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S.Durgeshwaran vs The Presiding Officer on 11 November, 2011

Madras High Court
S.Durgeshwaran vs The Presiding Officer on 11 November, 2011
       

  

  

 
 
 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 11/11/2011

CORAM
THE HONOURABLE MR.JUSTICE K.CHANDRU

W.P.(MD)No.7272 of 2011
and
M.P.(MD)No.1 of 2011

S.Durgeshwaran				... Petitioner

vs.

1.The Presiding Officer,
   Employees Provident Fund
   Appellate Tribunal,
   New Delhi.

2.The Assistant Provident
   Fund Commissioner,
   Employees Provident Fund Organisation,
   Tirunelveli.

3.The Recovery Officer,
   Employees Provident Fund Organisation,
   Sub-Regional Office,
   Bhavishyanidhi Bhawan,
   NGO 'B' Colony, Tirunelveli-627 007.	... Respondents

PRAYER

Writ Petition is filed under Article 226 of the Constitution of
India praying for the issuance of a Writ of Certiorari to call for the
proceedings of the first respondent in A.T.A.No.303(13)2011, dated 25.04.2011
and quash the same as illegal.

!For Petitioner	  	... Mr.P.Pethu Rajesh
^For Respondents	... Mr.K.Murali Shankar
	
				             ******

:ORDER

*******

When the petitioner mentioned for extension of interim order, this
Court was not inclined to grant extension of interim order and this Writ
Petition is a clear abuse of process of law. The very same petitioner earlier
filed Writ Petitions in W.P(MD).Nos.6174, 11472 and 1700 of 2008 before this
Court, challenging the order demanding dues including the distraint proceedings
initiated. All the three Writ Petitions were dismissed by this Court stating
that if the petitioner is aggrieved, the effective remedy by way of appeal under
Section 7-I of the Employees’ Provident Funds and Miscellaneous Provisions Act,
1952 [hereinafter referred to as “the Act”] before the Employees’ Provident Fund
Tribunal alone is available and he cannot dispute before this Court regarding
the partnership business liability as well as the status of the petitioner in
the said partnership.

2. Even though the order was made as early as on 06.10.2010, the
petitioner moved the Division Bench with Writ Appeals in W.A.(MD)Nos.221 to 223
of 2011. When the Writ Appeals themselves were taken up for hearing, for the
reasons best known, the petitioner withdrew the Writ Appeals with liberty to
file appeals under Section 7-I of the Act and he has also made an endorsement in
the appeal bundles. Accepting the endorsement made by the counsel, the Division
Bench dismissed the Writ Appeals with liberty to file appeals. The original
order of assessment was also handed over and he was directed to file appeals
within two weeks vide order dated 01.03.2011.

3. Thereafter, the petitioner exhausted the right of appeal under
Section 7-I before the Employees’ Provident Fund Tribunal and the said appeal
was taken on file as A.T.A.No.303(13)2011. As a pre-requisite for entertaining
the appeal, the Tribunal directed the petitioner to deposit 40% of the assessed
amount within two months and in case of such deposit, the respondents,
Employees’ Provident Fund authorities were directed not to take any coercive
measures till the disposal of the appeal presented. The counsel for the
respondent Provident Fund Department opposed the admission of the appeal.
However, in any event, the appeal was admitted and the interim order was granted
on a conditional basis. It is once again the petitioner is before this Court
challenging the interim order dated 25.04.2011. It is not clear as to how the
petitioner can have a second round of litigation, that too, against the
conditional interim order passed by the Tribunal. Under Section 7-O of the Act,
no appeal by the employer shall be entertained by a Tribunal, unless he has
deposited 75% of the amount due from him as determined by an officer referred to
in section 7-A. The proviso to Section 7-O gives liberty to the Tribunal, for
reasons to be recorded in writing, to waive or reduce the amount to be deposited
under the said Section.

4. In the present case, the Tribunal, in exercise of its discretion,
had only directed the petitioner to deposit 40% and not the entire 75% and there
cannot be any further judicial scrutiny on the conditional order of stay granted
by the Tribunal. The petitioner cannot state that such an order is reviewable
before this Court and raise once again the contentions, which weighed in the
earlier round of litigation, for the purpose of getting further reduction. In
essence, the petitioner cannot improve his terms of stay order, which is granted
by the Tribunal, when the main appeal is pending under Section 7-I, for which,
he took permission from the Division Bench to move the Tribunal, even though, at
the relevant time, the time for filing an appeal has already expired. Having
exhausted the right of appeal and also having made the Tribunal to exercise its
discretion in granting interim stay with reduced deposit, no further judicial
review is permissible.

5. The Supreme Court, vide its judgment in Raj Kumar Shivhare v.
Assistant Director, Directorate of Enforcement reported in (2010) 4 SCC 772, has
held that if an appeal is provided under the special enactment, it has to be
exhausted by an aggrieved party and merely because the appeal provides for a
pre-deposit, that will not make the appeal illusory and on that ground, the High
Court under Article 226 of the Constitution of India cannot entertain any Writ
Petition. In paragraph Nos.30 to 35, 39 and 40, the Supreme Court had observed
as follows:

“30.The argument that writ jurisdiction of the High Court under Article
226 of the Constitution is a basic feature of the Constitution and cannot be
ousted by parliamentary legislation is far too fundamental to be questioned
especially after the judgment of the Constitution Bench of this Court in L.
Chandra Kumar v. Union of India7. However,
that does not answer the question of
maintainability of a writ petition which seeks to impugn an order declining
dispensation of pre-deposit of penalty by the Appellate Tribunal.

31.When a statutory forum is created by law for redressal of grievance and
that too in a fiscal statute, a writ petition should not be entertained ignoring
the statutory dispensation. In this case the High Court is a statutory forum of
appeal on a question of law. That should not be abdicated and given a go-by by a
litigant for invoking the forum of judicial review of the High Court under writ
jurisdiction. The High Court, with great respect, fell into a manifest error by
not appreciating this aspect of the matter. It has however dismissed the writ
petition on the ground of lack of territorial jurisdiction.

32.No reason could be assigned by the appellant’s counsel to demonstrate
why the appellate jurisdiction of the High Court under Section 35 of FEMA does
not provide an efficacious remedy. In fact there could hardly be any reason
since the High Court itself is the appellate forum.

33.Reference may be made to the Constitution Bench decision of this Court
rendered in Thansingh Nathmal v. Supdt. of Taxes8, which was also a decision in
a fiscal law. Commenting on the exercise of wide jurisdiction of the High Court
under Article 226, subject to self-imposed limitation, this Court went on to
explain: (AIR p. 1423, para 7)
“7. ? The High Court does not therefore act as a court of appeal against
the decision of a court or tribunal, to correct errors of fact, and does not by
assuming jurisdiction under Article 226 trench upon an alternative remedy
provided by statute for obtaining relief. Where it is open to the aggrieved
petitioner to move another tribunal, or even itself in another jurisdiction for
obtaining redress in the manner provided by a statute, the High Court normally
will not permit by entertaining a petition under Article 226 of the Constitution
the machinery created under the statute to be bypassed, and will leave the party
applying to it to seek resort to the machinery so set up.”

(emphasis added)
The decision in Thansingh8 is still holding the field.

34.Again in Titaghur Paper Mills Co. Ltd. v. State of Orissa9 in the background
of taxation laws, a three-Judge Bench of this Court apart from reiterating the
principle of exercise of writ jurisdiction with the time-honoured self imposed
limitations, focused on another legal principle on right and remedies. In para
11, at AIR p. 607 of the Report, this Court laid down: (SCC pp. 440-41, para 11)
“11. ? It is now well recognised that where a right or liability is
created by a statute which gives a special remedy for enforcing it, the remedy
provided by that statute only must be availed of. This rule was stated with
great clarity by Willes, J. in Wolverhampton New Waterworks Co. v. Hawkesford10
in the following passage: (ER p. 495)
‘? There are three classes of cases in which a liability may be
established founded upon a statute. ? But there is a third class viz. where a
liability not existing at common law is created by a statute which at the same
time gives a special and particular remedy for enforcing it. ? The remedy
provided by the statute must be followed, and it is not competent to the party
to pursue the course applicable to cases of the second class. The form given by
the statute must be adopted and adhered to.’
The rule laid down in this passage was approved by the House of Lords in Neville
v. London Express Newspapers Ltd.11 and has been reaffirmed by the Privy Council
in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. Ltd.12 and
Secy. of State v. Mask and Co.13 It has also been held to be equally applicable
to enforcement of rights, and has been followed by this Court throughout. The
High Court was therefore justified in dismissing the writ petitions in limine.”

35.In this case, liability of the appellant is not created under any
common law principle but, it is clearly a statutory liability and for which the
statutory remedy is an appeal under Section 35 of FEMA, subject to the
limitations contained therein. A writ petition in the facts of this case is
therefore clearly not maintainable.

39.In the instant case none of the aforesaid situations are present.
Therefore, principle laid down in Ratan case15 applies in the facts and
circumstances of this case. If the appellant in this case is allowed to file a
writ petition despite the existence of an efficacious remedy by way of appeal
under Section 35 of FEMA this will enable him to defeat the provisions of the
statute which may provide for certain conditions for filing the appeal, like
limitation, payment of court fee or deposit of some amount of penalty or
fulfilment of some other conditions for entertaining the appeal. (See para 13 at
SCC p. 408.) It is obvious that a writ court should not encourage the aforesaid
trend of bypassing a statutory provision.

40.The learned counsel for the appellant relied on a decision of this
Court in Monotosh Saha v. Enforcement Directorate16. That was a decision
entirely on different facts. In that decision Saha preferred an appeal before
the Appellate Tribunal with a request for dispensing with requirement of pre-
deposit, but the Tribunal directed the deposit of 60% of the penalty amount
before entertaining the appeal. When an appeal was preferred before the High
Court under Section 35 of FEMA, the same was dismissed by the High Court holding
that no case for hardship was made out either before the Tribunal or before it.
In the background of those facts, this Court observed that since pursuant to
this Court’s interim order Rs 10 lakhs have been deposited with the Directorate,
the appellant was directed to furnish further such security as may be stipulated
by the Tribunal and directed that on such deposit the Tribunal is to hear the
appeal without requiring further deposit.”

6. In the present case, this Court is satisfied that the petitioner
had invoked the Tribunal’s discretion for the reduction of the pre-deposit. He
cannot have any further concession, as it is the second round of litigation and
the earlier attempt was terminated by this Court. Hence, there is no case made
out to entertain the present Writ Petition. Hence, the Writ Petition stands
dismissed. Consequently, the connected miscellaneous petition is closed. No
costs.

SML

To

1.The Presiding Officer,
Employees Provident Fund
Appellate Tribunal,
New Delhi.

2.The Assistant Provident
Fund Commissioner,
Employees Provident Fund Organisation,
Tirunelveli.

3.The Recovery Officer,
Employees Provident Fund Organisation,
Sub-Regional Office,
Bhavishyanidhi Bhawan,
NGO ‘B’ Colony, Tirunelveli-627 007.

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