# Kshetriya Shree Gandhi Ashram, Ghazipur v. The Employee Provident Fund Appellate

- **Citation:** (2021) 8 ILRA 864
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-02
- **Case number:** Writ C No. 11522 of 2021
- **Bench:** Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/kshetriya-shree-gandhi-ashram-ghazipur-v-the-employee-provident-fund-appellate-47322
- **Pages:** 6

## Headnote

Civil Law - Employees Provident Funds
and Miscellaneous Provisions Act (19 of
1952) - composite order passed under
Sections 14-B & 7-Q when appealed under
Section 7-I, then there is no mandatory
requirement for making pre-deposit in
view of Section 7-O of the Act (Para 11)
Composite Order passed u/s 14-B as well as 7-Q
of the "1952 Act" directing for payment of
damages & penal interest - an appeal was
preferred by the petitioner - Tribunal required
the petitioner to make pre-deposit of the full
amount assessed u/s 7-Q as well as 50% of the
amount assessed u/s 14B - Held - Impugned
order totally against the statutory provision 7-O
of the Act of 1952 - impugned order quashed
Allowed. (E-4)

## Text

864 INDIAN LAW REPORTS ALLAHABAD SERIES
Tehsil
Sadar,
District
Muzaffarnagar/
Assistant
Collector
for
a
fresh
determination
consistent
with
the
observation made in this judgment.

14. The following directions are being
passed to serve the interest of justice in this
case:

(1) The petitioner shall file fresh
application under Section 67(a) of the Code
before the respondent No. 3/Tehsildar
(Judicial)
Tehsil
Sadar,
District
Muzaffarnagar/ Assistant Collector.

(2)
The
respondent
No.
3/Tehsildar (Judicial) Tehsil Sadar, District
Muzaffarnagar/ Assistant Collector shall
register the proceedings under Section 67
(a)
upon
the
submission
of
such
application. Proceedings under Section
67(a) so instituted shall be consolidated and
heard with proceedings under Section 67 of
the Code registered as Case No. 59 of 2019
and decided by a common judgment.

15. The writ petition is allowed to the
extent indicated above.
----------
(2021)08ILR A864
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.08.2021

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ C No. 11522 of 2021

Kshetriya Shree Gandhi Ashram, Ghazipur
 ...Petitioner
Versus
The Employee Provident Fund Appellate
Tribunal and CGIT cum Labour Court ,
Kanpur & Anr. ...Respondents

Counsel for the Petitioner:
Sri Rajesh Tewari, Sri Satyajit Mukerji, Sri
Suresh Chandra Mishra

Counsel for the Respondents:
Sri Sachindra Upadhyay

Civil Law - Employees Provident Funds
and Miscellaneous Provisions Act (19 of
1952) - composite order passed under
Sections 14-B & 7-Q when appealed under
Section 7-I, then there is no mandatory
requirement for making pre-deposit in
view of Section 7-O of the Act (Para 11)
Composite Order passed u/s 14-B as well as 7-Q
of the "1952 Act" directing for payment of
damages & penal interest - an appeal was
preferred by the petitioner - Tribunal required
the petitioner to make pre-deposit of the full
amount assessed u/s 7-Q as well as 50% of the
amount assessed u/s 14B - Held - Impugned
order totally against the statutory provision 7-O
of the Act of 1952 - impugned order quashed
Allowed. (E-4)
(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. Heard Sri Rajesh Tewari, learned
counsel for the petitioner and Sri Sachindra
Upadhyay, learned counsel for respondent
Nos. 1 and 2.

2. This writ petition has been filed
seeking quashing of order dated 26.02.2021
passed by respondent No.1 in appeal filed
before Appellate Tribunal as well as
recovery order dated 02.03.2021 passed by
respondent No.2.

3. The facts, as disclosed in the
petition, are that the petitioner is a
registered society and has been established
with an object of popularizing hand woven
cloth by helping rural population of the
country and to develop Cottage Industry.
On 05.01.2021, an order was passed under
8 All. Kshetriya Shree Gandhi Ashram, Ghazipur Vs. The Employee Provident Fund Appellate
 Tribunal and CGIT cum Labour Court, Kanpur & Anr.
865
Section 14-B as well as 7-Q of the
Employees'
Provident
Funds
and
Miscellaneous
Provisions
Act,
1952
(hereinafter called as "1952 Act") directing
for payment of damages and penal interest
of Rs.33,73,011/- on the ground that
employer has not remitted the Provident
Fund and allied dues within stipulated time
as per Sections 6, 6A, 6C of 1952 Act and
also not deposited the administrative
charges for the period 01.4.2017 to
24.02.2020.

4. Against the said order, an appeal
was preferred by the petitioner before
respondent No.1 on 09.02.2021. The
Tribunal on 26.02.2021 required the
petitioner to make pre-deposit of the full
amount assessed under Section 7-Q of 1952
Act as well as 50% of the amount assessed
under Section 14B of 1952 Act. The
petitioner is aggrieved by the said order.

5. It has been contended by learned
counsel for the petitioner that appeal lies to
the Tribunal under Section 7-I of the 1952
Act and orders passed under Sections 7-A,
7-B, 7-C or Section 14-B are only
appellable and no appeal lies against the
order passed under Section 7-Q. Further
Section 7-O mandates deposit of 75% of
the amount as determined under Section 7A of 1952 Act, and thus there is no
requirement for pre-deposit for any appeal
filed against the order under Section 14B
and Section 7Q of 1952 Act. It was further
contended that the Appellate Tribunal
should have decided the appeal on merit
without asking for pre-deposit of the
amount as it was against the statutory
provisions of Section 7-O of 1952 Act. It
was further contended that the Apex Court
in case of Arcot Textile Mills Limited vs.
Regional Provident Fund Commissioner
and others (2013)16 SCC 1 has held that
when a composite order is passed under
Section 14-B and 7-Q then such an order is
appellable and in case the order under
Section 7-Q is passed independently, no
appeal lies against the said order. Reliance
has been placed upon decision of Apex
Court in case of Shiv Harbal Research
Laboratory vs. Assistant Provident Fund
Commissioner, Laws (SC) 2010 (4) 121;
SAM (India) Builtwell (P.) Ltd. vs.
Assistant Provident Fund Commissioner
2018 (157) FLR 410 and Old Village
Industries Ltd. vs. The Asstt. Provident
Fund (2005) LLJ 742 Delhi High Court.

6. Sri Sachindra Upadhyay, learned
counsel appearing for the respondent
defending the order of Tribunal as well as
respondent No.2 could not add anything
more.

7. Having heard counsel for the
parties and perusal of record it appears that
the sole question before this Court is to the
determination of fact whether in view of
provisions, as contained in 1952 Act, any
mandatory deposit of 75% of the amount
has to be made in view of Section 7-O in
appeal filed under Section 7-I against the
composite order passed under Section 14-B
and Section 7-Q of the 1952 Act?

8. In order to appreciate controversy
in issue, a glance of relevant provisions of
Sections 7-A, 7-I, 7-O, and 7-Q is
necessary. Relevant sections are extracted
here as under :

"7A. Determination of moneys
due from employers

(1) The Central Provident Fund
Commissioner, any Additional Central
Provident Fund Commissioner, any Deputy
Provident
Fund
Commissioner,
any
Regional Provident Fund Commissioner, or
866 INDIAN LAW REPORTS ALLAHABAD SERIES
any
Assistant
Provident
Fund
Commissioner may, by order,--

(a) in a case where a dispute
arises regarding the applicability of this
Act to an establishment, decide such
dispute; and

(b) determine the amount due
from any employer under any provision of
this Act, the Scheme or the3[Pension]
Scheme or the Insurance Scheme, as the
case may be, and for any of the aforesaid
purposes may conduct such inquiry as he
may deem necessary.

(2) The officer conducting the
inquiry under sub-section (1) shall, for the
purposes of such inquiry, have the same
powers as are vested in a court under the
Code of Civil Procedure, 1908 (5 of 1908),
for trying a suit in respect of the following
matters, namely:--

(a) enforcing the attendance of
any person or examining him on oath;

(b) requiring the discovery and
production of documents;

(c)
receiving
evidence
on
affidavit;

(d) issuing commissions for the
examination of witnesses ;

and any such inquiry shall be
deemed to be a judicial proceeding within
the meaning of sections 193 and 228, and
for the purpose of section 196, of the Indian
Penal Code.

(3) No order shall be made under
sub-section
(1), unless
the
employer
concerned]
is
given
a
reasonable
opportunity of representing his case.

(3A)
Where
the
employer,
employee or any other person required to
attend the inquiry under sub-section (1)
fails to attend such inquiry without
assigning any valid reason or fails to
produce any document or to file any report
or return when called upon to do so, the
officer conducting the inquiry may decide
the applicability of the Act or determine the
amount due from any employer, as the case
may be, on the basis of the evidence
adduced during such inquiry and other
documents available on record.

(4) Where an order under subsection (1) is passed against an employer
ex parte, he may, within three months from
the date of communication of such order,
apply to the officer for setting aside such
order and if he satisfies the officer that the
show-cause notice was not duly served or
that he was prevented by any sufficient
cause from appearing when the inquiry was
held, the officer shall make an order setting
aside his earlier order and shall appoint a
date for proceeding with the inquiry:

Provided that no such order shall
be set aside merely on the ground that
there has been an irregularity in the service
of the show-cause notice if the officer is
satisfied that the employer had notice of the
date of hearing and had sufficient time to
appear before the officer.

Explanation.--Where an appeal
has been preferred under this Act against
an order passed ex parte and such appeal
has been disposed of otherwise than on the
ground that the appellant has withdrawn
the appeal, no application shall lie under
this sub-section for setting aside the ex
parte order.

(5) No order passed under this
section shall be set aside on any
application under sub-section (4) unless
notice thereof has been served on the
opposite party.

7I. Appeals to Tribunal

(1) Any person aggrieved by a
notification
issued
by
the
Central
Government, or an order passed by the
Central Government or any authority,
under the proviso to sub-section (3), or
subsection (4) of section 1, or section 3, or
sub-section (1) of section 7A, or section 7B
8 All. Kshetriya Shree Gandhi Ashram, Ghazipur Vs. The Employee Provident Fund Appellate
 Tribunal and CGIT cum Labour Court, Kanpur & Anr.
867
[except an order rejecting an application
for review referred to in sub-section (5)
thereof], or section 7C, or section 14B,
may prefer an appeal to a Tribunal against
such notification or order.

(2) Every appeal under sub-section
(1) shall be filed in such form and manner,
within such time and be accompanied by such
fees, as may be prescribed.

7-O. Deposit of amount due, on
filing appeal- No appeal by the employer
shall be entertained by a Tribunal unless he
has deposited with it seventy-five per cent, of
the amount due from him as determined by
an officer referred to in section 7A:

Provided that the Tribunal may, for
reasons to be recorded in writing, waive or
reduce the amount to be deposited under this
section.]

7Q. Interest payable by the
employer- The employer shall be liable to
pay simple interest at the rate of twelve per
cent, per annum or at such higher rate as
may be specified in the Scheme on any
amount due from him under this Act from the
date on which the amount has become so due
till the date of its actual payment:

Provided that higher rate of
interest specified in the Scheme shall not
exceed the lending rate of interest charged by
any scheduled bank."

9. From careful reading of Section 7I, it transpires that appeal lies against
determination order passed under Section
7-A as well as review orders passed under
Section 7-B and determination of escaped
amount under Section 7-C as well as orders
under Section 14-B. The orders passed
under Section 7-Q are not appellable under
Section 7-I of 1952 Act. Further Section 7O mandates for pre-deposit of 75% of the
amount passed under Section 7-A which is
in regard to the determination of the
amount by the officers referred therein.

10. Thus, it is clear that requirement of
pre-deposit
is
only
when
there
is
determination/assessment order made by the
authority, while the order under Section 14-B
is passed for quantifying penal damages upon
the petitioner for not remitting the provident
fund dues within time. Moreover, Section 7Q mandates for the imposition of interest
upon the employer at a rate of 12% p.a. when
the actual payment has not been made on the
due date, but no remedy has been provided
under the Act for challenging the order
passed under Section 7-Q of the Act.

11. The decision of Apex Court in case
of Arcot Textile Mills Ltd. (supra) provides
for an appeal under Section 7-I in case where
the order passed under Section 14-B and 7-Q
are composite orders. Thus, it can be safely
said that the composite order passed under
Section 14-B and 7-Q when appealed under
Section
7-I,
there
is
no
mandatory
requirement for making pre-deposit in view
of Section 7-O of the Act.

12. The finding recorded by the
Appellate Tribunal on 26.02.2021 that
Section 7-O mandates an employer to deposit
statutory amount of 75% of the amount due
before his appeal is entertained by a Tribunal
determined by an officer referred to in
Section 7-A is totally against the statutory
provision of 1952 Act.

13.

In
Shiv
Harbal
Research
Laboratory (supra), the Apex Court while
dealing with this issue had categorically held
that there was no requirement for complying the
provision of Section 7-O in appeal filed under
Section 7-I against the order passed under
Section 14B and 7Q of the Act. Paras 4 and 5 of
the judgment are extracted here as under :

"4. Apart from the above, the
provision for preferring an appeal in
868 INDIAN LAW REPORTS ALLAHABAD SERIES
respect of an order under Section 14-B is
contained in Section 7-Iof the above Act
which provides for appeals to the Tribunal,
inter alia against orders passed under
Section 14-B. Sub-section (2) of Section 7-I
indicates that every appeal under subsection (1) shall be filed in such form and
manner,
within
such
time
and
be
accompanied by such fees, as may be
prescribed. There is nothing to indicate
that any part of the amount awarded under
Section 14-B was required to be deposited
at the time of filing of the appeal.

5. When specific provision has
been made within regard to appeals under
Section 7-A and under Section 7-O, a
definite provision has been indicated for
deposit of 75% of the awarded amount and
there is no such provision in Section 7-I, we
cannot read the principles of Section 7-O
into the provisions of Section 7-I in relation
to appeals under section 14-B of the above
Act."

14. Further the order dated 05.1.2021
passed by respondent No.2 under Section
14-B and 7-Q also appears to be non
speaking as the Apex Court in case of
Mcleod
Russel
India
Limited
vs.
Regional Provident Fund Commissioner,
Jalpaiguri and others (2014) 15 SCC 263
held as under :

"In HMT Ltd., this Court noted
the beneficial nature of the ESIC Act; that
subordinate legislation must conform to the
provisions of the parent Act. Despite giving
due regard to the use of the words "may
recover damages by way of penalty", and
mindful that mens rea and actus reus to
contravene a statutory provision are
necessary ingredients for levy of damages,
this Court set aside the interference of the
High Court vis-à-vis the imposition of
damages and further held that imposition
of damages by way of penalty was not
mandated in each and every case. The
dispute was remitted back to the High
Court for fresh consideration, i.e. to
proceed on the premise that the levy of
penalty under the Act was not a mere
formality, a foregone conclusion or an
inexorable
imposition;
and
that
the
circumstances surrounding the failure to
deposit the contribution of the employees
concerned would also have to be cogitated
upon. This decision does not prescribe that
damages or penalties cannot or ought not
to be imposed. Further, the presence or
absence of mens rea and/or actus reus
would be a determinative factor in
imposing damages Under Section 14B, as
also the quantum thereof since it is not
inflexible that 100 per cent of the arrears
has to be imposed in all the cases.
Alternatively stated, if damages have been
imposed Under Section 14B it will be only
logical that mens rea and/or actus reus was
prevailing at the relevant time. We may
also note that this Court had yet again
reiterated the well-known but oft ignored
principle that High Courts or any Appellate
Authority created by a statute should not
substitute their perspective of discretion on
that of the lower Adjudicatory Authority if
the impugned Order does not otherwise
manifest perversity in the process of
decision taking. HMT Ltd. does not
proscribe imposition of damages; that
would negate the intent of the legislature.
The submission of the Petitioner before us
is that the liability was of the erstwhile
management and since the Petitioner was
not the "employer" at the relevant time,
default much less deliberate and wilful
default on the part of the Petitioner was
absent. However, it seems to us that once
these damages have been levied, the
quantification and imposition could be
recovered from the party which has
8 All. Ishwar Chand & Ors. Vs. State of U.P. & Ors.
869
assumed the management of the concerned
establishment concerned."

15. Thus, having considered the
argument as well as the pleadings of the
parties, I find that the order dated
26.02.2021 passed by respondent No.1 and
the recovery order issued by respondent
No. 2 on 02.3.2021 are totally against the
statutory provision 7-O of the Act of 1952
and thus they are hereby quashed. The
matter is remitted back to the Appellate
Tribunal respondent No.1 to hear and
decide
the
appeal
of
the
petitioner
expeditiously preferably within next three
months from the date of production of a
copy of this order downloaded from the
website of this Court.

16. Writ petition stands partly
allowed.
----------
(2021)08ILR A869
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.07.2021

BEFORE

THE HON'BLE MANOJ MISRA, J.
THE HON'BLE JAYANT BANERJI, J.

Writ C No. 15641 of 2021

Ishwar Chand & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Vishesh Rajvanshi

Counsel for the Respondents:
C.S.C.

Constitution of India - Art. 226 - writ
petition after 41 years to stake a claim for
compensation - Limitation for entertaining
writ petition - there is no limitation
provided for entertaining a writ petition
under Article 226 - where no limitation is
provided, the person must approach the
Court
within
a
reasonable
time
-
 Reasonable time - reasonable time is
dependent on the facts of a case -
Ordinarily, where a civil court remedy
would get barred by limitation, the prayer
should
not
be
entertained
in
writ
jurisdiction - period of limitation is to be
counted from the date when the original
cause of action arose - later examination
of dead and stale issue would not give a
fresh cause of action to revive a timebarred issue - Rejection of time barred
claim by authorities do not give new cause
of action for staking claim (Para 10, 13)
Petitioners ancestors. were owners of plot -
acquisition of said land made in the year 1980,
but no compensation was paid/ awarded to
them - petitioners continued to represent their
cause - representations/claims of the petitioners
rejected in the year 2021 upon finding that the
claim was highly belated - Held - cause of
action to institute suit for compensation first
arose when the land was utilised in the year
1980 or before - no documentary material on
record to indicate that either within three years
or even twelve years of such utilisation of the
land any promise was extended by the State or
its agencies to compensate the farmers - where
even the remedy to seek possession was barred
by limitation, that is on expiry of 12 years from
the date the possession of land was taken from
the farmers - writ petition, filed after 41 years,
to stake a claim for compensation is hopelessly
barred by laches - court rejected petitioner's
contention that the cause of action should be
taken as the date when the impugned order was
passed i.e. 12.02.2021 - rejection of the time
barred claim by the impugned order dated
12.02.2021 does gave the petitioners a new
cause of action for staking a claim for
compensation.
Dismissed. (E-4)
List of Cases cited:
1.Syed Maqbool Ali Vs St. of U.P. (2011) 15
SCC 383