Tribunal has discretion to grant waiver from pre-deposit by recording reasons which are not necessarily be detailed and exhaustive

In Central Board Of Trustees EPFO Through APFC Delhi (South) v. Kendriya Bhanda, the writ petition was filed before the Delhi High Court by the Central Board of Trustees EPFO assailing the order passed by the Employees’ Provident Fund Appellate Tribunal. Under the impugned order, the Tribunal while admitting the Respondent’s appeal against the assessment order passed by the Petitioner under Section 7(A) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (‘the EPF Act’), has granted complete waiver from pre-deposit to the respondent. 

The Petitioner, alleging that, the Respondent had defaulted in paying the requisite provident fund dues, had initiated an inquiry under Section 7 (A) of the EPF Act. After granting due opportunity of hearing to the Respondent, the Petitioner passed an assessment order holding the Respondent liable to pay a sum of Rs.6,31,707 on the ground that, the Respondent was the principal employer and, therefore, liable to remit the dues in respect of the employees engaged by one M/s Shramika Kutir Udyog. 

Aggrieved by this assessment order, the Respondent approached the Tribunal by way of an appeal under Section 7(I) of the EPF Act, alongwith an application seeking waiver of the 75% pre-deposit, mandated in terms of Section 7(O) of the EPF Act. The Tribunal, while admitting the appeal under the impugned order, also granted complete waiver to the Respondent from pre-deposit by exercising its powers under the proviso to Section 7(O) of the EPF Act and it is this grant of waiver which is being assailed in the present petition. 

Learned counsel for the Petitioner submitted that, the impugned order fails to adhere to the express stipulations of the EPF Act; although the Act empowers the Tribunal to grant complete waiver of pre-deposit, it also sets down that such grant can only be made after carefully recording the reasons for the same, in writing. In the present case, however, the impugned order fails to record any reasons warranting the grant of such waiver. 

The High Court decided that once the proviso to Section 7(O) of the EPF Act specifically empowers the Tribunal with the discretion to grant complete or partial waiver to an Appellant from the rigours of making pre-deposit, after recording reasons for such grant, it cannot be urged that, even if the Tribunal finds a strong prima facie case in favour of the Appellant, it should not exercise such discretion. Once the provisions of the EPF Act itself vests the Tribunal with the power to exercise its discretion for grant of waiver from pre-deposit by recording reasons, it cannot be said that reasons provided by the Tribunal must necessarily be detailed and exhaustive.