Calcutta High Court (Appellete Side)
Paschim Banga Gramin Bank vs Union Of India & Ors on 21 June, 2024
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
Present :-
The Hon'ble Justice PARTHA SARATHI SEN
WPA 19141 of 2023
Paschim Banga Gramin Bank..
-Vs-
Union of India & Ors.
For the Petitioner: Mr. Soumya Majumder, Adv.,
Mr. Sarashi Baidya, Adv.
For the respondent nos. 2 to 4: Mr. Shiv Chandra Prasad, Adv.
For the respondent no. 6: Ms. Samapti Roy, Adv.,
Mr. Subhrohyoti Dey, Adv.,
For the respondent no.7: Mr. Pankaj Kumar Mukherjee, Adv.
Mr. Subir Bera, Adv.
Hearing concluded on: 13.06.2024.
Judgment on: 21.06.2024.
PARTHA SARATHI SEN, J. : -
1. In this writ petition as filed under Article 226 of the Constitution of
India the writ petitioner while challenging a proceeding and order dated
June 25, 2015 under Section 14B of the Employees Provident Funds and
Miscellaneous Provisions Act, 1952 ( hereinafter referred to as the 'said
Act') as passed by Regional Provident Fund Commissioner, Sub-Regional
office, Durgapur/respondent no.2 herein has prayed for declaring Section
14 B of the said Act ultravires or inconsistent with Section 17(1-A) (d) (iv)
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of the said Act vis-a-vis with Article 14 of the Constitution of India with a
further prayer to read down Section 14B of the said Act along with other
ancillary relief or reliefs by issuing necessary writs.
2. For effective adjudication of the instant writ petition the facts
leading to filing of the instant writ petition is required to be discussed in a
nutshell.
3. Originally one Mayurakshi Gramin Bank was independently
existing as a regional rural bank and at that time it was an exempted
establishment within the meaning of Section 17 (1-A) of the said Act and
with the implementation of the Employees' Pension Scheme, 1995 the
said Mayurakshi Gramin Bank started depositing contributions in the
pension fund with the concerned regional provident fund commissioner.
4. The Ministry of Finance, Government of India by a notification
dated February 26, 2007 amalgamated various regional rural banks
including Mayurakshi Gramin Bank into Paschim Banga Gramin Bank,
the writ petitioner herein.
5. By an order dated 07.09.2007/10.09.2007 the exemption under
Section 17 (1-A) of the said Act of Mayurakshi Gramin Bank was
cancelled. The Provident Fund Authority duly communicated such
revocation order of exemption to the Board of Trustees of the said
Mayurakshi Gramin Bank. The Provident Fund Authorities in course of
time noticed that the writ petitioner had failed to remit the contributions
along with administrative charges within the period from 23.07.1998 to
22.06.2010 and 15.09.2010 to 31.10.2013. The Provident Fund
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Authorities also noticed that the past accumulations have also not been
transferred in relation to Pension Funds, Provident Fund, Employees
Deposit Link Insurance Scheme Contributions, etc. Accordingly, on
31.12.2013 and 12.03.2014 two notices have been sent to the writ
petitioner by the respondent no.2/Provident Fund authority. Upon
hearing the respondent no.2/authority by its order dated June 25, 2015
passed the aforementioned order under Section 14B of the said Act and
thereby imposed damages to the tune of Rs.30,26,32,302/- along with
interest of Rs.8,06,37,304/- which has been impugned in this writ
petition.
6. In course of hearing Mr. Majumder, learned advocate for the writ
petitioner at the very outset draws attention of this Court to Section 17 of
the said Act. It is submitted by Mr. Majumder that under the law when an
establishment is granted an exemption under Section 17(1-A) of the said
Act the employer of the said establishment shall have to establish a Board
of Trustees for the administration of the Provident Fund as per the
Employees' Provident Fund Scheme, 1952 (hereinafter referred to as the
said Scheme) vide Section 17 (1-A)(b) of the said Act and after
establishment of the said Board of Trustees (hereinafter referred to as
'BOT' in short) the said BOT is duty bound to maintain the detailed
accounts of the contributions credited and withdrawals, submit returns to
the Provident Fund Authority and invest the Provident Fund money in
accordance with the directions issued by the Central Government from
time to time and so on as mentioned in Section 17 (1-A) of the said Act.
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7. It is further submitted by Mr. Majumder, learned advocate for the
writ petitioner that from the spirit of the said Act it would thus reveal that
as soon as BOT is created, the establishment lost its control over the
Provident Fund as maintained by the BOT and therefore no damages
and/or interest can be levied on account of delayed remittance of the
contributions and past accumulations upon the establishment which is
distinguishable from BOT.
8. It is further submitted by Mr. Majumder, learned advocate for the
writ petitioner that on perusal of Section 6 of the said Act read with para
nos. 29 and 30 of the said Scheme the employers' liability comes to an
end as soon the exempted establishment deposits contributions with the
BOT and in absence of any allegation of delayed deposit of such
contribution the respondent no.2 ought not have saddled the writ
petitioner with a huge damage and interest which is totally inconsistent of
the provision of the said Act and the same is unconstitutional too.
9. Mr. Majumder further submits that the alleged period for default in
depositing contributions and belated remittance of transfer of past
accumulation though occurred subsequent to the process of
amalgamation but such delay occurred at the instance of the BOT of
Mayurakshi Gramin Bank over which the Paschim Banga Gramin Bank,
the writ petitioner herein has got no control and the same has been
admitted by the respondent/Provident Fund Authority in its affidavit-in-
opposition.
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10. Drawing attention to Annexure P2 at page 23 of the writ petition it
is submitted that even after amalgamation of the aforesaid banks by the
notification dated February 26, 2007 the Provident Fund Authority by its
letter dated 07.09.2007/10.09.2007 made correspondence with the BOT
of the Mayurakshi Gramin Bank conveying the revocation of the
exemption which shows that the respondent no.2 /PF Authority by its act
and conduct found the BOT of Mayurakshi Gramin bank is the
responsible entity to remit the contributions and past accumulation to the
account of the respondent no.2/authority. Mr. Majumder, drawing
attention of this Court to para 27-AA of the said Scheme submits further
before this Court that Appendix -A of the said para 27 AA of the said
Scheme contains revised conditions for grant of exemption under Section
17 of the said Act and therefore none of the said revised conditions are
applicable to the writ petitioner which is not an exempted organization
under Section 17(1-A) of the said Act. It is thus submitted that the
proceeding and order Section 14 B of the said Act as conducted by the
respondent no.2 suffers from procedural irregularity. Mr. Mazunmder,
learned advocate for the writ petitioner also draws attention of this Court
to the Annexure P4 of the writ petition at page no 48 and 40. It is
submitted by Mr. Majumder that from the said Annexures it would reveal
that on December 27, 2016 the Provident Fund Authority issued
guidelines for processing the cases of surrender of Employees' Provident
Fund and therefore the Provident Fund Authority ought not to have
imposed damages and penalty under Section 14B of the Act for the period
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27.03.1998 to 22.06.2010 and 15.09.2010 to 31.10.2013 which are the
periods prior to the issuance of the aforesaid guidelines. In course of
argument Mr. Majumder, learned advocate for the writ petitioner relies
upon the following reported decisions:
i. Asha Sharma vs. Chandigarh Administration and Ors.
reported in (2011)10 SCC 86;
ii. M.P Power Management Company Ltd., Jabalpur vs. Sky
Power Southeast Solar India Pvt. Ltd and Ors. reported in
(2023) 2 SCC 703;
iii. Kelvin Jute Company Ltd. vs. Krishna Kumar Agarwal
and Ors reported in (2006) 2 CHN 358;
iv. WP No. 6138 (W) of 2009, order dated 14th November,
2011 passed by Calcutta High Court;
v. WP No.6138 (W) of 2009, order dated 5th February, 2018
passed by Calcutta High Court;
vi. WPA 10379 of 2021 by judgment dated 12th December,
2023 passed by Calcutta High Court; and
vii. Arup Bhuyan vs, State of Assam and Anr. reported in
(2023) 8 SCC 745.
11. It is submitted by Mr. Majumder that from the materials as placed
before this Court it would reveal that the action of the respondent no.2 is
not only arbitrary but also the provisions of Section 14B of the said Act is
totally inconsistent with Section 17(1-A) (iv) of the said Act as well as with
Article 14 of the Constitution of India and thus the same may be declared
ultravires and a necessary order may be passed by reading down Section
14B of the said Act prohibiting the respondent no.2/Authority from
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recovering the damages and interest as levied upon the writ petitioner
vide its order dated June 25, 2015.
12. Per contra, Mr. Prasad, learned advocate for the respondent/
Provident Fund Authority also places his reliance upon Section 17(1-A) as
well as Section 17(5) of the said Act. It is submitted by Mr. Prasad that
Section 17(5) of the said Act read with paragraph 28 of the said Scheme
clearly envisages the duty of the establishment whose exemption has been
cancelled and/or revoked to transfer the amount of accumulation to the
fund of the Provident Fund Authority within the statutory period and the
violation of which draws penal action under Section 14B as well as under
the other penal provisions of the said Act. It is submitted further on
behalf of the Provident Fund Authority that Section 17 of the said Act
read with Section 27A of the said Scheme clearly mandates that it is the
employer who shall have to establish the BOT and thus by no stretch of
imagination it can be said that BOT created and/or established by an
employer and /or by an establishment is different and distinct entity.
Drawing attention to Clause 22 and Clause 23 of Appendix A of para 27 A
of the said Scheme it is submitted by Mr. Prasad, learned advocate for the
respondent/Provident Fund that the employer of an erstwhile exempted
establishment cannot escape its liability for delayed deposit of
contributions and delayed transfer of past accumulation. It is submitted
by Mr. Prasad, learned advocate for the Provident Fund that from the
order impugned there is least possibility to find out any arbitrariness on
the part of the respondent no.2/Authority in view of the fact that prior to
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passing of the order dated June 25, 2015 two separate advance notices
have been sent to the writ petitioner and that due hearing was given to
the representative of the writ petitioner. It is further argued by Mr. Prasad
that while calculating the damages and interest as recoverable from the
writ petitioner no error in arithmetic calculation took place and that from
the materials as placed before this Court it cannot be said that Section
14B is at all inconsistent with any of the provisions of said Act and the
said Scheme and the same cannot be held to be violative of Article 14 of
the Constitution of India.
13. In course of his submission Mr. Prasad, learned advocate for the
respondent no.2/ Provident Fund Authority relied upon the following
reported decision :-
i. Dalgaon Agro Industries Ltd. ( Now known as Tasati Tea
Ltd.) vs. Union of India and Ors reported in (2005) 3 CHN
428 and
ii. Organo Chemical Industries and Anr. vs. Union of India
and Ors reported in (1979) 4 SCC 573.
14. Since not only the action of the Provident Fund Authority i.e. the
respondent no.2 but also the different provisions of the said Act and the
said Scheme have been challenged on the part of the writ petitioner, this
Court thinks that some of the relevant provision of the said Act as well as
of the said Scheme are required to be looked into for effective adjudication
of the instant lis. Some of the relevant Sections of the said Act are
enumerated below in verbatim:_
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"14B. Power to recover damages.--Where an employer
makes default in the payment of any contribution to the Fund
the ]Pension] Fund or the Insurance Fund] or in the transfer of
accumulations required to be transferred by him under sub-
section (2) of section 15 [or sub-section (5) of section 17] or in
the payment of any charges payable under any other provision
of this Act or of 5 [any Scheme or Insurance Scheme] or under
any of the conditions specified under section 17, [the Central
Provident Fund Commissioner or such other officer as may be
authorised by the Central Government, by notification in the
Official Gazette, in this behalf] may recover 7 [from the
employer by way of penalty such damages, not exceedingthe
amount of arrears, as may be specified in the Scheme:] 8
[Provided that before levying and recovering such damages, the
employer shall be given a reasonable opportunity of being
heard]:
[Provided further that the Central Board may reduce or waive
the damages levied under this section in relation to an
establishment which is a sick industrial company and in
respect of which a scheme for rehabilitation has been
sanctioned by the Board for Industrial and Financial
Reconstruction established under section 4 of the Sick
Industrial Companies (Special Provisions) Act, 1985,subject to
such terms and conditions as may be specified in the
Scheme.]"
17. Power to exempt.--(1) The appropriate Government may,
by notification in the Official Gazette and subject to such
conditions as may be specified in the notification, [exempt,
whether prospectively or retrospectively, from the operation] of
all or any of the provisions of any Scheme--
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(a) any [establishment] to which this Act applies if, in the
opinion of the appropriate Government, the rules of its
provident fund with respect to the rates of contribution are not
less favourable than those specified in section 6 and the
employees are also in enjoyment of other provident fund
benefits which on the whole are not less favourable to the
employees than the benefits provided under this Act or any
Scheme in relation to the employees in any other
[establishment] of a similar character; or
(b)............
(1-A) Where an exemption has been granted to an
establishment under clause (a) of sub-section (1),--
(a) the provisions of sections 6, 7A, 8 and 14B shall, so far as
may be, apply to the employer of the exempted establishment
in addition to such other conditions as may be specified in
the notification granting such exemption, and where such
employer contravenes, or makes default in complying with
any of the said provisions or conditions or any other
provisions of this Act, he shall be punishable under section
14 as if the said establishment had not been exempted under
the said clause (a);
(b) the employer shall establish a Board of Trustees for the
administration of the provident fund consisting of such
number of members as may be specified in the Scheme;
(c) the terms and conditions of service of members of the
Board of Trustees shall be such as may be specified in the
Scheme;
(d) the Board of Trustees constituted under clause (b) shall--
(i) maintain detailed accounts to show the contributions
credited, withdrawals made and interest accrued in respect of
each employee;
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(ii) submit such returns to the Regional Provident Fund
Commissioner or any other officer as the Central Government
may direct from time to time;
(iii) invest the provident fund monies in accordance with the
directions issued by the Central Government from time to
time;
(iv) transfer, where necessary, the provident fund account of
any employee; and
(v) perform such other duties as may be specified in the
Scheme.
(1-B).............
(1-C)............
(2)............
(2-A).........
(2-B).........
(3)..............
(3-A).............
(4).............
(5) Where any exemption granted under sub-section (1), sub-
section [(I-C)] [, sub-section (2), sub-section (2-A) or sub-section
(2-B)] is cancelled, the amount of accumulations to the credit of
every employee to whom such exemption applied, in the
provident fund [the [pension] fund or the insurance fund] of the
establishment in which he is employed [together with any
amount forfeited from the employer's share of contribution to
the credit of the employee who leaves the employment before
the completion of the full period of service] shall be transferred
within such time and in such manner as may be specified in
the Scheme or the [Pension] Scheme [or the Insurance Scheme]
to the credit of his account in the Fund or the [Pension] Fund
[or the Insurance Fund], as the case may be.
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(6)............."
15. In considered view of this Court para 27 AA of the said Scheme is
required to be looked into and the same is also reproduced herein below
in verbatim:-
27AA. Terms and conditions of exemption.-All exemptions
already granted or to be granted hereafter under section 17 of
the Act or under paragraph 27A of the scheme shall be subject
to the terms and conditions as given in the Appendix A.
Appendix "A"
Revised conditions for grant of exemption under section 17 of
the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952.
1.....
2.....
3.
4.
5. The employer shall transfer to the Board of Trustees the
contributions payable to the provident fund by himself and
employees at the rate prescribed under the Act from time to
time by the 15th of each month following the month for which
the contributions are payable. The employer shall be liable to
pay simple interest in terms of the provisions of Section 7Q of
the Act for any delay in payment of any dues towards the
Board of Trustees.
6...
7....
8....
9....
10....
11...
13
12...
13...
14...
15....
16.....
17. The Board of Trustees shall invest the monies of the
provident fund as per the directions of the government from
time to time. Failure to make investments as per directions of
the Government shall made the Board of Trustees separately
and jointly liable to surcharge as may be imposed by the
Central Provident Fund Commissioner or his representative.
18..........
19.........
20.
21...
22. The employer and the members of the Board of Trustees, at
the time of grant of exemption, shall furnish a written
undertaking to the RPFC in such format as may be prescribed
from time to time, inter alia, agreeing to abide by the conditions
which are specified and this shall be legally binding on the
employer and Board of Trustees, including their successors
and assignees, or such conditions as may be specified latter
for continuation of exemption.
23. The employer and the Board of Trustees shall also give an
undertaking to transfer the funds promptly within the time limit
prescribed by the concerned RPFC in the event of cancellation
of exemption. This shall be legally binding on them and will
make them liable for prosecution in the event of any delay in
the transfer of funds.
24.
25.
14
26......
27.
28.
29.
30..
28. Transfer of accumulations from existing Provident
Funds
(1) Every authority in charge of, or entrusted with the
management of, any Provident Fund in existence the
accumulations wherein are to be transferred to the Fund under
sub-section (2) of section 15 of the Act, [or sub-section (5) of
section 17 thereof, as the case may be] shall --
(i) send to the Commissioner a statement showing the amount
standing to the credit of each subscriber on the date of the
transfer, the total accumulations to the credit of subscribers
generally on that date and the advances, if any, taken by the
subscribers [within twenty-five days of the application of the
Scheme, or cancellation of exemption, as the case may be],
(ii) transfer to the Fund in the manner specified in sub-
paragraph (2) the total accumulations standing to the credit of
the subscribers in relation to each factory or other
establishment within ten days of the application of the Scheme,
or cancellation of the exemption, as the case may be, in case of
liquid cash in bank and within thirty days in case of securities,
and
(iii) transfer to the Central Board all pass books, books of
account and other documents relating to the said
accumulations.
(2) All accumulations standing to the credit of the subscribers,
howsoever invested, shall be transferred to the Fund by the
authority aforesaid in cash:
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Provided that where the whole or any part of such
accumulations consists of investments in Government
securities, or in securities guaranteed by appropriate
Government as regards repayment of principal and payment of
interest or in both, the authority making the transfer to the
Fund shall transfer those securities at the price for which they
were actually purchased or transfer a sum equivalent to such
price. In case, however, the whole or any part of such
accumulations is invested in National Savings Certificates or
National Plan Savings Certificates, the appreciated value of
such certificates at the time of the transfer will be taken into
account in determining the amount of the accumulations to be
transferred, provided that the difference between the face
value of such certificate and their appreciated value at the time
of the transfer has already been credited to the accounts of the
subscribers:
Provided further that where the whole or any part of such
accumulations consists of investments in securities bearing no
guarantee of an appropriate Government as regards repayment
of principal and payment of interest], the Central Government
may, in exceptional cases, allow acceptance of the transfer of
such securities from the authority making the transfer to the
Fund at the price for which they were actually purchased.
Explanation: The total amount of provident fund accumulations
includes interest thereon and the authority in charge of the
Fund shall transfer in cash any balance of interest on
investments which happens to be undistributed on the date of
the transfer, or realised or realisable for the period prior to the
registration of the securities in the name of the Central Board
of Trustees, Employees' Provident Fund.
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(3) Any cash transferred under sub-paragraph (2) shall be
deposited in any office or branch of the Reserve Bank of India
or the State Bank of India to the credit of the [Central Board],
and the receipt obtained in respect thereof shall be forwarded
to the Commissioner: Provided that where there is no office or
branch of either of the two Banks at the place where the
[factory or other establishment] is situated the amount shall be
credited to the Central Board by means of a Reserve Bank of
India Governmental Draft at par.
(4) The accumulations, transferred to the Fund in accordance
with this paragraph shall be credited to the account of each of
the members of the Fund, to the extent to which he may be
entitled thereto having regard to the statement furnished by
the authority aforesaid.
(5) When the accumulations in any such Provident Fund as is
referred to in subparagraph (1) have been so transferred to the
Fund, the Commissioner may, by notification in the Gazette of
India, declare that the subscribers of such Provident Fund have
now become members of the Fund and that the accumulations
aforesaid have now become vested in the Central Board."
16. Keeping in mind the aforesaid provisions of the said Act and of the
said Scheme if this Court makes an endeavour to look into the facts of the
instant writ petition it would reveal that admittedly Mayurakshi Gramin
Bank was an exempted establishment under Section 17 (1-A) of the said
Act and which is why the said Mayurakshi Gramin Bank established a
BOT in view of Section 17 (1-A) of the said Act and the said BOT of the
Mayurakshi Gramin Bank started its functioning as per provision of
Section 17(1-A) (d) of the said Act. With the implementation of the
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Employees' Pension Scheme , 1995 with effect from 16.11.1995 the said
Mayurakshi Gramin Bank stated deposing the contributions in the
pension fund maintained by the BOT of the said Mayurakshi Gramin
Bank. On February 26, 2007 by a notification of the Government of India
Mayurakshi Gramin Bank was amalgamated with the Paschim Banga
Gramin Bank and on and from 10.09.2007 the exemption of the then
Mayurakshi Gramin Bank has been revoked and according to the writ
petitioner Provident Fund contributions were thereafter deposited
prospectively and so far as the transfer of past accumulation lying with
the BOT is concerned several exchange of letters took place in between
16.01.2010 and 09.03.2013 regarding modalities of transfer.
17. In course of hearing it has not been contended on behalf of the writ
petitioner that there occurred no delay in transferring the Provident Fund
Contributions, Employees' Pension Fund Contributions, Employees'
Deposit Link Insurance Contribution and various administrative charges
on the part of the BOT. However, it has been contended that BOT is a
separate and distinct entity from the writ petitioner as well as from the
Mayurakshi Gramin Bank and the said BOT acts/acted independently
which is however being disputed by the respondent/authority.
18. It is settled position of law that by way of amalgamation the writ
petitioner/bank was entrusted with all the assets and liabilities of the
Mayurakshi Bank which is evident from the Clause 4 of the said
notification with reads as under:-
"4. (i) From the effective date of amalgamation, the
undertakings of the transferor Regional Rural Banks shall be
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transferred to and shall vest in the transferee Regional Rural
Bank,
(ii) The undertakings of the transferor Regional Rural Banks
shall include all assets, rights, powers, authorities and
privileges and all property movable and immovable, cash
balance, reserve funds, investments and all other rights and
interest in or arising out of such property, as are immediately
before the commencement of this notification, in the ownership,
possession, power or control of the transferor Regional Rural
Banks whether within or outside India and all books of
accounts, registers, records and all other documents of
whatever nature relating thereto and shall also be deemed to
include all borrowings, liabilities and obligations of whatever
kind then subsisting of the transferor Regional Rural Banks;
(iii) All contracts, deeds, bonds, agreements, guarantees,
powers of attorney, grants of legal representation and other
instruments of whatsoever nature subsisting or having effect
immediately before the commencement of this notification and
to which the transferor Regional Rural Banks are a party or
which are in favour of the transferor Regional Rural Banks
shall be in full force and effect against or in favour of the
transferee Regional Rural Bank and may be enforced or acted
upon as fully and effectively as if in the place of the transferor
Regional Rural Banks, the transferee Regional Rural Bank has
been a party thereto or as if they had been issued in favour of
the transferee Regional Rural Bank,
iv) If, on the effective date of amalgamation, any suit, appeal or
other proceedings of whatsoever nature in relation to any
business of the transferor Regional Rural Banks are pending
by, or against to, the transferor Regional Rural Banks, the
same shall not abate, be discontinued or be, in any way,
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prejudicially affected by reason of the transfer of the
undertaking of the transferor Regional Rural Banks or of
anything contained in this notification but the suit, appeal or
other proceedings may be continued. prosecuted and enforced
by, or against, the transferor Regional Rural Bank;
(v) Any reference to the transferor Regional Rural Banks in any
agreement, contract, conveyance, assurance, power of attorney
or any other document of whatsoever nature shall be deemed
to be a reference to the transferee Regional Rural Bank and the
rights and obligations of the transferor Regional Rural Bank
shall he deemed to be the rights and obligations of the
transferee Regional Rural Bank."
19. In view of such there is no hesitation to hold that with effect from
the date of notification of the amalgamation i.e. February 26, 2007 all the
past acts and deeds of Mayurakshi Gramin Bank binds the writ
petitioner i.e. Paschim Banga Gramin Bank. On perusal of Sub-clauses
22 and 23 of Appendix A of para 27AA of the said Scheme it reveals to
this Court that the present writ petitioner being the employer cannot
escape its liability by saying that BOT is an independent authority since
in view of the aforesaid two clauses the employer is equally duty bound to
perform his obligation on the basis of the written undertaking given to the
Provident Fund Authority failing which the employer is liable for
prosecution for delayed transfer of funds.
20. Though Mr. Majumder, learned advocate for the writ petitioner in
course of his argument vehemently contended that para 27A of the said
Scheme was incorporated with effect from October 30, 2003, it appears to
this Court that exemption in the name of Mayurakshi Gramin Bank stood
20
revoked on 10.09.2007 and notification of merger was published on
26.02.2007 and therefore the written undertaking as has been executed
by and/or ought to have been executed by the Mayurakshi Gramin Bank
equally binds the writ petitioner bank since the obligation of the
transferee rural bank i.e. Mayurakshi Gramin Bank shall be deemed to be
the obligations of the transferer bank (herein the writ petitioner) by virtue
of the notification dated 26.02.2007.
21. On conjoint perusal of the summons dated 31.12.2013 (Annexure
P5 to the writ petition), summons dated 12.03.2014 (Annexure P6 to the
writ petition) and the order dated 26.05.2015 being Annexure P7 to the
writ petition it reveals to this Court that it is the factual finding of the
respondent no.2/ authority that there occurred inordinate delay in
transferring the aforementioned fund and past accumulation to the
Provident Fund Authority by the BOT for which the writ petitioner being
the employer cannot escape its liability and thus the writ petitioner /bank
became liable for prosecution on account of delay in the transfer of funds
as per Clause 23 of Appendix A of Section 27 AA of the said Scheme.
22. As rightly pointed out by Mr. Prasad this Court thus finds no
inconsistencies in between provision of Section 14B and Section 17 (1-A)
of the said Act and by no stretch of imagination it can be said that Section
14B is also violative of Article 14 of the Constitution. On close scrutiny of
the entire proceeding as conducted by the respondent no.2/authority this
Court fails to find any arbitrariness on the part of the respondent
no.2/authority while passing the order under challenge and on the
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contrary it appears to this Court that due opportunity was given to the
officers of the writ petitioner/bank to defend their case.
23. Since the writ petitioner has also prayed to pass an appropriate
order to read down Section 14B of the said Act, the law of the land
relating to 'read down' is required to be looked into. In the reported
decision of Arup Bhuyan (supra) as cited form the side of the writ
petitioner the Hon'ble Supreme Court in its larger Bench expressed the
following :-
"59. Now so far as the reading down of Section 10(a) (i) of the
UAPA, 1967 by this Court in Arup Bhuyan is concerned, at the
outset it is required to be noted that such reading down of the
provision of a statute could not have been made without
hearing the Union of India and/or without giving any
opportunity to the Union of India.
60. When any provision of parliamentary legislation is read
down in the absence of the Union of India it is likely to cause
enormous harm to the interest of the State. If the opportunity
would have been given to the Union of India to put forward its
case on the provisions of Section 10(a)(i) of the UAPA, 1967, the
Union of India would have made submissions in favour of
Section 10(a) (i) of the UAPA including the object and purpose
for enactment of such a provision and even the object and
purpose of the UAPA. The submission made by Shri Parikh,
learned Senior Counsel relying upon the decision of this Court
in Sanjeev Coke22 that it is ultimately for the Court to interpret
and read down the provision to save any provision from
declaring as unconstitutional is concerned, it is true that it is
ultimately for the Court to interpret the law and/or particular
statute. However, the question is not the power of the Courts.
22
The question is whether can it be done without hearing the
Union of India?
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61. Even otherwise in absence of any challenge to the constitutional validity of Section 10(a)(i) of the UAPA there was no question of reading down of the said provision by this Court. Therefore, in the absence of any challenge to the constitutional validity of Section 10(a) (i) of the UAPA, 1967 there was no occasion for this Court to read down the said provision.
62. Even otherwise as observed and held by this Court in Subramanian Swamy v. Raju23 reading down the provision of a statute cannot be resorted to when the meaning of a provision is plain and unambiguous and the legislative intent is clear. This Court has thereafter laid down the fundamental principle of "reading down doctrine" as under: (SCC p. 420, para 61) "61. Courts must read the legislation literally in the first instance. If on such reading and understanding the vice of unconstitutionality is attracted, the courts must explore whether legislative omission. If such an intendment can be reasonably implied without undertaking what, unmistakably, would be a legislative exercise, the Act may be read down to save it from unconstitutionality."
At the cost of repetition, it is observed that reading down a particular statute even to save it from unconstitutionality is not permissible unless and until the constitutional validity of such provision is under challenge and the opportunity is given to the Union of India to defend a particular parliamentary statute.
63. In view of the above in all the aforesaid three decisions, this Court ought not to have read down Section 10(a)(i) of the UAPA, 1967 more particularly when neither the constitutional 23 validity of Section 10 (a)(i) of the UAPA, 1967 was under
challenge nor the Union of India was heard."
24. Admittedly in the instant writ petition the writ petitioner has raised the issue of unconstitutionality of Section 14B of the said Act and therefore there cannot be any predicament on the part of the writ petitioner to pray for reading down Section 14B of the said Act. However as discussed (supra) on comparative study of different provisions of the said Act vis-à-vis the said Scheme it never appears to this Court that Section 14B of the said Act is in anyway inconsistent with Section 17(1-A) of the said Act as well as with the different provisions of the said Scheme and thus this Court finds least possibility for reading down the aforesaid Section as prayed for by the writ petitioner.
25. In view of the discussion made hereinabove this Court finds no illegality and/or irregularity and/or irrationality and/or arbitrariness on the part of the respondent no.2 in passing the order dated 25.06.2015 thereby imposing damages under Section 14B and interest under Section 7(q) of the said Act upon the writ petitioner.
26. The instant writ petition is thus devoid of merit and is thus hereby dismissed.
27. There shall be however no order as to costs.
28. Urgent Photostat certified copy of this judgement, if applied for, be given to the parties on completion of usual formalities.
(PARTHA SARATHI SEN, J.)