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2014 Supreme(Del) 260
High Court of Delhi
THE HONOURABLE MR. JUSTICE V. KAMESWAR RAO
Haryana Petrochemicals Ltd.
Versus
Central Provident Fund Commissioner & Another
W.P.(C) No. 4037 of 2011
Decided On : 24-01-2014
For the Petitioner:Arunav Patnaik, Mahima Sinha, B. Das, Advocates.
For the Respondents:Keshav Mohan, Amrita Narayan, Advocates.
The central legal point established in the judgment is the need for specific evidence regarding the winding up of the firm and the effect of the establishment being in BIFR on the payment of EPF dues.
Headnote:
Employees’ Provident Fund - Challenge to order under Section 7A of the Act - Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 - [Section 7A] - [Summary of Acts and Sections: The court discussed the applicability of the Act and the liability of the establishment for dues under Section 7A. It referred to judgments emphasizing that the establishment continues to be covered by the Act until it is proved to no longer exist. The court highlighted the need for specific evidence regarding the winding up of the firm and the effect of the establishment being in BIFR on the payment of EPF dues.]
Fact of the Case:
The petitioner challenged the order passed by the Employees’ Provident Fund Appellate Tribunal under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, for assessment of dues against the establishment.
Finding of the Court:
The court found that the Tribunal failed to consider the effect of the establishment being in BIFR and the closure of the factory on the payment of EPF dues. It remanded the matter back to the Tribunal for a fresh decision, emphasizing the need to consider the documents relied upon by the parties and the position of law.
Issues: The issues revolved around the applicability of the Act, the liability of the establishment for dues, and the effect of the establishment being in BIFR and the closure of the factory on the payment of EPF dues.
Ratio Decidendi: The court emphasized the need for specific evidence regarding the winding up of the firm and the effect of the establishment being in BIFR on the payment of EPF dues. It highlighted the failure of the Tribunal to consider these aspects and remanded the matter for a fresh decision.
Final Decision: The W.P. was disposed of, and the matter was remanded back to the Tribunal for a fresh decision, with a direction to consider the documents relied upon by the parties and the position of law. No coercive steps were to be taken against the petitioner until the appeal was heard and decided by the Tribunal.
V. Kameswar Rao, J. (Oral)
1. The challenge in this writ petition is to the order dated January 31, 2011 passed by the Employees’ Provident Fund Appellate Tribunal, New Delhi (‘Tribunal’, in short) under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (‘Act’, in short) whereby the appeal filed by the petitioner against the order of the Regional Provident Fund Commissioner (‘Commissioner’, in short) in proceedings under Section 7A of the Act, was dismissed.
2. The brief facts are that the proceedings under Section 7A of the Act were initiated against the petitioner which is an establishment covered under the Act for assessment of dues for the period 1998-1999 and 2001-2002. The dues which the petitioner failed to deposit were the following:
1. Employee’share of PF Contributions under the EPF Scheme, 1952 of the period 1998-99 and 2001-2002.
2. Employer Share of PF Contributions under the EPF Scheme, 1952 of the period 1998-99 and 2001-2003. Employer share of contributions under the EPS, 1995 for the period 1998-99 and 2001-2002.
3. Administrative Charges under the EPF Scheme, 1952 for the period 1998-99 and 2001-2002.
4. Insurance Fund Contributions under the Employees’Deposit Linked Insurance Scheme, 1976 of the period 1998-99 and 2001-2002.
5. Administrative Charges under the Employees’ Deposit Linked Insurance Scheme, 1976 for the period 1998-99 and 2001-2002.
3. For determining the amount due, proceedings under Section 7A of the Act were initiated by the Commissioner by issuing a show cause notice to the petitioner on April 26, 2002. Suffice would it be to say that to enable the petitioner to produce the record, the Commissioner adjourned the hearing for many days. It is noted from the order of Commissioner dated July 01, 2004, none appeared for the petitioner. The Commissioner, on the basis of report submitted by the Enforcement Officer with regard to the dues payable by the petitioner, concluded as under:
SCHEDULE OF DUES
Contributions
Period
Total Amount
1. P.F. Contributions in A/c No. 1
1998-99 and 2001-2002
Rs. 1,78,482/-
2. Pension Contributions in A/c No. 10
1998-99 and 2001-2002
Rs. 14,760/-
3. P.F. Admn. Charges in A/c No. 2
1998-99 and 2001-2002
Rs. 1,11,781/-
4. EDLI Charges in A/c No. 21
1998-99 and 2001-2002
Rs. 6709/-
5. EDLI Admn. Charges in A/c No.22
1998-99 and 2001-2002
Rs. 6709/-
Total
Rs.3,11,866/-
(Three Lakh eleven thousand eight hundred sixty six only) Employer is directed to remit the dues alongwith other statutory returns within a fortnight.
4. The petitioner approached this Court earlier by way of a Writ Petition (C) No. 14111/2004 which was disposed of by this Court vide its order dated August 23, 2004, whereby this Court directed the appeal to be heard by the Tribunal. This Court had also directed that no coercive steps would be taken against the petitioner to recover the amount in terms of the order of the Commissioner dated July 01, 2004.
5. In the appeal, the case of the petitioner was that the petitioner has filed an application before BIFR to declare it as a sick company; the production has come to a standstill. In other words, the factory has been closed. In this regard, the petitioner relied upon the following documents
‘(i) Letter dated 17.08.98 sent to RPFC (A-6)
(ii) Letter dated 17.08.98 sent to Chief Inspector of Factory, Haryana (A-7)
(iii) Letter dated 12.08.98 sent to Chief Engineer, HSEB, HR (A-8)
(iv) Letter dated 07.08.98 received from HSEB regarding disconnection of electricity (A-9) due to non-payment of bills.
(v) Letter dated 12.08.98 received from SE, HSEB regarding disconnection of electricity due to non payment (Annexure A-10).
(vi) Letter dated 15.11.98 sent to Chief Inspector of Factories, Haryana Chandigarh (A-11).
(vii) Letter dated 22.04.99 sent to Asstt. Commissioner, Customer and Central Excise (A-12).
(viii) Balance sheet for the year 1998-99 (A-13). Under Director‟s report it is stated, “Plant of the company has been closed since 10.07.98 and no productio
