Quashed

Central Board of Trustees, Epf v. M/S. Venkateswara Packagings

Karnataka HC15 Oct 2020WP/30143/2015

Case brief

AI extract

What is this about?

The High Court disposed of the writ petition seeking to quash an EPF Tribunal order setting aside a Section 7A complaint. The Court affirmed the Tribunal's decision, holding that ESIC records were inadmissible as evidence without witness testimony, rendering the assessment order illegal.

What did the court decide?

The impugned order of the Employees Provident Fund Appellate Tribunal was affirmed. Liberty was granted to the Commissioner to initiate proceedings in accordance with the Act and law within six months

Central Board of Trustees, Epf Vs M/S… — Pension and Retirement Benefits | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF OCTOBER, 2020

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BEFORE

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THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

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WRIT PETITION No.30143/2015 (L - PF)

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BETWEEN

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CENTRAL BOARD OF TRUSTEES, EPF THROUGH ASSISTANT PROVIDENT FUND COMMISSIONER, REGIONAL OFFICE, S(1) F, 1^ST STAGE, PEENYA, BENGALURU – 560 058.

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... PETITIONER

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(BY SRI M.PRADEEP, ADVOCATE (PHYSICAL HEARING))

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AND

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M/S. VENKATESWARA PACKAGINGS 329/330, 9^TH CROSS, 4^TH MAIN, 4^TH PHASE, 2^ND STAGE, PEENYA INDUSTRIAL AREA, BENALURU – 560 058.

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... RESPONDENT

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(BY SRI J.KANIKARAJ, ADVOCATE (PHYSICAL HEARING)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 20.8.2014 (ANNX-A) PASSED BY THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL IN ATA NO.507(06)/2012 ETC.

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THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner-Central Board of Trustees, EPF is before this Court raising a challenge to an order dated 20.08.2014 passed by the Employees Provident Fund Appellate Tribunal (hereinafter referred to as ‘the Tribunal’ for short) setting aside the order under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as ‘the Act’ for short).

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Brief facts leading to the filing of the present

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petition are as follows:

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The respondent-Establishment was bought under the purview of the Act with effect from 01.10.1985. Proceedings were initiated by the Assistant Provident Fund Commissioner in terms of Section 7A of the Act by issuance of notice on the basis of a complaint given by an ex-employee of the respondent-Establishment that the

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strength of the Establishment was above 20 and it had not disclosed the same.

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On the respondent-Establishment not producing

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any document to show that the strength of the Establishment was less than 20, a squad of Enforcement Officers were sent for verification of the respondentEstablishment. It was noticed that statutory return/Inspectors report of the ESI organization displayed that the respondent-Establishment had twenty employees during the month of October 1985. This was based upon an inspection report of the Employees’ State Insurance Corporation (hereinafter referred to as ‘ESIC’ for short)

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and the returns filed by the respondent-Establishment before the ESIC showing its strength as 20 as on October 1985.

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Based upon the aforesaid documents, the proceedings against the respondent was concluded in terms of an order dated 16.05.2012 under Section 7A of the Act holding that the respondent is covered under the

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Act with effect from 01.10.1985 and assessed the provident fund dues to the tune of Rs.9,11,672/- and also passed an order of attachment of bank account of the respondent.

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The respondent-Establishment being aggrieved by the order under Section 7A of the Act covering the Establishment under the Act, filed an appeal invoking Section 71 of the Act before the Tribunal. The Tribunal, by its order dated 20.08.2014 allowed the appeal and set aside the order passed by the authority under Section 7A of the Act. It is this order of the Tribunal that is challenged in the present writ petition.

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Heard Sri.M.Pradeep, learned counsel appearing for petitioner and Sri.J.Kanikaraj, learned counsel appearing for respondent.

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The learned counsel for the petitioner would contend that the Tribunal erred in allowing the appeal notwithstanding the fact that no document was produced

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to show that the employees strength in the establishment was less than 20. The report of the squad and the documents of the ESIC department which clearly demonstrated that the employees strength of the respondent-Establishment was beyond 20 is completely ignored by the Tribunal. He would further contend that ESIC being another statutory authority, the records produced before the ESIC become a public document and ought to have given credence by the Tribunal.

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On the other hand, learned counsel appearing for the respondent-Establishment would contend that it has never employed more than 19 people and submits that the documents of the ESIC cannot be considered to decide the question of the Establishment being covered under the Act. The details of employees is neither indicated in the impugned order nor was placed before the Tribunal. There being no exact number of employees and their status, the order of the Tribunal is unassailable.

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I have given my anxious consideration to the submission made by the learned counsel for the parties and perused the material on record.

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It is not in dispute that the order passed by the Assistant Provident Fund Commissioner in terms of Section 7A of the Act is not upon any independent assessment or on verification of documents pertaining to the respondentEstablishment. The entire basis of the order is on the documents of the respondent-Establishment placed before the ESIC. The authority under Section 7A of the Act, while passing an order, has completely adopted the report of the ESIC, which cannot be the basis for determination of the number of employees in the respondent-Establishment to bring the Establishment under the Act.

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Having produced the ESIC report and records pertaining to the employees covered under the ESIC in respect of the respondent-Establishment, no officer from the ESIC was called upon by the commissioner to

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substantiate the authenticity of the records of the office of the ESIC.

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It is trite law that mere marking of a document will not amount to its proof unless it is proved by examination of a competent person in custody of those documents for it to become an admissible evidence in law.

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This Court in the case of Employees’ State Insurance Corporation Vs. Subbaraya Adiga reported in (1988-II LLN 452), has held as under:

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“A list of employees prepared by the Employees State Insurance Inspector in the course of his visit to an establishment, in order to find out whether the provisions of the Employees’ State Insurance Act are attracted to it, must contain the name, father’s name, place from which the employee hails, the designation, the length of service, emoluments and the signature or thumb impression of the employee, as the case may be. If at that time other persons other than the employees are present, the names and addresses of at least two of them with their signatures and also the

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signature of the proprietor or manager or the person in charge of the establishment should be obtained at the end of the list and a copy of which be furnished to the establishment”.

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In terms of the judgment of this Court, the list of employees prepared by the ESIC must contain various details. It is only then some credence can be given to the document that the Commissioner relies on.

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A perusal at the document relied on by the Commissioner to arrive at the finding would clearly indicate that, it is contrary to what this Court had held in the aforesaid judgment interpreting the ESIC Act as, except the name and the total wages paid it does not bear any other trait of becoming a document in consonance with the Act and consequently admissible as evidence.

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The Commissioner exercises power under Section 7A of the Act and when exercising such power the Commissioner is required to discover such documents and arrive at a conclusion with regard to the evidence that is

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available for bringing any establishment to be covered under the Act. It is only after collection of all evidence and collation of the same, conclusions are required to be arrived at. The order of the Commissioner was admittedly not in consonance with the power to be exercised and proceedings to be conducted under Section 7A of the Act.

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The Tribunal has rightly allowed the appeal filed by the respondent-Establishment on the aforesaid grounds and would not warrant any interference at the hands of this Court. However, liberty is to be reserved at the hands of the Commissioner to initiate proceedings, if any, strictly in consonance with the provisions of the Act and needless

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to state, that the respondent would extend co-operation for any such proceeding initiated. Therefore the following:

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ORDER

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(i) Writ petition is disposed of.

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(ii) The order of the appellate Authority is affirmed.

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(iii) Liberty is reserved to the petitioner to initiate proceedings, if any, strictly in accordance with law, keeping in mind the observations made hereinabove and conclude the same within six months of its initiation.

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(iv) The amount recovered from the respondent-Establishment shall be subject to the result of the proceedings, if any initiated, failing which, the amount shall be refunded forthwith to the respondent.

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Sd/JUDGE

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bkp CT:MJ

Central Board of Trustees, Epf v. M/S. Venkateswara Packagings

Case brief

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Central Board of Trustees, Epf v. M/S. Venkateswara Packagings

Case brief

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