State Consumer Disputes Redressal Commission
Liquidator, The Kotkapura Cooperative ... vs Surjit Singh & Ors. on 19 May, 2011
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SCO NO.3009-12, SECTOR 22-D, CHANDIGARH.
First Appeal No.2058 of 2010.
Date of Institution: 02.12.2010.
Date of Decision: 19.05.2011.
Liquidator, the Kotkapura Cooperative Spinning Mill Limited, Sandhwan, District
Faridkot, now C/o Spinfed Punjab, SCO No.22, 1st Floor, Sector 17-E,
Chandigarh.
.....Appellant.
Versus
1. Surjit Singh aged about 45 years s/o Hari Ram r/o Village Sandhwan,
District Faridkot.
2. Bhairon Nath s/o Paras Nath r/o Village Sandhwan, District Faridkot.
3. Khageshar Dass s/o Bal Kishan r/o Village Sandhwan, District Faridkot.
4. Tara Vati r/o Village Sandhwan, District Faridkot.
5. Ajit Bind r/o Village Sandhwan, District Faridkot.
6. Sham Babu r/o Village Sandhwan, District Faridkot.
7. Dharam Pal s/o Krishan Chand r/o Village Sandhwan, District Faridkot.
8. Shimla Devi r/o Village Sandhwan, District Faridkot.
9. Babu Ram s/o Lachhman Dass r/o Village Sandhwan, District Faridkot.
10. Mahesh s/o Ram Dayal r/o Village Sandhwan, District Faridkot.
11. Revti Ram s/o Siya Ram r/o Village Sandhwan, District Faridkot.
12. Chotey Roy r/o Village Sandhwan, District Faridkot.
13. Balwant Raj r/o Village Sandhwan, District Faridkot.
14. Vijay Shah r/o Village Sandhwan, District Faridkot.
15. Jag Lal r/o Village Sandhwan, District Faridkot.
16. Jaspal Singh r/o Village Sandhwan, District Faridkot.
17. Suresh Parshad r/o Village Sandhwan, District Faridkot.
.
....Respondents.
18. Regional Commissioner, EPF, Backside Kali Mata Mandir, near TV
Tower, Model Town, Bathinda.
.....Performa Respondents.
First Appeal No. 2058 of 2010 2
First Appeal against the order dated
15.04.2010 of the District Consumer
Disputes Redressal Forum, Faridkot.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Piare Lal Garg, Member.
Present:-
For the appellant : Sh. Puneet Kansal, Advocate .
Respondents no.1to 17 : Exparte.
For respondent no.18 : Sh. R.K. Syal, Advocate.
INDERJIT KAUSHIK, PRESIDING MEMBER:-
The Liquidator, The Kotkapura Cooperative Spinning Mill Limited (In short "the appellant") has filed this appeal against the order dated 15.04.2010 passed by the learned District Consumer Disputes Redressal Forum, Faridkot (in short "the District Forum").
2. Facts in brief are that Sh. Surjit Singh & others, respondent no.1 to respondent no.17/complainants (hereinafter called "the respondents no.1 to 17") filed a complaint u/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the appellant and respondent no.18, pleading that respondents no.1 to 17 were employees of Kotkapura Co-operative Spinning Mill Limited, Sandhwan, District Faridkot (hereinafter called as "the Mill"). The Mill was closed and the employees including respondents no.1 to 17 were retrenched in Fabruary, 1999. The EPF account numbers of the respondents were as under:-
Sr.No. Description EPF Account No. Respondent no.1 9529/2411 Respondent no.2 9529/434 Respondent no.3 9529/453 Respondent no.4 9529/3719 Respondent no.5 9529/880 Respondent no.6 9529/1059 Respondent no.7 9529/695 Respondent no.8 9529/3949 Respondent no.9 9529/1378 First Appeal No. 2058 of 2010 3 Respondent no.10 9529/1698 Respondent no.11 9529/3041 Respondent no.12 9529/3143 Respondent no.13 9529/323 Respondent no.14 9529/2832 Respondent no.15 9529/1606 Respondent no.16 9529/167 Respondent no.17 9529/1453
3. During the service period of respondents no.1 to 17, the Mill regularly deducted EPF from their salary and it was the duty of the Mill to deposit the EPF with respondent no.18 along with employer's share equal to the amount deducted from the salary of respondents no.1 to 17.
4. After retrenchment, respondents no.1 to 17 withdrew their EPF but later on, it transpired that EPF deducted from the salary of respondents no.1 to 17 during the period 1996 to 1998 along with employer's share was not deposited by the appellant-Mill. The respondents no.1 to 17 requested the respondent no.18 as well as also made written applications to pay the amount along with interest but the same was not paid and there is deficiency in service on the part of the appellant and respondent no.18 for not paying the above mentioned amount of EPF as well as interest.
5. The respondents no.1 to 17 suffered financial loss, inconvenience and mental agony on account of the deficiency of service on the part of the appellant as well as respondent no.18 and they are liable to pay compensation to the tune of Rs.10,000/-. Respondents no.1 to 17 are consumers of the appellant and respondent no.18 being beneficiary of services provided by respondent no.18 and prayed that the appellant and respondent no.18 be directed to pay interest on the amount of EPF from the date of deduction of EPF till realization with Rs.10,000/- as compensation and further to pay litigation expenses.
6. In the reply filed on behalf of the appellant, legal objections were taken that respondents no.1 to 7 are not consumers of the appellant, nor there is any contract between respondents no.1 to 17 and appellant and the complaint is First Appeal No. 2058 of 2010 4 liable to be dismissed. The complaint is not within limitation and is bad for mis- joinder of parties, as respondents no.1 to 17 have admitted that they are employee of the Kotkapura Co-operative Spinning Mill, Ltd., but have not impleaded the said employer as party in the complaint.
7. U/s 57 of the Punjab Cooperative Societies Act, 1961 (hereinafter called as "Act"), the Registrar Cooperative Societies, Punjab, vide order No.RCS/Mkg/MA-2/3/8/106-A dated 6.4.1998 brought the Mill under the process of winding up and appointed a liquidator vide order dated 06.04.1998 and as per section 82 (2) of the Act, the District Forum has no jurisdiction to entertain and try the complaint. The respondents no.1 to 17 have no cause of action or locus standi to file the complaint. The complaint is false and the appellant is entitled to special costs.
8. On merits, it was admitted that the respondents no.1 to 17 are ex- worker of the Mill and they were retrenched along with other employees of the mill on 22.02.1999 U/s 25(o) of the Industrial Dispute Act, because the Mill was running into losses and the total accumulated losses on 31.3.1997, were Rs.1575-91 lacs against the total investment of Rs.531-63 lacs and the electric connection of the Mill was disconnected for non payment of the power bill by the Mill and the Liquidator was appointed on 06.04.1998.
9. The EPF account numbers of the respondents no.1 to 17 as mentioned in the complaint were admitted and it was further pleaded and the appellant has deposited the share of EPF of the employees with respondent no.18. The Mill management had already deposited a sum of Rs.27,39,569-95 of the share of EPF of employees as well as employer's share including that of respondents no.1 to 17 for the period March, 1996 to September, 1996 in the year 1996 and the balance amount of Rs.98,48,810-10 for the period October, 1996 to February, 1999 was deposited by the appellant with respondent no.18 on 22.06.2006 and the amount of EPF was deposited by the Mill with respondent no.18 in the year 1996 to February, 1999, as per the list enclosed. First Appeal No. 2058 of 2010 5
10. The amount of EPF of respondents no.1 to 17 has already been deposited by their original employer as well as by the appellant with respondent no.18 and as such, there is no deficiency in service on the part of the appellant. Respondents no.1 to 17 are entitled to receive the same from respondent no.18. Respondents no.1 to 17 have claimed the amount for the period 1996 to 1998 by filing this complaint in the year 2009 i.e. after the lapse of 11 years and as such, the complaint is hopelessly time barred. The appellant has been unnecessarily dragged into the litigation and prayed that the complaint be dismissed.
11. In the reply filed on behalf of respondent no.18, it was admitted that respondents no.1 to 17 were having EPF Accounts as mentioned in the complaint and it was the responsibility of establishment to deduct and deposit dues with the answering respondent. The establishment of respondents no.1 to 17 and others has deposited the EPF dues for the period 1996-97 to 1998-99 during June, 2006 and payment of this amount was released with up to date interest to respondents no.1 to 10, 12 to 14, 16 and 17 as mentioned in the written reply. Regarding releasing of EPF dues of remaining two respondents no. 11 & 15 namely Sh. Revti Ram bearing EPF Account No. PN/9529/3041 and Sh. Jag Lal bearing EPF Account No. PN/9529/1606, it is submitted that their claim application i.e. Form-19 are not available in the office record. They may be asked to apply in Form-19 duly attested by their ex-employer and as soon as their applications are received, their EPF dues alongwith up to date interest will be released. There is no deficiency in service on the part of opposite party No. 18 and it was prayed that complaint deserves to be dismissed with costs.
12. Parties led evidence in support of their respective contentions by way of affidavits and documents.
13. After going through the documents and material placed on file and after hearing the learned counsel for the parties, the learned District Forum observed that it was admitted fact that respondents no.1 to 17 (complainants) were employee of the Mill and the appellant stepped into the shoes of the Mill on First Appeal No. 2058 of 2010 6 its liquidation and no explanation much less satisfactory is forthcoming for delay of payment of EPF amount even after the appointment of liquidator on 26.3.1998. The appellant is deficient in providing service to respondents no.1 to 17, by not depositing the EPF amount at the time when it was due, and accepted the complaint against the appellant, directed it to pay compensation of Rs.1000/- each to all respondents no.1 to 17 for causing them harassment, within one month from the receipt of copy of the order, failing which the appellant was further directed to pay interest @ 9% p.a. on the above amount from the date of filing the complaint till realization. The appellant was further directed to disburse the amount of EPF in the case of Revti Ram and Jag Lal, respondents no.11 & 15 on filing of Form-19 by them and in case of respondent Mahesh and Jaspal Singh on supply of their correct address by their counsel within a period of two months from the receipt of copy of the order.
14. Aggrieved by the impugned order dated 15.04.2010, the appellant has come up in appeal.
15. We have gone through the pleadings of the parties, perused the record of the learned District Forum and heard the arguments of the learned counsel for the appellant and respondents no.18.
16. It was contended on behalf of the appellant that respondents no.1 to 17 were employees of the Mill and due to losses, winding up order was passed on 06.04.1998 by the Registrar, Co-operative Societies and in February, 1999, all the employees, including respondents no.1 to 17, were retrenched. The respondents no.1 to 17 have filed this complaint for the payment of EPF dues for the period 1996 to 1998 and the complaint is hopelessly time barred. They have no cause of action to file the present complaint. It was further contended that respondents no.1 to 17 were employees of the Mill and are not covered under the definition of 'consumer'. The Mill was depositing the share deducted from their salary after adding its own share, with respondent no.18 and there is no deficiency in service, nor the deduction and deposit was for any consideration First Appeal No. 2058 of 2010 7 and the relation of the Mill and respondents no.1 to 17, is that of master and servant. The finding of the District Forum that being employees, respondents no.1 to 17 are consumers, is not correct. The Mill was under the process of winding up and the liquidator was appointed and after completion of the winding up process and selling the assets of the Mill, the appellant deposited the balance amount of EPF with respondent no.18 on 22.06.2006 and the balance amount of EPF along with interest has already been paid to respondents no.1 to 17. No harassment was caused and the appellant or the Mill was not liable to pay any compensation.
17. Respondents no.1 to 17 have not contested the appeal and were proceeded against exparte.
18. On behalf of respondent no.18, it was contended that entire dues of EPF as well as interest have already been paid to respondents no.1 to 17. The appellant Mill was under winding up process and the payment was made by the liquidator on the priority basis as per the rules and regulations.
19. We have considered the submissions made by the learned counsel for the appellant and respondent no.18.
20. Admittedly, respondents no.1 to 17 were employees of the Mill and were members of Employees Provident Fund Scheme. The Mill was deducting the share of EPF from their salary and after adding its own share, was depositing the EPF amount with respondent no.18. The Registrar, Co-operative Societies, Punjab, vide its order dated 06.04.1998 brought the Mill under the process of winding up and a liquidator was appointed on the same day. Respondents no.1 to 17 along with other employees were retrenched on 22.02.1999 under the provisions of section 25(o) of the Industrial Dispute Act. The appellant deposited the balance amount of EPF on 22.06.2006 and lastly, the amount with upto date interest was transferred to the EPF account numbers of respondents/ complainants except in the case of respondents namely Sh. Revti Ram bearing EPF Account No. PN/9529/3041 and Sh. Jag Lal bearing EPF Account No. First Appeal No. 2058 of 2010 8 PN/9529/1606 for want of Form-19 from the employer and respondent Mahesh and Jaspal Singh for want of their addresses/whereabouts.
21. Learned counsel for respondent no.18 has produced a letter dated 29.04.2011 written by Employees Provident Fund Organization as per which the above respondents no.10, 11, 15 and 16 have been paid the amounts as under:-
Names Account No. Amount Cheque No. Dated Mahesh 9529/1698 Rs.17978/- 224570 18.09.2009 Revti Ram 9529/3041 Rs.16,660/- 229132 04.12.2009 Jaspal Singh 9529/167 Rs.18,936/- 224563 18.09.2009 Jaglal 9529/1606 Rs.18,637/- 240151 28.06.2010
22. Much emphasis was laid during the arguments by the learned counsel for the appellant that the complaint is hopelessly time barred and has been filed after 11 years, for claiming the amount for the period 1996 to 1998. The arguments of the learned counsel for the appellant, are not tenable because the payment of interest on the EPF amount was made to the respondents/complainants in the months of September and October, 2009, as admitted by respondent no.18 in its reply, whereas the present complaint was filed on 17.08.2009. Thus, the cause of action continued till the last payment was made and it seems that the entire payment of the interest due has been made on filing of the present complaint. Thus, the complaint cannot be said to be time barred.
23. This fact is further corroborated as the Mill was under the winding up process and the liquidator was appointed on 06.04.1998 and after appointment of the liquidator, he has taken over all the assets and liabilities of the Mill. Later on, the payments were to be made as per the rules and the established law and the liquidator did so and deposited the share of the Mill with EPF authorities on 22.06.2006 and thereafter, the payments were made including that of the interest on the above date.
24. The next question to be decided is whether respondents no.1 to 17 were consumers of the Mill or not and whether the Mill was doing it for some First Appeal No. 2058 of 2010 9 consideration and getting the benefit or not? This question was answered by the Hon'ble National Commission in case "Capt. C.P. Gupta Vs Indian Airlines Provident Fund Trust, through its Principal Officer & Others", 2003(3) CLT- 46(NC). The Hon'ble National Commission discussed and distinguished the judgment of the Hon'ble Supreme Court in Shiv Kumar Joshi's case reported in 1 (1996) CPJ-199 (Regional Provident Fund Commissioner Vs Shiv Kumar Joshi) and the relevant Para Nos.12, 13 and 16 are reproduced as under:-
"12. Supreme Court also rejected the argument that Regional Provident Fund Commissioner, being Central Government, could not be held to be rendering service within the meaning and Scheme of the Act. Finally the Court said:-
"A perusal of the scheme clearly and unambiguously indicate that it is a 'service' within the meaning of Section 2(1) (o) and the member is a consumer within the meaning of section 2(1) (d) of the Act. It is, therefore, without any substance to urge that the services under the scheme, are rendered free of charge and, therefore, the scheme is not a 'service' under the Act".
13. We have now to analyze the provisions of the Service Regulations and Provident Fund Regulations keeping in view the principles laid by the Supreme Court in the case of Shiv Kumar Joshi. However, for that we might as well refer to the Trust established by the Indian Airlines for the purpose of vesting the provident fund in the Trustee- for the benefit of the employees. Reference in this connection may be made to Section 2(38) of the Income Tax Act, 1962 which defines recognized provident fund and to various other provisions in that Act which help the employer not to pay income-tax on the contributions made by it to the provident fund. An employee also gets benefits under the provisions of the Income-tax Act.
16. To that extent, there may be difference in the facts of the case in Shiv Kumar Joshi and the present one. But the facts remain that Supreme Court observed it is immaterial as to who meets the expenses of administering the Fund whether it is employer or the employee, particularly, when fund has been established for the benefit of the employee. In the present case, the employer also gets benefit of deduction in income-tax on the contribution made by it to the Fund and also the expenses incurred for maintaining the Fund. It is, therefore, clear that there is a consideration. In our view, State Commission was not First Appeal No. 2058 of 2010 10 correct in holding otherwise. Captain Gupta is a 'consumer' and consumer dispute has been raised".
Thus, applying the above ratio of the law to the facts and circumstances of the present case, the EPF was deducted by the Mill from the salary of the employee and after adding its own share, it was being deposited with respondent no.18 and the Mill was getting the benefit of income-tax on the contribution made by it to the EPF scheme. The employee also gets the benefit under the provisions of Income-tax Act. Therefore, respondents no.1 to 17 were 'consumers' of the Mill in whose steps the appellant has stepped in.
25. The District Forum awarded Rs.1000/- each as compensation to respondents no.1 to 17 against the appellant for not depositing the EPF amount collected from its employees, for about eight years and on failure to pay, further awarded the interest. The learned District Forum while passing the impugned order under appeal, altogether ignored the fact that the Mill was under the winding up process from 06.04.1998 onwards and on that very date, the liquidator was appointed and after appointment of the liquidator, it was for the liquidator to pay the debts on priority basis as per the law. Once the liquidator has been appointed, the Mill could not make payment of its contribution, as the Mill was under winding up process and the management of the Mill had no control on the fiscal matters after appointment of the liquidator. The liquidator, on priority basis, ultimately deposited the balance amount with respondent no.18 on 22.06.2006 and respondent no.18, accordingly, made the payments including the interest. So, the Mill or the appellant cannot be said to be at fault for not making the payment or delaying the payment of the EPF dues and cannot be held liable for delay, if any, because during this period, the liquidator was proceeding with the winding up process of the Mill in accordance with the provisions of law and respondents no.1 to 17 have no right to claim any compensation from the Mill or the appellant. As such, the impugned order under appeal passed by the District Forum, being erroneous, cannot be sustained.
First Appeal No. 2058 of 2010 11
26. Accordingly, the appeal is accepted and the impugned order under appeal dated 15.04.2010 passed by the District Forum, is set aside. Consequently, the complaint filed by respondents no.1 to 17(complainants) is dismissed. No order as to costs.
27. The appellant had deposited an amount of Rs.500/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the appellant by way of a crossed cheque/demand draft after the expiry of 45 days.
28. The arguments in this appeal were heard on 16.05.2011 and the order was reserved. Now the order be communicated to the parties.
(Inderjit Kaushik) Presiding Member (Piare Lal Garg) Member May 19, 2011.
(Gurmeet Singh) First Appeal No. 2058 of 2010 12