Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 23.02.2018
Date of Judgment: 27.02.2018
+ W.P. (C) 9178/2015
SAM (INDIA) BUILTWELL (P) LTD. ..... Petitioner
Through: Mr.S.K. Gupta, Advocate.
versus
ASSISTANT PROVIDENT FUND COMMISSIONER
..... Respondent
Through: Mr.Arvind Kumar Verma,
Advocate.
CORAM:
HON'BLE MR. JUSTICE VINOD GOEL
VINOD GOEL, J.
1. Challenge in this writ petition under Article 226 & 227 of the
Constitution of India is the order dated 13.08.2015 of the
Employees‟ Provident Fund Appellate Tribunal, New Delhi (in
short „Tribunal‟) in Appeal No. ATA-887(04)2015 vide which
the Tribunal has stayed the order dated 13.07.2015 impugned
before it passed by the respondent subject to deposit of 50% of
the assessed amount within 30 days failing which the stay shall
be vacated automatically.
2. The facts giving rise to the writ petition, bereft of unnecessary
details, are that the petitioner company had failed to remit the
Provident Fund and allied dues for the period from September,
2005 to November, 2013 within the stipulated time frame i.e.
W.P (C) 9178/2015 Page 1 of 8
within 15 days from the close of every month as required under
Para 38 of the Employees‟ Provident Fund Scheme, 1952 (in
brief „EPF scheme‟). After issuing show cause notices under
Section 14-B and 7-Q of the of the Employees‟ Provident Funds
and Miscellaneous Provisions Act, 1952 (in short „EPF Act‟),
by order dated 13.07.2015, the Assistant Provident Fund
Commissioner, Delhi (North) in exercise of his powers
conferred under Section 14-B and 7-Q of the EPF Act assessed
the damages for the relevant period to the tune of
Rs.13,52,769/- and interest at a sum of Rs.8,66,701/-. By this
order, the petitioner was directed to deposit the said amount
within 15 days failing which action shall be taken under Section
8 of the EPF Act to recover the amount.
3. The petitioner establishment preferred an appeal under Section
7-I of the EPF Act against the aforesaid order dated 13.07.2015
before the Tribunal. At the time of admission of the appeal and
considering the interim stay during the pendency of the appeal,
the Tribunal by impugned order dated 13.08.2015 came to the
conclusion that Section 7-O of the EPF Act was not attracted as
the order impugned before it was not under Section 7-A but
under Section 7-Q and 14-B of the EPF Act and the petitioner
was not required to make pre-deposit of 75% of the assessed
amount. However, the Tribunal granted stay against the
impugned order dated 13.07.2015 till further orders subject to
W.P (C) 9178/2015 Page 2 of 8
the petitioner depositing 50% of the assessed amount within 30
days failing which the stay shall be vacated automatically.
4. Mr.S.K. Gupta, learned counsel for the petitioner, argued that
the order of the Tribunal is bad in law inasmuch as the direction
to deposit the amount as assessed is just like a pre-deposit
condition mentioned in Section 7-O of the EPF Act. He
submits that under Section 7-O of the EPF Act, it is provided
that no appeal by the employer shall be entertained by a
Tribunal unless he has deposited with it 75% of the amount due
from him as determined under Section 7-A of the EPF Act. He
submits that the proviso of Section 7-O of the EPF Act provides
that the Tribunal for the reasons to be recorded in writing may
waive or reduce the amount to be deposited under this section.
He argued that the Tribunal has waived off this pre-deposit
condition in many appeals and has thus discriminated the
petitioner company by the impugned order.
5. Per contra, it is argued by the learned counsel for the respondent
that the amount directed to be deposited by the petitioner
company was not a pre-deposit amount for filing the appeal
rather it is a conditional order to deposit the amount for the
purpose of granting interim relief during the subsistence of the
appeal before the Tribunal.
6. To deal with the rival contentions of the parties, it is relevant to
refer to Section 7-O of the EPF Act, which provides as under: -
“7–O. Deposit of amount due, on filing appeal. – No
appeal by the employer shall be entertained by a
W.P (C) 9178/2015 Page 3 of 8
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.”
7. It is as clear as crystal from a bare reading of section 7-O of the
EPF Act that whenever an order has been passed under Section
7-A of the EPF Act, the appeal filed by an employer shall not be
entertained by the Tribunal unless the employer deposits with it
75% of the assessed amount under Section 7-A of the EPF Act.
However, the Tribunal may for the reasons to be recorded in
writing may waive or reduce the amount to be deposited under
this section. Admittedly, the order impugned before the
Tribunal was not under Section 7-A of the EPF Act but a
composite order under Section 14-B and 7-Q of the EPF Act,
therefore, the petitioner was not liable to make pre-deposit of
any amount.
8. In fact, this question has been considered by the Hon’ble
Supreme Court in the case of Arcot Textile Mills Limited Vs.
Regional Provident Fund Commissioner and Others, (2013)
16 SCC 1, wherein it was held that when a composite order
under Section 14-B and 7-Q is passed together, such an order
shall be appealable under Section 7-I of the EPF Act. It was
further observed by the Apex Court that if for some reason the
W.P (C) 9178/2015 Page 4 of 8
authority chooses to pass an independent order under Section 7-
Q, the same is not appealable.
9. The impugned order dated 13.07.2015 before the Tribunal was a
composite order passed under Section 14-B and 7-Q of the EPF
Act and therefore in view of the judgment of the Apex Court in
the aforementioned case of Arcot Textile Mills Limited
(supra) , such an order impugned before the Tribunal was
appealable.
10. Regarding the power of Tribunal to grant interim relief during
subsistence of appeal subject to certain conditions, it would be
relevant to refer to Para No. 15 & 19 of a judgment of the
Division Bench of this court in Jai Balaji Security Services
(Regd.) Vs. A.P.F.C. Delhi (North) in LPA No. 880/2015
decided on 16.12.2015, which read as under: -
“15. But that would not mean that if an aggrieved
person, who has challenged an order under Section 7-
Q and/or Section 14-B of the Act moves an
application before the Appellate Tribunal seeking
stay of the demand raised, the Appellate Tribunal
would not be empowered to pass a conditional order
of stay. Whereas Section 7-I of the Act creates the
forum of appeal, Section 7-O puts an embargo on the
entertainment of the appeal by the Appellate Tribunal by
requiring 75% of the amount due as determined under
Section 7-A to be deposited; with a power vested in the
Appellate Tribunal to waive or reduce the amount to be
deposited. Thus, whereas an appeal has to be entertained
without insisting on any pre-deposit concerning orders
passed under Section 7-Q and Section 14-B of the Act,
but the pendency of the appeal would not prohibit
the Competent Authority to effect the recovery unless
the Appellate Tribunal passes an interim order
W.P (C) 9178/2015 Page 5 of 8
concerning the demand. This would simply mean that
the Appellate Tribunal can pass conditional orders.”
“19. We reiterate once again. Section 7-O of the Act
would apply only to orders passed under Section 7-A of
the Act and condition of pre-deposit of 75% of the
amount assessed would be a condition for entertaining
the appeal by the Appellate Tribunal subject to the
Tribunal passing an order under the Proviso to the said
Section. The said order is distinct from an order
passed by the Appellate Tribunal in an application
seeking interim directions where demands raised
under Section 7-Q and Section 14-B of the Act are
challenged. Said orders are not passed in exercise of
the power under the Proviso to Section 7-O of the
Act.”
11. It is conveyed from the above said judgment of the Division
Bench of this court that the Tribunal would be empowered to
pass a conditional order of stay during the pendency of appeal
where the demand raised under Section 14-B and 7-Q of the
EPF Act has been challenged. Mere pendency of appeal would
not prohibit the EPF Authority to effect recovery unless
Tribunal stays the recovery by interim order during subsistence
of appeal subject to certain conditions.
12. While considering the facts of the present case in the light of the
aforesaid legal position, it is found that by impugned order the
Tribunal has directed the petitioner to deposit 50% of the
amount assessed with the concerned authorities within 30 days
and on such deposit no coercive steps shall be taken against the
petitioner till the disposal of the appeal, failing which the stay
shall be vacated automatically.
W.P (C) 9178/2015 Page 6 of 8
13. In view of the judgment of the Division Bench of this Court in
Jai Balaji Security Services (Regd.) (supra), during the
pendency of the appeal the competent authority would not be
prohibited to effect the recovery of the assessed damages and
interest unless the Tribunal passes an interim order concerning
the demand subject to certain condition including deposit of
assessed amount or part thereof. The damages assessed by the
impugned order before the Tribunal under Section 14-B of the
EPF Act is Rs.13,52,769/- and interest assessed under Section
7-Q of the EPF Act is Rs.8,66,701/-.
14. By impugned order, the Tribunal has granted interim relief to
the petitioner during the pendency of the appeal subject to the
petitioner depositing 50% of the amount assessed with the
respondent within 30 days and subject to this deposit no
coercive steps shall be taken, failing which the stay shall be
vacated automatically.
15. The order impugned before the Tribunal was not under Section
7-A of the EPF Act but under Section 14-B and 7-Q of the EPF
Act and therefore the question of pre-deposit as mentioned in
section 7-O of the EPF Act does not arise. It is Section 7-O of
the EPF Act which puts an embargo on the entertainment of the
appeal by the Tribunal by requiring 75% of the amount due as
determined under Section 7-A of the EPF Act to be deposited
with a power vested in the Tribunal to waive or to reduce such
amount to be deposited. This embargo to entertain the appeal is
W.P (C) 9178/2015 Page 7 of 8
not attracted in the present case as the order impugned before
the Tribunal was under Section 14-B and 7-Q of the EPF Act.
The petitioner company having felt aggrieved by the composite
order passed under Section 7-Q and 14-B of the EPF Act prayed
for an interim relief during the pendency of the appeal before
the Tribunal which was empowered to pass a conditional order
of stay. The impugned order is not passed under Section 7-O of
the EPF Act by the Tribunal. It is a conditional order of stay of
the impugned order before the Tribunal which the Tribunal was
empowered to pass. Therefore, I do not find any merit in the
writ petition. The same is hereby dismissed with no order as to
costs.
16. It is directed that the petitioner shall comply with the directions
of the Tribunal dated 13.08.2015 within four weeks from today
and subject to such compliance no coercive steps shall be taken
against the petitioner by the respondent, during the pendency of
the appeal before the Tribunal.
(VINOD GOEL)
JUDGE
th
FEBRUARY 27 , 2018
“shailendra”
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