vide order dated 9.10.2006 granting liberty to the petitioner-company to avail the statutory remedy of appeal provided under the Act.

In furtherance of the liberty granted, petitioner-company filed appeal dated 5.12.2006 under Section 7(1) of the Act before the Tribunal and such appeal stands rejected vide impugned order dated 6.5.2011 (Annexure P-1).

It is against such brief factual backdrop that the instant petition has been -filed impugning the order dated 13.8.2004 (Annexure P-2), passed by respondent No. 2 as also order dated 6.5.2011 (Annexure P-1), passed by the Tribunal.

Having heard learned counsel for the parties at length and having perused the pleadings on record, I find that it is a fit case for remand back to the Tribunal.

The appeal preferred by the petitioner-company under Section 7(1) of the Act along with all the supporting documents has been placed and appended on record at Annexure P-6. Apart from other contentions, the following issues were raised in appeal:--

"(i) After proceedings having been initiated under Section 7-A(1) of the Act, a reply dated 9.10.2003 was duly filed and the same was appended as Annexure A-5 along with the appeal. In the reply, a categoric stand was taken that the petitioner-company was operating only buses in the name and style of M/s. Kot Kapura Bus Service Pvt. Ltd. and had engaged only eight persons as Drivers and Conductors. It had further been submitted that as per sub section 3 of section 1 of the Act, the provisions would apply only to such establishments which employ 20 or more persons and as such, the provisions of the Act would not apply in any manner to the petitioner-company.

(ii) The statutory powers conferred under Section 7-A(1) of the Act upon the Assistant Provident Fund Commissioner were quasi judicial in nature to determine the applicability of the Act as well as the amount due and in furtherance of such powers, the authority was vested with the same power as with a court as per Code of Civil Procedure and no order could be passed unless the employer or effected person was afforded a reasonable opportunity of representing the case. Accordingly, the issue had been raised in the appeal that even though, the petitioner-company had been proceeded ex-parte on 25.5.2004, yet, its reply dated 9.10.2003 had duly been filed but the same was not even taken into account while passing the order dated 13.8.2004.

(iii) The next crucial issue raised in the appeal by the petitioner-company was that within the stipulated period of three months an application had been filed under Section 7-A(4) of the Act for setting aside the order dated 25.5.2004 for proceedings to be conducted ex-parte as also the consequential final order dated 13.8.2004 but the same was rejected on 19.11.2004 by treating such application to be a review application under Section 7-B of the Act. As such, it had been contended in the appeal that the scope and sphere of operation of the two provisions i.e. Application under Section 7-A(4) of the Act for setting aside proceedings ex-parte and under Section 7-B of the Act as regards review, were totally different and distinct and as such, there had been a violation of not only the statutory provisions contained in the Act but also of the principles of natural justice.

(iv) In the appeal, a specific ground had been taken that the Assistant Provident Fund Commissioner, Sub Regional Office, Bathinda had passed the impugned order dated 13.8.2004 even without deciding the basic and core issue as regards the petitioner''s establishment not falling within the purview of the Act in the light of sub section (3) of Section 1 of the Act."

A perusal of the impugned order dated 6.5.2011 (Annexure P-1), passed by the Tribunal would reveal that the afore-noticed specific issues raised in the appeal have not been dealt with at all. To the contrary, observations have been made that there was no document to prove the staff strength of the establishment and that the order of the Assistant Provident Fund Commissioner, Sub Regional Office, Bathinda dated 13.8.2004 reveals that the petitioner-company had engaged 20 employees and the staff strength was not less than 20.

This Court would be constrained to observe that such observation as noticed herein above, passed by the Tribunal is totally perverse. The order dated 13.8.2004 passed by the Assistant Provident Fund Commissioner fastening a liability of Rs. 1,88,003/- is for the period April, 1987 to April, 2004 and was in respect to only three employees. It is strange that the Tribunal rather than examining the matter in detail and adverting to the reply dated 9.10.2003 that had been appended along with the appeal at Annexure A-5 has chosen to record that the order dated 13.8.2004 passed by the Assistant Provident Fund Commissioner reveals the staff strength of the petitioner''s establishment to be not less than 20. There has been a total non-application of mind in such regard.

The impugned order dated 6.5.2011, passed by the Tribunal at Annexure P-1 has been passed in a casual and routine manner and is in the nature of a mere stamp of approval on the order passed by the Assistant Provident Fund Commissioner concerned.

The statutory remedy of appeal under Section 7(1) of the Act available to the petitioner-company would be in the nature of a substantive remedy. The appellate authority i.e. the Tribunal was obligated to consider the matter independently and to deal with all the contentions/grounds raised in the appeal. Having failed to do so, the Tribunal while passing the impugned order dated 6.5.2011 has defeated the very purpose of the enactment by virtue of which the substantive remedy of appeal has been provided. For the reasons recorded above, the order dated 6.5.2011 at Annexure P-1, passed by the Tribunal is set aside. The appeal preferred by the petitioner-company will now be heard by the Tribunal afresh on merits and in accordance with law. Contentions on both sides are kept open. The Tribunal shall make an endeavor to decide the appeal expeditiously and in any case within a period of four months from the date of communication of this order.

Petition allowed in the aforesaid terms.