1. Challenge to orders under Section 7-A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, following the introduction of a statutory appeal under Section 7-D. (Para 1 , 8 , 9 )
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1998 Supreme(SC) 238
SUPREME COURT OF INDIA
S. B. Majmudar, V. N. Khare
SUMEDICO CORPORATION AND ANOTHER, APPELLANTS
Versus
REGIONAL PROVIDENT FUND COMMR., RESPONDENT.
Civil Appeals Nos. 5540 and 5541 of 1983 with Nos. 2611-12 of 1989,
decided on February 19, 1998.
The availability of a statutory remedy of appeal to the Appellate Tribunal renders a challenge to the vires of a provision academic.
Headnote:
EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 7-A - APPEAL TO APPELLATE TRIBUNAL - AVAILABILITY OF STATUTORY REMEDY - COURT'S DIRECTION TO APPROACH TRIBUNAL - OBSERVATIONS OF HIGH COURT ON MERITS OF SECTION 7-A ORDER RENDERED INCONSEQUENTIAL.
Fact of the Case:
The appellant challenged the Section 7-A order passed by the authorities under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, on various grounds, including its vires. The High Court upheld the vires of Section 7-A but made observations on its merits. Meanwhile, the Act was amended to provide for an appeal to the Appellate Tribunal under Section 7-D.
Finding of the Court:
The court held that the challenge to the vires of Section 7-A had become academic due to the amendment providing for an appeal to the Appellate Tribunal. It also directed the appellant to file a statutory appeal before the Tribunal within two months, relegating the appellant to the statutory remedy.
Issues: 1. Whether the challenge to the vires of Section 7-A was rendered academic due to the amendment providing for an appeal to the Appellate Tribunal? 2. Whether the appellant should be relegated to the statutory remedy of appeal before the Appellate Tribunal?
Ratio Decidendi: 1. The court held that the challenge to the vires of Section 7-A had become academic due to the amendment providing for an appeal to the Appellate Tribunal. 2. The court directed the appellant to file a statutory appeal before the Tribunal within two months, relegating the appellant to the statutory remedy.
Final Decision: The court disposed of the appeals, directing the appellant to file a statutory appeal before the Appellate Tribunal within two months. The observations of the High Court on the merits of the Section 7-A order were rendered inconsequential.
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2. Challenge to the vires of Section 7-A due to lack of appellate remedy and disputes regarding the merits of the Section 7-A orders. (Para 1 , 9 )
3. The introduction of Section 7-D providing for an Appellate Tribunal renders challenges to the vires of Section 7-A based on the absence of an appeal academic. (Para 2 , 10 )
4. Parties should be relegated to a statutory appellate remedy when such a remedy is introduced by legislation to challenge administrative orders. (Para 3 , 10 )
5. Appellants relegated to the statutory remedy of filing appeals before the Appellate Tribunal under Section 7-D; previous High Court observations on merits set aside. (Para 3 , 5 , 10 , 12 )
6. Does the introduction of Section 7-D affect challenges to the vires of Section 7-A based on the lack of an appeal?
Yes, the introduction of Section 7-D, which provides for a remedy of appeal before an Appellate Tribunal, renders challenges to the vires of Section 7-A on the ground of lack of appeal academic. (Para 2 , 10 )
7. What is the status of High Court observations on the merits of a Section 7-A order when a party is relegated to a statutory appeal?
Such observations are treated as having no legal consequence, and the Tribunal must decide the matter on its own merits, unfettered by those earlier observations. (Para 5 , 11 )
8. Can a party challenge the jurisdiction of the authority passing a Section 7-A order before the Appellate Tribunal under Section 7-D?
Yes, once a statutory appeal is filed, the appellant may put forward all legally permissible contentions, including those pertaining to the jurisdiction of the authority passing the order. (Para 10 )
ORDER
In CAs Nos. 5540-5541 of 1983.
1. These two appeals are moved by a common appellant that has felt aggrieved by order dated 8-12-1982 under Section 7-A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 passed by the authorities functioning under the Act against the present appellant. Civil Appeal No. 5540 of 1987 arises out of a writ petition which the appellant moved before the High Court of Gujarat challenging the aforesaid Section 7-A order on diverse grounds including the ground that Section 7-A was ultra vires the provisions of the Constitution of India. The High Court repelled the challenge to the vires of the provision by the impugned order and also made observations on the merits of the Section 7-A order. The other civil appeal is moved directly by the appellant against the Section 7-A order before this Court. As the controversy ultimately centres round the Section 7-A order itself which is the order of the first authority, these appeals were tagged together for disposal.
2. Pending these appeals, the legislature itself has amended the provisions of the Act by inserting Section 7-D providing for remedy of an appeal before an Appellate Tribunal. Not only that, but by notifications dated 30-6-1997 the Tribunal is already constituted and it is functioning at Delhi. Copies of the relevant notifications are taken on record. In view of this development, therefore, the question of challenge to the vires of Section 7-A on the ground that there was no appeal provided under the Act does not survive and it has become academic.
3. Now remains the question about the merits of the order under Section 7-A of the Act. So far as this question is concerned, it is true that the appellant in the first instance went to the High Court and the High Court made certain observations on the merits of the order. But, in our view, interest of justice will be served if we relegate the appellant to the statutory remedy available now to it to approach the Tribunal constituted under Section 7-D of the Act. We, therefore, relegate the appellant to the remedy of this statutory appeal which shall be filed by the appellant within a period of two months from today. If such appeal is filed within that time, the Tribunal will decide the same on merits after bearing the parties concerned.
4. This direction will result in making CA No. 5541 of 1983 infructuous as that appeal is directed against the very same Section 7-A order which is being permitted to be challenged by the appellant before the Tribunal.
5. So far as the judgment and order of the High Court under appeal in CA No. 5540 of 1983 are concerned, once we relegate the appellant to the remedy of statutory appeal under Section 7-D pursuant to the present order, the observations made by the High Court on the merits of the impugned Section 7-A order would not survive any further and will be treated to be of no legal consequence. Meaning thereby, the entire controversy centering round Section 7-A order will have to be decided on its own merits by the Tribunal unfettered by any earlier observations made by the High Court in this connection and which observations are treated to be of no consequence by our present order.
6. We make it clear that we are expressing no opinion on the merits of the Section 7-A order. Similarly, we express no opinion on the observations of the High Court on the merits of Section 7-A order as in our view those observations do not survive in view of the statutory remedy made available to the appellant.
7. The appeals are accordingly disposed of. No costs.
In CAs Nos. 2611-12 of 1989
8. These two appeals by special leave are moved by a common appellant, who felt aggrieved by two orders of the High Court of Delhi. One order was passed by the Division Bench of the High Court in a writ petition under Articles 226 and 227 of the Constitution of India on 10-5-1988 and another order was passed by the Bench in review petition rejecting the same on 19-8-1988.
9. T
