The Gangtok Municipal Corporation V. Union of India and Ors.

WP(C)/38/2019

AI Insights

The case involves the Gangtok Municipal Corporation (Petitioner) challenging an order dated 05.07.2019 issued by the Union of India and others (Respondents), which pertained to the enforcement of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (EPF & MP Act, 1952) against the Petitioner. The Petitioner argued that the EPF & MP Act, 1952 was not applicable to it as it was not enforced in Sikkim in accordance with Article 371F of the Constitution of India. The Respondents contended that the Petitioner had an alternative, efficacious remedy under the statute which had not been exhausted. The Court agreed with the Respondents, emphasizing the need to exhaust statutory remedies before approaching the High Court under Article 226.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 799985 (HC-SIKKIM)
• Appeal Type: Others
• Pronouncement Date: 22-10-2021
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax and Others vs. Chhabil Dass Agarwal, United Bank of India vs. Satyawati Tondon & Others, M/s. S.K. Nasiruddin Beedi Merchant Ltd. vs. Central Provident Fund Commissioner and Another, State of H.P. and Others vs. Gujarat Ambuja Cement Ltd. and Another
• Laws Referred To: Employees' Provident Funds and Miscellaneous Provisions Act, 1952, Article 226 of the Constitution of India, Article 371F of the Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SANGITA PRADHAN; K T TAMANG
• Assessee Lawyers: JORGAY NAMKA; SIMEON SUBBA
• Keywords: Certiorari; Certiorari; EPF & MP Act; Jurisdiction; Mandamus; Principal Employer; Statutory Body; Writ petition
• Section: 8; 7A; 14B; 7Q; 7I; 7L

Judgement Text

"THE HIGH COURT OF SIKKIM : GANGTOK (Civil Extraordinary Jurisdiction) DATED : 22nd October, 2021 -------------------------------------------------------------------------------------------- SINGLE BENCH: THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE -------------------------------------------------------------------------------------------- W.P.(C) No.38 of 2019 Petitioner : The Gangtok Municipal Corporation versus Respondent : Union of India & Ors. Application under Article 226 of the Constitution of India --------------------------------------------------------------- Appearance Mr. Jorgay Namka and Mr. Simeon Subba, Advocates for the Petitioner. Ms. Sangita Pradhan, Assistant Solicitor General of India for the Respondent No.1. Mr. K.T. Tamang, Advocate for Respondents No.2 and 3. ----------------------------------------------------------------- O R D E R Meenakshi Madan Rai, J. 1. The Petitioner being a Statutory Body established under the Sikkim Municipalities Act, 2007, claims that the provisions of the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952, (for short the “EPF & MP Act, 1952”) is not applicable in the State of Sikkim as it was not enforced in compliance to the provisions of Article 371F of the Constitution of India. It is also the Petitioner‟s case that the provisions of the EPF & MP Act, 1952, is not applicable to the Petitioner Corporation. In this circumstance, the impugned Order, dated 05.07.2019, passed by the Respondents is illegal and void, hence the prayers in the Petition which inter alia are as follows; „(a) to hold that the provisions of the Central Act are not applicable to the Petitioner; and (b) to hold that the provisions of the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952 is not applicable to the Petitioner Corporation; and 2021:SHC:198 W.P.(C) No.38 of 2019 2 The Gangtok Municipal Corporation vs. Union of India & Ors. (c) to hold that the Petitioner is not the principal employer of the Municipal wards Association/Committee/Samaj which is a non-profit making NGO as decided by the Respondents; and (d) to issue an appropriate writ in the nature of mandamus or any other writ, order or direction holding that the proceedings conducted by the Respondents is without jurisdiction, bad and illegal; and/or (e) to issue an appropriate writ in the nature of mandamus or certiorari or any other writ, order or direction quashing the Order dated 05.07.2019 passed by the Respondent; (f) and upon cause/s being shown and after hearing the parties be pleased to make the rule absolute and/or pass such other orders; (g) to pass any other direction/s, relief/s, order/s that may be deemed fit and proper in the circumstances of this case; (h) to allow the costs of the Writ Petition in favour of the Petitioner.‟ 2. Learned Counsel for the Respondents No.2 and 3, while challenging the Maintainability of the Petition contended that where an alternative, efficacious remedy is available, the Writ Jurisdiction of this Court cannot be invoked. That, it is settled law that Petitions under Writ Jurisdiction are not to be entertained by the High Court when an efficacious, alternative remedy is available, this being a Rule of self-imposed limitation, although discretion lies with the Court to permit a Petition under Article 226 of the Constitution, despite existence of such a remedy. That, it is also a Rule of policy, convenience and discretion rather than a Rule of law. Towards this submission, strength was garnered from the ratio in Commissioner of Income Tax and Others vs. Chhabil Dass Agarwal1. That, the Hon‟ble Supreme Court in United Bank of India vs. Satyawati Tondon & Others2 propounded that the High Court overlooked the settled law that it will ordinarily not entertain a Petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this Rule applies with equal rigour in matters 1 (2014) 1 SCC 603 2 (2010) 8 SCC 110 2021:SHC:198 W.P.(C) No.38 of 2019 3 The Gangtok Municipal Corporation vs. Union of India & Ors. involving recovery of Taxes, Cess, Fees, other types of Public Money and the dues of Banks and other Financial Institutions. That, in the instant matter, Public Money is involved and the Petitioner must necessarily exhaust the remedies available to it under the Statute, for which the attention of this Court was drawn to the provisions of Section 7I and Section 7L of the EPF & MP Act, 1952. That, in these circumstances, as an efficacious remedy has been provided by the Statute which has not been exhausted by the Petitioner, the Writ Petition is not maintainable. 3. Learned Assistant Solicitor General for the Respondent No.1, for her part, relied on the submissions put forth by Learned Counsel for the Respondents No.2 and 3 and had no further submissions to make. 4. Contesting the submissions of the Respondents No.2 and 3, Learned Counsel for the Petitioner, while relying on the ratio of the Hon‟ble Supreme Court in M/s. S.K. Nasiruddin Beedi Merchant Ltd., vs. Central Provident Fund Commissioner and Another3 and on State of H.P. and Others vs. Gujarat Ambuja Cement Ltd. and Another4, argued that the Respondents No.2 and 3 have assumed jurisdiction when they did not possess any, as they were not entitled to issue Orders such as the impugned one. That, the pivotal contentions of the Petitioner are that the EPF & MP Act, 1952, is not applicable to it and the Petitioner is not bound to pay the amount as ordered in the impugned Order, as the concerned Employees are not that of the Petitioner Corporation. Hence, the Petition is maintainable. 3 AIR 2001 SC 850 4 AIR 2005 SC 3936 2021:SHC:198 W.P.(C) No.38 of 2019 4 The Gangtok Municipal Corporation vs. Union of India & Ors. 5. I have carefully heard the parties, perused the averments and all documents on record. 6.(i) At this juncture, it is relevant to notice that the impugned Order, dated 05.07.2019, (Annexure P20), is one under Section 7A of the EPF & MP Act, 1952, in respect of M/S Gangtok Municipal Corporation, for the period April, 2012 to August, 2016 having Diary No.46/2016. In sum and substance, the Order concludes inter alia as under; “4. After having quantified the labour payment for a particular project PF & Allied liability was calculated as to be(sic) 25.61% of the total wages paid to the labours. Accordingly Evaded Wages paid to Contractors/Contractual employees engaged therein by the contractors for each financial year have been calculated. ……” (ii) Thereafter, necessary calculations have been made for the Financial Year 2012-13, Financial Year 2013-14, Financial Year 2014-15 and Financial Year 2015-16. It was further ordered inter alia as follows; “And therefore having perused the available records, submission made by the establishment representative, report cum statement of dues and deposit filed by departmental representative cum Area Enforcement Officer, non-discovery of any counter evidence to the submitted report/records and due application of mind, I, Surjeet Kumar in exercise of power vested by(sic) me under Section 7A of the Act determine the dues to the tune of Rs 95,45,845 out of which Rs 85,68,430 has been paid by the establishment and therefore the Balance dues is Rs 9,77,415 which is quantified as assessed dues for the inquiry period 04/2012 to 08/2016. The detail of dues and payment is provided on next page:- ……….…………………………………………………………………………………… Further, the time allowed for 15 days to make the payment of dues as mentioned above will not absolve the employer of his liability to pay Penal Interest and Penal damages contemplated under Section 7Q and 14B of the Act and the other actions as provided under Section 8 and 14 of the EPF & MP Act, 1952 that may be initiated against the establishment where the payments are not made within due date and the department shall be at liberty to proceed against the establishment for non-submission of statutory returns within the prescribed time schedule as 2021:SHC:198 W.P.(C) No.38 of 2019 5 The Gangtok Municipal Corporation vs. Union of India & Ors. per relevant provisions of the Act and the Schemes framed there under. ……..……” (iii) Section 7I provides for Appeals to Tribunals and Section 7L to Orders of Tribunal, which are extracted hereinbelow for easy reference; “7-I. Appeals to Tribunal.—(1) Any person aggrieved by a notification issued by the Central Government, or an order passed by the Central Government or any authority, under the proviso to sub- section (3), or sub-section (4) of section 1, or section 3, or sub-section (1) of section 7A, or section 7B [except an order rejecting an application for review referred to in sub-section (5) thereof], or section 7C, or section 14B, may prefer an appeal to a Tribunal against such notification or order. (2) Every appeal under sub-section (1) shall be filed in such form and manner, within such time and be accompanied by such fees, as may be prescribed. ………………………………………………………………………………………… 7L. Orders of Tribunal.—(1) A Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against or may refer the case back to the authority which passed such order with such directions as the Tribunal may think fit, for a fresh adjudication or order, as the case may be, after taking additional evidence, if necessary. (2) A Tribunal may, at any time within five years from the date of its order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment in the order if the mistake is brought to its notice by the parties to the appeal: Provided that an amendment which has the effect of enhancing the amount due from, or otherwise increasing the liability of, the employer shall not be made under this sub-section, unless the Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. (3) A Tribunal shall send a copy of every order passed under this section to the parties to the appeal. (4) Any order made by a Tribunal finally disposing of an appeal shall not be questioned in any court of law.” 7. In light of the specific provisions of law and the observations made in the ratiocinations referred to supra by Learned Counsel for the Respondents No.2 and 3, in my considered opinion, before invoking the Writ Jurisdiction of this Court, the 2021:SHC:198 W.P.(C) No.38 of 2019 6 The Gangtok Municipal Corporation vs. Union of India & Ors. Petitioner is to necessarily exhaust the remedy available to it under the Statute. 8. Writ Petition disposed of accordingly. 9. No order as to costs. ( Meenakshi Madan Rai ) Judge 22.10.2021 ml Approved for reporting : Yes 2021:SHC:198 "