Gujarat High Court
M/S Sachin Enterprise vs The Regional Provident Fund ... on 14 August, 2024
NEUTRAL CITATION
C/SCA/15586/2019 ORDER DATED: 14/08/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 15586 of 2019
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M/S SACHIN ENTERPRISE
Versus
THE REGIONAL PROVIDENT FUND COMMISSIONER & ORS.
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Appearance:
MS. NASRIN SHAIKH, ADVOCATE FOR
MS SRUSHTI A THULA(5014) for the Petitioner(s) No. 1
MR AV NAIR(5602) for the Respondent(s) No. 1,2
NOTICE SERVED for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 14/08/2024
ORAL ORDER
1. At this juncture, learned advocate Ms. Nasrin Shaikh for the petitioner seeks permission to join - principal employer as party respondent.
2. Permission as prayed for, is granted. Cause tittle be amended accordingly.
3. Rule returnable forthwith. Learned advocate Mr. A.V. Nair waives service of notice of rule on behalf of respondent Nos. 1 & 2. Page 1 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024 NEUTRAL CITATION C/SCA/15586/2019 ORDER DATED: 14/08/2024 undefined
4. The present petition is filed by the petitioner under Articles 14, 16, 19, 21, 226 & 227 of the Constitution of India and under the provision of Employees' Provident Fund & Misc. Provisions Act, 1952 with the following prayers :-
"[A] Your Lordships may be pleased to issue writ of Certiorari or writ in nature of Certiorari or any other appropriate writ, order or direction quashing and setting aside the [1] impugned order passed by the authorized Officer of the respondent authority under section 8 of the EPF & MP Act, 1952 dated 1/4/2019 (Annexure-I) [2] impugned prohibitory order passed by the respondent authority u/s 8G of the Act read with 26(1) (i) and issued to the respondent No.3 bank dated 17/5/2019 (Annexure-J) as well as the impugned orders passed by the Regional Provident Fund Commissioner, Vadodara under section 14B dated 12/6/2018 (Annexure-F), order under section 7Q dated 12/6/2018 (Annexure-E), order u/ss 14B and 7Q of the Act dated 13/10/2015 (Annexure-C) as well as the impugned order under section 7A dated 27/1/2015 (Annexure-B), and be pleased to hold and declare that the same are illegal, and against the provision of law and further be pleased to direct the respondent Nos.1 and 2 authorities or their agent, servants etc. and respondent No.3 bank not to recover any amount from the petitioner under the Act and if recovered, direct them to refund the same to the petitioner.
[B] Pending admission, hearing and final disposal of this petition, Your Lordships may be pleased to stay the execution, operation and implementation of the [1] impugned order passed by the authorized Officer of the respondent authority under section 8 of the EPF & MP Act, 1952 dated 1/4/2019 (Annexure-I) [2] impugned prohibitory order passed by the respondent authority u/s 8G of the Act read with 26(1)(i) and issued to the respondent No.3 bank dated 17/5/2019 (Annexure-J) as well as the impugned orders passed by the Regional Provident Fund Commissioner, Vadodara under section 14B dated 12/6/2018 (Annexure-F), order under section 7Q dated 12/6/2018 (Annexure-E), order u/ss 14B and 7Q of the Act dated 13/10/2015 (Annexure-C) as well as the impugned order under section 7A dated 27/1/2015 (Annexure-B), as the same are illegal, against the evidence on record, against the provision of law, against the settled legal position and in Page 2 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024 NEUTRAL CITATION C/SCA/15586/2019 ORDER DATED: 14/08/2024 undefined violation of the principles of natural justice.
[C] Your Lordships may be pleased to grant such other and further relief as may be deem just and proper in the interest of justice."
5. The brief facts of the present case are as under :-
5.1 The Assistant Provident Fund Commissioner, Regional Office, Vadodara passed order for levy of damages under section 14B and interest under section 7Q of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 asking the petitioner stating that M/s Anilkumar Vishramsingh bearing Code No.GJ/66544 is an establishment to which the EPF & MP Act, 1952 applies and the petitioner failed to pay [i] provident fund [ii] administrative charges [iii] Family Pension Fund Contribution / Employees' Pension Scheme [iv] Employees' Debit Linked Insurance Contribution and Administrate Charges and hence the employer of the establishment is liable for damages u/s.14B of the EPF & MP Act. Show cause notice u/s 14B was issued on 9/12/2013 asking to show cause as to why damages u/s 14B for the period from 1/2012 to 2/2013 should not be recovered and the petitioner appeared on 20/1/2014 and submitted copy of the Chalan dated 5/1/2014 for payment of damages of Rs.29974 u/s14B and payment of interest of Rs. 71,937/- u/s 79 for the period from 1/2012 to 2/2013, and thus, the establishment admitted the delay in remittance of PF dues. Therefore, the Commissioner ordered in exercise of powers u/s 14B of the EPF & MP Act, 1952 to close the inquiry u/s 14B as the employer paid Rs.1,01,911/- towards damages / interest for the period mentioned above.Page 3 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024
NEUTRAL CITATION C/SCA/15586/2019 ORDER DATED: 14/08/2024 undefined 5.2 The principal employer earlier paid the damages under section 14B and interest u/s 7Q. However, as the principal employer establishment M/s. Kemrock Industries & Exports Ltd. went into liquidation, the dues of the respondent department is not paid. Even huge amount is due to be recovered by the petitioner from the principal employer M/s. Kemrock Industries & Exports Ltd.
5.3 The Regional PF Commissioner, Vadodara passed order dated 27/1/2015 under section 7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for the period from 3/13 to 6/14, though the petitioner submitted before the Commissioner that the principal employer M/s. Kemrock Industries & Exports Ltd. has not made payment to the petitioner, and thereby the Commissioner directed the petitioner to pay Rs.23.62,827 for the period from 3/13 to 6/14 as payable to the respondent on account of provident fund, pension fund, deposit linked insurance fund and administrative charges towards provident fund and insurance as in accordance with the provisions of the Act and schemed framed thereunder.
5.4 The summons under Section 14 B of the EPF & MP Act, 1992 dated 13.10.2015 issued by the Regional Provident Fund Commissioner to the petitioner stating that there is failure to deposit PF dues and the petitioner was informed to deposit the amount of Rs.19,75,174/- towards dues of EPF for the period from 1/4/1996 to 13/10/2015. The petitioner replied to the notice under section 14B and 7Q of the Act, vide reply dated 19/8/2016 stating that the petitioner received notice for payment of Rs.19,75,174/- as damages and interest. Petitioner Page 4 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024 NEUTRAL CITATION C/SCA/15586/2019 ORDER DATED: 14/08/2024 undefined stated that please refer the letter addressed by the petitioner dated 19/5/2017 which is self explanatory.
6. Learned advocate Ms. Nasrin Shaikh for the petitioner has submitted that earlier the Assistant Provident Fund Commissioner, Regional Office, Vadodara passed order for levy of damages under section 14B and interest under section 7Q of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for the period from 1/2012 to 2/2013 holding that the employer of the establishment is liable for damages u/s.14B of the EPF & MP Act. It is submitted that the employer submitted copy of the Chalan dated 5/1/2014 for payment of damages of Rs.29974/- and payment of interest of Rs. 71,937/- for the period from 1/2012 to 2/2013. However, as the employer paid the amount as claimed, the Commissioner ordered in exercise of powers u/s 14B of the EPF & MP Act, 1952 to close the inquiry as the employer paid Rs.101911/- towards damages/interest for the period mentioned above.
6.1 It is also submitted that earlier the damages under section 14B and interest u/s 7Q were paid. However, as the principal employer is M/s. Kemrock Industries & Exports Ltd. and therefore the dues of the respondent department is not paid. Even huge amount is due to be recovered by the petitioner from M/s. Kemrock Industries & Exports Ltd. It is submitted that M/s. Kemrock Industries & Exports Ltd. is principal employer and the petitioner is not liable for the alleged dues of the respondent department as the principal employer has not paid the dues, the respondent department cannot fasten the liability of the principal employer, when the petitioner is not legally bound to Page 5 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024 NEUTRAL CITATION C/SCA/15586/2019 ORDER DATED: 14/08/2024 undefined pay the dues of the principal employer. In fact, huge amount is due to be recovered by the petitioner from the principal employer. Hence, the respondent can not recover the alleged dues of the principal employer from the petitioner.
6.2 It is submitted that there are two companies namely (1) M/s. Anilkumar Vishramsingh Singh and (2) Sachin Enterprise and both are different entities and have no relation with each other. The Account No.07760200001048 is not at all linked with the PAN Card of M/s. Anilkumar Vishramsingh and therefore, the Bank cannot seize the bank account only on the say of the EPF Commissioner.
6.3 Learned advocate for the petitioner submits that the amount lying in the above mentioned account is only for the disbursement of the salary of workers of M/s. Sachin Enterprise and also payment to be made to various government offices towards legal dues. Therefore also the bank account cannot be seized. Impugned order directing for seizure of the Bank account is illegal, arbitrary and contrary to the provision of law. It is further submitted that there is dispute between the PF Commissioner office and principle employer - M/s. Kemrock Industries & Exports Ltd. and as the principal employer is not making payment of the dues, the respondent department cannot recover the due of the principal employer from the petitioner.
6.4 Learned advocate for the petitioner further submits that even otherwise, the impugned orders and action of the respondents in recovering the amount under the Act are illegal, unjust, irrational, against the provision of law and in violation of Page 6 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024 NEUTRAL CITATION C/SCA/15586/2019 ORDER DATED: 14/08/2024 undefined the principles of natural justice, requires to be quashed and set aside.
7. On the other hand, learned advocate Mr. Nair has submitted that since it is interse dispute, the contract which is part and parcel of the proceedings, which is produced before the authority, it can not be said that they are not liable and responsible for payment of dues towards the workman and the same can be paid by either of the parties. It is also submitted that since the order passed by the authority is against both the contractor and the principal employer and in spite of joining necessary party to the proceedings, the present petition is not maintainable. It is further submitted that the present petition being meritless and deserves to be dismissed.
8. Having heard learned advocates for the respective parties and having gone through the material on record, this Court finds that the present petition is devoid of merits and deserves to be dismissed. The present petition is hereby dismissed. Rule is discharged.
(HEMANT M. PRACHCHHAK,J) SALIM/ Page 7 of 7 Uploaded by SALIM(HC01108) on Tue Aug 27 2024 Downloaded on : Fri Aug 30 21:57:47 IST 2024