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Assistant Provident ... v. Employees Provident ...
Factual and Procedural Background
The Assistant Provident Fund Commissioner, Visakhapatnam, filed the writ petition challenging the Employees Provident Fund Appellate Tribunal’s order dated 10.05.1999 in Appeal No. ATA/1(18)99/1351. [1]
The respondent company, which operated a factory at Rajahmundry, had been granted exemption under Section 17 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Following a settlement, it paid permanent workmen an adhoc amount of Rs.2,800/- and treated that payment as not constituting wages for provident fund purposes. [2]
The Assistant Provident Fund Commissioner initiated proceedings under Section 7-A of the Act and directed the company to pay Rs.2,54,885/- towards provident fund contributions and other charges on that amount. The company challenged that order, later appealed under Section 7-I of the Act, and the Appellate Tribunal set aside the Commissioner’s order. [3]
The present writ petition challenged the Tribunal’s decision. [4]
Legal Issues Presented
- Whether the Assistant Provident Fund Commissioner, acting as a quasi-judicial authority under Section 7-A of the Act, was an aggrieved person entitled to challenge the Appellate Tribunal’s order setting aside his decision. [5]
- Whether the writ petition under Article 226 of the Constitution was maintainable at the instance of the Assistant Provident Fund Commissioner. [6]
Arguments of the Parties
Respondent Company's Arguments
- The writ petition was not maintainable because the Assistant Provident Fund Commissioner was not competent or authorized to challenge the Tribunal’s order. [7]
Petitioner's Arguments
- The Assistant Provident Fund Commissioner was entitled to question the Tribunal’s order and the writ petition was maintainable. [8]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Mohtesham Mohd. Ismail V. Special Director, Enforcement Directorate and another | A quasi-judicial adjudicating authority ordinarily cannot appeal against an appellate decision setting aside its order unless specifically authorized. [9] | The Court applied this principle to hold that the Assistant Provident Fund Commissioner could not challenge the Tribunal’s reversal of his order. [5][9] |
| District Collector and others Vs. Bagathi Krishna Rao and another | Appeals filed by officers against a judgment in a suit were held not maintainable, with the State being the necessary party. [10] | The decision supported the conclusion that the individual statutory officer was not the proper party to challenge the adjudicatory result. [10] |
| Joint Collector, Ranga Reddy District and others Vs. P.V.Narasimha Rao and others | Quasi-judicial primary and appellate authorities are not aggrieved parties merely because their orders are set aside in appeal. [11] | The Court relied on this principle in determining that the Commissioner could not defend his own order through a writ petition. [11][6] |
| Assistant Provident Fund Commissioner Vs. Nirmitee Holidays Pvt. Ltd. | An Assistant Provident Fund Commissioner cannot maintain a writ petition challenging an Appellate Tribunal order reversing his Section 7-A decision; permitting such a challenge would undermine judicial discipline. [12] | The Court expressly agreed with this reasoning and applied it to the present writ petition. [12][6] |
Court's Reasoning and Analysis
The Court considered whether the petitioner was an “aggrieved person.” It stated that a person is aggrieved when an adjudication adversely affects his interests and deprives him of something to which he has a right. [5]
The Assistant Provident Fund Commissioner was exercising quasi-judicial powers under Section 7-A and was required to follow natural justice. He was not a party to the dispute and could not assume the position of a litigating party. His decisions were subject to the statutory appellate mechanism. [5]
Relying on the cited authorities, the Court held that a quasi-judicial authority whose order has been reversed by an appellate authority cannot ordinarily challenge that appellate decision, particularly where no statutory or specific authorization permits such action. [9][10][11]
The Court accepted the principle that allowing the Assistant Provident Fund Commissioner to defend his own order by challenging the Tribunal’s decision would be subversive of judicial discipline. The petitioner was unable to identify any provision of the Act authorizing him to question the appellate order. [12][6]
Holding and Implications
DISMISSED: The writ petition was held not maintainable at the instance of the Assistant Provident Fund Commissioner and was dismissed. No order was made as to costs, and pending miscellaneous petitions were closed. [13]
The direct effect was that the Appellate Tribunal’s order setting aside the Commissioner’s provident fund assessment remained undisturbed. The opinion does not state broader implications or establish a new precedent. [3][13]
1 2007 (8) SCC 254
2 (2010) 6 SCC 427
3 2011 (1) ALD 103 (DB)
4 2011 -LLJ-2-469
ORDER:
This Writ Petition has been filed by the Assistant Provident Fund Commissioner, Visakhapatnam, challenging the order dated 10.05.1999 passed by the Employees Provident Fund Appellate Tribunal in appeal No. ATA/1(18)99/1351.
2. The second respondent is a Public Limited Company incorporated under the Companies Act, 1956. It has set up a factory for its Company at Rajahmundry. However, the Government of Andhra Pradesh had granted exemption to the establishment of the respondent company by notification dated 18.05.1982 issued in exercise of powers under Section 17 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short, 'the Act'). Pursuant to a settlement dated 03.07.1990 with its Union the second respondent revised the Basic Wages, Scheme of Dearness Allowance, Leave Travel Allowance, House Rent Allowance and Educational Allowance apart from making payment of adhoc amount of Rs.2,800/- to all permanent workmen who were on the rolls as on 01.11.1989 and continued to be on the rolls on 01.07.1990. The terms of the settlement specifically provide that adhoc payment would not be referred as remuneration / wages and would not be treated for E.S.I., P.F., Bonus etc., or any other payment linked with the wages. The Office of the Regional Provident Fund Commissioner, Visakhapatnam (the petitioner herein), however, insisted that payment of adhoc amount of Rs.2,800/- under the settlement dated 03.07.1990 is "wage arrears" and respondent No.2 has to pay Provident Fund contribution on the said amount and initiated enquiry under Section 7-A of the Act to decide as to whether Provident Fund contributions are payable on this amount paid to the workmen by the 2nd respondent.
3. On 31.10.1995, the petitioner, in exercise of powers under Section 7-A of the Act, directed the second respondent Company to pay an amount of Rs.2,54,885/- as Provident Fund contribution and other charges on the adhoc amount of Rs.2,800/- paid to the permanent workmen, who were on the rolls as on 01.11.1989 and continued to be on rolls on 01.07.1990 under the settlement dated 03.07.1990. Challenging this order, the second respondent filed W.P.No.25331 of 1995 and obtained stay of operation of the order dated 31.10.1995 of the petitioner. In the mean time, in September 1998 the Appellate Tribunal under Section 7-I of the Act was constituted and in view of this development, the Hon'ble High Court by order dated 22.01.1999 gave liberty to the second respondent to avail the remedy of appeal and directed that the stay of operation of the impugned order dated 31.10.1995 of the petitioner be continued till the disposal of appeal to be filed by the 2nd respondent. Thereafter, the second respondent filed an appeal before the first respondent under Section 7-I of the Act. After hearing both the parties, the first respondent passed the impugned order dated 10.05.1999 allowing the appeal and setting aside the order dated 31.10.1995 of the petitioner.
4. Heard Sri R.N.Reddy, learned counsel for the petitioner and Sri I.Nagesh, learned counsel for the second respondent.
5. Learned counsel for the second respondent raised a preliminary objection to the maintainability of the Writ Petition alleging that the petitioner, who is the Assistant Provident Fund Commissioner, is not a competent and authorized person to file the Writ Petition challenging the impugned order dated 10.05.1999.
6. Learned counsel for the petitioner contended that the Assistant Provident Fund Commissioner is entitled to question the order of the first respondent Tribunal and that the Writ Petition filed by the petitioner is maintainable.
7. It is not in dispute that the petitioner is the Assistant Provident Fund Commissioner, Visakhapatnam, a statutory authority exercising quasi-judicial powers under Section 7-A of the Act. The order dated 31.10.1995 was passed by him in exercise of his powers under Section 7-A of the Act has been set aside by the first respondent - Tribunal in Appeal No. ATA/1(18)99/1351, dated 10.05.1999. The petitioner has challenged the said order by filing this Writ petition.
8. The question is whether the petitioner can be said to be an aggrieved person entitled to challenge the order passed by the first respondent. In my opinion, a person can said to be aggrieved, if his interests are adversely affected by adjudication and the said adjudication has deprived him of something to which he had a right. The Assistant Provident Fund Commissioner, Visakhapatnam, who is the petitioner herein, is a quasi-judicial authority entitled to exercise the powers conferred under Section 7-A of the Act by following principles of natural justice. He has no role to step into the shoes of the party to a dispute. He is not a party to the lis. All his decisions are subject to the appeals provided under the statute. In Mohtesham Mohd. Ismail V. Special Director, Enforcement Directorate and another1, the Supreme Court of India while considering the provisions of Section 54 of the Foreign Exchange Regulation Act, 1973 held as under:
" An adjudicating authority exercises a quasi-judicial power and discharges judicial functions. When its order had been set aside by the Board, ordinarily in absence of any power to prefer an appeal, it could not do so. The reasonings of the High Court that he had general power, in our opinion, is fallacious. For the purpose of exercising the functions of the Central Government, the officer concerned must be specifically authorized. Only when an officer is so specifically authorized, he can act on behalf of the Central Government and not otherwise. Only because an officer has been appointed for the purpose of acting in terms of the provisions of the Act, the same would not by itself entitle an officer to discharge all or any of the functions of the Central Government. Even ordinarily a quasi-judicial authority cannot prefer an appeal being aggrieved by and dissatisfied with the judgment of the appellate authority whereby and whereunder its judgment has been set aside. An adjudicating authority, although an officer of the Central Government, should act as an impartial tribunal. An adjudicating authority, therefore, in absence of any power conferred upon it in this behalf by the Central Government, could not prefer any appeal against the order passed by the Appellate Board."
9. Similar view has also been expressed in District Collector and others Vs. Bagathi Krishna Rao and another2, wherein the Supreme Court of India held that an appeal which has been filed by the District Collector, Mandal Revenue Officer and District Forest Officer as against the judgment in a suit is not maintainable and that the State of Andhra Pradesh is a necessary party.
10. In Joint Collector, Ranga Reddy District and others Vs. P.V.Narasimha Rao and others3, the Division Bench of this Court held that quasi judicial bodies constituted under provisions of an Act as primary and appellate authorities cannot be said to be aggrieved parties if their orders are set aside in appeal and challenge such orders while supporting their own orders.
11. In Assistant Provident Fund Commissioner Vs. Nirmitee Holidays Pvt. Ltd.,4 the Bombay High Court held that the Assistant Provident Fund Commissioner, who challenged the order passed by the Employees Provident Fund Tribunal, New Delhi, in an appeal preferred under Section 7-I of the Act against the order is not entitled to maintain a writ petition challenging the order of the Employees Provident Fund Tribunal passed under Section 7-I of the Act. The Bombay High Court also held that the Assistant Provident Fund Commissioner is exercising quasi-judicial functions while passing the order under Section 7-A of the Act and when the said order has been set aside by the appellate Tribunal under Section 7-I of the Act, it would not be permissible for the Assistant Provident Fund Commissioner to challenge the order passed by the Appellate Tribunal reversing his order. It held that permitting such exercise would be subversive of judicial discipline.
12. I respectfully agree with the above decisions and hold that the Assistant Provident Fund Commissioner exercises quasi-judicial functions and he is not supposed to defend his own orders (when his orders are challenged before the Appellate Tribunal and set aside by such Tribunal), by challenging the orders of the Tribunal in a Writ Petition filed under Article 226 of the Constitution of India. Any such exercise by the Assistant Provident Fund Commissioner is subversive of judicial discipline. Learned counsel for the petitioner has not been able to point out any provision of the Act which entitles the Assistant Provident Fund Commissioner to question the orders passed in an appeal against its own order.
13. Therefore, I hold that the Writ Petition is not maintainable at the instance of the petitioner and accordingly, the Writ Petition is dismissed. There shall be no order as to costs. Miscellaneous petitions, if any, pending in this Writ Petition shall stand closed.
_____________________________ M.S.RAMACHANDRA RAO, J SEPTEMBER 28, 2012
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