Madras High Court
M/S. Skm Animal Feeds And Foods (India) ... vs The Assistant Pf Commissioner on 27 January, 2021
Author: P.D. Audikesavalu
Bench: P.D. Audikesavalu
W.P. No. 35850 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 01.10.2020 Pronounced on : 27.01.2021
CORAM
THE HON'BLE MR. JUSTICE P.D. AUDIKESAVALU
W.P. No. 35850 of 2019
and
W.M.P. Nos. 36752 and 36753 of 2019
and
W.M.P. No. 1976 of 2020
M/s. SKM Animal Feeds and Foods (India) Private Limited,
Mr. N. Parameshwaran,
Rep. by Assistant General Manager,
101, Ireniyan Street,
Opp. To Manickam Vasanga Colony,
Karur Bye Pass Road,
Erode – 638 104. ... Petitioner
-vs-
1. The Assistant PF Commissioner,
Regional Office,
S.J. Plaza,
Swarnapuri,
Salem – 636 004.
2. The Branch Manager,
HDFC Bank Ltd.,
No. 141, Sathy Road,
Opp to Bus Stand,
Erode – 638 003. ... Respondents
Prayer:- Writ Petition filed under Article 226 of the Constitution of India praying
to issue a Writ of Certiorarified Mandamus, calling for the records in
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W.P. No. 35850 of 2019
CB/RO/SLM/COMP-II/17247/E-II/8F/2019 dated 19.12.2019 on the file of the
First Respondent served to the Second Respondent and quash the same and
consequently direct the First Respondent to refund the sum of Rs.1,61,92,768/-
(Rupees One Crore, Sixty One Lakh Ninety Two Thousand Seven Hundred and
Sixty Eight Only) collected coercively through the Second Respondent from the
Petitioner's bank account on 23.12.2019. (Prayer amended as per order dated
24.02.2020 in W.M.P. No. 5441 of 2020)
For Petitioner : Mr. T.Balaji
For Respondents : Mr. R.Thirunavukkarasu,
Standing Counsel (for R1)
Mr. C.Mohan,
for M/s. King and Patridge (for R2)
ORDER
(through video conference) Heard Mr. T.Balaji, Learned Counsel for the Petitioner, Mr. R.Thirunavukkarasu, Learned Standing Counsel appearing for the First Respondent and Mr. C.Mohan, Learned Counsel for the Second Respondent and perused the materials placed on record, apart from the pleadings of the parties.
2. The Petitioner, who was aggrieved by Order No. CB/RO/SLM/COMP-I/ SEC 7A/17247/E-2/2019 dated 17.10.2019 passed by the Regional Provident 2/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 Fund Commissioner - I under Section 7-A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the 'EPF Act' for short), had preferred appeal against that order on 13.12.2019 in EPFA No. 282 of 2019 under Section 7-I of the EPF Act before the Central Government Industrial Tribunal cum Labour Court, Chennai (hereinafter referred to as the 'Appellate Authority' for short) within the prescribed period of limitation of 60 days from its receipt in terms of Rule 7(2) of the Employees' Provident Fund Appellate Tribunal (Procedure) Rules, 1997. As per Section 7-O of the EPF Act, the Petitioner has to deposit 75% of the amount that had been determined in the order impugned in that appeal as condition for entertaining the same and the Appellate Authority for reasons to be recorded in writing has discretion to waive or reduce that amount. According to the Petitioner, apart from such application for waiver, it had also filed another application for stay of the order impugned in the appeal till its disposal.
3. The First Respondent, viz., Assistant Provident Fund Commissioner, in the interregnum, proceeded to issue Order No. CB/RO/SLM/COMP-II/17247/E-II/ 8F/2019 dated 19.12.2019 in the exercise of powers under Section 8-F of the EPF Act attaching the sum of Rs. 1,61,92,768/- in the bank account 3/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 No. 02320330000255 held by the Petitioner with the Second Respondent, viz., HDFC Bank, towards recovery of provident fund dues as determined in the Order No. CB/RO/SLM/ COMP-I/SEC 7A/17247/E-2/ 2019 dated 17.10.2019 passed by the Regional Provident Fund Commissioner - I. The Second Respondent by letter dated 19.12.2019 sent a copy of the said order of attachment to the Petitioner, who claims that the First Respondent had not informed the same directly. Aggrieved thereby, the Petitioner has filed this Writ Petition initially challenging the said Order No. CB/RO/SLM/COMP-II/17247/E-II/ 8F/2019 dated 19.12.2019 issued by the First Respondent.
4. This Court at the time of admission on 30.12.2019, while directing notice to be issued to the Respondents, had granted an order of interim stay in W.M.P. No. 36753 of 2019. However, inasmuch as the order dated 19.12.2019 issued by the First Respondent had specifically mentioned that in the event of non-compliance of the requirements of that order, the Second Respondent would be deemed to be the defaulter to the extent of the amount in default under the provisions of Section 8-F(3)(x) of the EPF Act and further action to recover that amount as if it was arrears due from the Second Respondent would be initiated as provided under Sections 8-B to 8-E of the EPF Act, the Second Respondent was 4/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 constrained to make immediate payment of the sum of Rs. 1,61,92,768/- by D.D. No. 022113 dated 23.12.2019 to the First Respondent, even before the said interim order was passed by this Court. In furtherance thereto, the First Respondent by Order No. CB/RO/SLM/COMP-II/17247/E-II/2019 dated 24.12.2019 informed the Second Respondent with a copy to the Petitioner that the earlier order dated 19.12.2019 issued by him was revoked.
5. In that backdrop, the Petitioner made an application in W.M.P. No. 5441 of 2020 for amending the relief sought in the Writ Petition as follows:-
" For the reason stated in the accompanying affidavit it is therefore prayed that this Hon'ble Court may be pleased to issue a Writ of Certiorarified Mandamus, and to call for the records in CB/RO/SLM/COMP-II/17247/E-II/8F/2019 dated 19.12.2019 on the file of the First Respondent served to the Second Respondent and quash the same and consequently direct the First Respondent to refund the sum of Rs.1,61,92,768/- (Rupees One Crore, Sixty One Lakh Ninety Two Thousand Seven Hundred and Sixty Eight Only) collected coercively through the Second Respondent from the Petitioner's bank account on 23.12.2019 and pass such further or 5/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 other orders deem fit and proper in the circumstances of the case and thus render justice."
This Court by order dated 24.02.2020 permitted such amendment to be carried out.
6. The Appellate Authority had also passed an order dated 21.02.2020 in EPFA No. 282 of 2019, which reads as follows:-
" Appeal is admitted subject to deposit of 60% of the dues determined in the Impugned Order by the Appellant before the Respondent on or before 30.04.2020.
The operation of the Impugned Order No. CB/RO/SLM/ COMP-I/SEC 7A/17247/E-2/2019 dtd. 25.10.2019 is stayed till 30.04.2020. The notice under 8F No. CB/RO/SLM/COMP-II/17247/ E.II/8F/2019 dtd. 19.12.2019 if issued be recalled subject to deposit of the amount by the Appellant before it. The Respondent is directed not to take any coercive step against the Appellant till 30.04.2020.
List for compliance on 30.04.2020."
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https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 When the aforesaid events that had taken place was brought to the notice of this Court during the hearing of this Writ Petition on 07.08.2020, the following self-explanatory order was passed:-
" Though it is contended that the First Respondent has already revoked the impugned order No. CB/RO/SLM/COMP-II/ 17247/E.II/8F/2019 dated 19.12.2019 by issuing another order No.CB/RO/SLM/COMP-II/17247/E-II/2019 dated 24.12.2019, it is borne out from the record that the entire amount of Rs.1,61,92,768/- determined in the order No. CB/RO/SLM/COMP-I/SEC 7A/17247/ E- 2/2019 dated 25.10.2019 has been realized on 23.12.2019 from the account of the Petitioner maintained with the Second Respondent.
2. It has also been brought to notice that after the filing of the Writ Petition, the Central Government Industrial Tribunal -cum- Labour Court, Chennai (hereinafter referred to as the 'Tribunal' for short) by order dated 21.02.2020 in EPFA No. 282 of 2019 has directed the First Respondent to recall the order No. CB/RO/SLM/ COMP-II/17247/E.II/8F/2019 dated 19.12.2019, which is impugned in this Writ Petition, subject to deposit of 60% of the amount payable 7/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 under the order No. CB/RO/SLM/COMP-I/SEC 7A/17247/E-2/2019 dated 25.10.2019 as condition for staying that order. This would obvious mean that in terms of the aforesaid order passed by the Tribunal, it is incumbent upon the First Respondent to have refunded the excess amount of 40% already collected by restoring payment to the account of the Petitioner maintained with the Second Respondent.
The First Respondent shall file a report of compliance of the action taken in this regard, before the next hearing.
Post the matter under the caption 'Provident Fund (Bank) cases' on 14.08.2020."
The compliance of the said order has been reported to this Court during the hearing on 24.08.2020. As a consequence, the amended relief sought in the Writ Petition does not survive for examination.
7. It is, however, pointed out by the Learned Counsel for the Petitioner that the hasty manner in which the First Respondent proceeded with the recovery action without enabling the Petitioner to avail relief from the Appellate Authority cannot be affirmed. In support of the said contention, the decisions of this Court 8/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 in Pyramid Saimira Theatre Ltd., -vs- Regional Provident Fund Commissioner, Chennai [(2009) 3 LLN 483] and Q Sources Global Consulting Pvt. Ltd., -vs- Regional Provident Fund Commissioner II, Chennai (Order dated 01.08.2016 in W.P. No. 32054 of 2015) have been cited, where it has been held that the recovery proceedings would have to be kept in abeyance during the period of limitation prescribed for filing appeal before the Appellate Authority.
8. Learned Counsel for the Second Respondent, buttressing the said contention of the Learned Counsel for the Petitioner, has brought to notice that the threat of holding the garnishee as deemed defaulter in the initial order of attachment itself and passing further orders immediately for attaching the salaries of the officials of the Second Respondent in the event of non-compliance created a piquant situation, which is not in accordance with the prescribed procedure for recovery.
9. Combating the said grievance sought to be ventilated by the Petitioner and the Second Respondent, it is highlighted by the Learned Standing Counsel appearing for the First Respondent that the rigour of the decisions of the Learned Single Judges of this Court in Pyramid Saimira Theatre Ltd., -vs- Regional 9/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 Provident Fund Commissioner, Chennai [(2009) 3 LLN 483] and Q Sources Global Consulting Pvt. Ltd., -vs- Regional Provident Fund Commissioner II, Chennai (Order dated 01.08.2016 in W.P. No. 32054 of 2015) have been diluted in appeal by the Division Benches of this Court in Regional Provident Fund Commissioner, Chennai -vs- Pyramid Saimira Theatre Ltd. (Judgment dated 01.04.2015 in W.A. No. 1337 of 2009) and Regional Provident Fund Commissioner - II -vs- Q Sources Global Consulting Pvt. Ltd. (Judgment dated 30.07.2018 in W.A. No. 1284 of 2016) by observing that the said rulings have to be confined to the peculiar fact situations of those cases. The judgment of the Full Bench of the Gujarat High Court in Employees Provident Fund Organization
-vs- Rollwell Forge Ltd. [(2011) 131 FLR 525] has been relied upon to fortify that there is no legal bar for proceeding with recovery during the period of limitation for filing appeal before the Appellate Authority.
10. Having regard to the aforesaid rival submissions made, there is considerable force in the submission made by the First Respondent that there cannot be any absolute bar in taking action for recovery during the period of limitation for filing appeal before the Appellate Authority for the reason that expeditious recovery of provident fund dues is of paramount importance, but that would not mean that the 10/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 authorities under the EPF Act can have unbridled powers to flout the prescribed procedure for recovery infringing the safeguard provided in Article 300-A of the Constitution of India, which mandates as follows:-
"300-A. Persons not to be deprived of property save by authority of law:-
No person shall be deprived of his property save by authority of law."
It cannot be gainsaid that the right to property of a person can be taken away only by a procedure established by law, which has to be fair and reasonable and not arbitrary. At this juncture, it would be appropriate to quote the relevant passages from the decision of the Hon'ble Supreme Court of India in Ram Kishun -vs- State of Uttar Pradesh [(2012) 11 SCC 511], which read as follows:-
"Recovery of public dues
13. Undoubtedly, public money should be recovered and recovery should be made expeditiously. But it does not mean that the financial institutions which are concerned only with the recovery of their loans, may be permitted to behave like property dealers and be permitted further to dispose of the secured assets in any 11/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 unreasonable or arbitrary manner in flagrant violation of the statutory provisions.
14. A right to hold property is a constitutional right as well as a human right. A person cannot be deprived of his property except in accordance with the provisions of a statute. (Vide Lachhman Dass
-vs- Jagat Ram [(2007) 10 SCC 448] and State of M.P. -vs- Narmada Bachao Andolan [(2011) 7 SCC 639]. Thus, the condition precedent for taking away someone's property or disposing of the secured assets, is that the authority must ensure compliance with the statutory provisions."
Referring to the same, the Hon'ble Supreme Court of India in the decision in Mathew Varghese -vs- M.Amirtha Kumar [(2014) 5 SC 610] has held as follows:-
"43. The above principles laid down by this Court also make it clear that though the recovery of public dues should be made expeditiously, it should be in accordance with the procedure prescribed by law and that it should not frustrate a constitutional right, as well as the human right of a person to hold a property and 12/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 that in the event of a fundamental procedural error occurred in a sale, the same can be set aside."
11. In this backdrop, it requires to be noticed that while Section 8, 8-A to 8-F of the EPF Act provides substantive provisions conferring powers for recovery of provident fund dues, the procedure for recovery has been stipulated in Section 8-G of the EPF Act, which reads as follows:-
8G. Application of certain provisions of Income-tax Act:-
The provisions of the Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time, shall apply with necessary modifications as if the said provisions and the rules referred to the arrears of the amount mentioned in section 8 of this Act instead of to the income-tax:
Provided that any reference in the said provisions and the rules to the “assessee” shall be construed as a reference to an employer as defined in this Act."
13/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 In the context of attachment of the bank account of the Petitioner with the Second Respondent for the recovery of the provident amount dues by the First Respondent, it would be necessary to look into Rules 2, 3, 4, 5, 8, 11, 12, 13, 20, 21, 22, 26, 28, 30 and 47 of the Second Schedule to the Income Tax Act, 1961, which are extracted below:-
"2. Issue of notice:-
When a certificate has been received by the Tax Recovery Officer from the Assessing Officer for the recovery of arrears under this Schedule, the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule.
3. When certificate may be executed:-
No step in execution of a certificate shall be taken until the period of fifteen days has elapsed since the date of the service of the notice required by the preceding rule:
Provided that, if the Tax Recovery Officer is satisfied that the defaulter is likely to conceal, remove or dispose of the whole or any 14/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 part of such of his movable property as would be liable to attachment in execution of a decree of a civil court and that the realisation of the amount of the certificate would in consequence be delayed or obstructed, he may at any time direct, for reasons to be recorded in writing, an attachment of the whole or any part of such property:
Provided further that if the defaulter whose property has been so attached furnishes security to the satisfaction of the Tax Recovery Officer, such attachment shall be cancelled from the date on which such security is accepted by the Tax Recovery Officer.
4. Mode of recovery:-
If the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realise the amount by one or more of the following modes:-
(a) by attachment and sale of the defaulter’s movable property;
(b) by attachment and sale of the defaulter’s immovable property;
(c) by arrest of the defaulter and his detention in prison; 15/30
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(d) by appointing a receiver for the management of the defaulter’s movable and immovable properties.
5. Interest, costs and charges recoverable:-
There shall be recoverable, in the proceedings in execution of every certificate,
(a) such interest upon the amount of tax or penalty or other sum to which the certificate relates as is payable in accordance with sub-section (2) of section 220, and
(b) all charges incurred in respect of
(i) the service of notice upon the defaulter to pay the arrears, and of warrants and other processes, and
(ii) all other proceedings taken for realising the arrears.
...
8. Disposal of proceeds of execution:-
(1) Whenever assets are realised by sale or otherwise in execution of a certificate, the proceeds shall be disposed of in the following manner, namely:-
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(a) they shall first be adjusted towards the amount due under the certificate in execution of which the assets were realised and the costs incurred in the course of such execution;
(b) if there remains a balance after the adjustment referred to in clause (a), the same shall be utilised for satisfaction of any other amount recoverable from the assessee under this Act which may be due on the date on which the assets were realised; and
(c) the balance, if any, remaining after the adjustments under clauses (a) and (b) shall be paid to the defaulter. (2) If the defaulter disputes any adjustment under clause (b) of sub-rule (1), the Tax Recovery Officer shall determine the dispute.
...
11. Investigation by Tax Recovery Officer:-
(1) Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection:
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https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed.
(2) Where the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit.
(3) The claimant or objector must adduce evidence to show that
(a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or
(b) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question.
(4) Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of 18/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.
(5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim.
(6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive.
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12. Removal of attachment on satisfaction or cancellation of certificate:-
Where
(a) the amount due, with costs and all charges and expenses resulting from the attachment of any property or incurred in order to hold a sale, are paid to the Tax Recovery Officer, or
(b) the certificate is cancelled, the attachment shall be deemed to be withdrawn and, in the case of immovable property, the withdrawal shall, if the defaulter so desires, be proclaimed at his expense, and a copy of the proclamation shall be affixed in the manner provided by this Schedule for a proclamation of sale of immovable property.
13. Officer entitled to attach and sell:-
The attachment and sale of movable property and the attachment and sale of immovable property may be made by such persons as the Tax Recovery Officer may from time to time direct. ...
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20. Warrant:-
Except as otherwise provided in this Schedule, when any movable property is to be attached, the officer shall be furnished by the Tax Recovery Officer (or other officer empowered by him in that behalf) a warrant in writing and signed with his name specifying the name of the defaulter and the amount to be realised.
21. Service of copy of warrant:-
The officer shall cause a copy of the warrant to be served on the defaulter.
22. Attachment:-
If, after service of the copy of the warrant, the amount is not paid forthwith, the officer shall proceed to attach the movable property of the defaulter.
...
26. Debts and shares, etc:-
(1) In the case of
(a) a debt not secured by a negotiable instrument,
(b) a share in a corporation, or 21/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019
(c) other movable property not in the possession of the defaulter except property deposited in, or in the custody of, any court, the attachment shall be made by a written order prohibiting,
(i) in the case of the debt—the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Tax Recovery Officer;
(ii) in the case of the share—the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;
(iii) in the case of the other movable property (except as aforesaid)—the person in possession of the same from giving it over to the defaulter.
(2) A copy of such order shall be affixed on some conspicuous part of the office of the Tax Recovery Officer, and another copy shall be sent, in the case of the debt, to the debtor, in the case of the share, to the proper officer of the corporation, and in the case of the other movable property (except as aforesaid), to the person in possession of the same.
22/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 (3) A debtor prohibited under clause (i) of sub-rule (1) may pay the amount of his debt to the Tax Recovery Officer, and such payment shall discharge him as effectually as payment to the party entitled to receive the same.
...
28. Share in movable property:-
Where the property to be attached consists of the share or interest of the defaulter in movable property belonging to him and another as co-owners, the attachment shall be made by a notice to the defaulter prohibiting him from transferring the share or interest or charging it in any way.
...
30. Attachment of negotiable instrument:-
Where the property is a negotiable instrument not deposited in a court nor in the custody of a public officer, the attachment shall be made by actual seizure, and the instrument shall be brought before the Tax Recovery Officer and held subject to his orders. ...
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47. Order for payment of coin or currency notes to the Assessing Officer:-
Where the property attached is current coin or currency notes, the Tax Recovery Officer may, at any time during the continuance of the attachment, direct that such coins or notes shall be credited to the Central Government and the amount so credited shall be dealt with in the manner specified in rule 8."
On a conspectus of the aforesaid legal provisions, it becomes clear that the concerned authorities under the EPF Act would have to ensure that the following requirements must be fulfilled while taking any recovery action:-
(i) A notice would have to be served upon the defaulter to pay the specified amount within 15 days from the date of its service and intimating that in default, steps would be taken to realize that amount.
(ii) No steps in execution shall be taken until the period of 15 days has elapsed from the date of service of the notice requiring such payment.
(iii) However, if the defaulter is likely to conceal or remove or dispose of the whole or any part of his movable property, which would delay or obstruct the realization of the amount due, the Recovery Officer may attach the 24/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 movable property by dispensing with the notice to the defaulter for reasons to be recorded in writing while passing such order.
(iv) When a defaulter, whose property has been so attached, furnishes security to the satisfaction of the Recovery Officer, such attachment shall be cancelled from the date of acceptance of the security by the Recovery Officer.
(v) Where any objection is made to the attachment of any property on the ground that the property is not liable to such attachment, the Recovery Officer would have to investigate into that objection on the basis of the evidence adduced by the objector in that regard.
(vi) Where the Recovery Officer on such investigation comes to the conclusion that the property attached is not owned by the defaulter, such part of the property shall be released from the attachment made.
(vii) A warrant of attachment signed by the Recovery Officer with his name specifying the name of the defaulter and the amount to be realized shall be served on the defaulter.
(viii) The Recovery Officer shall proceed to attach the movable property of the defaulter only if the amount mentioned in the warrant is not paid forthwith. 25/30
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(ix) In the case of debt or other movable property not in the possession of the defaulter, the attachment has to be in writing prohibiting the creditor from recovering the debt and the debtor from making payment thereof or giving it over to the defaulter until further order from the Recovery Officer and a copy of such order shall be furnished to the defaulter and the person in possession of the debt.
(x) Where the property attached is currency notes, it shall be credited to the Central Government and the amount so credited shall be adjusted towards provident fund dues and other amounts recoverable from the defaulter and the balance, if any, remaining shall be paid to the defaulter. It would assume significance that every stage of the recovery proceedings contemplates to afford an opportunity to the defaulter to either remit the dues or place his objection with supporting materials in that regard in consonance with the principles of natural justice before proceeding further. Such protection statutorily guaranteed to ensure the salutary object that justice in not only done, but also manifestly seen to be done, cannot be lost sight in the anxiety to complete the recovery process by the authorities under the EPF Act. 26/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019
12. The First Respondent has not placed any materials before this Court to show that the First Respondent has waited for a period of 15 days after calling upon the Petitioner to remit the amount due. Similarly, no order containing reasons for dispensing with such notice informing the Petitioner before attaching its bank account, has been produced. There is also nothing to show that the Petitioner was simultaneously informed of the attachment of its bank account. Such non-compliance would necessarily mean that the required opportunity to remit the dues before effecting attachment of the amount in the bank account of the Petitioner had not been granted in this case. That apart, the scheme for recovery postulates that objections could be made in respect of the attachment which would have to be investigated by the Recovery Officer. In this case, no time had been granted for raising such objections and on the other hand, the Second Respondent has been warned in the attachment order itself that if payment of the attached amount had not been made, it would be treated as a deemed defaulter and the salary of the concerned officials would be attached. Such coercive methods of recovery adopted by the First Respondent is in glaring transgression of the rule of law, which cannot be countenanced. It is made clear that though this Court is not inclined to disturb the recovery effected at this advanced stage due to the orders passed by the Appellate Authority, the hasty manner in which that exercise has 27/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 been carried out without complying with the relevant statutory provisions cannot be justified. It is expected that prompt action would be taken to sensitize the authorities functioning under the EPF Act by training programmes and administrative instructions to scrupulously follow the prescribed rules while carrying out recovery of provident fund dues so that such blatant violations do not recur henceforth, lest the illegal actions would have to be undone, in addition to entailing disciplinary action against the erring officials under the relevant service rules.
Accordingly, the Writ Petition is disposed with the aforesaid observations. Consequently, the connected Miscellaneous Petitions are closed. No costs.
27.01.2021 vjt Index: Yes Note: Issue order copy by 29.01.2021.
To
1. The Assistant PF Commissioner, Regional Office, S.J. Plaza, Swarnapuri, Salem – 636 004.
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2. The Branch Manager, HDFC Bank Ltd., No. 141, Sathy Road, Opp to Bus Stand, Erode – 638 003.
Copy to
1. The Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court, 1st Floor, B-Wing, 26, Haddows Road, Shastri Bhawan, Chennai – 600 006.
2. The Central Provident Fund Commissioner, Employees Provident Fund Organization, Bhavishya Nidhi Bhawan, 14, Bikaji Cama Place, New Delhi – 110 066.
3. The Regional Provident Fund Commissioner – I, Regional Office, S.J. Plaza, Swarnapuri, Salem – 636 004.
29/30 https://www.mhc.tn.gov.in/judis/ W.P. No. 35850 of 2019 P.D. AUDIKESAVALU, J.
vjt W.P. No. 35850 of 2019 Reserved on : 01.10.2020 Pronounced on : 27.01.2021 30/30 https://www.mhc.tn.gov.in/judis/