1. An authority issued an order determining contribution liability under a welfare statute, then conducted a second enquiry without notice and issued a fresh order, prompting a legal challenge. (Para 1 , 2 )
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2026 Supreme(Online)(Ker) 74885
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Viju Abraham, J
C.A. Velayudhan – Appellant
Versus
State of Kerala – Respondent
WP(C) NO. 24269 OF 2025
Important Points
An order enhancing financial liability or determining fresh entitlement under the Kerala Toddy Workers’ Welfare Fund Act, 1969, is invalid if issued without granting the affected employer an opportunity of being heard, as it violates the principles of natural justice and statutory mandates.
Subject
Civil - Labour and Welfare Laws
Act Referred
Headnote
(A) Principles of Natural Justice - Right to be heard - Issuance of an order determining liability to pay contribution under the Kerala Toddy Workers’ Welfare Fund Act, 1969, without affording the employer an opportunity of hearing is in violation of natural justice and is legally unsustainable. (Para 5, 6)
(B) Statutory Rectification - Section 8B of the Kerala Toddy Workers’ Welfare Fund Act, 1969 - Rectification of errors resulting in enhancement of determined amounts mandates a reasonable opportunity of being heard for the employer; failure to provide such hearing renders the order void. (Para 3, 6)
Issues: Whether the order directing payment of contribution was passed in violation of the principles of natural justice and the statutory requirements of Section 8B of the Kerala Toddy Workers’ Welfare Fund Act, 1969.
(B) Statutory Rectification - Section 8B of the Kerala Toddy Workers’ Welfare Fund Act, 1969 - Rectification of errors resulting in enhancement of determined amounts mandates a reasonable opportunity of being heard for the employer; failure to provide such hearing renders the order void. (Para 3, 6)
Issues: Whether the order directing payment of contribution was passed in violation of the principles of natural justice and the statutory requirements of Section 8B of the Kerala Toddy Workers’ Welfare Fund Act, 1969.
Legal Category Hierarchy
Advocates:
For the Appellants/Petitioners: Basil Chandy Vavachan, Charutha Bhaiju, Chandhana Bhaiju, Basil Sajan, Fathim Navas, Lekshmi Priya V., Kavya Rani Jayaprakash, Muhammed Shuhaib A.S., Basil Scaria
For the Respondents: G. Santhosh Kumar (P.), K.S. Arun Kumar, S. Gokul Babu, M. Praveen Kumar
For the Appellants/Petitioners: Basil Chandy Vavachan, Charutha Bhaiju, Chandhana Bhaiju, Basil Sajan, Fathim Navas, Lekshmi Priya V., Kavya Rani Jayaprakash, Muhammed Shuhaib A.S., Basil Scaria
For the Respondents: G. Santhosh Kumar (P.), K.S. Arun Kumar, S. Gokul Babu, M. Praveen Kumar
Table of Contents
2. Petitioner challenges the lack of notice and jurisdiction to reopen a concluded matter; respondents assert powers of rectification under the statute and existence of an alternate appellate remedy. (Para 2 , 3 )
3. The court observed that the second order constituted a fresh determination requiring natural justice, and the statutory proviso necessitates an opportunity of hearing when enhancing determined liabilities. (Para 5 , 6 )
4. Procedural compliance with the principles of natural justice and mandatory statutory requirements for notice cannot be bypassed by an alternate remedy when a determination is made without hearing. (Para 6 )
5. The court set aside the impugned orders and directed the respondent to conduct a fresh enquiry while strictly observing the principles of natural justice. (Para 6 )
6. Can an authority reopen a claim and determine liability without providing an opportunity of being heard to the employer?
No, the court held that any determination or rectification of liability, especially when involving a fresh consideration of a previously rejected claim, requires the authority to provide a reasonable opportunity of being heard to the affected parties in line with natural justice. (Para 5 , 6 )
7. Does the existence of an alternate statutory remedy preclude a court from exercising its jurisdiction where there is a violation of natural justice?
No, the court ruled that when an order is issued in violation of the principles of natural justice, the court is not inclined to relegate the petitioner to an alternate appellate remedy. (Para 6 )
VIJU ABRAHAM, J.
JUDGMENT
The petitioner has approached this Court challenging Exts.P2 and P3 orders issued by the 1st respondent. The petitioner is a licensee of the Toddy Shop Nos.6, 7, 8, 9 and 19 of second group of the Kothamangalam Range for the year 2023-2024. On 24.08.2024, an enquiry was conducted by the 3rd respondent and Ext.P1 order was passed on 20.11.2024, directing the petitioner to pay the employers' contribution towards the welfare fund of certain employees under the Kerala Toddy Workers’ Welfare Fund Act, 1969.
2. The case of the petitioner is that the claim raised by the 4th respondent was also considered by the 3rd respondent and in Ext.P1 order, the claim of the 4th respondent was rejected on the finding that there is no evidence to show that the 4th respondent is an employee under the petitioner. Later, another enquiry was conducted by the 3rd respondent without giving any notice to the petitioner or affording an opportunity of hearing and Ext.P2 order was issued, wherein it was found that the petitioner was liable to pay contribution in respect of the 4th respondent also. The specific case of the petitioner is that Ext.P2 order was issued without giving notice to the petitioner and further that, since the entitlement of the 4th respondent was considered and rejected in Ext.P1, the 4th respondent ought to filed an appeal against the same, and the same cannot be done as has been done as per Ext.P2, that too, without notice to the petitioner. The petitioner would submit that a perusal of Ext.P2 order itself would reveal that it is a case of review of Ext.P1 order for which the 3rd respondent has absolutely no jurisdiction.
3. Learned counsel appearing for respondents 2 and 3, based on the counter affidavit, submits that the 3rd respondent has ample power to rectify any errors, etc., in the order passed, in view of Section 8B of the Kerala Toddy Workers’ Welfare Fund Act, 1969, which empowers the Welfare Fund Inspector to rectify any error apparent on the face of the record in respect of an order against which no appeal has been preferred before the Government. The said Section mandates that no such rectification, which has the effect of enhancing the amount determined, shall be made unless the employer concerned has been given a reasonable opportunity of being heard. Therefore, the 3rd respondent has acted well within his powers as provided under Section 8B of the Act, 1969 and submits that if the petitioner has any grievance against Ext.P2, the petitioner has an effective alternate remedy to file an appeal before the Government, which the petitioner has not availed of.
4. I have heard the rival contentions on both sides.
5. Admittedly, the claim of the 4th respondent has been considered and rejected as per Ext.P1 order on the finding that there is no evidence to prove that the petitioner is liable to pay any contribution towards the 4th respondent. Based on the complaint preferred by the Union, Ext.P2 order has been issued by the 3rd respondent, wherein the entitlement of the 4th respondent was found. Admittedly, Ext.P2 order was issued without affording an opportunity of being heard to the petitioner. Even in Section 8B , which deals with rectification of an error apparent on the face of the record, any such rectification, which has an effect of enhancing the amount determined, going by the proviso to Section 8B , the employer should be given an opportunity of being heard. But, the specific contention of the petitioner is that this is not a case of rectification or correction of the error or a case of enhancement of the amount determined and is a case of a fresh determination of the entitlement of the 4th respondent, which had already been rejected by Ext.P1. It is submitted that, had an opportunity of hearing been given to the petitioner before issuing Ext.P2, all these aspects could have been brought to the notice of the 3rd respondent, based on which a decision could have been arrived at by the sa
