Case: M/s. Arcot Textile Mills Ltd Vs. The Regional Provident Fund Commissioner &amp; Others

But in reality when an independent order is passed under Section 7Q which can also be done as has been done in the present case the affected person, we are inclined to think, should have the right to file an objection if he intends to do. We are disposed to think so, when a demand of this nature is made, it can not be said that no prejudice is caused. It is highlighted by the respondents that once the amount due is determined the levy of interest is automatic. The rate of interest is stipulated at 12 per cent or at a higher rate if so is provided in the scheme. Despite this, there can be errors with regard to the period and the calculation. It is a statutory power which is exercised by the competent authority under the Act. Once the said authority takes recourse to the measure for computation and sends a bald order definitely the affected person can ask for clarification and when computation sheet is provided to him he can file an objection. Though, the area of delineation would be extremely limited yet the said opportunity cannot be denied to the affected person. 25. We may state with profit that principles of natural justice should neither be treated with absolute rigidity nor should they be imprisoned in a straight-jacket. It has been held in Ajit Kumar Nag v. General Manager (PJ), Indian Oil Corpn. Ltd., Haldia and Others [(2005) 7 SCC 764] that the maxim audi alteram partem cannot be invoked if the import of such maxim would have the effect of paralyzing the administrative process or where the need for promptitude or the urgency so demands. It has been stated therein that the approach of the Court in dealing with such cases should be pragmatic rather than pedantic, realistic rather than doctrinaire, functional rather than formal and practical rather than precedential. The concept of natural justice sometimes requires flexibility in the application of the rule. What is required to be seen the ultimate weighing on the balance of fairness. The requirements of natural justice depend upon the circumstances of the case. 26. In Natwar Singh v. Director of Enforcement and Another [(2010) 13 SCC 255] , this Court while discussing about the applicability of the rule had reproduced the following passage:- “It is not possible to lay down rigid rules as to when the principles of natural justice are to apply: nor as to their scope and extent. Everything depends on the subject-matter:” [see R. v. Gaming Board for Great Britain, ex p Benaim and Khaida [(1970) 2 QB 417] at QB p. 430 C], observed Lord Denning, M.R.... Their application, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject-matter of the case.” 27. In this context, we may fruitfully refer to the verdict in Kesar Enterprises Limited v. State of Uttar Praesh and Others [(2011) 13 SCC 733] wherein the Court was considering the applicability of principles of natural justice to Rule 633(7) of the Uttar Pradesh Excise Manual. The said Rule provided that if certificate was not received within the time mentioned in the bond or pass, or if the condition of bond was infringed, the Collector of the exporting district or the Excise Inspector who granted the pass shall take necessary steps to recover from executant or his surety the penalty due under the bond. A two-Judge Bench referred to the decisions in Swadeshi Cotton Mills v. Union of India [(1981) 1 SCC 664] , Canara Bank v. V.K. Awasthy [(2005) 6 SCC 321] and Sahara India (Firm) v. CIT [(2008) 14 SCC 151] and came to hold as follows:- “30. ... we are of the opinion that keeping in view the nature, scope and consequences of direction under sub-rule (7) of Rule 633 of the Excise Manual, the principles of natural justice demand that a show-cause notice should be issued and an opportunity of hearing should be afforded to the person concerned before an order under the said Rule is made, notwithstanding the fact that the said Rule does not contain any express provision for the affected party being given an opportunity of being heard.” 28. Regard being had to the discussions made and the law stated in the field, we are of the considered opinion that natural justice has many facets. Sometimes, the said doctrine applied in a broad way, sometimes in a limited or narrow manner. Therefore, there has to be a limited enquiry only to the realm of computation which is statutorily provided regard being had to the range of delay. Beyond that nothing is permissible. We are disposed to think so, for when an independent order is passed making a demand, the employer cannot be totally remediless and would have no right even to file an objection pertaining to computation. Hence, we hold that an objection can be filed challenging the computation in a limited spectrum which shall be dealt with in a summary manner by the Competent Authority. 29. In the present case, it is manifest from the record that the appellant had already deposited a sum of Rs.34,00,000/- before the Competent Authority and sought for supply of the calculation sheet the basis on which the computation had been made so that it could reconcile the accounts. We think it appropriate to direct that the computation sheets shall be provided to the appellant within three weeks and it shall file its objection within two weeks therefrom and thereafter the Competent Authority shall fix a date for reconciliation of the accounts. However, regard being had to the fact that the Act is a piece of social welfare legislation, we direct the appellant to deposit a further sum of Rs.16,00,000/- within a period of four weeks from today. If the amount is not deposited within the time stipulated hereinabove, the entire amount would be leviable and the right to file objection shall stand extinguished. 30.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]On a perusal of the aforesaid provision it is evident that an appeal to the tribunal lies in respect of certain action of the Central Government or order passed by the Central Government or any authority on certain provisions of the Act. We have scanned the anatomy of the said provisions before. On a studied scrutiny, it is quite vivid that though an appeal lies against recovery of damages under Section 14B of the Act, no appeal is provided for against imposition of interest as stipulated under Section 7Q. It is seemly to note here that Section 14B has been enacted to penalize the defaulting employers as also to provide reparation for the amount of loss suffered by the employees. It is not only a warning to employers in general not to commit a breach of the statutory requirements but at the same time it is meant to provide compensation or redress to the beneficiaries, i.e., to recompense the employees for the loss sustained by them. The entire amount of damages awarded under Section 14B except for the amount relatable to administrative charges is to be transferred to theit is evident that the appellant had sent a communication dated 3.10.2007 to the Regional Provident Fund Commissioner submitting that that establishment could not pay the provision fund dues from 1998 due to financial crisis, etc. and it was remitting Rs.83,01,037.80 (Rupees eighty three lacs one thousand thirty seven and eighty paise only) from 1998 to April 2006. Under these circumstances, there was no adjudication with regard to liability as the appellant company had accepted the fault on its own. As it appears the respondent does not have any cavil with regard to the dues payable towards the provident fund by the appellant to the company. What is disputed is that the third respondent issued a demand notice on 23.10.2007 requiring the appellant to remit a sum of Rs.94,27,334/- towards interest under Section 7Q of the Act for the belated remittances made from December 1998 to April 2006. The letter stated a computation sheet was attached to said demand notice which was rebutted by the petitioner by sending a communication stating that it was not sent and it may be provided so that they may reconcile the accounts. The demand notice manifestly has been issued in exercise of power under Section 7Q of the Act and is an independent action and against such an order or issue of demand no appeal could have been filed. Therefore, the conclusion of the learned Single Judge as well as by the Division Bench on the said score is nothold that an objection can be filed challenging the computation in a limited spectrum which shall be dealt with in a summary manner by the Competentis manifest from the record that the appellant had already deposited a sum of Rs.34,00,000/- before the Competent Authority and sought for supply of the calculation sheet the basis on which the computation had been made so that it could reconcile the accounts. We think it appropriate to direct that the computation sheets shall be provided to the appellant within three weeks and it shall file its objection within two weeks therefrom and thereafter the Competent Authority shall fix a date for reconciliation of the accounts. However, regard being had to the fact that the Act is a piece of social welfare legislation, we direct the appellant to deposit a further sum of Rs.16,00,000/- within a period of four weeks from today. If the amount is not deposited within the time stipulated hereinabove, the entire amount would be leviable and the right to file objection shall stand extinguished.