RELIANCE INDUSTRIES LIMITED Vs. ASSISTANT PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The present Special Civil Application is filed praying for the following reliefs:-

(2.) It is the case of the petitioner company that on 11/6/2007 and 12/6/2007, a team from the office of Assistant Provident Fund Commissioner, Surat came to inspect the manufacturing unit of the petitioner at Hazira. Thereafter, on 22/6/2007, the respondent called upon the petitioner company to submit the required documents by 25/6/2007 failing which an inquiry under Sec. 7(A) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ["the Act" for short] would be initiated. Thereafter, vide letter dtd. 26/6/2007 the petitioner informed the respondent that they had submitted the information / details pertaining to the compliance of the payment of the provident fund in respect of their employees to the inspection team at the time of their visit on 11 th and 12/6/2007. It was further pointed out that there were several contractors who were working with the petitioner company and therefore, it was their responsibility to maintain the books of account in respect of the payment of the provident fund of the employees engaged through the contractors and it was prayed that the respondent may ask such contractors to produce the relevant records which were in their possession. That thereafter notice dtd. 22/8/2007 came to be issued for an inquiry under Sec. 7(A) of the Act for the period from April-2005 to March- 2007 regarding the compliance of the employees engaged through the contractors and the petitioner was directed to remain present on 4/9/2007 for the hearing in the said inquiry. That by letter dtd. 29/8/2007, the petitioner made a request for finalizing the schedule for the inspection at the company's manufacturing unit so that the concerned contractors for whom the inquiry was initiated could be kept present along with the relevant provident fund records which were in exclusive possession of such contractors with the intention to assist the respondent in the inquiry. Thereafter through several correspondences, the petitioner company produced the list of contractors employed by the petitioner company at its Hazira unit and also requested the respondent authority to summon all the contractors with relevant records. That thereafter on 18/2/2008, the petitioner company produced a list of contractors employed by the petitioner at its Hazira unit who were separately covered under the Act. Thereafter the hearing was adjourned to 25/2/2008 when the petitioner company filed its written representation. Several discrepancies were also pointed out to the respondent with respect to the contractors who the respondent believed had not complied with the provisions of the Act. In order to clarify such a position, it was once again requested by the petitioner company to the respondent authority to issue summons to all the contractors so that the relevant material and provident fund records could be produced before the respondent authority so as to enable it to come to a proper decision as to the exact amount of differential provident fund required to be deposited by the petitioner company if at all there is any. That thereafter by the impugned order dtd. 25/2/2008, the respondent authority directed the petitioner company to make payment of provident fund for 40 contractors for the year 2005-2006 and for 34 contractors for the year 2006-2007 aggregating to an amount of Rs.83,54,559.00 within a period of seven days from the receipt of the copy of the said order.

(3.) Mr. K.S.Nanavati, learned senior counsel appearing for the petitioners has submitted that the impugned order is in teeth of the principles of natural justice and has been passed without any substantive or effective hearing. He submits that the respondent authority has failed to exercise its jurisdiction and discharge its legal duty by summoning the contractors and calling upon them to produce the relevant material and provident fund records maintained by them to clarify the factual position which are in their sole knowledge though specifically requested for and prayed for by the petitioner during the inquiry. He further submits that without rejecting such a prayer on behalf of the petitioner company, the respondent authority has proceeded to decide and adjudicate the proceedings under Sec. 7(A) of the Act without giving proper hearing to the petitioner company and directed it to make a payment of provident fund for the alleged employees who were employed through the contractors without collecting necessary evidence. He submits that the petitioner company had raised many discrepancies in respect of the list of contractors through which the petitioner company was employing workmen. He further submits that the squad of the enforcement officers who had come to inspect the records at the Hazira unit of the petitioner company had submitted their report dtd. 25/2/2008 to the respondent authority which was taken into account while deciding the liability in the impugned order. He submits that the said report was never made available to the petitioners and no opportunity was granted to assail the report on the basis of which the impugned order was passed. He submits that the report of the enforcement officer is dtd. 25/8/2008 and the impugned order is also passed on the same day. He submits that the said action on the part of the respondent authority is in complete breach of principles of natural justice and contrary to the settled position of law. He submits that the impugned order be set aside and the petitioners be granted opportunity to counter the report dtd. 25/2/2008 as submitted by the enforcement officer to the respondent authority. He submits that grave prejudice have been caused without allowing the petitioner company to give its reply to the said report. He submits that the respondent authority has passed the impugned order based on the said report and has saddled the petitioner company with financial liability without granting any hearing in respect of the report submitted by the enforcement officer. He, therefore, submits that the impugned order be set aside and the matter be remanded to the respondent authority for fresh hearing after giving opportunity to the petitioner to make their submissions on the report dtd. 25/2/2008.