IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.T.RAVIKUMAR TUESDAY, THE 20TH OCTOBER 2009 / 28TH ASWINA 1931 OP.No. 5572 of 1998(L) ---------------------- PETITIONER(S): --------------- PARTHAS TEXTILES, KOTTAYAM REPRESENTED BY ITS MANAGING PARTNER SRI.SRINIVASA REDDIAR BY ADV. SRI.M.PATHROSE MATTHAI, SENIOR ADVOCATE SRI.SAJI VARGHESE RESPONDENT(S): --------------- 1.THE EMPLOYEES PROVIDENT FUNDS APPELLATE TRIBUNAL NEW DELHI. 2.THE REGIONAL PROVIDENT FUND COMMISSIONER, PATTOM, THIRUVANANTHAPURAM. 3. M/S PARTHAS TEXTILES, KAYAMKULAM (DELETED) (R3 DELETED AT THE RISK OF THE PETITIONER VIDE ORDER DATED 17.8.09 IN I.A.10141/09) ADV. SRI.N.N. SUGUNAPALAN (SR.), STANDING COUNSEL, P.F.-R1,R2 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 20/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P.NO.5572 OF 1998 APPENDIX PETITIONER'S EXHIBITS: Ext.P1: True copy of order dated 29.8.97 issued by the 1st respondent. Ext.P2: True copy of partnership firm of the petitioner firm. Ext.P3: True copy of application filed by the petitioner before the 1st respondent. Ext.P5: True copy of the order passed by the 1st respondent. RESPONDENTS' EXHIBITS: NIL ORDER ON C.M.P.NO.10053/1998 IN O.P.NO.5572/1998 DISMISSED 20.10.2009 Sd/-(C.T.RAVIKUMAR, JUDGE) C.R C.T. RAVIKUMAR, J. --------------------------------------------- O.P NO.5572 OF 1998 --------------------------------------------- Dated this the 20th day of October, 2009 JUDGMENT The scope and ambit of the power under Section 7L(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short 'the Act') and consequently, the correctness or otherwise of Ext.P5 passed by the first respondent invoking the said power arise for consideration in this Writ Petition. 2. The petitioner herein-Parthas Textiles, Kottayam is a partnership firm duly registered under Partnership Act engaged in the business of textiles at Kottayam. As per the petitioner, it does not have any branches or any other establishment other than the establishment at Kottayam and admittedly the firm was covered and brought under the purview of the Act with effect from 31.3.1963. The second respondent initiated proceedings to treat the establishments of different firms carrying the name 'Parthas Textiles' as the branches of the petitioner firm although they were covered separately under the act. On 19.10.84 he had passed an order under Section 7A of the Act. Feeling aggrieved by the said action, a representation under Section O.P. NO.5572 of 1998 2 19A of the Act was preferred by the petitioner before the Central Government. Since the decision thereon went against the petitioner, the said order was challenged before this Court in O.P.No.1101/97. This court set aside the same and directed the Central Government to decide the matter afresh after hearing the parties. Subsequently the matter was heard by the legal advisor of the Central Governement on different occasions, but, no order was passed there on. While the matter was thus pending before the Central Government, Employees Provident Fund Appellate Tribunal was constituted and the representations pending before the Central government under Section 19A including the one submitted by the petitioner, were transferred to the Tribunal treating them as appeals. Thereupon, after considering the rival contentions the first respondent Tribunal passed Ext.P1 order under Section 7L(1) which reads thus: The appeal is allowed in respect of liability of the employer towards M/s Parthas Textiles, Alleppy. M/s Parthas, Trivandrum, M/s Parthas Textiles, Nagarcoil and the impugned order is set aside to that extent. So far as the order relates to M/s Parthas Textiles, Kayamkulam, it is upheld with modification that the firm shall be alloted a new number and all the partners of the firm shall be liable for the amount due. The firm shall be liable to pay simple interest at the rate of 12% on the outstanding amount from the date of impugned order till the date of payment of the same. O.P. NO.5572 of 1998 3 3. After the passing of Ext.P1 order by the Tribunal, the petitioner has filed a petition under Section 7L(2) of the Act. Ext.P4 is the copy of the petition thus filed before the Tribunal. It is obvious from Ext.P4 that the prayer made thereunder is only to amend the Ext.P1 order suitably to rectify the mistakes apparent from the record in Ext.P1 by invoking the power under S.7L(2). Ext.P4 petition was then taken up for consideration by the Tribunal. Thereupon, holding that misconception of facts affected Ext.P1 order passed by it, the review petition viz., Ext.P4 was admitted to re-hear the entire case, as per Ext.P5. The said order reads as hereunder: For petitioner, Sri.S.Ajit, Advocate perused the Partnership Deed relating to M/s Parthas Textiles, Kottayam and Parthas Textiles, Kayamkulam today. Photo copy of which is taken up for record. The order dated 29.8.1997 passed in Case No.S. 35011/7(5) 85-PFC seems to have suffered from misconception of fact and whole of the judgment has been affected due to this misconception. Therefore the review is admitted for rehearing the entire case and the petitioner employer is called upon to show why all the units should not be clubbed together. Fixed for entire evidence and hearing at Delhi on 30th March and 31st March 1998. The Regional Commissioner will produce the entire file relating to this case at Delhi. Let copy of the order be sent to the Regional Provident Fund Commissioner, Cochin for compliance. Before considering the correctness or otherwise of Ext.P5 the scope and ambit of power conferred to Tribunals under Section O.P. NO.5572 of 1998 4 7L(2) is to be looked into. Section 7L(2) reads thus: 7L(2)--A Tribunal may, at any time within five years from the date of its order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment in the order if the mistake is brought to its notice by the parties to the appeal: Provided that an amendment which has the effect of enhancing the amount due from, or otherwise increasing the liability of, the employer shall not be made under this sub- section, unless the Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. 4. This Writ Petition has been filed challenging Ext.P5 order. The learned senior counsel for the petitioner submitted that Ext.P5 is liable to be interfered with on several grounds. It is contended that the power to rectify mistake is a specific and limited power subject to the conditions laid down in sub-section (2) of Section 7L and the same is exercisable only at the instance of a party to the appeal. The scope of the power is only to rectify any mistake apparent from the record and to amend the order passed under Section 7L(1) accordingly, subject to the conditions thereunder, it is contended. Further, it is contended that the Tribunal has no power under Section 7L(2) to set aside Ext.P1 order or any part of it in respect of which no mistake is brought to its notice by a party to the appeal and at O.P. NO.5572 of 1998 5 any rate, the proposal to re-hear the entire case and calling the petitioner to show why all the units should not be clubbed together are beyond the jurisdiction of the Tribunal. The learned counsel for the second respondent strenuously contended to support and sustain Ext.P5 order. Admittedly, the second respondent did not, hitherto, take up any challenge against Ext.P1 order on the ground that it is founded on misconception of facts. No other provisions in the Act, other than Section 7L(2) was brought to my notice by the learned counsel, under which an order like Ext.P5 could be passed. 5. As per Ext.P4 petition filed under Section 7L(2) of the Act before the Tribunal, the petitioner has brought a mistake in Ext.P1 order to its notice and sought for rectification. The relevant portion of Ext.P4 reads as hereunder:- “Thus it can be seen that it is not correct that the partners of M/s. Parthas Textiles, Kottayam and M/s.Parthas Textiles, Kayamkulam could be clubbed as found by Honourable Tribunal. It is submitted that the very basis of the findings of the Tribunal as stated above, is a mistake and therefore it is only just and proper that the Tribunal is pleased to rectify the mistake apparent on the face of the record as stated above and amend the order of the Honourable Tribunal, rectifying the mistake, in terms of Section 7L(2) of EPF and MP Act, 1952. Hence it is humbly prayed that the O.P. NO.5572 of 1998 6 Honourable Tribunal may be pleased to amend the order suitably on the basis of the above statement of correct facts, in terms of section 7L(2) of the Act.” As noticed hereinbefore, the Tribunal has treated Ext.P4 as a review petition and issued Ext.P5 order admitting the same and ordering for re-hearing the entire case and called upon the petitioner to show why all the units should not be clubbed together. To know the scope and ambit of the power under Section 7L(2) of the Act it is proper and profitable to refer to Section 7B of the Act, as well. Section 7B reads thus:- 7B.Review of orders passed under Section 7A--(1) Any person aggrieved by an order made under sub-section (1) of Section 7A, but from which no appeal has been preferred under this Act, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made, or on account of some mistake or error apparent on the face of the record or for any other sufficient reason, desires to obtain a review of such order may apply for a review of that order to the Officer who passed the order: Provided that such officer may also on his own motion review his order if he is satisfied that it is necessary so to do on any such ground. (Emphasis supplied) O.P. NO.5572 of 1998 7 6. A scanning of the power of review under Section 7B would thus reveal that discovery of new and important matter or evidence which, after the exercise of due diligence was not within the knowledge of the review petitioner or could not be produced by him at the time when the order was made or some mistake or error apparent on the face of the record or any other sufficient reason, may be grounds for review of an order passed under Section 7A before the officer who passed that order. That apart, it would reveal that the power of suo moto review is also available under Section 7B of the Act. 7. Now, I may examine the construction of section 7L (2) of the Act. A bare perusal of Section 7L(2) would bring forth the fact it is not in the nature of a review as contemplated under sections 7B of the Act. In fact, it is only a power conferred on the Tribunal exercisable at any time within five years from the date of its order to rectify any mistake apparent from the record. By invoking the said power amendment in the order passed under sub-section (1) of Section 7L can be effected by rectifying the mistake that was brought to its notice by the parties to the appeal. If the amendment sought for would carry the effect of enhancing the amount due from or O.P. NO.5572 of 1998 8 otherwise increasing the liability of the employer it shall be made only after giving notice to the concerned employer of its intention to do so and only after allowing such employer a reasonable opportunity of being heard. Thus, a close scrutiny of the power conferred on the Tribunal under Section 7L(2) would reveal that it is not actually a power of review akin to the one conferred under Section 7B of the Act whilst it is only a power conferred on the Tribunal only to correct any mistake apparent from the record. The said power is exercisable only when it is brought to the notice by the parties to the appeal and there is no suo moto power available to the Tribunal to invoke the provision under Section 7L(2) of the Act. The legislature, even after conferring power of review under section 7B to the concerned officer to review the order on manifold grounds specified thereunder conferred on the Tribunal only a power to rectify any mistake apparent from the record in the order passed under Section 7L(1) and to amend it accordingly, that too, with certain riders. The tribunal does not have inherent power of review. Therefore, in order to exercise a power of review it must be conferred on the Tribunal by law either specifically or by implication. In this case, the Act does not confer any power of review on the Tribunal either specifically or O.P. NO.5572 of 1998 9 by implication even after specifically conferring such a right under Section 7B on the concerned officer who passed order under Section 7A of the Act. What is thus emerging from the discussion is that the power of review is not statutorily conferred on the Tribunal and what is conferred on it under Section 7L(2) is only a specific power to rectify any mistake apparent from the record. Mere description of the said power by using the nomenclature 'review' cannot and will not expand or extend the scope and ambit of the power under Section 7L(2) which is statutorily restricted only for rectifying mistake apparent from the record. 8. As noticed earlier, what was sought to be rectified by invoking the power under Section 7L(2) by the petitioner in Ext.P4 is only a mistake which according to the petitioner apparent from the record. The Tribunal can therefore exercise or decline to exercise the power under Section 7L(2) subject to its decision regarding the existence of such a mistake apparent from the record. If the mistake is brought to its notice by the party to the appeal is one apparent from the record it can rectify the same and amend its order suitably in terms of Section 7L(2) or else it can only dismiss the petition. But, O.P. NO.5572 of 1998 10 Ext.P5 would reveal that the Tribunal after treating Ext.P4 as a review petition admitted it for the purpose of re-hearing the entire case besides calling upon the petitioner to show why all the units should be clubbed together. Ext.P1 would show that the Tribunal had interfered with the said finding in the order passed under Section 7A, to the extent evident from Ext.P1, and therefore, the action proposed as per Ext.P5 can be construed only as an attempt to re-construct and correct Ext.P1 order originally passed under sections 7L(1) of the Act. In short, there is no justification for treating Ext.P4 as a review petition and for admitting it for the purpose of re-hearing the entire case. Since the clubbing of the units proposed would have the effect of re-constructing and correcting Ext.P1 order passed under Section 7L(1) it is also not permissible under Section 7L (2). No other power enabling the Tribunal to pass an order like the one in Ext.P5 has been brought to my notice by the respondents. My endeavour to find any such power also did not fructify. In short, the order in Ext.P5 is passed without jurisdiction. 9. In the circumstances, Ext.P5 is liable to be interfered with. Accordingly, it is quashed to the extent Ext.P4 is treated O.P. NO.5572 of 1998 11 as a review petition and it is proposed to re-hear the entire case and calling the petitioner to show why all units should not be clubbed together. The Tribunal is further directed to consider Ext.P4 petition filed under Section 7L(2) of the Act in accordance with the power conferred on it as per Section 7 L(2) of the Act and to pass orders thereon expeditiously, at any rate, within a period of three months from the date of a receipt of copy of this judgment. Original Petition is allowed to above extent. (C.T.RAVIKUMAR) JUDGE spc