CoramThe Honourable Mr v. The Presiding Officer

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 19-9-2007CoramThe Honourable Mr.Justice S.J.MUKHOPADHAYAandThe Honourable Mr.Justice N.PAUL VASANTHAKUMARW.A.No.1971 of 2003W.A.M.P.No.2796 of 2003M/s.The Indian Hume Pipe Co Ltd.,Madurai....AppellantVs.1.The Presiding Officer,Employees Provident Fund Appellate Tribunal,7th Floor, 60 Skylark Building,Nehru Place,New Delhi - 110 019.2.The Regional Provident Fund Commissioner,Office of the Regional Provident Fund Commissioner,Lady Doak College Road,Chokkikulam,Madurai - 625 002.3.The Enforcement Officer,Office of the Regional Provident Fund Commissioner,Lady Doak College Road,Chokkikulam,Madurai - 625 002.RespondentsThis Writ Appeal has been filed under Clause 15 of LettersPatent against the order of the learned single Judge inW.P.No.2781 of 2000 dated 14.2.2003.W.P.No.2781 of 2000:= Presented to this Court under Article 226of the Consideration of India, praying to issue a writ ofcertiorari to call for the records on the file of the firstrespondent presiding officer, employees provident fund AppellateTribunal, New Delhi, pertaining to case No. ATA/13 (14)/99 dated26.11.1999 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For Appellant:Mr.Ramaswamyfor Mr.V.Mani1st Respondent:TribunalRespondents 2 & 3:Mr.V.VibhishananJ U D G M E N TN. PAUL VASANTHAKUMAR, J.This writ appeal is directed against the order passed by thelearned single Judge in W.P.No.2781 of 2000 dated 14.2.2003,dismissing the writ petition filed by the appellant herein.2.The brief facts necessary for disposal of the writappeal are that the appellant Company was established during theyear 1926 and is engaged in the manufacture, sale and laying ofvarious types of cement, concrete pipes, penstock pipes, railwayconcrete sleepers, etc. The Company is having 25 factories andprojects all over India and the said factories were establishedas the pipes are heavy and bulky to avoid transportation for along distance, so that it can cater to the needs of the nearbyareas. The appellant Company established a factory in the placecalled Silaiman near Madurai for manufacture and supply of pre-stressed concrete pipes. The Tamil Nadu Water Supply andDrainage Board, gave an order to the appellant for laying pipesfrom Vaigai Dam to Andipatti, to the distance of 30 Kms. Theappellant executed the contract work from December, 1993 toJanuary, 1995. The laying of pipeline was entrusted to differentcontractors. The appellant was served with a show cause noticeby the respondents and called upon to furnish particulars. Theappellant contended that the Employees Provident Fund andMiscellaneous Provisions Act and Employees State Insurance Acthave no application to the factory at Madurai or to the executionof the work of laying pipelines. It was further stated that thework was executed for a sum of Rs.5,11,41,709/- throughindependent contractors and as such no contribution is payable.The second respondent however held that the appellant is liableto contribute towards Provident Fund contribution and insurancecharges to the tune of Rs.5,54,811.10 by order dated 7.9.1997.The appellant, having aggrieved, challenged the said order byfiling an appeal before the Employees Provident Fund AppellateTribunal and by order dated 9.2.1998, the Appellate Tribunal setaside the order of the second respondent and remitted the matter https://hcservices.ecourts.gov.in/hcservices/ to give fresh hearing by summoning the sub-contractors to producerecords in respect of the employees, who were engaged in layingof the pipes. Thereafter, the second respondent issued summonsto the Sub-Contractors as well as to some of the employees andconsidered the matter and thereafter passed an order on 25.2.1999holding that the appellant is liable to pay a sum ofRs.11,50,323/- in respect of contribution towards Provident Fund,Family Pension Fund, Administrative charges, etc. The said orderwas again challenged before the Employees Provident FundAppellate Tribunal by filing appeal bearing Case No.ATA/13(14)/1999. The said appeal was also dismissed by order dated26.11.1999.3.The said order of the second respondent dated25.2.1999, confirmed by the first respondent on 26.11.1999 werechallenged by the appellant before this Court in W.P.No.2781 of2000 and the learned single Judge dismissed the same by orderdated 14.2.2003 by holding that the original authority as well asthe appellate authority, after analysing the entire evidence,came to a factual conclusion in appreciation of material evidenceand the same cannot be interfered with under Article 226 ofConstitution of India as there is no error of jurisdiction northere is any illegality or infirmity in the said orders. Asagainst the said dismissal of writ petition, this writ appeal ispreferred.4.The learned counsel appearing for the appellantsubmitted that even after remand made by the appellate authority,the second respondent failed to appreciate the contention of theappellant that laying of the pipeline was made throughcontractors and the contractors have also filed affidavit toprove the same, but still the second respondent erroneously fixedthe liability on the appellants, which was confirmed by the firstrespondent as well as the learned single Judge and therefore thesaid orders are liable to be set aside by remanding the matter tothe second respondent for fresh consideration. The learnedcounsel also submitted that the Cement Industry, manufacturingthe pipes, owned by the appellant is different from layingpipeline from Madurai to Theni, for which TWAD Board grantedpermission and the pipelines having been laid by the contractors,they are entitled to have infancy period and non-consideration ofthe above aspect by the respondents vitiates the entireproceedings. The learned counsel also submitted that theworkmen, who are to be given the benefit are not identified andthe respondents have not assessed the liability of the appellantin the manner known to law and therefore prayed for setting asidethe orders passed and remit the matter. https://hcservices.ecourts.gov.in/hcservices/

5.The learned counsel for respondents 2 & 3 submittedthat the original authority and the appellate authority factuallyfound that the appellant is liable to pay the amount and thelearned single Judge rightly refused to go into the disputedfacts in the writ petition filed under Article 226 ofConstitution of India. The learned counsel submitted that theworkers are identified, whose names find place in Annexure-A ofthe order passed by the second respondent dated 25.2.1999, andthat the alleged sub-contractors are not independent contractorsand they are getting the cement pipes only from the appellanteven as per the agreement said to have been entered into by theappellant Company with the contractors dated 6.3.1989 and theliability to pay the statutory dues, even though fixed on thecontractor in case of non-payment, the appellant Company isentitled to recover the same from the contractor as per theprovisions of the Employees Provident Fund Act, 1952, and thescheme thereunder. On the basis of the said submissions thelearned counsel prayed for dismissal of the writ appeal.6.We have considered the rival submissions made by thelearned counsel for the appellant as well as respondents 2 and3.7.The point for consideration is whether the order passedby the second respondent as confirmed by the first respondent isjust and proper and whether the learned single Judge is right indismissing the writ petition. 8.Admittedly the appellant Company was established duringthe year 1926 and engaged in the manufacture of re-inforcedcement concrete pipes, etc., throughout India and establishedseveral factories all over the country. The TWAD Board entrustedthe work of laying pipes from Vaigai Dam to Andipatti in the thenMadurai District, to the appellant and the appellant executed thecontract from December, 1993, and completed the same in January,1995. It is true that the earlier order passed by the secondrespondent demanding a sum of Rs.5,54,811.10 was challenged bythe appellant and the first respondent appellate authority setaside the same and remitted the matter to re-determine all thedues, after impleading the sub-contractors. Thereafter theappellant was directed to submit written statement with referenceto the dues payable by the establishment in respect of theemployees employed through the contractors, for which theappellant filed written statement on 9.9.1998. The learnedcounsel appearing for the appellant before the second respondentfurther stated that M/s.CEC and M/s.Namperumal & Co., areseparate establishments functioning independently with permanentemployees for various purposes and they are to be treated as https://hcservices.ecourts.gov.in/hcservices/ Principal Employer. The learned counsel also submitted writtenarguments and stated that the assessment proceeding may be closedas no document is available to ascertain the payment of salary toeach workers. The learned counsel appearing for M/s.S.Ganapathyand S.Danasekar submitted that they are only employees of theappellant Company and they were doing the work of Maistry andthey used to receive the amount for the purpose of disbursingwages to the employees engaged by the Maistry on behalf of thePrincipal Employer viz., the appellant. Similarly the learnedcounsel for M/s.Namperumal & CO., also stated that it is the dutyof the appellant Company to make contributions in connectionwith the employees. Section 7A of the Employees Provident FundAct deals with determination of moneys due from employers and theprocedures to be followed during determination.9.We could see from the order of the second respondentsthat the appellant, who is the Principal Employer, failed toproduce records to contradict the records produced by thecontractors. The Contractors also failed to produce theattendance register and wage register of the employees engaged bythem on behalf of the appellant Company and stated that they werenot maintaining any such record and certain employees weresummoned by the enquiry authority to find out the truth and someof them appeared and supported the document filed by thecontractors. Whether the contractors, whose companies were notcoverable as on that date and were enjoying infancy and whetherthey should be treated as Contractors or Maistries could not bedecided by the second respondent as no documentary evidence wasproduced to ascertain their status.10.The above said facts clearly proved the non co-operation of the appellant to deny the liability and the secondrespondent proceeded to fix the quantum by way of bestassessment. In similar matter with regard to determination ofcontribution payable under section 45A of Employees StateInsurance Act, the Supreme Court in the decision reported in(2007) 1 SCC 584 (ESI Corpn. v. C.C. Santhakumar) held that onnon co-operation, best assessment order can be passed. Inparagraph 15, the Supreme Court held thus,"15. Section 45-A provides fordetermination of contributions in certaincases. When the records are not produced bythe establishment before the Corporation andwhen there is no cooperation, the Corporationhas got the power to make assessment anddetermine the amount under Section 45-A andrecover the said amount as arrears of landrevenue under Section 45-B of the Act. This https://hcservices.ecourts.gov.in/hcservices/ is in the nature of a best-judgmentassessment as is known in taxing statutes.When the Corporation passes an order underSection 45-A, the said order is final as faras the Corporation is concerned. UnderSection 45-A(1), the Corporation, by anorder, can determine the amount ofcontributions payable in respect of theemployees where the employer prevents theCorporation from exercising its functions ordischarging its duties under Section 45, onthe basis of the material available to it,after giving reasonable opportunity. But,where the records are produced, theassessment has to be made under Section 75(2)( a ) of the Act. Section 45-A(2) providesthat the order under Section 45-A(1) shall beused as sufficient proof of the claim of theCorporation under Section 75 or for recoveryof the amount determined by such order asarrears of land revenue under Section 45-B.In other words, when there is a failure inproduction of records and when there is nocooperation, the Corporation can determinethe amount and recover the same as arrears ofland revenue under Section 45-B. ......" 11.In this case, the Enquiry Authority assessed the amounton the basis of the list of employees furnished by thecontractors and the quantum of amount paid to each of them.Since there was no contra evidence produced by the PrincipalEmployer viz., the appellant the said amount was assessed as duesand the list of employees and the wages paid was also appended asAnnexure-A.12.We have also perused the agreement said to have beenentered into by the appellant with the Namperumal & Co., whereinin clause 28 it is stated that if the contractor fails to pay thelawful dues as per the provisions of Employees Provident FundAct, 1952, the appellant Company is entitled to recover the samefrom the contractor from his bill. The said clause in theagreement clearly establishes the liability to pay EmployeesProvident Fund Contribution to its employees either by thecontractors or by the appellant/principal Employer.13.The appellate authority also found that the appellantbeing a Construction Compnay, its employees are liable to payProvident Fund contribution under section 1(3)(b) of the Act andeven according to the appellant company, it is having a factoryto manufacture pipes and they have taken the project of laying https://hcservices.ecourts.gov.in/hcservices/ down the pipes. The second respondent having given reasons foraccepting the documents filed by the Contractors and theappellant Company being the Principal Employer having failed tomaintain necessary records and to ensure regular payment, wasrequired to pay the contribution to its employees. The learnedappellate authority also found that the contract said to havebeen made by the appellant with the sub- contractors are notgenuine as the amount paid to the sub-contractors discloses onlywages and salaries and not higher than the amount other than thewages paid. No document to disprove the said finding is producedeither before the original authority or before the appellateauthority. The number of workers having been identified as perAnnexure-A by the second respondent, the appellate authorityrejected the contentions of the appellant and dismissed theappeal.14.The learned single Judge having found that only factualdisputes were raised by the appellant before the secondrespondent as well as the first respondent and the same havingbeen found factually against the appellant, refused to interferein the writ petition filed under Article 226 of Constitution ofIndia. We are in entire agreement with the reasonings andconclusions arrived at by the learned single Judge.15.In the decision reported in (1997) 6 SCC 650 (AhmedabadMunicipal Corporation v. Virendra Kumar Jayantibhai Patel), theSupreme Court considered the scope of article 226 and held thus,"High Courts under Article 226 ofConstitution are entitled to issue directions,writs and orders for correcting the record ofthe inferior Courts or the tribunal. It istrue that the High Court while exercising itsjurisdiction under Article 226, cannot convertitself into a Court of appeal and assess thesufficiency or adequacy of the evidence insupport of the finding of fact reached by thecompetent Courts or the tribunals, but thisdoes not debar the High Court from its powerto enquire whether there is any evidence insupport of a finding recorded by the inferiorCourt or tribunal. There is a differencebetween a finding based on sufficiency oradequacy of evidence and a finding based on noevidence. If the finding of fact recorded bythe tribunal is based on no evidence, such afinding would suffer from error of lawapparent on the face of record." https://hcservices.ecourts.gov.in/hcservices/

16.In view of the above finding of fact by the secondrespondent as confirmed by the first respondent in the appeal, weare also of the view that the said findings of fact cannot beinterfered with under Article 226 of Constitution of India andthe said findings are not proved as perverse finding. Thelearned single Judge is perfectly justified in refusing tointerfere with the said finding under Article 226 of Constitutionof India and dismissed the writ petition.17.There is no merit in the writ appeal and the same isdismissed. The order of the learned single Judge in W.P.No.2781of 2000 dated 14.2.2003 is confirmed. No costs. Connectedmiscellaneous petition is also dismissed. vrSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1.The Presiding Officer,Employees Provident Fund Appellate Tribunal,7th Floor, 60 Skylark Building,Nehru Place,New Delhi - 110 019.2.The Regional Provident Fund Commissioner,Office of the Regional Provident Fund Commissioner,Lady Doak College Road,Chokkikulam,Madurai - 625 002.3.The Enforcement Officer,Office of the Regional Provident Fund Commissioner,Lady Doak College Road,Chokkikulam,Madurai - 625 002.+ 1 cc to Mr. V. Mani, Advocate SR No. 58331/07 Judgment in W.A.No.1971 of 2003 SA(CO)SR/26.9.2007