1998 (2) TMI 621 - SC - Indian Laws

Challenges to Section 7-A dismissed; appellant directed to pursue statutory appeal under new Section 7-D within two months

Sumedico Corporation and Ors. Versus Regional Provident Fund Commr.

Appellant's challenges to a Section 7-A order were dismissed by the SC, which relegated the appellant to the statutory remedy under newly enacted Section ... - ISSUES PRESENTED AND CONSIDERED - (1) Whether a constitutional challenge to Section 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, premised on absence of a statutory appeal remedy, remains viable after subsequent legislative insertion of Section 7-D providing an appellate Tribunal and constitution/notification of that Tribunal. ISSUES PRESENTED AND CONSIDERED - (2) Whether this Court should decide the merits of a Section 7-A order made by the first-instance authority or relegate the aggrieved party to the newly created statutory appellate remedy under Section 7-D and the constituted Appellate Tribunal. ISSUES PRESENTED AND CONSIDERED - (3) Legal effect of earlier High Court observations on merits of a Section 7-A order when a statutory appellate forum has been subsequently provided and the matter is remitted to that forum. ISSUES PRESENTED AND CONSIDERED - (4) Whether this Court should express any opinion on the merits of the impugned Section 7-A orders while directing relegation to the Tribunal and what procedural directions (time for filing appeal; treatment of deposits) should be given. Issue 1 - Legal framework The statutory scheme under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 as amended: Section 7-A empowers the authority to determine coverage; Section 7-D (inserted subsequently) provides an appellate remedy by way of appeal to an Appellate Tribunal; notifications have been issued constituting the Tribunal. Issue 1 - Precedent Treatment No prior judicial authorities were relied upon or overruled in relation to the effect of a subsequently enacted statutory appeal provision rendering a challenge academic; the Court treated the legislative amendment as determinative. Issue 1 - Interpretation and reasoning The Court reasoned that where the legislature has supplied an adequate statutory remedy (Section 7-D) and the Tribunal has been constituted, a constitutional challenge to the pre-amendment absence of appeal has become academic; continuation of such a challenge need not be entertained by this Court. Issue 1 - Ratio vs. Obiter Ratio: A statutory provision subsequently providing an appellate forum renders judicial challenges to the pre-existing absence of appeal academic; litigants should be relegated to the statutory remedy when available and operational. Issue 1 - Conclusion The vires challenge to Section 7-A on the ground of absence of appeal does not survive after insertion of Section 7-D and constitution of the Tribunal; that limb of challenge is academic. Issue 2 - Legal framework Principles governing allocation of forum: where a statute confers a specific statutory appeal and the appellate body is in existence, issues of fact and merits of orders made under the statute are primarily to be determined by the statutory appellate forum; inherent supervisory jurisdiction of higher courts may be declined in favour of statutory remedies. Issue 2 - Precedent Treatment The Court did not purport to follow or distinguish specific precedents but applied the general administrative-law principle that a statutory remedy, once provided and available, should be pursued before the specialized tribunal empowered to decide the matter on merits. Issue 2 - Interpretation and reasoning The Court held that, in the interest of justice, it was appropriate to relegate appellants to the statutory appeal under Section 7-D so that the Tribunal may examine all legally permissible contentions, including jurisdictional objections, and decide the Section 7-A order on its own merits after hearing evidence and contentions. Issue 2 - Ratio vs. Obiter Ratio: Where a statutory appellate forum exists and is competent to decide merits, the superior court will ordinarily remit the matter to that forum for full adjudication rather than decide merits itself; the Tribunal must adjudicate unfettered by prior observations. Issue 2 - Conclusion The Court relegated the appellant to the remedy of statutory appeal to the Tribunal, granted two months to file the appeal, and directed the Tribunal to decide the appeal on merits after hearing parties. Issue 3 - Legal framework Finality and preclusive effect of earlier judicial observations: considerations as to when observations by an intermediate court survive or should be treated as of no legal consequence on remittal to a statutory forum. Issue 3 - Precedent Treatment No precedential analysis was undertaken; the Court treated prior High Court observations as not binding on the Tribunal once the statutory appellate remedy is invoked. Issue 3 - Interpretation and reasoning The Court reasoned that because the Tribunal will re-examine the Section 7-A order on its merits, any observations made by the High Court during earlier proceedings will not survive and are to be treated as of no legal consequence, so as not to fetter the Tribunal's independent adjudication. Issue 3 - Ratio vs. Obiter Ratio: Earlier observations by a High Court on merits do not bind or preclude fresh adjudication by a statutory appellate tribunal constituted subsequently; such observations can be declared to have no legal consequence when remittal is ordered. Issue 3 - Conclusion The Court declared the High Court's merit observations to be of no consequence and directed that the Tribunal decide the controversy afresh and unfettered. Issue 4 - Legal framework Exercise of appellate and supervisory discretion by the Court when statutory remedy exists; procedural directions regarding time for appeal and effect of interim compliance (deposits) pending appellate adjudication. Issue 4 - Precedent Treatment No case law cited; the Court exercised its discretion to prescribe a time limit and to clarify the treatment of compliance pending appeal. Issue 4 - Interpretation and reasoning The Court declined to express any opinion on merits so as not to prejudice the Tribunal's function; it granted two months for filing the statutory appeal and observed that any amounts deposited in compliance with the Section 7-A order will abide the final result of the appellate proceedings. Issue 4 - Ratio vs. Obiter Ratio: When remitting matter to a statutory appellate tribunal, the superior court may set a reasonable time for instituting the statutory appeal and clarify that amounts paid in compliance with the impugned order will be subject to the outcome of said appeal; the superior court should ordinarily refrain from expressing views on merits. Issue 4 - Conclusion The Court granted two months for filing the statutory appeal, made no expression on merits, directed that deposits made pursuant to the Section 7-A order will abide the result of the appellate proceedings, and awarded no costs.