Civil Writ Petition No. 16819 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No. 16819 of 2009 Date of decision: 08.12.2010 Regional Provident Fund Commissioner ...Petitioner Versus Employees Provident Fund Appellate Tribunal and another ...Respondents CORAM: HON'BLE MR. JUSTICE RANJIT SINGH Present: Mr. Kamal Sehgal, Advocate for the petitioner. Mr. Hitesh Pandit, Advocate for respondent No. 2. RANJIT SINGH J. The Regional Provident Fund Commissioner, Amritsar has filed this writ petition to impugn order passed by EPF Appellate Tribunal, New Delhi dated 04.09.2009. Vide this order, the appellate Tribunal has waived the condition of pre-deposit of 75% of the amount assessed by the petitioner authority under Section 7-A of the EPF and MP Act, 1952. The impugned order passed by the Tribunal reads as under:- “ The present appeal has been filed to challenge the order dated 18.2.2000 passed under Section 7-A of the EPF & MP Act, 1952 and 7-B order dated 1.7.2004. The appellant has also filed an application for exemption under Section 7-O of the Act for seeking exemption from pre-deposit. Heard the counsel for the appellant. The appeal is admitted. The condition of pre-deposit is dispensed with and the operation of the impugned order Civil Writ Petition No. 16819 of 2009 2 shall remain stayed. Respondent is directed not to take any coercive measures against the appellant in pursuant to the impugned order till disposal of the present appeal. Notice be issued to the respondent returnable by 02.12.2009 before the Registrar to complete the service and pleadings.” Mr. Kamal Sehgal has drawn my attention to the provisions of Section 7-O, which regulates the deposit of amount at the time of filing an appeal and the jurisdiction of the appellate Tribunal to waive the pre-deposit of the amount so assessed for hearing the appeal. Section 7-O of the EPF Act provides that no appeal by the employer shall be entertained by a Tribunal unless he has deposited with it 75% of the amount due from him as determined by an officer referred to in section 7A. This is a salutary provision which is made in regard to the maintainability of the appeal. However, there is a proviso under Section 7-O of the Act which give an enabling power to the appellate Tribunal to either waive or reduce the amount required to be deposited as a pre-condition for hearing the appeal. The proviso reads as under:- “ Provided that the Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section.” There is not much dispute that the appellate authority has a power either to waive or reduce the amount to be deposited for entertaining the appeal. However, while directing waiver or reduction in amount of pre-deposit, Tribunal is called upon to record the Civil Writ Petition No. 16819 of 2009 3 reasons in writing for doing so. This requirement is with a reason and for purpose. To highlight the purpose, the counsel has referred to a Division Bench of Kerala High Court in the case of M/s. Muthoot Pappachan Consultancy & Management Services v. Employees Provident Fund Organization & Ors. 2009 LAB I.C. 994 It is held in this case that the requirement of recording reasons is essential and is a legal requirement to ensure that no power under the section is exercised in arbitrary and whimsical manner. This can be so noticed for the following observation made in this case:- “ The deposit of 75% under Section 7-O is a pre- condition for maintaining the appeal and not a condition for staying the operation of the order under appeal. Under Section 7-O the normal rule is deposit of 75% of the amount assessed under Section 7-A. However, under the proviso, the Tribunal is given a power to either waive or reduce the deposit. For the exercise of the power under the proviso the Appellate Tribunal has to record its reason as to why the pre-deposit is waived or reduced. Since the proviso to Section 7-O has given a wide discretion to the Appellate Authority either to reduce or even to waive the pre-deposit as such, the statute has insisted that the Appellate Authority should record its reasons in writing, lest the authority should exercise its power arbitrarily. Therefore, in cases where the Appellate Authority intends to exercise its power under the proviso to Section 7-O of the Act, the authority should record its Civil Writ Petition No. 16819 of 2009 4 reasons for the exercise of its power either for reducing the percentage of pre-deposit or for waiving the same. ” The perusal of the impugned order which is reproduced in earlier part of the order would clearly show that the appellate authority has not recorded any reasons while allowing the complete waiver of the deposit of the amount while entertaining the appeal. The requirement of depositing 75% of the assessed amount is pre- condition for maintaining the appeal and, therefore, the same could be waived or reduced for some reasons, which would prima face be something other than the grounds on which appeal is filed. Recording of reason to waive or reduce the amount is a requirement of the statute. Since no reasons have been disclosed for waiving the amount of pre-deposit completely, the impugned order may not be sustainable. The same is, therefore, set aside. The case is remanded back to the appellate Authority with the direction to consider the prayer for waiving the requirement of pre-deposit and pass fresh order in accordance with law giving reasons in support of the order. December 08, 2010 ( RANJIT SINGH ) rts JUDGE