M/S. ARCOT TEXTILE MILLS LTD.versusTHE REGIONAL PROVIDENT FUND COMMISSIONER AND ORS.

                  [2013] 11 S.C.R. 371


            M/S. ARCOT TEXTILE MILLS LTD.                    A
                            v.
  THE REGIONAL PROVIDENT FUND COMMISSIONER
                      AND ORS.
           (Civil Appeal No. 9488 of 2013)
                                                             B
                   OCTOBER 18, 2013
        [ANIL R. DAVE AND. DIPAK MISRA, JJ.]

    Employees Provident Funds and Miscellaneous
Provisions Act, 1950:                                        c
     s. 71 and 7Q - Appeal u/s. 71 - Against the order passed
uls. 7Q - Maintainability of - Held: An order is amenable to
appeal u/s. 71 if it is passed as a composite order u/ss. 7A
and 7Q - But if the order is an independent order uls. 7Q D
alone, such order is not appealable.

    s. 7Q - Demand uls. 7Q - Applicability of principie of
natural justice (Audi alteram partem) - Held: The principle of
natural justice is applicable to the demand uls. 7Q only in a
narrow manner i.e. limited to the realm of computation which E
is statutorily provided - Principle of Natural Justice.

     Appeal ~ Right to appeal - Held: Cannot be assumed
to exist unless expressly provided for by a statute.
                                                             F
    Maxim - Audi alteram partem - Applicability of.

    The questions for consideration in the present appeal
were whether an appeal is maintainable against an order
passed uls. 7Q of Employees' Provident Funds and
Miscellaneous Provisions Act, 1952, and whether the G
principles of natural justice would· get attracted, when in
independent exercise of power under s. 7Q of the Act, a
demand comes into existence.

                           371                               H
    372      SUPREME COURT REPORTS              [2013] 11 S.C.R.


A         Partly allowing the appeal, the Court

        HELD: 1.1. On a perusal of s.71 of Employees
  Provident Funds and Miscellaneous Provisions Act, 1952,
  it is evident that an appeal to the tribunal lies in respect
  of certain action of the Central Government or order
8
  passed by the Central Government or any authority on
  certain provisions of the Act. Though an appeal lies
  against recovery of dam~ges under Section 148 of the
  Act, no appeal is provided for against imposition of
  interest as stipulated under Section 7Q. Section 148 has
C been enacted to penalize the defaulting employers as
  also to provide reparation for the amount of loss suffered
  by the employees. It is not only a warning to employers
  in general not to commit a breach of the statutory
  requirements but at the same time it is meant to provide
D compensation     or redress to the beneficiaries, i.e., to
  recompense the employees for the loss sustained by
  them. The entire amount of damages awarded under
  Section 148 except for the amount relatable to
  administrative charges is to be transferred to the
E Employees' Provident Fund. [Para 15] [383-G-H; 384-A-C]

        Organo Chemical Industries and Anr. vs. Union of India
    and Ors. AIR 1979 SC 1803: 1980 (1) SCR 61 - relied on.

         1.2. It is clear and unambiguous that s. 71 does not
F   provide for an appeal against the determination made
    under 7Q. It is well settled in law that right of appeal is a
    creature of statute, for the right of appeal inheres in no
    one and, therefore, for maintainability of an appeal there
    must be authority of law. This being the position a
G   provision providing for appeal should neither be
    construed too strictly nor too liberally, for if given either
    of these extreme interpretations, it is bound to adversely
    affect the legislative object as well as hamper the
    proceedings before the appropriate forum. A right of
H
     ARCOT TEXTILE MILLS LTD. v. REGIONAL                373
         PROVIDENT FUND COMMNR.
appeal cannot be assumed to exist unless expressly              A
provided for by the statute and a remedy of appeal must
be legitimately traceable to the statutory provisions. If the
express words employed in a provision do not provide
an appeal from a particular order, the court is bound to
follow the express words. An appeal for its maintainability     B
must have the clear authority of law and that explains
why the right of appeal is described as a creature of
statute. [Para 17) [385-A-D]

     Ganga Bai vs. Vijay Kumar and Ors. (1974) 2 SCC 393:
1974 (3) SCR 882; Gujarat Agro Industries Co. Ltd. vs.          C
Municipal Corporation of the City of Ahmadabad and Ors.
(1999) 4 SCC 468: 1999 (2) SCR 895; State of Haryana vs.
Maruti Udyog Ltd. and Ors. (2000) 7 SCC 348: 2000 (3)
Suppl. SCR 185; Super Cassettes Industries Limited vs.
State of U.P. and Anr. (2009) 10 sec 531: 2009 (14) SCR         D
627; Raj Kumar Shivhare vs. Assistant Director, Directorate
of Enforcement and Anr. (2010) 4 SCC 772: 2010 (4) SCR
608; Competition Commission of India vs. Steel Authority of
India Limited and Anr. (2010) 10 SCC 744: 2010 (11) SCR
112 - relied on.                                                E

      1.3. An order passed under Section 7A is an order
that determines the liability of the employer under the
provisions of the Act and while determining the liability,
the delay in payment of the dues and component of F
interest are also determined. It is a composite order. That
it is an order passed under Section 7A and 7Q together.
Such an order shall be amenable to appeal under Section
71. The same is true of any composite order a facet of
which is amenable to appeal and Section 71 of the Act. G
But, if for some reason when the authority chooses to ·
pass an independent order under Section 7Q, the same
is not appealable. [Para 18) [386-A-C]

   1.4. In the present case, it is evident that the appellant
had sent a communication dated 3.10.2007 to the                 H
    374     SUPREME COURT REPORTS              [2013] 11 S.C.R.


A Regional Provident Fund Commissioner submitting that
  that establishment could not pay the provision fund dues
  from 1998 due to financial crisis, etc. and it was remitting
  Rs.83,01,037 .80 (Rupees eighty three lacs one thousand
  thirty seven and eighty paise only) from 1998 to April
s 2006. Under these circumstances, there was no
  adjudication with regard to liability, as the appellant
  company had accepted the fault on its own. What is
  disputed is that the third respondent issued a demand
  notice on 23.10.2007 requiring the appellant to remit a
c sum of Rs.94,27,334/- towards interest under Section 7Q
  of the Act for the belated remittances made from
  December 1998 to April 2006. Thus, the demand notice
  manifestly has been issued in exercise of power under
  Section 7Q of the Act and is an independent action and
0 against such an order or Issue of demand no appeal
  could have been· filed. [Para 19] [386-D-H; 387-A]

        Maharashtra State Cooperative Bank Limited vs.
    Assistant provident Fund Commissioner and Ors. (2009) 10
    SCC 123: 2009 (15) SCR 1 - referred to.
E
       2.1. The legislature always intended that when hearing
  takes place for determination of the money due, the
  component of interest would be computed and in that
  backdrop the affected person will have opportunity of
F hearing. But in reality when an independent order is
  passed under Section 7Q which can also be done as has
  been done in the present case, the affected person, should
  have the right to file an objection, if he intends to do. When
  a demand of this nature is made, it can not be said that no
G prejudice is caused. It is highlighted by the respondents
  that once the amount due is determined, the levy of interest
  is automatic. The rate of interest is stipulated at 12 per
  cent or at a higher rate if so is provided in the scheme.
  Despite this, there can be errors with regard to the period
  and the calculation. It is a statutory power which is
H
     ARCOT TEXTILE MILLS LTD. v. REGIONAL               375
         PROVIDENT FUND COMMNR.
exercised by the competent authority under the Act. Once       A
the said authority takes recourse to the measure for
computation and sends a bald order, definitely the affected
person can ask for clarification and when computation
sheet is provided to him he can file an objection. Though,
the area of delineation would be extremely limited yet the     B
said opportunity cannot be denied to the affected person.
[Para 24] (390-G-H; 391-A-D]
     2.2. The principles of natural justice should neither
be treated with absolute rigidity nor should they be
imprisoned in a straight-jacket. The maxim audi alteram        C
partem cannot be invoked if the import of such maxim
would have the effect of paralyzing the administrative
process or where the n8-ed for promptitude or the
urgency so demands. The approach of the Court in
dealing with such cases should be pragmatic rather than        D
pedantic, realistic rather than doctrinaire, functional
rather than formal and practical rather than precedential.
The concept of natural justice sometimes requires
flexibility in the application of the rule. What is required
to be seen is the ultimate weighing on the balance of          E
fairness. The requirements of natural justice depend
upon the circumstances of the case. [Para 25] [391-D-G]

    Ajit Kumar Nag vs. General Manager (PJ), Indian Oil
Corpn. Ltd., Haldia and Ors. (2005) 7 SCC 764: 2005 (3)        F
Suppl. SCR 314 - relied on.

     2.3. Natural justice has many facets. Sometimes, the
said doctrine is applied in a broad way, sometimes in a
limited or narrow manner. Therefore, there has to be a
limited enquiry only to the realm of computation which         G
is statutorily provided regard being had to the range of
delay. Beyond that nothing is permissible. When an
independent order is passed making a demand, the
employer cannot be totally remediless and would have
no right even to file an objection pertaining to               H
    376    SUPREME COURT REPORTS             [2013] 11 S.C.R.


A computation. Hence, an objection can be filed
  challenging the computation in a limited spectrum which
  shall be dealt with in a summary manner by the
  Competent Authority. [Para 28] [393-C-E]

      2.4. In the present case, it is manifest from the record
8
  that the appellant had already deposited a sum of
  Rs.34,00,000/- before the Competent Authority and
  sought for supply of the calculation sheet, the basis on
  which the computation had been made so that it could
C reconcile the accounts. It would be appropriate to direct
  that the computation sheets shall be provided to the
  appellant and it shall file its objection and thereafter the
  Competent Authority shall fix a date for reconciliation of
  the accounts. However, regard being had to the fact that
  the Act is a piece of social welfare legislation, the
D appellant is directed to deposit a further sum of
  Rs.16,00,000/-. [Para 29] [393-E-G]

        C.B. Gautam vs. Union of India and Ors. (1993) 1 SCC
    78: 1992 (3) Suppl. SCR 12 - followed.
E
       Union of India and Anr. vs. Col. J. N. Sinha and Anr.
  (1970) 2 sec 458: 1971 (1) SCR 791; Olga Tellis VS.
  Bombay Municipal Corporation (1985) 3 SCC 545: 1985 (2)
  Suppl. SCR 51; Regional Provident Fund Commissioner vs.
  S.D. College, Hoshiarpur and Ors. (1997) 1 SCC 241: 1996
F (8) Suppl. SCR 27; Regional Provident Fund Commissioner
  vs. Hoogh/y Mills Company Limited and Ors. (2012) 2 SCC
  489: 2012 (1) SCR 363; Natwar Singh vs. Director of
  Enforcement and Anr. (2010) 13 SCC 255: 2010 (13) SCR
  99; Kesar Enterprises Limited vs. State of Uttar Praesh and
G Ors. (2011) 13 SCC 733: 2011 (9) SCR 19; Swadeshi Cotton
  Mills vs. Union of India (1981) 1 SCC 664: 1981 (2) SCR
  533; Canara Bank vs. V.K. Awasthy (2005) 6 SCC 321: 2005
  (3) SCR 81 ; Sahara India (Firm) vs. CIT (2008) 14 SCC 151:
  2008 (6) SCR 427 - referred to.
H
     ARGOT TEXTILE MILLS LTD. v. REGIONAL                 377
         PROVIDENT FUND COMMNR.
                     Case Law Reference:                         A
   2009 (15) SCR 1              referred to         Para 12
  1980 (1) SCR 61               relied on          Para 15
   1974 (3) SCR 882             relied on           Para 17
                                                                 B
  1999 (2) SCR 895              relied on           Para 17
  2000 (3) Suppl. SCR 185 relied on                 Para 17
  2009 (14) SCR 627             relied on           Para 17
  2010 (4) SCR 608              relied on           Para 17
                                                                 c
  2010 (11) SCR 112             relied on           Para 17
  1992 (3) Suppl. SCR 12        followed            Para 21
  1971 (1) SCR 791              referred to         Para 21      D
  1985 (2) Suppl. SCR 51        referred to         Para 21
   1996 (8) Suppl. SCR 27       referred to         Para 23
  2012 (1) SCR 363              referred to         Para 23      E
  2005 (3) Suppl. SCR 314 relied on                 Para 25
   2010 (13) SCR 99             referred to         Para 26
  2011 (9) SCR 19               referred to         Para 27
                                                                 F
  1981 (2) SCR 533              referred to         Para 27
  2005 (3) SCR 81               referred to        Para 27
   2008 (6) SCR 427             referred to        Para 27
                                                                 G
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
9488 of 2013.

    From the Judgment & Order dated 19.12.2011 of the High
Court of Judicature at Madras in Writ Appeal No. 2230 of 2011.
                                                                 H
    378      SUPREME COURT REPORTS                  (2013) 11 S.C.R.


A       Nikhil Nayyar, T.V.S. Radhavendra Sreyas for the
    Appellant.

        S.L. Gupta, Chander Shekhar Ashri, Aparna Bhat for the
    Respondents.

B         The Judgment of the Court was delivered by

          DIPAK MISRA, J. 1. Leave granted.
       2. This appeal is directed against the judgment and order
  dated 19.12.2011 passed by the High Court of Judicature at
C Madras in W.A. No. 2230 of 2011 whereby the Division Bench
  has concurred with the judgment and order dated 21.4.2011
  passed in W.P. No. 7046 of 2008 by the learned single Judge
  holding that the order passed by the Assistant Provident Fund
  Commissioner under the Employees' Provident Funds and
D Miscellaneous Provisions Act, 1952 ("for brevity "the Act")
  requiring the appellant to remit a sum of Rs.94,27,334/- towards
  interest under Section 70 of the Act for belated remittances,
  was to be assailed in appeal before the Employees' Provident
  Funds Appellate Tribunal (for short "the tribunal'') and, therefore,
E it was appropriate on the part of the appellant to take recourse
  to the alternative remedy and not to approach the High Court
  under Article 226 of the Constitution of India.

        3. The facts giving rise to the present appeal, bereft of
F unnecessary details, are that the appellant-company has a
  textile factory at Kallakurichi and it was established in the year
  1964 and with passage of time it took steps for modernization
  but it suffered a setback in the year 1997 due to slump in the
  cotton industry affecting the industrial base in South India. The
G financial constraints compelled the company to make a
  reference to the Board for Industrial and Financial
  Reconstruction (BIFR) under Section 15(1) of the Sick Industrial
  Companies (Special Provisions) Act, 1985 and the BIFR by
  order dated 4.5.1999 declared the appellant-company as a sick
  industrial company and appointed Industrial Development Bank
H
    ARCOT TEXTILE MILLS LTD. v. REGIONAL                379
  PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]
of India (IDBI) as the Operating Agency. Because of the A
prevalent situation, the apj)ellant-company defaulted in making
contributions towards the Provident Fund and delay occurred
in remitting the dues under the Act. On 3.10.2007, the appellant
had paid a sum of Rs.83,01,037.80 (Rupees eighty three lacs
one thousand thirty seven and eighty paise) being arrears of B
the Provident Fund contribution to the Regional Provident Fund
Commissioner, the 1st respondent herein. A letter was also
sent by the company stating that the appellant-company had
become a sick industry and a scheme for rehabilitation of the
company had been submitted to the BIFR and the same was c
pending consideration. On 23.10.2007, the Assistant provident
Fund Commissioner, Trichy, the second respondent herein,
issued a demand requiring the appellant to deposit a sum of
Rs.94,27,334/- towards interest under Section 70 of the Act
for belated remittances. On receipt of the said letter the D
appellant replied that the report stated to have been annexed
with the calculation had not been sent along with the notice and
the same may be provided to it to reconcile the accounts. In
the meantime, certain proceedings went on before the BIFR
and, eventually, a joint meeting was held between the Operating E
Agency, the company and the employees of the establishment
and it was agreed that the amount due towards the Provident
 Fund shall be paid in a phased manner. On 3.3.2008, an order
came to be passed under Section SF of the Act demanding
the amount of interest and an order was passed by the Assistant
Provident Fund Commissioner taking certain coercive F
measures to realize the amount.

      4. Being grieved by the aforesaid action the appellant
approached the High Court in WP No. 7046 of 2008. The
learned single Judge, by order dated 25.3.2008, granted an G
interim stay subject to the appellant's depositing 25% of the
interest amount within 10 days and in pursuance of the said
order the appellant deposited Rs.34,00,000/- before the
Competent Authority under the Act. When the writ petition came
up for hearing on 21.4.2011, the learned single Judge came H
    380       SUPREME COURT REPORTS                  [2013] 11 S.C.R.

A   to hold that it was appropriate to approach the tribunal under
    Section 71 of the Act and, accordingly, dismissed the writ
    petition.

         5. The said order of the learned single Judge was assailed
B   before the Division Bench which concurred with the view
    expressed by the learned single Judge opining that the order
    impugned charging interest on the belated payment of
    Provident Fund is appealable and, accordingly, granted liberty
    to the appellant to move the appellate authority. The said order
C   is the subject-matter of challenge in this appeal by special
    leave.

         6. We have heard Mr. Nik~il Nayyar, learned counsel
    appearing for the appellant, Ms. Aparna Bhat, learned counsel
    appearing for respondent Nos. 1 to 3 and Mr. C.S. Ashri,
D   learned counsel for respondent No. 6.

         7. At the outset, it obligatory to state that when this matter
    came up on 20.4.2012, this Court had passed the following
    order: -
E         "One of the contentions urged by learned counsel
          appearing for the petitioner is that despite specific request,
          the detailed working of interest, amount to Rs.94,27,334/
          - on account of delay in remission of the statutory dues
          under the Employees' Provident Fund and Miscellaneous
F         Provisions Act, 1952 had not been provided by the
          Assistant Provident Fund Commissioner. It is further
          submitted that in fact an amount of Rs.34 lakhs has
          already been deposited by the petitioner towards the
          interest under Section 7Q of the said Act. In view of the
G         submission; issue notice."

         8. After so stating, the Court restrained the respondents
    from taking any further action in terms of public notice dated
    21.3.2012 fixing the date for auction of the appellant-company's
H   property.
    ARCOT TEXTILE MILLS LTD. v. REGIONAL                        381
  PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]

      9. Mr. Nikhil Nayyar, learned counsel appearing for the           A
appellant has raised two contentions, namely, (i) the learned
single Judge as well as the Division Bench erred by expressing
the view that an appeal would lie to the tribunal under Section
71 of the Act when the said provision does not so envisage, and
(ii) when the appellant asked for the documents relating to             B
computation, it was obligatory on the part of the third
respondent to provide the same so that the accounts could be
reconciled and a proper view could be taken as regards the
computation but the same having not been acceded to the
action taken is vitiated being violative of the principles of natural   c
justice.

    10. Ms. Aparna Bhat, learned counsel appearing for
respondent Nos. 1 to 3, supporting the order passed by the High
Court, submitted that when the statute commands levy of
interest and no discretion is left to the authority, there is no        D
warrant for interference with the impugned order.

     11. First we shall deal with the maintainability of an appeal
against an order passed under Section 7Q of the Act. To
address the said controversy it is necessary to appreciate the          D
scheme of the Act. Section 1(3) stipulates that subject to the
provisions contained in Section 16 the Act shall apply to every
establishment which is a factory engaged in any industry
specified in Schedule I and in which twenty or more persons
are employees and to any other establishment employing twenty           E
or more persons or class of such establishments which the
Central Government may, by notification in the Official Gazette,
specify in this behalf. Sub-section (4) of Section 1 provides that
where it appears to the Central Provident Fund Commissioner,
whether on an application made in this behalf or otherwise that
                                                                        F
the employer and the majority of employees in relation to any
establishment have agreed that the provisions of this Act should
be made applicable to the .establishment, he may, by
notification in the Official Gazette, apply the provisions of this
Act to that establishment on and from the date of such
                                                                        G
    382       SUPREME COURT REPORTS                 (2013] 11 S.C.R.


A agreement or from any subsequent date specified in that
  agreement. Section 3 confers power on the Central Government
  to issue notification directing that the provisions of the Act could
  apply to such other establishment which has a common
  Provident Fund with other establishments. Section 7A(1)
8 provides for determination of moneys due from employers.
  Section 78 deals with review of orders passed under Section
  7A. Section 7C deals with determination of escaped amount.
  Section 8 provides for mode of recovery of moneys due from
  employer. The said provision stipulates that the arrears can be
c recovered in the manner specified in section 88 to BG. Section
  88 provides for issue of certificate by the authorised officer in
  respect of the amount due to the recovery officer so as to
  unable him to recover the amount by way of attachment and
  sale of movable and immovable property of the 'establishment
0 or the employer or take such coercive measurers as provided
  therein. Section 11 gives a statutory priority of payment of
  contributions over other debts. Section 11 (2) contains non-
  obstante clause which prescribes for if any amount is due from
  employer the said amount shall be deemed to be the first
E charge on the assets of the establishment. Section 148 confers
  power on the Competent Authority under the Act to recover
  damages. Section 17 provides for power to exempt.

          12. This court in Maharashtra State Cooperative Bank
    Limited v. Assistant provident Fund Commissioner and
F   others1 while interpreting the expression " any amount due from
    an employer" has opined as follows:-

          "The expression "any amount due from an employer"
          appearing in sub-section (2) of Section 11 has to be
          interpreted keeping in view the object of the Act and other
G
          provisions contained therein including sub-section (1) of
          Section 11 and Sections 7-A, 7-Q, 14-b and 15(2) which
          provide for determination of the dues payable by the
          employer, liability of the employer to pay interest in case
H 1.   (2009) 10 sec 123.
    ARGOT TEXTILE MILLS LTD. v. REGIONAL                       383
  PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]
    the payment of the amount due is delayed and also pay              A
    damages, if there is default in making contribution to the
    Fund. If any amount payable by the employer becomes due
    and the same is not paid within the stipulated time, then
    the employer is required to pay interest in terms of the
    mandate of Section 7-Q. Likewise, default on the                   B
    employer's part to pay any contribution to the Fund can
    visit him with the consequence of levy of damages."

     13. We have referred to the aforesaid decision only for the
purpose of the levy of interest under Section 70 is a part of          C
the sum recoverable under Section 11 (2) of the Act, and it is
an insegregable part of the total amount due from employer.

     14. At this juncture, it is relevant to state that the tribunal
was constituted at a later stage. Section 71 provides for appeals
to the tribunal. The said provision reads as follows:-                 D

     "71. 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       E
     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.
                                                                       F
     (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."

     15. On a perusal of the aforesaid provision it is evident G
that an appeal to the tribunal lies in respect of certain action of
the Central Government or order passed by the Central
G.Qvernment or any authority on certain provisions 6f the Act.
We have scanned the anatomy of the said provisions before.
On a studied scrutiny, it is quite vivid that though an appeal lies H
    384       SUPREME COURT REPORTS                 [2013] 11 S.C.R.


A   against recovery of damages under Section 148 of the Act, no
    appeal is provided for against imposition of interest as
    stipulated under Section 70. It is seemly to note here that
    Section 148 has been enacted to penalize the defaulting
    employers as also to provide reparation for the amount of loss
B   suffered by the employees. It is not only a warning to employers
    in general not to commit a breach of the statutory requirements
    but at the same time it is meant to provide compensation or
    redress to the beneficiaries, i.e., to recompense the employees
    for the loss sustained by them. The entire amount of damages
c   awarded under Section 148 except for the amount relatable to
    administrative charges is to be transferred to the Employees'
    Provident Fund. (see Organo Chemical Industries and another
    v. Union of India and others2)

         16. Presently we shall refer to 70 of the Act. It is as
D   follows:-

          "7Q. Interest payable by the employer.- The employer
          shall be liable to pay simple interest at the rate of twelve
          per cent per annum or at such higher rate as may be
E         specified in the Scheme on any amount due from him
          under this Act from the date on which the amount has
          become so due till the date of its actual payment:

               Provided that higher rate of interest specified in the
          Scheme shall not exceed the lending rate of interest
F         charged by any scheduled bank."

         17. Ms. Aparna Bhat, learned counsel for the respondent
    Nos. 1 to 3 would contend that the payment of interest by the
    employer in case of belated payment is statutorily leviable and
G   a specified rate having been provided, the authority has no
    discretion and, therefore, it is only a matter of computation and
    there cannot be any challenge to it. Be it noted, it was
    canvassed by the said respondents before the High Court that

H   2.   AIR 1979 SC 1803.
       ARCOT TEXTILE MILLS LTD. v. REGIONAL                    385
     PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]
an appeal would lie against an order passed under 70. On a             A
scrutiny of Section 71, we notice that the language is clear and
unambiguous and it does not provide for an appeal against the
determination made under 70. It is well settled in law that right
of appeal is a creature of statute, for the right of appeal inheres
in no one and, therefore, for maintainability of an appeal there       B
must be authority of law. This being the position a provision
providing for appeal should neither be construed too strictly nor
too liberally, for if given either of these extreme interpretations,
it is bound to adversely affect the legislative object as well as
hamper the proceedings before the appropriate forum.                   c
Needless to say, a right of appeal cannot be assumed to exist
unless expressly provided for by the statute and a remedy of
appeal must be legitimately traceable to the statutory
provisions. If the express words employed in a provision do not
provide an appeal from a particular order, the court is bound          D
to follow the express words. To put it otherwise, an appeal for
its maintainability must have the clear authority of law and that
explains why the right of appeal is described as a creature of
statute. (See: Ganga Bai v. Vijay Kumar and others3, Gujarat
Agro Industries Co. Ltd. v. Muncipal Corporation of the City           E
of Ahmedabad and Ors. 4, State of Haryana v. Maruti Udyog
Ltd. and others5, Super Cassettes Industries Limited v. State
of U. P. and another6, Raj Kumar Shivhare v. Assistant
Director, Directorate of Enforcement and another7,
Competition Commission of India v. Steel Authority of India
Limited and another6)                                                  F

     18. At this stage, it is necessary to clarify the position of
law which do arise· in certain situations. The competent authority

3.   (1974) 2 sec 393.                                                 G
4.   (1999) 4' sec 468
5.   c2000) 1 sec 348.
6.   (2009) 10 sec 531.
1.   (2010) 4 sec 112.
8.   c2010) 10 sec 744.                                                H
    386      SUPREME COURT REPORTS·                 [2013] 11 S.C.R.


A under the Act while determining the moneys due from the
  employee shall be required to conduct an inquiry and pass an
  order. An order under Section 7A is an order that determines
  the liability of the employer under the provisions of the Act and
  while determining the liability the competent authority offers an
B opportunity of hearing to the concerned establishment. At that
  stage, the delay in payment of the dues and component of
  interest are determined. It is a composite order. To elaborate,
  it is an order passed under Section 7A and 7Q together. Such
  an order shall be amenable to appeal under Section 71. The
c same is true of any composite order a facet of which is
  amenable to appeal and Section 71 of the Act. But, if for some
  reason when the authority chooses to pass an independent
  order under Section 7Q the same is not appealable.

          19. Coming to the case at hand, it is evident that the
D   appellant had sent a communication dated 3.10.2007 to the
    Regional Provident Fund Commissioner submitting that that
    establishment could not pay the provision fund dues from 1998
    due to financial crisis, etc. and it was remitting Rs.83,01,037.80
    (Rupees eighty three lacs one thousand thirty seven and eighty
E   paise only) from 1998 to April 2006. Under. these
    circumstances, there was no adjudication with regard to liability
    as the appellant company had accepted the fault on its own.
    As it appears the respondent does not have any cavil with
    regard to the dues payable towards the provident fund by the
F   appellant to the company. What is disputed is that the third
    respondent issued a demand notice on 23.10.2007 requiring
    the appellant to remit a sum of Rs.94,27,334/- towards interest
    under Section 7Q of the Act for the belated remittances made
    from December 1998 to April 2006. The letter stated a
G   computation sheet was attached to said demand notice which
    was rebutted by the petitioner by sending a communication
    stating that it was not sent and it may be provided so that they
    may reconcile the accounts. The demand notice manifestly has
    been issued in exercise of power under Section 7Q of the Act
H   and is an independent action and against such an order or
       ARCOT TEXTILE MILLS LTD. v. REGIONAL                  387
     PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]
issue of demand no appeal could have been filed. Therefore,         A
the conclusion of the learned Single Judge as well as by the
Division Bench on the said score is not sustainable.

     20. The next issue that arises for consideration is when in
independent exercise of power under Section 70 a demand
                                                                    B
comes into existence, whether the principle of natural justice
would get attracted or not. Section 7A (3) provides that no order
shall be made under sub-Section (1) unless the employer
concerned is given a reasonable opportunity of representing
his case. Section 14B which provides for recovery of damages        C
stipulates that before levying and recovery of such damages,
the employer shall be given a reasonable opportunity of being
heard. Learned counsel for the respondent Nos. 1 to 3 would
submit that the first one is the initial determination and,
therefore, an opportunity of hearing is given and the second one
which relates to imposition of damages there is discretion on       D
the part of the authorities but as far as the levy of interest is
component is concerned, it being only an arithmetical
calculation the question of affording an opportunity to the
employer does not arise. Learned counsel for the respondent
has stressed upon the fact that when interest payable by the        E
employer is automatic and the competent authority has no
discretion to waive the interest or reduce the interest or limit
the interest otherwise, the question of affording of an
opportunity of hearing to the employer is not warranted.
                                                                    F
     21. To appreciate the said submission we may refer to the
Constitution Bench decision in C.B. Gautam v. Union of India
and others9• In the said case, the Constitution Bench was
dealing with the validity of provision of chapter XX-C inserted
in the Income Tax Act, 1961 by the Finance Act of 1986. A           G
contention was advanced by virtue of incorporation of the
provision the appropriate authority had been conferred powers
of compulsory purchase of immovable property which was
punitive in nature. It was submitted on behalf of the Union of
9.   (1993) 1 sec 78.                                               H
    388       SUPREME COURT REPORTS                   [2013] 11 S.C.R.


A India that the said Chapter had been introduced to curb the
  large-scale evasion of income-tax and to counter the modes
  of tax evasion adopted by various assesses which deprive the
  Government of its legitimate tax deals. Section 269-UD
  provided for order by appropriate authority for purchase of
B immovable property by Central Government. The larger Bench
  adverted to the issue of natural justice as a contention was
  raised that there was no provision for giving an opportunity of
  being heard before an order was passed under the provision
  ofsub-Section 269-UD occurring in the said chapter. The Court
c referred to the pronouncements in Union Union of India and
  another v. Col. J. N. Sinha and another10 and Olga Tellis v.
  Bombay Municipal Corporation 11 and opined thus:-

          "lt must, however, be borne in mind that courts have
          generally read into the provisions of the relevant sections
D         a requirement of giving a reasonable opportunity of being
          heard before an order is made which would have adverse
          civil consequences for the parties affected. This would be
          particularly so in a case where the validity of the section
          would be open to a serious challenge for want of such an
E         opportunity.

                29. It is true that the time frame within which the order
          for compulsory purchase has to be made is a fairly tight
          one but in our view the urgency is not such as would
F         preclude a reasonable opportunity of being heard or to
          show cause being given to the parties likely to be
          adversely affected by an order of purchase under Section
          269-UD(1). The enquiry pursuant to the explanation given
          by the intending purchaser or the intending seller might be
          a somewhat limited one or a summary one but we decline
G
          to accept the submission that the time-limit provided is so
          short as to preclude an enquiry or show cause altogether."

                                                  [Emphasis supplied]
    10. (1970) 2 sec 458.
H 11. (1985) 3 sec 545.
    ARCOT TEXTILE MILLS LTD. v. REGIONAL                   389
  PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]

     22. After so stating the Constitution Bench proceeded to     A
lay down that the requirement of a reasonable opportunity being
given to the concerned parties, particularly, the intending
purchaser and the intending seller must be read into the
provisions of Chapter XX-C. In that context, the Constitution
Bench observed thus:-                                             B

     "The observance of principles of natural justice is the
     pragmatic requirement of fair play in action. In our view,
     therefore, the requirement of an opportunity to show cause
     being given before an order for purchase by the Central      C
     Government is made by an appropriate authority under
     Section 269-UD must be read into the provisions of
     Chapter XX-C. There is nothing in the language of Section
     269-UD or any other provision in the said Chapter which
     would negate such an opportunity being given. Moreover,
     if such a requirement were not read into the provisions of   D
     the said Chapter, they would be seriously open to
     challenge on the ground of violations of the provisions of
     Article 14 on the ground of non-compliance with principles
     of natural justice." .
                                                                  E
     23. Presently we shall address to the nature of the lis that
can arise under this provision. There cannot be any dispute that
the Act in question is a beneficial social legislation to ensure
health and other benefits of the employees and the employer
under the Act is under statutory obligation to make the deposit F
that is due from him. In the event of default committed by the
employer Section 14-B steps. in and calls upon the employer
to pay the damages. (See: Regional Provident Fund
Commissioner v. S.D. College, Hoshiarpur and others12).
Section 7Q which provides. for interest for belated payment is G
basically a compensation for payment of interest to the affected
employees. This provision has been made to secure just and .
humane conditions of work as has been opined in Regional
Provident Fund Commissioner v. Hooghly Mills Company
12. (1997) 1 sec 241.                                             H
    390      SUPREME COURT REPORTS                   [2013] 11 S.C.R.


A Limited and others. 13 The language employed in Section 7Q
  provides for levy of interest on delayed payment and the rates
  have been stipulated. When a composite order is passed or
  order imposing interest becomes a part of the order or levy in
  any of the provisions of the Act the authority grants a reasonable
B opportunity of hearing to the employer/affected party.

          24. The issue that falls for consideration in this case when
    the employer volunteers may be after long delay to pay the
    dues, can he claim any right to object pertaining to the interest
C   component. On certain occasions the authority on its own may
    issue a demand notice under Section 7Q after long lapse of
    time by computing the delay committed by the employer in
    payment of the dues. We repeat at the cost of repetition that it
    is a matter of computation but sometimes computation is done
    when the main order is passed and at times an interest
D   component is demanded separately by the competent authority.
    To say that there cannot be any error at any point of time will
    be an absolute proposition. There can be errors in
    computation. It is difficult to h.old that when a demand of this
    nature is made in a unilateral manner and the affected person
E   is visited with some adverse consequences no prejudice is
    caused. Learned counsel for the respondent would contend.that
    the natural justice has been impliedly excluded and for the said
    purpose she would emphasise upon the scheme and the
    purpose of the Act. There is no cavil for the fact that it is social
F   welfare legislation to meet the constitutional requirement to
    protect the employees. That is why the legislature has provided
    for imposition of damages, levy of interest and penalty. It is
    contended that it is luminous that the legislature always intended
    that when hearing takes place for determination of the money
G   due, the component of interest would be computed and in that
    backdrop the affected person will have opportunity of hearing.
    But in reality when an independent order is passed under
    Section 7Q which can also be done as has been done in the

H 13. (2012) 2 sec 489.
    ARCOT TEXTILE MILLS LTD. v. REGIONAL                      391
  PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]
present case the affected person, we are inclined to think,          A
should have the right to file an objection if he intends to do. We
are disposed to think so, when a demand of this nature is
made, it can not be said that no prejudice is caused. It is
highlighted by the respondents that once the amount due is
determined the levy of interest is automatic. The rate of interest   B
is stipulated at 12 per cent or at a higher rate if so is provided
in the scheme. Despite this, there can be errors with regard to
the period and the calculation. It is a statutory power which is
exercised by the competent authority under the Act. Once the
said authority takes recourse to the measure for computation         c
and sends a bald order definitely the affected person can ask
for clarification and when computation sheet is provided to him
he can file an objection. Though, the area of delineation would
be extremely limited yet the said opportunity cannot be denied
to the affected person.
                                                                     D
     25. We may state with profit that principles of natural justice
should neither be treated with absolute rigidity nor should they
be imprisoned in a straight-jacket. It has been held in Ajit
Kumar Nag v. General Manager (PJ), Indian Oil Corpn. Ltd.,
Haldia and Others 14 that the maxim audi alteram partem E
cannot be invoked if the import of such maxim would have the
effect of paralyzing the administrative process or where the
need for promptitude or the urgency so demands. It has been
stated therein that the approach of the Court in dealing with such
cases should be pragmatic rather than pedantic, realistic rather F
than doctrinaire, functional rather than formal and practical
rather than precedential. The concept of natural justice
sometimes requires flexibility in the application of the rule. What
is required to be seen the ultimate weighing on the balance of
fairness. The requirements of natural justice depend upon the G
circumstances of the case.

     26. In Natwar Singh v. Director of Enforcement and

14. c2005) 1 sec 764.
                                                                     H
    392       SUPREME COURT REPORTS                   [2013] 11 S.C.R.


A   Another, 15 this Court while discussing about the applicability of
    the rule had reproduced the following passage:-

          "lt is not possible to lay down rigid rules as to when the
          principles of natural justice are to apply: nor as to their
          scope and extent. Everything depends on the subject-
B
          matter:" [see R. v. Gaming Board for Great Britain, ex p
          Benaim and Khaida 16 at QB p. 430 C], observed Lord
          Denning, M.R.

                ... Their application, resting as it does upon statutory
c         implication, must always be in conformity with the scheme
          of the Act and with the subject-matter of the case."

          27. In this context, we may fruitfully refer to the verdict in
    Kesar Enterprises Limited v. State of Uttar Praesh and
0   Others17 wherein the Court was considering the applicability of
    principles of natural justice to Rule 633(7) of the Uttar Pradesh
    Excise Manual. The said Rule provided that if certificate was
    not received within the time mentioned in the bond or pass, or
    if the condition of bond was infringed, the Collector of the
E   exporting district or the Excise Inspector who granted the pass
    shall take necessary steps to recover from executant or his
    surety the penalty due under the bond. A two-Judge Bench
    referred to the decisions in Swadeshi Cotton Mills v. Union of
    lndia 18, Canara Bank v. V.K. Awasthy19 and Sahara India
    (Firm) v. C/P. 0 and came to hold as follows:-
F
          "30 .... we are of the opinion that keeping in view the nature,
          scope and consequences of direction under sub-rule (7)


G 15. (2010) 13 sec 255.
    16. (1970) 2 QB 417.
    17. c2011) 13 sec 733.
    18. (1981) 1 sec 664.
    19. c2005) 6 sec 321.
H 20. c2008) 14 sec 151.
     ARCOT TEXTILE MILLS LTD. v. REGIONAL                    393
   PROVIDENT FUND COMMNR. [DIPAK MISRA, J.]
     of Rule 633 of the Excise Manual, the principles of natural A
     justice demand thfit a show-cause notice should be issued
     and an opportunity of hearing should be afforded to the
     person concerned before an order under the said Rule is
     made, notwithstanding the fact that the said Rule does not
     contain any express provision for the affected party being B
     given an opportunity of being heard."

      28. Regard being had to the discussions made and the
law stated 1n the field, we are of the considered opinion that
natural justice has many facets. Sometimes, the said doctrine
applied in a broad way, sometimes in a limited or narrow C
manner. Therefore, there has to be a limited enquiry only to the
realm of computation which is statutorily provided regard being
had to the range of delay. Beyond that nothing is permissible.
We are disposed to think so, for when an independent order is
passed making a demand, the employer cannot be totally D
remediless and would have no right even to file an objection
pertaining to computation. Hence, we hold that an objection can
be filed challenging the computation in a limited spectrum which
shall be dealt with in a summary manner by the Competent
Authority.                                                       E

       29. In the present case, it is manifest from the record that
  the appellant had already deposited a sum of Rs.34,00,000/-
  before the Competent Authority and sought for supply of the
  calculation sheet the basis on which the computation had been F
  made so that it could reconcile the accounts. We think it
  appropriate to direct that the computation sheets shall be
  provided to the appellant within three weeks and it shall file its
  objection within two weeks therefrom and thereafter the
  Competent Authority shall fix a date for reconciliation of the G
. accounts. However, regard being had to the fact that the Act is
  a piece of social welfare legislation, we direct the appellant to
  deposit a further sum of Rs.16,00,000/- within a period of four
  weeks from today. If the amount is not deposited within the time
  stipulated hereinabove, the entire amount would be leviable and
  the right to file objection shall stand extinguished.              H
    394      SUPREME COURT REPORTS                [2013] 11 S.C.R.


A       . 30. Consequently, the appeal is allowed to the aforesaid
    extent and the judgment and order passed by the Division
    Bench and that of the learned single Judge of the High Court
    are set aside. In the facts and circumstances of the case, there
    shall be no order as to costs.
B
    K.K.T.                                  Appeal partly allowed.