THE FACT FINDING AUTHORITIES SHOULD CONSIDER THE CONTENTIONS RAISED BY THE PARTIES

[Mr. M. GOVINDARAJAN]

In judicial proceedings or in quasi-judicial proceedings the fact finding authorities should consider the contentions raised by the parties which is according to the principles of Natural Justice. The doctrine of audi alteram partem has three basic principles which are as follows:

• A person against whom an order is required to be passed must be granted an opportunity;
• The concerned authority should provide a fair and transparent procedure; and
• The authority concerned must apply its mind and dispose of the matter by a reasoned or speaking order.

The requirement of indicating reasons has been judicially recognize as imperative. The reason is the heartbeat of every conclusion and without the same it becomes lifeless. The reasons at least sufficient to indicate an application of mind to the matter before the Court is an indispensable part of a sound judicial system. It enables the affected party to know why the decision has gone against him. It is the reasoning alone that enable a higher or an appellate court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the authority/Court, whose order is impugned, is sustainable in law. Non recording of reasons could lead to dual infirmities; firstly, it may cause prejudice to the affected party and secondly, more particularly, hamper the proper administration of justice. ‘Reasons’ are the links between the materials on which certain conclusions arfe based and the actual conclusions.

In ‘BSNL V. EPF Appellate Tribunal and another’ – 2013-I-LLJ-42 (P&H) the petitioner is a State owned corporation which is covered under the provisions of EPF Act. Commission issued a notice to the petition on 19.12.2008 to show cause as to why interest and damages be not levied under Sections 7-Q and 14-B of the Act on account of delayed deposit of provident fund and other dues. The petitioner replied to the notice furnishing information including the fact that for certain employees the amount was earlier being deposited with the General Provident Fund Scheme of the Central Government, however, later they were enrolled as members of the scheme under the Act and the amount lying in their credit was deposited with the provident fund organization. The Commissioner assessed Rs.7,24,494/- on account of interest and damages recoverable from the petitioner.  Further the Commissioner withdrew the above said amount from the account of the petitioner maintained with Punjab National Bank, Pathankot. taxmanagementindia.com

The petitioner filed an appeal before the Tribunal along with an application for stay. The Tribunal directed to deposit 30% of the amount assessed.

The petitioner requested the Commissioner to refund a sum of Rs.5,07,146/- after deducting 30% of the amount. As no action was taken by the Commissioner a sum of Rs.2,17,348/- was deposited by the petitioner to comply with the order passed by the Tribunal on the stay application. The Tribunal rejected the appeal and the petitioner approached the High Court.

The petitioner submitted the following before the High Court:

• In response to the show cause notice the petitioner reply specifically pointing out certain errors in the notice;
• It was further explained the reasons for delay in deposit of the provident fund dues which, inter alia, was for the reason that for certain employees the amount was earlier being deposited in GPF scheme of the Central Government which amount was later transferred to EPF;
• Without considering any of the contentions raised by the petitioner in the reply, the Commissioner passed the order;
• Even before the Tribunal the issues were raised in detail, however, still the appeal was rejected by the Tribunal;
• The order of the Tribunal is a cryptic, which is more in the kind of precise than a reasoned one;
• The petitioner is a state owned corporation; damages have to be levied only in case it is established that there is some mens rea, which is totally missing in the present case;
• Even though there was no requirement of pre deposit for entertainment of appeal an order assessing interest and damages, but still the Tribunal imposed a condition of deposit of 30% of the demand raised.

The petitioner prayed for setting aside of the order and remand the case back to the Tribunal for fresh consideration.

The respondents submitted the following:

• The delay in deposit of provident fund dues is not in dispute;
• Once that is so, as a necessary consequence, in terms of mandatory provisions of the Act, interest and damages were leviable;
• There is no jurisdiction vested with any authority to waive off the same;
• It was for the petitioner to have pointed out before the Tribunal that the amount of demand raised against it having already been recovered by the Commissioner, prayer for stay had been rendered infructuous;

The respondents prayed for the dismissal of the writ petition.

The High Court held that the petitioner has deposited 130% of the demand. The impugned order does not show that it was a pre-condition for entertaining appeal under Section 7-O of the Act, which deals with the precondition for entertainment of the appeal by the Tribunal, provides that the condition for deposit of 75%of the amount of demand raised before entertainment of appeal is in the cases, when the demand is raised by passing order under Section 7A of the Act. As far as consideration of the case on merits is concerned, a bare perusal of the impugned order shows that the contentions raised by the petitioner were neither considered by the Commissioner nor the Tribunal. The order passed by the Tribunal, which is the last fact finding authority, is totally cryptic. If the order passed by the Tribunal is examined on the principles of Natural Justice, it does not fall within the category of a speaking order, hence, deserves to be set aside and on this score alone and the matter is to be remitted back to the Tribunal for fresh consideration after hearing both the parties. The High Court further held that the petitioner is entitled to get the refund of Rs.2,17,348/- along with interest at the same rate at which the Provident Fund Organization charges interest on account of delayed deposit of Provident Fund dues.