Judgment:
Nishita Mhatre, J.
1. The order challenged in this petition is dated 24.4.1995 and has been passed by the Regional Provident Fund Commissioner, Pune. It has been held that there is functional integrality between the petitioners and therefore, all the units must be clubbed together in order to ascertain the liability of payment of provident fund. It has been found that all the petitioners are liable to contribute to the Provident Fund Scheme framed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 w.e.f. 31.3.1982. An amount of Rs. 2,23,536.40 has been claimed from the three petitioners as dues payable for the months of April 1982 to February 1995.
2. The petitioners have challenged this order primarily on the five grounds: (i) that the claim for Provident Fund contributions has been made belatedly; (ii) that there was no functional integrality between the three petitioners; (iii) that the documents on which reliance is placed by the Department in the enquiry conducted Under Section 7A of the Act have not been furnished to the petitioners; (iv) that dues have been claimed from a date which was prior to the date when they came into existence and; (v) that since the excise department had concluded that the 3 petitioners had separate identities and there was no functional integrality between them, the findings of the excise authority ought to have weighed with the respondent herein while passing the impugned order.
3. To ascertain whether the contentions raised on behalf of the petitioners can be accepted it would be necessary to advert to a few facts. Petitioner No. 1 (for short, 'Small Gauges Ltd.') commenced its business of 8' gauges in 1977. The 3rd Petitioner came into existence in 1977 and was doing the job work and thread grinding work. The manufacturing activities of Petitioner No. 2 commenced from 1980 and was also engaged in doing job work and manufacturing special gauges. A code number was allotted by the provident fund authorities to the Small Gauges Ltd. from October 1983 and accordingly, it has been deducting the contributions from the salaries of the employees and depositing the same alongwith a matching contribution of its own from October 1983. A show-cause notice was issued to all the petitioners Under Section 7A of the Act calling upon the petitioner No. 1 to remit provident fun contributions in respect of the employees working with Petitioner Nos. 2 and 3 for the period from January 1979 to June 1991. The enquiry Under Section 7A was concluded and Petitioner No. 1 was held liable to pay Rs. 103,484 as provident fund dues in respect of the Petitioner Nos. 2 and 3. This amount was determined on the basis that petitioner Nos. 2 and 3 were branches/departments of the petitioner No. 1.
4. On receipt of the order, correspondence ensued between petitioner No. 1 and the respondent. An application was also made for review of the order. At the same time, Petitioner No. 1 requested the respondent to furnish the depositions of the workmen referred to in the impugned order. An attachment notice was issued Under Section 8F(3) of the Act. The respondent however refused to accede to the request of the petitioners for reviewing the order. A writ petition was consequently filed by the petitioner being Writ Petition No. 2747 of 1993. Minutes were filed in this petition and the Court disposed of the petition in terms of the minutes of order. Petitioner No. 1 was directed to deposit the entire amount determined by the impugned order with the respondent. The petitioners were also directed to furnish the relevant documents on record for the period for which the contributions were claimed. Several documents were filed by the petitioner No. 1 and the amount stipulated in the minutes of the order filed before this Court in the writ petition was also deposited with the Provident Fund authorities. Additional documents including the partnership deed, balance sheets and profit and loss accounts were also filed by the petitioners. The petitioners informed the respondent that some of the documents which they had been called upon to produce had been seized by the Excise department and, they were unable to produce them till such time as the excise department released the documents.
4. The petitioners were given a hearing by the respondent. Objections with regard to clubbing of the Petitioners Nos. 2 and 3 with Petitioner No. 1 were submitted on 5.3.1993. Further objections were also submitted on 23.12.1993. The Area Enforcement Officer visited the establishments of the petitioners on 5.4.1994. A report was submitted by the Enforcement Officer on 5.9.1994 and 29.9.1994. 2 Further reports were submitted by him on 12.1.1995 and 14.3.1995 after visiting the premises in January and March 1995. Copies of the reports were not furnished to the petitioners except for the report dated 5.9.1994. Thereafter, the Enforcement Officer visited the premises of the petitioner once more when the petitioners furnished further documents including purshis, muster rolls, etc. to him. Another report was submitted by the Enforcement Officer a copy of which has not been given to the petitioners. A statement of the outstanding dues which was prepared by the Enforcement Officer on submission of the report has also not been furnished to the petitioners. The deposition of the Enforcement Officer was recorded by the respondent and a copy of which again was not furnished to the petitioners.
5. The impugned order has been passed on 24.4.1995 in which it has been held that petitioner No. 1 is required to pay Rs. 74942/- for the period from February 1982 to October 1983. It was held further that the petitioner Nos. 2 and 3 are branches/departments of petitioner No. 1 and, therefore, were covered by the provisions of the Act from April 1982 onwards. The entire amount of Rs. 2,23,536.40 was sought to be recovered from petitioner No. 1.
6. The learned Counsel for the petitioners has drawn my attention to the fact that the impugned order has been passed without furnishing the reports of the Enforcement Officer filed after his visit to the establishments. His deposition recorded on 10.4.1995 has also not been furnished to the petitioners. She points out that this contention has been raised in the petition and there is no denial of this fact by the respondent. She submits that unless the petitioners are furnished with the reports and the deposition of the Enforcement Officer, it would not be possible for them to effectively defend themselves at the enquiry being conducted against them. The learned Counsel has also drawn my attention to the order passed by the Joint Commissioner of Central Excise, Pune which indicates that there was no evidence to show that the petitioners did not each have an independent existence. it was held that there was no functional integrality between them all. The learned Counsel has also relied on several judgments in support of her submission that the three units could not be clubbed together as there was no functional integrality between them. Reliance has been placed on the judgment of a learned Single Judge of this Court in Sunder Transport and Anr. v. The Regional P.F. Commissioner 1999 III LLJ 503; judgment of the Supreme Court in the case of Regional Provident Fund Commisioner and Anr. v. Dharamsi Morarji Chemical Co. Ltd. 1998 I LLJ 1060.
6. In my view, the order Under Section 7A of the EPF Act cannot be sustained inasmuch as it has been passed without furnishing the reports and other documents relied on by the Enforcement Officer in support of the claim made against the petitioners. Unless the report, the depositions and the documents are furnished to the petitioners, these documents cannot be relied on by the respondent to pass orders against the petitioners. The basic tenets of the principle of audi alteram partem require that a person should not be condemned without giving him a hearing. Such a hearing must be meaningful and effective and not a farce. All documents relied on by the Department in support of its claim against the petitioners must be furnished to the petitioners before any conclusion is arrived at on the basis of those documents.
7. Therefore, the enquiry held against the petitioners and the impugned order are vitiated. It is not necessary for me to dwell upon the other submissions raised by the learned Counsel for the petitioners as I find it appropriate to remand the matter to the respondent for a fresh hearing. The respondent shall ensure that the petitioners are furnished with all relevant documents which have been filed by them before the Commissioner well in advance in order to avoid any prejudice to the petitioners. Moreover, the claim against the petitioner No. 1 is with respect to the period from January 1979 to June 1991. However, the impugned order directs the petitioners to pay the amounts for the period upto 1995. In my opinion, unless the show-case notice calls upon the petitioners to contribute to the scheme upto 1995, an order directing them to do so cannot be passed. There is no material on record to indicate that a second show-cause notice was issued for a period subsequent to January 1979 to June 1991. All these factors will have to be borne in mind by the Commissioner while deciding the matter on remand.
8. The respondent has not filed any affidavit to controvert the pleadings in the petition although an opportunity to do so was given to him. In these circumstances, in my opinion, the following order would meet the ends of justice:
i) The impugned order dated 24.4.1995 passed by the respondent Under Section 7A of the EPF Act is set aside.
ii) The proceedings are remanded to the respondent for hearing the petitioners again.
iii) All documents on which the Enforcement Officer wishes to rely, including his inspection reports and any evidence led earlier shall be furnished to the petitioners. If such documents are not furnished, no reliance can be placed by the Commissioner on those documents while passing orders Under Section 7A of the Act.
iv) The petitioners shall appear before the Regional Provident Fund Commissioner, Pune on 6.10.2008 at 11.30 am.
v) The amount which has been deposited in this Court pursuant to the earlier orders shall continue to be deposited in this Court pending final decision in the Section 7A enquiry by the respondent on remand.
9. Writ Petition is disposed of accordingly. No order as to costs.