BOMBAY HIGH
COURT
Hon'ble Mr.
K.K. Tated, J.
CAJ W.P. No.
1564/2013, D/–9-4-2013
Vindyachal
Security, Detective & Allied Services Pvt. Ltd. vs. Assistant Provident
Fund Commissioner
EMPLOYEES'
PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 – Sections 7A, and 7B(1)
– EPF Authority called upon the petitioner to pay the arrears of dues by
passing an order without providing copy of deposition of Enforcement Officer –
EPF Authority also rejected the review application, filed by the petitioner
under section 7B(l) of the Act without hearing the petitioner – Petitioner
challenged that order of the EPF Authority in writ petition – Held, whenever,
the powers are to be exercised for quasi -judicial purpose or whenever the
authority is acting as a quasi -judicial authority, the hearing is a must
because passing of any order is to visit with civil consequences – Opportunity
of hearing is must to comply with the principles of natural justice – Hence,
impugned order is set aside – Matter remanded to the Authority to decide it on
its own merits, providing all documents relied by it, to the petitioner. Paras
7 to 10
For
Petitioner : Mr. S.C. Naidu a/w Mr. T.R. Yadav i/b M/s. C.R. Naidu and Co.,
Advocates.
For
Respondent : Mr. Suresh Kumar, Advocate Mr. S. Yadagiri, Enforcement Officer
present in the Court.
IMPORTANT
POINTS
Whenever,
the powers are to be exercised for quasi -judicial purpose or whenever the
authority is acting as a quasi -judicial authority, the hearing of the parties
concerned is a must because passing of any order is to visit with civil
consequences.
Opportunity
of hearing is must to comply with the principles of natural justice.
No doubt,
clause (a) of proviso to sub-section (4) of section 7B of the Act does not make
it mandatory to authority to give hearing if the application is to be allowed
but thereby it cannot be read that no hearing is necessary if application is to
be rejected.
P.C.
PER K.K.
TATED, J.—1. Heard the learned counsel for the petitioner.
2. By
consent, matter is taken on board for final hearing at the stage of admission.
3. By this petition,
under Article 226 and 227 of the Constitution of India, petitioner challenges
the order under section 7A of the Employees' Provident Fund and Miscellaneous
Provisions Act, 1952 dated 11th December, 2012 and the order dated 2nd January,
2013 under section 7B(1) of the said Act. By order dated 11th December, 2012
under section 7A of the said Act, Authority called upon the petitioner to pay a
sum of Rs. 3,94,21,674 towards dues under the said Act.
4. It is the
case of the petitioner that at the time of passing order dated 11th December,
2012, the Assistant Provident Fund Commissioner relied on deposition of
Enforcement Officer. He further states that copy of the said deposition was not
provided by the Authority and therefore, the order passed by the Assistant
Provident Fund Commissioner dated 11th December, 2012 is against justice,
equity and good conscious and same is liable to be set aside.
5. The
learned counsel for the respondent after taking instructions from the concerned
officer, Mr. S. Yadagiri who is present in the court made a statement that it
is an admitted fact that copy of deposition of Enforcement Officer was not
provided to the petitioner.
6. In view
of this fact, it is crystal clear that Authority passed impugned order dated
11th December, 2012 without providing the material facts and documents to the
petitioner and therefore, same is against justice, equity and good conscious
and same is liable to be set aside.
7. The
learned counsel for the petitioner further pointed out that the order is passed
by the Assistant Provident Fund Commissioner in Review Application under
section 7B(1) of the said Act without hearing the petitioner. These facts have
also been admitted by the Advocate for the respondent. Counsel for the
petitioner in support of his contention states that if the order is passed
without hearing, the same is liable to be set aside. He relies on the judgment
of the Gujarat High Court in the matter of Cookvel Foods India Private Limited
v. Assistant Provident Fund Commissioner in Civil Appeal No. 17769 of 2003
dated 25th March, 2005 in para 5 as under:
“(5) No
appeal shall lie against the order of the officer rejecting an application for
review, but an appeal under this Act shall lie against an order under review as
if the order passed under review were the original order passed by him under
section 7A.
8. The
perusal of Section 7B shows that if a new ground is discovered or new matter or
evidence could not be produced to the notice of the authority, the review
application can be preferred. What would be the scope and ambit of review on
the basis of new material or which can be said as new material etc. is not the
subject matter of this petition, therefore, it would not be necessary to
examine the scope and ambit of the power of review under Section 7B of the Act
on the aforesaid aspects, except the only aspect as to whether the opportunity
of hearing is required or not. Sub-section (3) of Section 7B provides that
where it appears to the officer receiving an application for review that there
is no sufficient ground for a review, he shall reject the application and,
therefore, the contention possibly based on the said sub-section is that there
is no express provision made for giving opportunity of hearing. It is well
settled that whenever the powers are to be exercised for quasi-judicial purpose
or whenever the authority is acting as a quasi-judicial authority, the hearing
is a must, because passing of any order is to visit with civil consequences.
Such principles are in certain matters read even for administrative decision.
In the present case, if the scheme of the Act, more particularly sections 7A
and 7B are considered, firstly the powers under section 7A with the Provident
Fund Authority are as quasi-judicial authority. Express powers are provided as
per Section 7B for review on the ground mentioned in review. Even otherwise
also, it is well settled that even if the statute does not provide for
opportunity of hearing unless it is expressly excluded or unless there are any
emergent circumstances warranting for such purpose, the section or any power
under statute as that of quasi judicial authority are to be read with the
principles of natural justice and such scheme of giving opportunity of hearing
by observance of principles of natural justice is to be read as inbuilt
mechanism of any decision-making process by a quasi judicial authority.
Therefore, the contention of Mr. Mehta that hearing is required only if new
material to the satisfaction of the authority is found for exercise of the
power of review cannot be accepted. Whether such material is new material or
whether such contention is required to be considered for attracting the power
of review or not would also require that the -person concerned who has
preferred the review application is heard. The authority before concluding the
proceedings of the review application must give an opportunity of hearing to
the party concerned. Mr. Mehta made an attempt to submit that in proviso to
Sub-section (4) of section 7B hearing is provided as per Clause (a) and,
therefore, power under section 7B(3) may not be read with principles of natural
justice. As such Clause (a) of proviso to sub-section (4) of section 7B does
make it mandatory to authority to give hearing if the application is to be
allowed but thereby it cannot be read that no hearing is necessary if application
is to be rejected. Since in the present case, as observed earlier, it is an
admitted position that no opportunity of hearing has been given, the order
passed in review application dated 26.12.2002 cannot be sustained in the eye of
law and deserves to be quashed and set aside on the ground that opportunity of
hearing has not been given.”
9.
Considering the fact that the Advocate for the respondents admits that at the
time of deciding Review Petition, personal hearing was not given to the
petitioner and the law laid down by the Gujarat High Court in the matter of
Cookvel Foods India Private Limited v. Assistant Provident Fund Commissioner,
(Supra), I am of the opinion that it is necessary to set aside the order dated
2nd January, 2013 dismissing the petitioner's Review Application.
10. The
learned counsel for the respondents after taking instructions from his officer
who is present in the court makes a statement that they will provide all the
documents relied by them in the proceeding under section 7A of the said Act
either to the petitioner or his Advocate on record within four weeks from
today. Statement is accepted.
11.
Considering these facts, petition is disposed of with following directions:
·
Order dated
11th December, 2012 passed under section 7A of the said Act and order dated 2nd
January, 2013 under section 7B(1) of the said Act is set aside.
·
Matter is
remanded to the 7A Authority to decide on its own merits.
·
Respondents
to provide all documents relied by them in 7A proceeding either to petitioner
or their Advocate within four weeks from today.
·
Liberty
granted to the petitioner to file additional application and/or documents
before the 7A Authority within 8 weeks from today.
·
Authority
under section 7A to decide the application as early as possible after giving
hearing to both the sides and allowing them to file additional documents, if
any
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