Calcutta High Court (Appellete Side)
Averill Infrastructure Private ... vs Union Of India & Ors on 28 March, 2024
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
28.03.2024 IN THE HIGH COURT AT CALCUTTA
Sl. No.4 CONSTITUTIONAL WRIT JURISDICTION
(PP) APPELLATE SIDE
WPA 4810 of 2023
with
CAN 1 of 2023
And
CAN 2 of 2024
Averill Infrastructure Private Limited & Anr.
Vs.
Union of India & Ors.
Mr. S. N. Mitra, Sr. Adv.,
Mr. Shyamal Sarkar, Sr. Adv.,
Mr. Kumar Gupta,
Mr. Abhishek Jain
....for the applicants/petitioners.
Mr. Debasis Nandi
....for Union of India.
Mr. Susovan Sengupta,
Mr. Sanatan Panja
....for the State/respondent no.5.
Ms. Aparna Banerjee .....for Provident Fund Authorities. Two applications respectively being CAN 1 of 2023 and CAN 2 of 2024 have been filed by the writ petitioners inter alia for certain interim measures till the final hearing of the writ petition.
Before dealing with the two applications, the brief facts of the matter is stated hereinafter for better appreciation of the reliefs claimed in the two applications.
(1) It is the case of the petitioners that Weaverly Jute Mills Private Limited (in 2 short Weaverly) used to run and operate a jute mill by the name Waverly Jute Mill which was previously known as Kelvin Broadloom Division situate at Premises No.117, West Ghosh Para Road, P. S. Jagaddal, District - North 24-Parganas (hereinafter referred to as the said premises).
(2) Waverly Jute Mills Company Limited (hereinafter referred to as Waverly) purchased the said premises in 1919 and had set up the said jute mill.
(3) Weaverly for various reasons could not run the Jute Mill and as such, the same was closed since 28th November, 2020.
(4) The petitioner no.1, being desirous of purchase of the assets of the said Jute Mill approached Weaverly. In Course of discussion, Weaverly made several representations including the exemption to the provident fund of Kelvin Jute Company Limited (in short, Kelvin) (5) It appears from the representations made by Weaverly as stated in the writ petition that Kelvin took over the jute mill under the name and style Waverly Jute Mills Company Limited (in short Waverly). Kelvin 3 had two divisions, namely Kelvin Jute Mill at Titagarh and the Kelvin Broadloom Division.
(6) Kelvin had an exempted provident fund with effect from 24th January, 1949 by the name Kelvin Jute Mill Company Workers' Provident Fund. The said provident fund was controlled by a Board of Trustee (in short BOT) constituted and appointed under a trust deed dated 12th February, 1952.
(7) After the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (in short EPF Act) came into operation, Kelvin was granted exemption as to its provident fund by a notification dated 11th April, 1960 issued by the appropriate Government under the provisions of Section 17 of the EPF Act.
(8) The Broadloom Division of Kelvin was operated by Hasimara Industries Limited between 1977 and 29th June, 1986 as a lessee.
(9) On 30th June, 1986, Hooghly Mills Company Limited (in short Hooghly) took over the said Kelvin Broadloom Division. 4 (10) After taking over, Hooghly opened a new trust fund by the name "Waverly Jute Mill Workers' Provident Fund" with a new Board of Trustees. No exemption or separate exemption was granted to Waverly Jute Mill Workers' Provident Fund. (11) After the take over, the provident fund accumulation in respect of the employees of Broadloom Division was not transferred from Kelvin Jute Mill Co. Workers' Provident Fund despite there being request from the EPF authorities. This resulted in a writ petition, being filed by Waverly Jute Mill Workers' Provident Fund through its President against Kelvin, being matter no.4312 of 1993.
(12) In the said writ petition by an order dated 15th March, 2002, the learned Single Judge directed Kelvin Jute Mills Co. Limited Workers' Provident Fund to transfer the accumulation to Waverly Jute Mill Workers' Provident fund.
(13) This order was challenged by Kelvin as also Kelvin Jute Mills Co. Limited Workers' Provident Fund by filing two appeals respectively being APO 238 of 2002 and APO 258 of 2002. Both the appeals were 5 dismissed by an order dated 16th February, 2006.
(14) The said dismissal order was challenged by the appellants respectively by filing two Special Leave Petitions which on being admitted was numbered as Civil Appeal No.2591 of 2006 and 2593 of 2006.
(15) By an order dated 10th May, 2016 the Hon'ble Supreme Court directed the Provident Fund Commissioner to determine the outstanding amounts and to submit a report.
(16) After the report was filed, pursuant to the leave granted by the Hon'ble Supreme Court Kelvin Jute Mills Co. Limited Workers' Provident Fund and Trend Vyapar Limited, a unit of Kelvin Jute Mill, filed two review petitions respectively being RVW 38 of 2018 and RVW 39 of 2018.
In this background, the petitioner no.1 which was incorporated sometime in August 2022 purchased the assets of the Broadloom Division of Weaverly. The lease in respect of the land on which the said division is set up was surrendered by Weaverly and a fresh lease was granted in the name of the petitioner no.1. The petitioner thereafter 6 invited the workers of the Broadloom Division of Kelvin to join the mill, but only 1200 employees out of 4000 employees of the said division as on the date of closure joined on the same being opened for operation by the petitioner no.1 on 11th December, 2022. The issue, which cropped up with the petitioner no.1 in entering the scenario, was the responsibility of the provident fund contribution of the employees of the Broadloom Division of Kelvin which was initially operated by Hasimara then by Hooghly and ultimately by Weaverly.
It is the case of the petitioners that they can be liable only from the date the mill was reopened that is 11th December, 2022 and not for the period prior thereto.
The Provident Fund Authorities, on the other hand, say that irrespective of the transfer by sale or acquiring of the movables and separate lease of the land, the petitioner no.1 as an establishment is liable for the contribution and dues of the workers of the said Broadloom Division. EPF Authorities rest their case in view of the provisions of Section 17B of the EPF Act. EPF Authorities also say the audit of the Provident Fund of Kelvin has taken place upto the year 2017-2018 and not thereafter. EPF Authorities do not know as to whether any contribution was collected and deposited upto August 2022. The PF 7 Authorities, however, are treating the petitioner no.1 as Weaverly as will appear from the minutes of the meeting dated 6th March, 2024.
The EPF authorities discharging statutory duties cannot shirk their responsibility in this manner. Till 2017 - 2018 the audit has taken place. Any deposit of the contribution made by Kelvin has been against proper document i.e. register of employees, their respective salary, joining date and date of retirement. Even if, the provident fund is exempted the right to supervise as per statute remains with the EPF authorities. The EPF authorities have the right to even cancel the exemption if there is statutory violation. It is not known at this state as to the steps taken by EPF authorities when the mill was operational till 2020, if there was default in deducting and depositing the contribution. It also appears to be strange when EPF authorities say that exemption was given to Waverly for it PF in 1961 and Hooghly did not have the exemption though it opened and operated a trust fund for PF in the same name as that of Waverly. It remains unexplained as to the steps taken by EPF authorities in respect thereof.
The petitioner no.1 is presently depositing the current contribution in terms of an interim order passed in this writ petition on 5th April, 2023 in the code allotted to Weaverly Jute Mill Co. Limited 8 without prejudice to the rights and contention of the petitioners.
The petitioners say that in course of the meeting held on 6th March, 2024, the minutes whereof is annexed at pages 55-56 of the application being CAN 2 of 2024 that the Regional Provident Fund Commissioner-I had directed the disbursement of the benefits to the workers under the Employees' Pension Scheme, the contributions whereof are lying with the EPF Authorities as recorded in the said minutes. The petitioners say that EPF Authorities have not taken any step despite such direction contained in the minutes of the meeting.
The EPF Authorities in response say that unless the digital signature of an authorised representative of the petitioner no.1 is uploaded in the portal of the EPF Authorities and From 5A issued under the EPF Act is filled and/or uploaded, the pensionary benefits of the retired workmen of the Kelvin Jute Mills Broadloom Division cannot be processed.
CAN 1 of 2023 has been filed for this relief. By consent of the parties, CAN 1 of 2023 is disposed of by the following order:
(i) The petitioner no.1 shall, within one month from date, upload the digital signature of an authorised representative 9 of petitioner no.1 in the portal managed and operated by EPF Authorities.
(ii) The petitioner no.1 shall file Form 5A and/or upload the same in the portal also within a month from date.
(iii) The uploading of digital signature and/or Form 5A or filing of the same in the portal of the EPF Authorities or with the EPF Authorities shall be without prejudice to the rights and contention of the petitioners in this writ petition. This is more so directed as the interest of the petitioners in the writ petition will be jeopardized if the same is not without prejudice.
(iv) These directions are also passed keeping in mind that the workmen/employees are deprived of the statutory dues in the cobweb.
CAN 1 of 2023 is accordingly disposed of.
In Re: CAN 2 of 2024 In the application, being CAN 2 of 2024, the petitioners have sought for a direction upon the Provident Fund Authorities to consider their representation dated 12th March, 2024 being 10 Annexure - 'A-7' to the said application. The petitioners have also prayed for appointment of an Auditor from the panel of the Provident Fund Organisation to audit the accounts of Weaverly Jute Mill Workers' Provident Fund for the period 2019- 2020 till August 2022.
The respondent no.5 has objected to this relief on the ground that the issue whether Weaverly or Waverly is an exempted provident fund is yet to be finally decided. According to the respondent no.5, this is more so necessary as the EPF Authorities say that Waverly had an exempted fund ever since 1961.
It is further submitted by the respondent no.5 that the mode of transaction by which the Broadloom Division has been acquired by the petitioner no.1 is also a pending issue in the writ petition since the said respondent is unaware about the exact nature of transaction.
On behalf of the Provident fund Authorities, it is submitted that the authorities had asked for documents by which the movables of Broadloom Division of Weaverly has been acquired by the petitioner no.1 has been submitted, but other documents as per the letter dated 3rd March, 2024 has not been submitted.
Responding to the submission made by the EPF Authorities and respondent no.5, the petitioners say 11 that the nature of transaction is explicit from the document itself, a copy whereof has already been submitted with the EPF Authorities and the same has no nexus as to the PF dues claimed by the EPF authorities. The respondents have also not considered their representation which would have simplified the issue instead of the same being complicated resulting in the sufferings of the workmen/employees.
A representation has also been made to the State (respondent no.5) for cancellation of the exemption and for a direction to deposit the money lying therein with the EPF authorities. In course of taking such decision, it will be open for the State to look into all the issues now raised on behalf of the State Government and other related issues.
The consideration of the representation is also germane as the Regional Provident Fund Authorities have already recommended cancellation of the exemption of Waverly PF to the Head Office of the EPF Organisation at New Delhi.
After hearing the parties, I find that to protect the interest of the workmen/employees it is necessary to hold an audit as also to consider the representation. The documents which will be necessary for carrying out the audit have to be spelt out by the auditor. Once such documents are 12 identified, then the question will arise as to who is in possession of such documents, particularly in view of the fact that the petitioners say that the documents pertaining to the period prior to their acquiring the Broadloom Division of Weaverly are lying with the Board of Trustees who were controlling the exempted provident fund and copies thereof should be with the EPF Authorities being the overall supervisor of such fund which is, however, being disputed by the EPF Authorities.
The EPF Authorities have placed before the Court a letter dated 21st March, 2024 with an order dated 17th April, 2023 annexed thereto. The said letter with the annexure is taken on record.
It appears from the order dated 17th March, 2023 that five Chartered Accountant Firms are empanelled as Third Party Auditors for re-audit the accounts of the exempted establishments under Kolkata zone.
Out of the five entities, I find that Keshri & Associates has their office at Kolkata. It will, therefor, be convenient for them to conduct the audit than the others, who are located outside Kolkata.
Since EPF Authorities have said that the audit of the accounts of Weaverly has not been conducted after 2017-2018 and the petitioners are willing to have the audit done at their own expense, let Keshri & Associates having their office at 1G, Madan Mohan 13 Burmn Street, 1st Floor, Kolkata - 700007 be appointed as auditor to re-audit the accounts of Waverly Provident Fund for the year ending 31st March, 2019 and audit the provident fund account for the period 2019-2020, 2020-2021 and upto 11th December, 2022. The accounts for 2018 - 2019 has to be re-audited as the petitioners claim that the same has been done and submitted with EPF authorities which is, however, disputed by EPF authorities.
The audit shall be conducted as expeditiously as possible. All the parties should cooperate with the auditors.
The Provident Fund Authorities are at liberty to direct the Board of Trustees of Weaverly to produce and/or furnish necessary documents, if sought for by the auditor.
The EPF Authorities shall process and disburse the pensionary benefits to the employees of the Broadloom Division of Weaverly as expeditiously as possible upon receiving the requisite claim forms subject to however, uploading of digital signature and Form 5A by the petitioners.
The State respondent shall consider the representation dated 12th March, 2024 at the earliest for the benefit of the workmen/employees. 14 Nothing further remains to be adjudicated in this application. The same is disposed of accordingly. Urgent photostat certified copies of this order, if applied for, be supplied to the parties upon compliance of all necessary formalities.
(Arindam Mukherjee, J.)