M/s Gopish Pharma vs RPFC on 4 November 2026

1. The appellant has filed the present appeal under section 7-1 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short “the Act") challenging the order dated 30.08.2019 passed by the respondent under section 7A of the Act. Vide the above-said impugned order of the respondent, the appellant was directed to pay the provident fund dues of Rs. 5,58,884/- to the respondent.

2. Briefly stated, the case of the appellant was to the following effect. The appellant is duly covered under the provisions of the Act. The appellant states that it had closed down its business in July, 2017 and did not have any employee working lor it after M/s Gopish Pharma (Ershvhile Closed Firm) Vs. Regional Provident Fund Commissioner-11,

July, 2017. The respondent had illegally initiated an enquiry against it under section 7A of the Act despite the fact that the appellant had closed down its business in July, 2017. Vide the impugned order dated August 30, 2019 of the respondent, the appellant was directed to pay the provident fund dues of Rs.5,58,884/- to the respondent. Through the present appeal, the appellant has prayed that the impugned order dated August 30, 2019 of the respondent should be quashed.

3. Respondent has filed a written reply strongly contesting the above-said appeal of the appellant. Respondent has denied all the averments made by the appellant in its appeal. Respondent has stated that the establishment of the appellant was fiinctioning normally during the relevant assessment period. Respondent has further stated that the impugned order dated August 30, 2019 was passed after carefully examining the material available on the record and after duly considering the submissions made by the parties before the respondent. Respondent has defended the impugned order dated August 30, 2019 of the respondent as being perfectly legal and valid. Respondent has prayed that the appeal of the appellant should be dismissed with heavy costs.

4. I have heard the learned counsel for the appellant and the learned counsel for the respondent. Written submissions on behalf of the respondent were also perused.

5. Learned counsel fbr the appellant has argued that the impugned order of the respondent dated August 30, 2019 was not a speaking M/s Gopish Pharma (Erstwhile Closed Firm) Vs. Regional Provident Fund Commissioncr-II, and a reasoned order. Learned counsel fbr the appellant has fiirther argued that the appellant had closed its business in July, 2017 and was not employing any worker during the relevant period under assessment after July, 2017. Learned counsel fbr the appellant has pleaded that the impugned order dated August 30, 2019 was passed by the respondent without even identifying the beneficiaries of the different provident fund accounts. Learned counsel of the appellant has further pleaded that the impugned order dated August 30, 2019 was solely based upon the report submitted by the Area Enforcement Officer. Learned counsel for the appellant contended that even the final amount of Rs. 5,58,884/- recoverable from the appellant was not calculated and assessed by the respondent himself who had merely accepted the calculation made by the Area Enforcement Officer. Learned counsel fbr the appellant has further contended that the respondent had passed the impugned order without even considering the written submissions made to the respondent by the appellant. Learned counsel for the appellant has stated that the respondent could not have directed the appellant to pay the employees5 share of the provident fimd contributions fbr a retrospective period. Learned counsel fbr the appellant prayed that the impugned order dated August 30, 2019 of the respondent should be set-aside. Reliance in this behalf was placed upon the ruling of the HoiVble Supreme Court of India in District Exhibitors Association, Muzaffarnagar and Others Vs. Union of India and Others, AIR 1991 SC 1381.

6. Learned counsel for the respondent has strongly contested the allegations made by the appellant against the respondent. Learned counsel for the respondent has argued that the appellant had intentionally not paid the requisite provident fund dues of the workers employed by it. Learned counsel fbr the respondent has further argued that the establishment of the appellant was functioning normally during the relevant assessment period. Learned counsel for the respondent has pleaded that the appellant had failed to comply with the direction of the Ministry of Labour and Employment to pay the salary/ wages of employees through cheque/ bank transfer only. Learned counsel for the respondent has further pleaded that the appellant had made a false statement in respect of three employees namely Sh. V.K. Verma, Sh. Chudamani and Sh. Ashok Verma that these employees had declared that they had never been members of Provident Fund and Family Pension Scheme. Learned counsel fbr the respondent has contended that salary for the month of March, 2017 amounted to Rs.44,393/- whereas in the audited balance-sheet the establishment/ appellant made a provision of salary payable to the extent of Rs.30,000/- only. Learned counsel fbr the respondent has further contended that while passing the impugned order, the respondent had duly examined the relevant material available on record besides considering the submissions made by the parties before him. Learned counsel for the respondent has defended the impugned order dated August 30, 2019 passed under section 7A of the Act by the respondent as being perfectly legal and valid. Learned counsel for the respondent has prayed that the appeal of the appellant should be dismissed with heavy costs.

M/s Gopish Pharma (Ershvhile Closed Finn) Vs. Regional Provident Fund Commissioner-II,

7. For a just and proper decision of this appeal, it is necessary to refer to the copy of the impugned order dated August 30, 2019 passed by the respondent.

8. Vide the impugned order dated August 30, 2019, the respondent had ordered the recovery of provident fund dues to the extent of Rs. 5,58,884/- from the appellant under section 7A of the Act. In the above-said impugned order, after mentioning the brief details of the enquiry proceedings, the respondent had reproduced the report of the Area Enforcement Officer, counter-submissions of the establishment(appellant in the appeal), the rejoinder of Area Enforcement Officer, his conclusion, before passing the final impugned order dated August 30, 2019. Significantly, the respondent has passed his final order on pages no. 15 & 16 of the impugned order, inter alia, to the effect that having regard to the facts of the case, after considering the submissions of the parties concerned, the report of the departmental representative (Area Enforcement Officer), applying his mind, he “agrees” with the report of Area Enforcement Officer and determines the dues amounting to Rs.5,58,884/- before closing the enquiry proceedings under section 7A of the Act.

9. A careftil perusal of the impugned order dated August 30, 2019 would show that the whole impugned order dated August 30, 2019 is based solely upon the report submitted by the Area Enforcement Officer. Even the final amount of Rs. 5,58,884/- ordered to be recovered from the appellant under section 7A of M/s Gopish Pharma (Ershvhile Closed Finn) Vs. Regional Provident Fund Commissioner-II, the Act was calculated and assessed by the Area Enforcement Officer only. Through the final impugned order, the respondent has merely reproduced the above-said figure of Rs. 5,58,884/- as the final amount recoverable from the appellant under section 7A of the Act.

10. It is important to note that the personal contribution of the respondent was limited only to concluding that the Form-11 submitted by the establishment in respect of 14 employees had to be rejected. Barring the decision to reject the Form-11 submitted by the establishment in respect of 14 employees, the respondent has done nothing except to "agree” with the report of the Area Enforcement Officer and to order the recovery of Rs. 5,58,884/- as assessed and calculated by Area Enforcement Officer.

11. Under the provisions of the Act, it was the duty of the respondent himself to examine all the relevant records, consider the submissions of the parties and assess the provident fund dues recoverable from the appellant. There is no provision in the Act permitting the respondent to delegate his powers under the Act to Area Enforcement Officer. The respondent should have himself thoroughly examined the entire records of the establishment/ appellant to verify the facts and circumstances of this case. However, it is important to observe that in the impugned order, the respondent has faithfiilly adopted the conclusions recorded by the Area Enforcement Officer as his own conclusions without verifying the facts and circumstances in question himself. In the present case, even the final amount of Rs. 5,58,884/- recoverable from the appellant was calculated and assessed by the Area Enforcement Officer. Significantly, the respondent had himself not bothered to calculate and assess the above-said final amount and had blindly accepted the assessment made by the Area Enforcement Officer to be the final amount recoverable fi'om the appellant. The impugned order dated August 30, 2019 of the respondent is liable to be set-aside on this single ground alone.

12. Further, it is important to note that in the impugned order the respondent has specifically reproduced the counter-submissions made by the establishment (appellant in the appeal). The above­ said observation made by the respondent himself in the impugned order dated August 30, 2019 would clearly prove that the appellant/establishinent had indeed filed written submissions during the proceedings conducted before the respondent. It is settled law that the submissions can be made on behalf of any party either orally or through written submissions before the court/ quasi-judicial Authority concerned. Therefore, it is very clear that the written submissions made on behalf of the appellant were already on the record before the respondent when the respondent had passed the impugned order dated August 30, 2019.

13. However, the respondent had passed the impugned order dated August 30, 2019 without even considering the written submissions made by the appellant before the respondent. When the written submissions made by the appellant were already on record before the respondent while passing the impugned order

dated August 30, 2019, such written submissions on behalf of the appellant should have been at least duly considered by the respondent before passing the impugned order dated August 30, 2019. However, there is no indication in the impugned order that the written submissions made by the appellant had even been duly considered by the respondent before passing the impugned order dated August 30, 2019. Accordingly, it is apparent that the impugned order dated August 30, 2019 was passed by the respondent without even considering the written submissions of the appellant placed upon the record before him.

14. It is settled law that any court/quasi-judicial Authority is bound to consider the submissions made on behalf of any party to the proceedings. In case, any court/quasi-judicial authority fails to duly consider the submissions made on behalf of a party to the proceedings/case, this would be deemed to be a clear violation of the principles of natural justice. Law is well-settled that any order passed by any court/quasi-judicial authority in violation of the principles of natural justice is patently illegal and cannot be sustained in law. In this view, I am guided by the ruling of Hon'ble Supreme Court of India in Maneka Gandhi Vs. Union of India AIR 1978 SC 597.

15. Still further, the respondent could not have directed the appellant to pay the employees9 share of the provident fund contributions for a retrospective period since the appellant cannot recover the same from the liiture wages of the employees concerned. In this view, I am guided by the ruling of the Hon'ble Supreme Court of

India in District Exhibitors Association, Muzaffarnagar and Others Vs. Union of India and Others, AIR 1991 SC 1381. The impugned order of the respondent cannot be upheld due to this reason also.

16. For the reasons discussed in the foregoing paragraphs, the impugned order dated August 30, 2019 of the respondent cannot be sustained in law and is hereby set aside.

17. The case is remanded back to the respondent with a direction to pass a fresh assessment-order under section 7A of the Act keeping in view the observations made in the foregoing paragraphs of this order.

18. The present appeal of appellant stands disposed off in terms of the observations made above.

19. Case file be consigned to the Record Room. (Presiding Officer) Central Government Industrial Tribunal, Delhi-1 04.11.2026