Ascot Hotels and Resorts Pvt. Ltd. v. Assistant Provident Fund Commissioner

1. This hearing has been done through video conferencing.

2. The present appeal has been filed challenging the impugned orders dated 18th September, 2019 and 6th November, 2019 passed by the Central Government Industrial Tribunal/Employees’ Provident Fund Appellate Tribunal (hereinafter “Tribunal”) by which the appeal filed by the Petitioner has been dismissed.

3. The brief facts are that a show cause notice was issued on 9th May, 2014 under Section 14-B and 7-Q of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter “the Act”) for the period November, 2008 to April, 2014. The Respondent-Authority passed an order on 30th July, 2014 assessing the Petitioner for payment of interest and also imposition of damages to the following effect:- “NOW THEREFORE, I, SATISH KUMAR GUPTA Assistant Provident Fund Commissioner, Delhi (North), in exercise of the powers conferred 2021:DHC:2389 on me by section 14-B the Act and on application of my mind to the facts and circumstances of the case and on perusal of the relevant records, consider it to be a fit case for levy of damages as per the rates prescribed under Para 32-A of the EPF Scheme, 1952, Para 5(1) of the Employees’ Pension Scheme, 1995 and Para 8-A of the EDLI Scheme, 1976 notified vide notification dated 14.08.91 and 26.09.2008 issued by the Government of India and accordingly order that the damages for the delayed payment for the period from 11/2008 to 04/2014 totalling Rs. 52,22,078/- be recovered as per the account wise schedule indicated below from the employer in relation to M/S ASCOT HOTELS and RESORT PVT LTD. Bearing code No. DL/35589:- Nature of Interest Amount Account No. P.F Contribution Rs.4774393/- 1 Administrative charges Rs.228259/- 2 FPF/EPS contributions Rs.205788/- 10 EDLI contributions Rs.13370/- 21 EDLI administrative charges Rs.268/- 22 Total Rs.52,22,078/- (Rs. Fifty Two Lac, Twenty Two Thousand & Seventy Eight Only)

AND WHEREAS an order under section 14B of the EPF & MP Act, 1952 has been issued after affording opportunity to the establishment levying damages for the delayed payments of contribution and administrative charges for the period 11/2008 to 04/2014 totaling Rs.52,22,0781-, it is ordered that the establishment is liable to pay the following amount of interest under section 7Q of the EPF & MP Act, 1952 on account of belated remittances of contributions and administrative charges for the period 11/2008 to 04/2014 as per the account wise schedule indicated below:- Nature of Interest Amount Account No. P.F Contribution Rs.2374036/- 1 Administrative charges Rs.113526/- 2 FPF/EPS contributions Rs.102902/- 10 EDU contributions Rs.6664/- 21 EDLI administrative charges Rs.132/- 22 Total Rs.25,97,260/- (Rs. Twenty Five Lac, Ninety Seven Thousand Two Hundred and Sixty Only)

4. Damages have been imposed upon the Petitioner to the tune of Rs.52,22,078/- and interest amount has been computed at Rs.25,97,260/-. Challenging these impositions, the Petitioner filed an appeal before the Tribunal under Section 7-I of the Act. The case of the Petitioner is that the entire interest amount has already been deposited and the challenge was only to the component awarding damages. Vide interim order dated 9th October, 2014 passed by the Tribunal, the operation of the impugned order was stayed, subject to the deposit of interest assessed under Section 7-Q of the Act, and an additional amount of Rs. 20,00,000/- with the Respondent Authority, within four weeks. The operative portion of the said order reads as under:- “The present appeal has been filed by the appellant under Section 7 I of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (in sort 'the Act') challenging the orders dated 30.07.2014, 28.08.2014 & 02.09.2014 passed by the APFC, Delhi under Section 14B of the Act.

2 Heard the advocate for the parties and gone through the record on file. The appeal is admitted for consideration. The operation of impugned orders are stayed subject to deposit of 7Q amount along with an additional amount of Rs. 20 Lakhs with the respondent within four weeks. The respondent authority is directed not to take any coercive measure till the disposal of present appeal subject to said deposit. The respondent may file reply within 30 days from today as required under rule 12 of the EPFAT (procedure) Rules. Notice is accepted by Sh. Amit Tyagi Advocate, for the respondent for 04.03.2015. List the case for reply and further order before Court for 04th March, 2015.”

5. The said order was also challenged before the High Court by WP(C) No.5290/2015. In the said writ petition, vide judgment dated 27th February, 2018, the ld. Single Judge held that the Petitioner would comply with the direction issued by the Tribunal vide order dated 9th October, 2020 within four weeks from the date of the said judgment, 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.

6. Thus, the Petitioner, in compliance with the condition of stay, ought to have deposited a sum of Rs.20,00,000/-. However, on 6th April, 2018, on the ground that the Rs. 20,00,000/ was not deposited and the same constituted a breach of trust, the appeal was dismissed by the Tribunal. Reliance was placed on the judgment of the Hon’ble Supreme Court in Organo Chemical Industries & Anr. v. Union of India & Ors. [1979 (4) SCC 573] and Chamunda Standard Mills v. RPFC [2018 LLR 181]. The operative portion of the said order dated 6th April, 2018 reads as under:-

7. An application was then moved by the Petitioner under Rule 15 of the Tribunal (Procedure) Rules, 1997 under the Act, seeking recall of the said order of dismissal and a restoration of the appeal. In the application, it is stated that the interest amount has already been deposited and in addition, the Petitioner has deposited a sum of Rs.3,00,000/-.

8. Mr. S.K Gupta, ld. Counsel for the Petitioner submits that the application under Rule 15 ought to have been considered on merits. However, by the impugned orders, the Tribunal has dismissed the appeal due to non-deposit of the amount of Rs.20,00,000/-.

9. The legal question raised by Mr. Gupta, ld. counsel for the Petitioner is that, as per the order dated 9th October, 2014, the deposit of Rs. 20,00,000/- was only a condition for stay and not for the hearing of the appeal on merits. Moreover, he submits that the entire interest amount has already been deposited. Mr. S.K. Gupta, ld. Counsel submits that now the Petitioner has also deposited Rs.20,00,000/- as well. Dr. Subhash Gupta, ld. counsel for the Respondent, submits that the Petitioner was in complete noncompliance of the Tribunal’s direction and hence, the appeal has been rightly dismissed by the Tribunal.

10. In WP(C) No.5290/2015, vide order dated 27th February, 2018, the ld. Single Judge of this Court has already held that there is no embargo to entertain the appeal and pre-deposit cannot be ordered just for the purpose of entertaining the appeal. The relevant extract reads as under:-