IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN THURSDAY, THE 21ST JANUARY 2010 / 1ST MAGHA 1931 WP(C).No. 11261 of 2009(C) ----------------------------------- PETITIONER(S): ------------------------ M/S.HOTEL AMIRTHA (PVT) LTD., THYCAUD, THIRUVANANTHAPURAM, REPRESENTED BY ITS DIRECTOR, S.HARI MURALI, S/O.R.SREEDHARA PANICKER, RESIDING AT BRINDAVAN, THYCAUD, THIRUVANANTHAPURAM. BY ADVS.MR.M.RAMASWAMY PILLAI MR.P.M.JOSEPH RESPONDENT(S): ------------------------- 1. UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF LABOUR, NEW DELHI. 2. THE COMMISSIONER, EMPLOYEES PROVIDENT FUND COMMISSIONER, REGIONAL OFFICE, BAVISHAYA NIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. 3. THE ASSISTANT PROVIDENT FUND COMMISSIONER, BAVISHAYA NIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. R2 & R3 BY MR.N.N.SUGUNAPALAN (SR) R2 & R3 SMT.T.N.GIRIJA, SC,EPF ORGANISATION THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.N.RAVINDRAN, J. ---------------------------- W.P.(C)No.11261 of 2009 ---------------------------- Dated 21st January, 2010 JUDGMENT The petitioner is an establishment covered by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the scheme framed thereunder ever since 30.11.1976. Based on complaints filed by the Thiruvananthapuram Gilla Hotel Mazdoor Sangam that the management is not paying the provident fund contributions from September, 2006 onwards and that a large number of employees working in the hotel have not been enrolled in the provident fund, the third respondent conducted an enquiry under section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, hereinafter referred to as 'the Act' for short. Summons was issued to the Managing Director of the petitioner company inviting her to appear for the enquiry held on 19.6.2008. The summons was sent by registered post only on 11.6.2008. Though the summons was duly served and acknowledged, no one representing the employer appeared for the enquiry. The enquiry was thereupon adjourned to 30.6.2008, 22.7.2008 and 13.8.2008. 2. It appears, even before the summons was issued, the WP(C).No.11261/2009 2 Enforcement Officer had inspected the petitioner's hotel to enquire into the complaints sent by the Thiruvananthapuram Gilla Hotel Mazdoor Sangam. The Enforcement Officer reported that there is failure to remit the dues regularly from September, 2006 to March, 2008 and that 45 employees had not been enrolled in the provident fund. He also prepared a statement of dues and a list of non-enrolled employees. Based on the said material, as the employer did not adduce any evidence, the third respondent passed Ext.P2 order dated 13.8.2008 determining the amount due from the petitioner for the period from September, 2006 to March, 2008 in respect of the enrolled employees and for the period from May, 2006 to April, 2008 in respect of the non-enrolled employees. The Managing Director of the company was directed to pay the sum of Rs.7,25,558.65 within 15 days from the date of receipt of the said order. By Ext.P2 it was also stated that the amount demanded therein is not inclusive of the damages leviable under section 14B and interest under section 7(Q) of the Act. Aggrieved by Ext.P2 order, the petitioner filed W.P.(C)No.30109 of 2008 in this Court. By Ext.P3 judgment delivered on 14.10.2008, a learned Single Judge of this Court held that the petitioner should invoke the alternate remedy available to him. However, in order to enable the petitioner to avail the alternate remedy, this Court directed WP(C).No.11261/2009 3 that in the event of the petitioner remitting the sum of Rs.2.5 lakhs towards the amount demanded in Ext.P2, proceedings for enforcement of Ext.P2 shall stand stayed for a period of three months. 3. Pursuant to Ext.P3 judgment, the petitioner filed an application under section 7B of the Act seeking a review of Ext.P2 order. The petitioner also remitted the sum of Rs.2.50 lakhs as directed by this Court in Ext.P3 judgment. The petitioner states that besides depositing the sum of Rs.2.5 lakhs as directed in Ext.P3 judgment, other payments were also made and that till date, towards the amount demanded in Ext.P2 order, the petitioner has remitted the sum of Rs.7,12,883/=. On receipt of the application filed by the petitioner under section 7B of the Act, the third respondent issued notice to the Managing Director of the petitioner on 19.11.2008 informing her that a hearing will be held on 1.12.2008 to examine the admissibility of the review petition. Though notice was served on the Managing Director of the petitioner company on 21.11.2008, no one appeared on behalf of the petitioner before the third respondent. The third respondent thereupon rejected the application by Ext.P4 order passed on 1.12.2008. Aggrieved thereby the petitioner filed W.P.(C) No.1043 of 2009 in this Court contending that due to personal reasons, including the strike that was going on in the establishment WP(C).No.11261/2009 4 and the ailment of the Managing Director, the petitioner could not make arrangements to appear before the third respondent when the application for review was taken up for consideration on 1.12.2008. By Ext.P5 judgment delivered on 13.1.2009 after hearing the learned standing counsel appearing for the Employees Provident Fund Organization, this Court quashed Ext.P4 and directed the third respondent to issue notice to the petitioner and pass orders on the application filed by the petitioner under section 7B of the of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 after hearing the petitioner. 4. The third respondent thereafter issued notice to the Managing Director of the petitioner company on 9.2.2009 fixing the date of hearing as 25.2.2009. Notice was also issued to the Vice President and General Secretary of Thiruvananthapuram Gilla Hotel Mazdoor Sangam on 25.2.2009. On that day, Sri.N.Vijayakumar, the learned counsel engaged by the petitioner appeared on their behalf. He sought an adjournment of the hearing in order to enable the petitioner to substantiate the petitioner's contentions in the review petition. On 25.2.2009, no one representing the trade unions had appeared and as requested by the petitioner's counsel the hearing was adjourned to 27.2.2009. On that day, neither the representative of WP(C).No.11261/2009 5 the petitioner nor the representative of the trade unions appeared. On the short ground that there was no appearance for the employer, the third respondent rejected the application filed by the petitioner under section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 by Ext.P6 order dated 27.2.2009. Ext.P6 is under challenge in this writ petition. 5. The learned counsel appearing for the petitioner submitted that as this Court had in Ext.P4 judgment directed the third respondent to hear the petitioner and take a decision and as the petitioner's counsel had appeared on 25.2.2009, the third respondent erred in rejecting the application on 27.2.2009, the date to which hearing of the application under section 7B stood adjourned, without affording the petitioner/petitioner's counsel an opportunity to substantiate their contentions. The learned counsel for the petitioner contended that even if the petitioner's counsel had appeared on 27.2.2009, as no one representing the trade unions based on whose complaints the order under section 7A had been passed as regards the 45 employees who according to the trade unions have not been enrolled, no final determination would have been possible on 27.2.2009 and that the third respondent has acted mechanically in passing Ext.P6. Per contra, the learned standing counsel appearing for WP(C).No.11261/2009 6 the Employees' Provident Fund Organization contended that the conduct of the petitioner throughout the proceedings discloses that the petitioner is only interested in delaying the disposal of the application filed by them under section 7B of the Act. The learned standing counsel contended that the petitioner's representative did not appear for the section 7A enquiry though the enquiry was adjourned to five different dates and that the petitioner's representative did not also appear when the section 7B application was posted for enquiry prior to and after Ext.P5 judgment. The learned standing counsel submitted that the petitioner's conduct disentitles them from canvassing the correctness of Ext.P6 proceedings. 6. I have considered the submissions made at the Bar by the learned counsel appearing on either side. By Ext.P2 order passed after enquiry under section 7A, the petitioner was held liable to pay the arrears of contribution payable in respect of the enrolled employees during the period from September, 2006 to March, 2008, and also the contribution claimed in respect of the 45 employees who according to the Thiruvananthapuram Gilla Mazdoor Sangam, were working in the hotel but were not enrolled in the provident fund. Before Ext.P2 order was passed, though the petitioner was given notice, the petitioner did not appear notwithstanding the fact that the WP(C).No.11261/2009 7 enquiry was adjourned on four occasions. The representatives of the trade unions however appeared. They were heard and Ext.P2 order was passed. It is relevant to note that at that time a strike was going on in the petitioner's establishment involving the workers and that the petitioner was constrained to move this Court seeking police protection to continue to run the hotel. After Ext.P2 order was passed, the petitioner had moved this Court by filing W.P.(C)No.30109 of 2008 challenging Ext.P2 order. This Court declined to interfere with Ext.P2 and relegated the petitioner to invoke the alternate remedy available to them. The petitioner was also directed to pay the sum of Rs.2.5 lakhs within one month. It is not in dispute that the said sum has been paid. The petitioner also claims that besides the sum of Rs.2.5 lakhs other amounts have also been paid and that till date the sum of Rs.7,12,883/- has been paid. The petitioner has however not produced proof of such payment. The learned standing counsel for the respondents submitted that he is therefore not in a position to state whether as claimed by the petitioner the sum of Rs.7,12,883/= has been paid. However, there is no dispute regarding the fact that the petitioner has remitted Rs.2.5 lakhs pursuant to Ext.P3 judgment. 7. After Ext.P3 judgment was delivered, the petitioner filed an application under section 7B of the Employees' Provident Funds WP(C).No.11261/2009 8 and Miscellaneous Provisions Act, 1952. That application was rejected on the ground that the petitioner's representative did not appear notwithstanding service of notice and also for the reason that no documents have been produced to substantiate the review petition. The review petition was accordingly rejected by Ext.P4 order. The petitioner successfully challenged it by filing W.P.(C)No.1043 of 2009 wherein this Court held that as the order impugned saddles the petitioner with monetary liabilities, the petitioner should be afforded another opportunity to substantiate their contentions. This Court also directed the third respondent to issue notice to the petitioner and after hearing the petitioner, pass orders on the petition filed by the petitioner under section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. This Court had not in Ext.P5 fixed a time limit within which orders have to be passed on the application under section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Ext.P5 judgment was delivered on 13.1.2009. Thereafter, the third respondent issued notice dated 9.2.2009 fixing the date of hearing as 22.2.2009. The petitioner's lawyer appeared on that day. Though notice had been issued to the office bearers of the Thiruvananthapuram Gilla Mazdoor Sangam, they did not appear. The learned counsel for the petitioner sought an adjournment. That WP(C).No.11261/2009 9 request was granted and the enquiry was adjourned to 27.2.2009. On that day, neither the petitioner's representative nor the representative of the trade union appeared. No request for adjournment was also received. The third respondent, thereupon passed Ext.P6 order holding that no evidence has been adduced before him for admitting the application under section 7B and as the employer was not present, he has no option but to reject the application. If the third respondent had given the petitioner an opportunity to produce documents and to substantiate their contentions, the filing of this writ could have been avoided. This Court had in Ext.P5 judgment directed the third respondent to pass an order after hearing the petitioner on the petition for review filed under section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. That implies that the third respondent ought to have passed an order on the merits of the application filed under section 7B instead of rejecting it by a non- speaking order. The third respondent has by his action deprived the petitioner of the right to move the Appellate Tribunal in appeal for the reason that on a plain reading of sections 7B and 7-I of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, no appeal lies from an order rejecting an application under section 7B . I do not however propose to consider the maintainability of an appeal from an WP(C).No.11261/2009 10 order of the kind of Ext.P6 in this proceedings. In my opinion, as the order passed under section 7A saddles the petitioner with monetary liability even in relation to 45 employees who are, according to the union not enrolled in the provident fund but are employed in the hotel, the third respondent ought to have afforded the petitioner an opportunity to adduce evidence to substantiate their contentions instead of passing an order rejecting the application filed under section 7B of the Act. That apart, Ext.P6 discloses that the representatives of the trade union had also not appeared either on 22.2.2009 or on 27.2.2009. The question whether, as alleged by the trade unions, 45 employees who are not enrolled in the provident fund were working in the petitioner's hotel was a crucial aspect on which the third respondent should have entered a finding. Without the presence of the trade union, the third respondent would not have been able to give a just decision on that issue. In such circumstances, I am persuaded to agree with the learned counsel for the petitioner that the third respondent has acted mechanically in passing Ext.P6. However, in view of the fact that the petitioner has been given more than one opportunity to participate in the enquiry into the application filed under section 7B of the Act, I am of the opinion that the petitioner should be held liable to pay the costs of this writ petition to the third respondent, WP(C).No.11261/2009 11 which I fix at Rs.5,000/-. In the result, I allow this writ petition, quash Ext.P6 and direct the third respondent to pass an order on the merits of the application filed by the petitioner under section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 after affording the petitioner one more opportunity to substantiate their contentions. The third respondent shall issue notice by registered post to the petitioner giving the Managing Director of the petitioner at least two weeks time from the date of receipt of the notice to attend the hearing. The petitioner/petitioner's representative shall positively appear on that date and produce the documents which the petitioner chooses to rely on. It will be open to the petitioner to file a written submission raising all contentions. The third respondent shall thereupon pass revised orders on the petitioner's application and communicate copies thereof to the petitioner. Final orders in the matter shall be passed expeditiously and in any event with an outer limit of three months from today. The petitioner shall also pay to the third respondent the sum of Rs.5,000/- fixed as costs within two weeks from the date of receipt of a copy of this judgment. It is clarified that if notwithstanding receipt of notice from the third respondent, the petitioner does not appear before the third respondent WP(C).No.11261/2009 12 or does not co-operate with the finalisation of the proceedings within the period of three months stipulated above, the third respondent need not extend any further opportunity to the petitioner to substantiate their contentions. If costs as directed above is not remitted within the period stipulated above, the respondents will be free to recover the said amount along with the contribution determined under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. P.N.RAVINDRAN Judge TKS