- (1.) The petitioner is a registered partnership firm and manufactures building and hardware fittings etc. Its factory is situated at Industrial Area, Aishbagh, Lucknow. Provisions of the Employee's Provident Funds and Family Pension Funds Act, 1952, as amended from time to time, (herein after to be referred to as the Act) are applicable to the establishment of the petitioner. The petitioner was served with a notice dt. 8th Oct., 1969, issued under the signatures of Accounts Officer for Regional Provident Fund Commissioner, U. P., Kanpur, bringing to the notice of the petitioner that the Provident Fund dues were remitted by the petitioner after the prescribed dates for the period from March, 1968 to February, 1969 and thus rendered himself liable for damages under S. 14-B of the said Act, which come to Rs. 2448.10 Paise on account of Provident Fund contribution and Rs. 50.00 on administrative charges. By this notice, petitioner was required to show cause within seven days of the receipt of the notice as to why the State Government of Uttar Pradesh may not impose damages up to 25% on the belated payments as per revised procedure intimated to the petitioner vide Circular Letter No. 1557/EPF/ UP/Gr. I/221 (Dmg.) dt. 22nd June, 1963. In reply to said notice, the petitioner on 18th Oct., 1969 wrote to the Regional Provident Fund Commissioner that the Provident Fund dues as well as administration charges were sent to the State Bank of India, Lucknow within prescribed period and the State Bank of India in clearance has recorded payment on the date of the presentation of the cheque, and possibly the delay in clearance on the part of State Bank of India may have been caused due to intervening holidays and suspension of work due to strike etc. The petitioner asserted that payment of the Provident Fund dues and administrative charges have always been regularly made in due time as would be evident from past records. Later on the petitioner received letter dt. 27th Aug., 1971 issued by the Regional Provident Fund Commissioner (hereinafter to be referred to as opposite party No. 1) requiring him to deposit a sum of Rs. 2448.10 on Provident Fund contribution and Rs. 63.65 on administrative charges under S. 14-B of the Act for making belated payments of provident fund dues for the period referred to in earlier letter dated 8th Oct., 1969, failing which the said amount will be recovered as arrears of land revenue under S. 8 of the said Act without any further reference. After receiving the said notice, the petitioner immediately wrote to the Secretary, Labour Department, U. P. Government, Lucknow on 8th Sept., 1971 enclosing therein a statement showing dates of deposits in respect of the period for which the damages had been levied and asserted that the delay, if any, cannot be attributed to lack of bona fides on their part. The petitioner through its representation made a request for consideration of the matter and for cancellation of the said demand notice issued by opposite party No. 1. A request for giving an opportunity of personal hearing in order to clarify the matter was also made. When the petitioner did not hear anything from the Government on the subject, he wrote a letter dt. 10th Aug., 1974 to opposite party No. 1 wherein it was asserted that payments were regularly made without any delay towards provident fund contribution and administrative charges. It was also mentioned in the said letter that the representative of the petitioner had called on opposite party No. 1 in his office and had shown the details of the payments made by the petitioner. Bank challans showing dates of payments through cheques where also enclosed with the said letter. In reply to said letter opposite party No. 1 intimated to the petitioner that in view of certain amendments made in the Act, the State Government is no longer bound to decide any issue with regard to damages and it is Regional Commissioner who has been vested with full powers to levy damages. It was also referred in this letter that the damages in question were levied by the State Government and intimated to the petitioner vide letter No. 19796/UP/52/Dmg. dt. 27th Aug. 1971 which the petitioner was required to deposit. He has failed to deposit the same. The petitioner was, thus, called upon to make deposit of the said amount within ten days of the receipt of this letter, failing which action to recover the same under S. 8 of the Act was threatened. The petitioner has sought quashmg of notice of demand dt. 18th June, 1975 (Annexure 6 to the writ petition) and earlier notice of demand dt. 27th Aug., 1971 (Annexure 3) to the writ petition. A counter-affidavit was filed on behalf of opposite party No. 1 to which an order dt. 31st July, 1971, issued by the State Government in which a sum of Rs. 2448.10 as damages under S. 14-B of the said Act and Rs. 63.65 as administrative charges was imposed upon the petitioner, was annexed as Annexure A-4. The petitioner has also sought for quashing of the said order.
(2.) Learned counsel for the petitioner, Dr. R. K. Srivastava urged that the aforesaid order dt. 31st July, 1971 (Annexure A-4) passed by the State Government cannot be enforced and deserves to be quashed as it was passed without giving any opportunity of hearing to the petitioner. In para 19 of the writ petition, it has been specifically averred that the Government of Uttar Pradesh did not afford any opportunity to the petitioner before levying the damages nor there could arise any occasion for the petitioner to put up their case before the Government of Uttar Pradesh. In para 20 of the writ petition it has been averred that the order dt. 31st July, 1971 of the Government of Uttar Pradesh was never sent to the petitioner and the order dt. 27th Aug., 1971 passed by opposite party Nq. 1 could not be a substitute for the order which the State Government was required to pass in case the damages were imposed under S. 14-B of the Employee's Provident Fund Act, 1952. In para 20 of the counter-affidavit filed on behalf of opposite party No. 1, the said averments of para 19 of the writ petition have not been disputed and only this much has been said that the contents of said para need no comments. Similarly with reference to contents of para 20 of the writ petition. it has been averred that those do not concern opposite party No. 1 consequently no reply in respect of the same is required. It may be mentioned that no counter affidavit has been filed on behalf of opposite party No. 2 disputing the aforesaid facts averred in the writ petition. Thus we are left with no option but to accept it to be a correct fact that no opportunity was afforded to the petitioner by the State Government before passing the order 31. July, 1971, contained in Annexure A-4, levying damages etc. on the petitioner, This order, thus, stands vitiated in law being violative of principle of natural justice. It is well settled that no order prejudicial to a party can be passed by any authority without giving an opportunity of hearing to the concerned party. The said order, therefore, cannot be said to be a valid and proper order in the eye of law.
(3.) Learned standing counsel Sri H. N. Tilhari, however, urged that no opportunity of hearing was required to be given by the State Government while passing the said order contained in Annexure A-4 becauses opposite party No. 1, namely, Central Provident Fund Commissioner was authorised by the Governor to calculate and realise damages recoverable under S. 14-B of the Act from the employers of the defaulting factories. According to him, the petitioner was served with a notice to show cause why the matter may not be referred to the State Government for imposing damages recoverable under S. 14B of the Act and in pursuance of the said notice, the petitioner was afforded an opportunity of hearing by opposite party No. 1. In this connection he referred to the petitioner's letter dt. 10th Aug., 1974, (Annexure 5 to the writ petition) and pointed out that the petitioner in said letter has himself admitted that a representative had called on the opposite party No. 1 and had shown the details of the payments made by him on account of provident fund dues and administrative charges in question. The petitioner has also submitted documentary evidence namely Bank Challans etc. with the said letter. He, thus, urged that in view of these facts it cannot be said that the petitioner was not afforded any opportunty of hearing by opposite party No. 1. Learned Standing Counsel referred to Circular Letter No. E 128 (l)/60-l, dt. Nov., Nov. 23, 1962 and urged that the Government had authorised opposite party No. 1 to calculate and realise damages recoverable under S. 14B of the Act. In view of this authorisation opposite party No. 1 was competent to calculate damages etc. under S. 14-B of the Act, which, according to him, were calculated by opposite party No. 1 after giving an opportunity of hearing to the petitioner. After calculation of damages and administrative charges payable by the petitioner under S. 14-B of the Act, there remains nothing on which the petitioner should have been given an opportunity of hearing by the State Government prior to passing of the order contained in Annexure A-4. Learned Standing counsel further contended that in view of said delegation of power, the calculation of damages etc. by opposite party No. 1 payable by the petitioner under S. 14-B of the Act cannot be said to be illegal and without jurisdiction and thus the notice of demand contained in Annexures 3 and 6, referred to above, cannot be said to be illegal and un-enforceable in law. At the first flush the said arguments appear to be attractive, but on scrutiny we find that the same are devoid of any substance.;