MOHAMED AMEER AND ANOTHER v. YAPA , ASSISTANT COMMISSIONER OF LABOUR

021-SLLR-SLLR-1998-1-MOHAMED-AMEER-AND-ANOTHER-v.-YAPA-ASSISTANT-COMMISSIONER-OF-LABOUR.pdf


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Sri Lanka Law Reports
(1998) 1 Sri LR.
MOHAMED AMEER AND ANOTHERv.
YAPA, ASSISTANT COMMISSIONER OF LABOUR
SUPREME COURTFERNANDO, J.,
WIJETUNGA, J. ANDANANDACOOMARASWAMY, J.
S.C. APPEAL NO. 121/97C.A. APPLICATION NO. 3/97H.C. NWP NO. 70/95M.C. KURUNEGALA NO. 91382DECEMBER 2ND, 1997.
Employees' Provident Fund Act, No. 15 of 1958 – Default by the employer -Recovery of sums due – Particulars required to be set out in certificate underS. 38 (2).
Held:
Section 38 (2) of the Employees' Provident Fund Act, No. 15 of 1958 requiresthat the employees in respect of whom default is alleged must be named orotherwise adequately identified; and that (at least) where default is allegedin respect of a period during which there has been changes in remuneration and/or rates of contributions, the remuneration in relation to which the contributionsand default has been computed must also be disclosed.
Cases referred to:
. 1. Vaz v. Commissioner of Income Tax 46 NLR 200, 202.
Ekanayake v. Prince of Wales Co-operative Society 50 NLR 297.
De Silva v. Commissioner of Income Tax 53 NLR 280, 282, 283.
Barnes de Silva v. Galkissa-Wattarapola Co-operative Stores Society54 NLR 326, 329.
sc
Mohamed Ameer and Another v.
Yapa, Assistant Commissioner of Labour (Fernando, J.)
157
Nilaweera v. Commissioner of Inland Revenue 63 NLR 486.
Free Lanka Trading Limited v. Commissioner of Labour (1982) 1 Sri LR 97.
Ramlin v. Commissioner of Inland Revenue (1988) 2 Sri LR 259.
Philip v. Commissioner of Inland Revenue 1 Sriskantha 133, 134.
Mendis v. Commissioner of Income Tax 61 NLR 95, 96.
City earners Ltd. v. Attorney-General (1992) 2 Sri LR 257.
APPEAL from the judgment of the Court of Appeal.
A. P. Niles with Shilan Nagoor for the appellants.
Adrian Pereira, SSC for the respondent.
Cur. adv. vult
December 16, 19P7.
FERNANDO, J.
In this appeal we have to interpret section 38 (2) of the Employees'
Provident Fund Act, No. 15 of 1958, as amended by Act No. 8 of
1971, which provides:
"Where an employer makes default in the payment of any sumwhich he is liable to pay under this Act and the Commissioneris of opinion that it is impracticable or inexpedient to recover that. sum under section 17 or under subsection (1) of this section orwhere the full amount due has not been recovered by seizure andsale, then, he may issue a certificate containing particulars of thesum so due and the name and place of residence of the defaultingemployer, to the Magistrate having jurisdiction in the division inwhich such place is situate. The Magistrate shall, thereupon, summonsuch employer before him to show cause why furhter proceedingsfor the recovery of the sum due under this Act should not be takenagainst him and in default of sufficient cause being shown, suchsum shall be deemed to be a fine imposed by a sentence of theMagistrate on such employer . . .“
Section 38 (3) further provides:
"The correctness of any statement in a certificate issued by theCommissioner for the purposes of this section shall not be calledin question or examined by the court in any proceedings under
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this section, and accordingly nothing in this section shall authorizethe court to consider or decide the correctness of any statementin such certificate, and the Commissioner's certificate shall besufficient evidence that the amount due under this Act from thedefaulting employer has been duly calculated and that such amountis in default".
A certificate under section 38 (2) was issued to the Magistrate'sCourt of Kurunegala alleging default by the respondents-petitioners-petitioners-appellants (“the Appellants") in a sum of Rs. 150,992; the
following details were given:
Number of employees in respect of whomthere was a default in contributions
Period of defaultMAY 1971
Employees' contributions under section 10 (1)
Employer's contributions under section 10 (2)
Total amount of contributions in default
Surcharge added under section 16
TOTAL
The Magistrate's Court, the High Court in revision,of Appeal, held that the certificate was in order.
The question is whether the above details constitute "particularsof the sum so due" within the meaning of section 38 (2). Counselagreed that the appeal must be dismissed if they did; but allowedif they did not.
The principal grievance of learned Counsel for the Appellants wasthat the certificate did not set out the names and emoluments of theemployees in respect of whom default was alleged. He cited Vaz v.Commissioner of Income Tax,® Ekanayake v. Prince of Wales Co-operative Society,1® De Silva v. Commissioner of Income Tax,® Barnesde Silva v. Galkissa-Wattarapola Co-operative Stores Society,®Nilaweera v. Commissioner of Inland Revenue,® Free Lanka TradingLimited v. Commissioner of Labour,® Ramlin v. Commissioner ofInland Revenue,m Philip v. Commissioner of Inland Revenue,m andMendis v. Commissioner of Income Tax,® in support of the proposition
TWO
to JULY 1991Rs. 40,264Rs. 60,398Rs. 100,662Rs. 50,330
Rs. 150,992
and the Court
sc
Mohamed Ameer and Another v.
Yapa, Assistant Commissioner of Labour (Fernando,- J.)
159
that a certificate issued under provisions similar to section 38 (2) couldbe challenged, notwithstanding preclusive clauses similar to section38 (3). He also cited City Carriers Ltd. v. Attorney-General,<w> whichquashed proceedings before the Magistrate's Court, where thecertificate contained no particulars of the sum claimed. Since therewere no particulars at all, it was unnecessary in that case to decidewhat details must be furnished; however, Counsel referred to thesubmission made in that case that:
. . the document X1 contains only the total sum alleged tobe due but does not set out any particulars whatsoever in regardto e.g. the computation of that sum, the period within which thatsum became due, the number of employees concerned in makingthe computation SK their names and emoluments, etc. …"
He contended that names and emoluments should be stated, whilelearned Senior State Counsel argued that it was sufficient to stateeither the number of employees or their names and emoluments.
The Court of Appeal considered that the details given weresufficient — seemingly on the basis that because the number ofemployees was stated, their names and emoluments wereunnecessary.
It seems to me that two distinct questions arise in relation toenforcement proceedings commenced by means of a certificate issuedunder section 38 (2). The first is whether the certificate sets out theparticulars of the sum due, in the manner and to the extent requiredby section 38 (2). If it does not, the certificate does not satisfy section38 (2), and no further proceedings can be had. That is a requirementas to form. The issue that arises is as to the sufficiency of particulars,and not as to their truth. The second question only arises where thenecessary particulars have been given – which will be in the formof "statements" in the certificate, as to persons, periods, amounts, etc.In that event, in the course of the proceedings, section 38 (3) comesinto operation to restrict the extent to which the truth of suchstatements may be disputed or disproved by the alleged defaulter.
To put it in another way, the first question is whether omissionsin the certificate result in its formal invalidity; the second relates tothe proof – or, rather, disproof – of statements contained in thecertificate.
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It is unnecessary to consider the first group of decisions cited,because section 38 (3) deals with the extent of immunity fromchallenge of a statement which is contained in a valid certificate. Weare concerned here not with the disproof of statements containedin a certificate, but with the alleged invalidity of the certificate itselfon account of what has been omitted therein; not with burden of proofor sufficiency of evidence, but with validity and jurisdiction.
A certificate can be issued under section 38 (2) only where anemployer makes default in the payment of any sum which he is liableto pay under the Act. The issue of a certificate does not compel theMagistrate's Court to proceed, automatically, to recover the sum stated:the Court must first give the alleged defaulter an opportunity to showcause why further proceedings for the recovery of the sum claimedshould not be taken. The law thus expressly incorporates the audialteram partem rule. Fairness requires that when a certificatementions a sum allegedly due, it must also give adequate details ofhow it was made up to enable the alleged defaulter to show cause.It is true that the certificate does give some details: but to say thatthe number of employees involved was two is in my opinion quiteinsufficient. An employer may have ten, or a hundred, or a thousand,employees; if it is alleged that he has not paid the dues of twoemployees – or even one – without naming or otherwise identifyingthem, how can he satisfy the Court that no further proceedings shouldbe taken? His position may be that he has regularly made contributionsfor all his employees, and even that he has receipts and otherdocumentary proof: and accordingly that the persons to whom thecertificate relates either were not his employees, or were employeesin respect of whom all dues had been paid. If the names are withheld,the alleged defaulter will be denied a meaningful opportunity of showingcause; he may be put to the trouble and expense of proving whohis employees were, and that all their dues were paid during a longperiod of time. On the other hand, the Commissioner must necessarilyhave in his possession full details of the names of the employeesin respect of whom there has been a default, and – in respect ofeach employee separately – the period of the default, his emolumentsduring that period (on the basis of which would be calculated thecontributions due from employer and employee), the contributionsactually remitted, and the amount of the default; and the sum claimedwould be the aggregate of those amounts. I see no reason why therelevant particulars cannot be disclosed to the alleged defaulter
sc
Mohamed Ameer and Another v.
Yapa, Assistant Commissioner of Labour (Fernando, J.)
161
in the certificate. There is neither prejudice to the Commissioner, norany breach of confidentiality.
There is another aspect. Proceedings for recovery may not becriminal in the strict sense, but they may result in fines and evenimprisonment. While particulars need not be given with the samestrictness as in a criminal charge or indictment, yet enough detailsmust be disclosed so as to enable the alleged defaulter to know whathe is being accused of. To tell the alleged defaulter "You have notpaid the dues in respect of two of your employees, but I am not tellingyou who they are” is grossly unfair. If he is told “You have not paidthe dues in respect of X and Y“, he can produce receipts, or otherbooks and documents, to prove that X and Y were paid, or that theywere not his employees. But if it is permissible to withhold the names,what would ensue is a game of hide-and-seek, for – as I have pointedout earlier – there would be an undue and unfair burden placed onhim to prove payment in respect of a large number of persons, eventhough the Commissioner does not allege default in respect of them.
A certificate is issued by the Commissioner in the context of analleged default "in the payment of any sum which [the alleged defaulter]is liable to pay under [the] Act"; the law allows the alleged defaulteran opportunity to show cause: and it must follow that the certificatemust contain the particulars known to the Commissioner in relationto which he must show cause, i.e. that he is not in default, or thatthe default is less than what is alleged. The opportunity that he isentitled to is to show cause in respect of the alleged default: notan opportunity to prove payment of dues in other cases, in whichthe Commissioner has not alleged any default. I
I have therefore no hesitation in holding that section 38 (2) requiresthat the employees in respect of whom default is alleged must benamed or otherwise adequately identified; and that (at least) wheredefault is alleged in respect of a period during which there have beenchanges in remuneration and/or rates of contributions, the remunera-tion in relation to which the contributions and default has been computedmust also be disclosed. Learned State Counsel submitted that itwould be difficult to include all that information in a single certificate.Since the certificate is not to be equated to a charge in a criminalcase, I hold that the required particulars can be furnished in a dulyauthenticated schedule, referred to in, and annexed to, the formalcertificate.
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I therefore set aside the orders of the Magistrate's Court, the HighCourt, and the Court of Appeal, and quash the proceedings in theMagistrate's Court, without prejudice to the right of the Commissionerto issue a fresh certificate. The appellants will be entitled to a sumof Rs 15,000 as costs in this Court and in the Courts below.
WIJETUNGA, J. – I agree.
ANANDACOOMARASWAMY, J. – I agree.
Order set aside.