Kerala High Court
Thanikkudam Bagawati Mills Ltd vs Regional Provident Fund Commissioner on 29 September, 2011
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
MONDAY, THE 13TH DAY OF OCTOBER 2014/21ST ASWINA, 1936
WP(C).No. 23660 of 2013 (F)
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PETITIONER(S) :
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THANIKKUDAM BAGAWATI MILLS LTD.,
THANIKKUDAM, KURICHIKARA P.O., THRISSUR,
REPRESENTED BY ITS MANAGING DIRECTOR,
S.NAGAMANICKKAM.
BY ADVS.SRI.K.K.JOHN
SRI.ASISH K.JOHN
RESPONDENT(S) :
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1. REGIONAL PROVIDENT FUND COMMISSIONER,
EMPLOYEES PROVIDENT FUND ORGANISATION, KALOOR,
ERNAKULAM, KOCHI-682 017.
2. THE ASSISTANT PROVIDENT FUND COMMISSIONER &
RECOVERY OFFICER, P.B.NO.1895, KALOOR, KOCHI-682 017.
BY DR.S.GOPAKUMARAN NAIR (SENIOR ADVOCATE)
ADV. SRI.A.RAJASIMHAN,S.C
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 13-10-2014, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
Msd.
WP(C).No. 23660 of 2013 (F)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXHIBIT P1: COPY OF THE SUMMARY RECORDS OF PROCEEDINGS OF THE BIFR
IN CASE NO.1/2008 DATED 29.09.2011.
EXHIBIT P2: COPY OF THE LETTER OF THE 2ND RESPONDENT PERMITTING
INSTALLMENT FACILITY FOR PAYMENT OF THE ARREARS
DATED 15.06.2011.
EXHIBIT P3: COPY OF THE ORDER OF ATTACHMENT OF THE IMMOVABLE
PROPERTY ISSUED BY THE SECOND RESPONDENT DATED 10.08.2012.
EXHIBIT P4 : COPY OF THE ORDER OF ATTACHMENT ISSUED BY THE SECOND
RESPONDENT ATTACHING 5 ACRES 32 CENTS 760 SQ LINKS IN
SURVEY NO.37 OF KURICHIKKARA VILLAGE, BELONGING TO
THE PETITIONER DATED 20.02.2014.
EXHIBIT P4(A): MAHAZAR PREPARED BY THE ENFORCEMENT OFFICERS EFFECTING
THE ORDER OF ATTACHMENT DATED 12.03.2014.
EXHIBIT P5 : COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE SECOND
RESPONDENT NO.KR/KC/RECOVERY/15506/2014-15/5853
DATED 27.08.2014.
EXHIBIT P6 : COPY OF THE STATEMENT SUBMITTED BY THE MANAGING DIRECTOR
OF THE PETITIONER COMPANY BEFORE THE SECOND RESPONDENT
DATED 12.09.2014.
EXHIBIT P7 : COPY OF THE ORDER U/S 8F OF EPF & MP ACT ISSUED BY
THE SECOND RESPONDENT TO THE FEDERAL BANK LTD.
DATED 09.09.2014.
EXHIBIT P7(A): COPY OF THE LETTER OF THE FEDERAL BANK, THRISSUR MAIN
BRANCH DATED 10.09.2014.
EXHIBIT P7(B): COPY OF THE LETTER OF THE UNION BANK OF INDIA, THRISSUR
DATED 19.09.2014.
RESPONDENT(S)' EXHIBITS
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NIL
//TRUE COPY//
P.A.TO JUDGE.
Msd.
K. VINOD CHANDRAN, J.
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W.P.(C) No.23660 of 2013 - F
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Dated this the 13th day of October, 2014
J U D G M E N T
The petitioner is aggrieved by the continuance of the attachment made as per Ext.P3, with respect to 114.60 cents in survey No.38 (resurvey No.18/48) of Kurichikkara village, Thrissur. Admittedly, the petitioner has dues to be satisfied to the respondent Organization being the provident fund remittances, with respect to its employees. The petitioner was a Sick Industry, which had approached the Board for Industrial and Financial Reconstruction (for brevity "BIFR")for rehabilitation and revival. A sanctioned scheme SS-11, as evidenced at Ext.P1 was promulgated by the BIFR on the recommendation of the operating agency, for revival of the industry. As is evidenced from the proceedings at Ext.P1 dated 29.09.2011, specifically by paragraph 9.15, the Bench directed release of the attachment of the properties by the respondent W.P.(C) No.23660 of 2013 - F 2 Organization.
2. It was also directed that the provident fund dues shall be paid as provided under the scheme. The said order was passed after hearing the respondent Organization also, who had been appearing before the BIFR. Pursuant to the scheme being sanctioned, the recovery officer under the respondent Organization had also issued Ext.P2 order dated 15.06.2011, wherein, total dues as also the interest under Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity, 'the Act'), were computed and the amounts were directed to be paid in 36 instalments.
3. The learned Counsel appearing for the petitioner submits that, the same was continuously paid and as of now 25 instalments were paid. But the release of attachment was not made and again by Ext.P3, dated 10.08.2012, attachment of the properties were confirmed. The respondent Organization has filed a statement dated 07.01.2014, which shows that the amounts due as on the W.P.(C) No.23660 of 2013 - F 3 said date in a tabulated form, which is extracted hereunder:-
Sl. Particulars Amount
No.
1 Interest under Section 7Q 17,87,868
2 Penal damages 34,90,262
3 Recovery Cost 32184
4 TOTAL 53,10,314
4. In such circumstance, obviously the petitioner has paid up the contributions and what remains as directed by the BIFR is only the payment of Section 7Q interest, and 14B damages, the former of which, definitely the petitioner is liable to pay. With respect to the penal damages under Section 14B of the Act, the learned Counsel would submit that, the petitioner has approached the Central Provident Fund Trustees as provided under the 2nd proviso to Section 14B of the Act, for waiver of damages imposed; which however could be taken up for consideration only on payment of the entire interest under Section 7Q.
5. Subsequent to the attachment made, in the year 2012, by Ext.P4, a further attachment was made with W.P.(C) No.23660 of 2013 - F 4 respect to 5 acres and 32 cents, 760 sql. of property, also owned by the petitioner, in survey No.37 of Kurichikkara Village, Thrissur, which attachment too subsists as on date. The total dues as per the said attachment is shown as Rs.49,56,844/-, which would be the total dues including the damages under Section 14B of the Act.
6. A warrant of arrest was also issued as per Ext.P5, which indicates that as of now, the amounts due as interest under Section 7Q would be Rs.14,31,398/-. The attachment of the account of the petitioner was also made as indicated in Ext.P7. The petitioner in the present petition seeks for release of the attachment with respect to 114.60 cents effected as per Ext.P4, so that the petitioner could either mortgage the said property or sell the same and definitely in that circumstance, the dues to the Provident Fund Organization would have first charge.
7. The petitioner also seeks that, the attachment with respect to the accounts may be released after appropriating the amounts already appropriated, so that the petitioner W.P.(C) No.23660 of 2013 - F 5 can continue operation and resume business. Evidently, the petitioner had complied with Ext.P2 order for instalment granted by the Provident Fund Organization. Considerable amounts with respect to Section 7Q interest as computed at Ext.P2 has also been paid. The contributions too have been paid even prior to Ext.P2.
8. In such circumstance, this Court is of the opinion, especially considering the fact that, the sanctioned scheme also directed the Provident Fund Organization to lift the attachment of the property, that the request of the petitioner is only to be allowed. The attachment made as per Ext.P3 is hence set aside. In setting aside such attachment, this Court is also considerably influenced by the fact that, the Provident Fund Organization has obtained attachment of a further extent of 5 acres and 32 cents 760 sql. as per Ext.P4, which definitely shall continue. The amounts due as Section 7Q interest would be slightly higher than Rs.14,00,000/- and the attachment already made of the 5 acres of property would suffice insofar as such dues are W.P.(C) No.23660 of 2013 - F 6 concerned. That attachment would in fact, take care of the dues under Section 14B of the Act also. In such circumstance, attachment made of the account of the petitioner shall also be lifted.
9. The writ petition is allowed with the following directions:-
(i) The attachment made as per Ext.P3 ( 114.60 cents in survey No.38 (resurvey No.18/48) of Kurichikkara Village, Thrissur) is set aside with immediate effect.
(ii) The petitioner before effecting a sale or before effecting the mortgage of the said property shall file an undertaking before the respondent Organization that, the consideration or the finance generated would be applied first to the provident fund dues especially Section 7Q interest.
(iii) The details of such conveyance or transaction shall also be disclosed to the Provident Fund Organization.
(iv) The attachment as per Ext.P4 shall continue to be in force.
W.P.(C) No.23660 of 2013 - F 7
(v) No proceedings shall be taken with respect to Ext.P5 for arrest of the petitioner, as of now.
(vi) The attachment made of the Bank account of the petitioner as per Ext.P7 and P7(b) shall be lifted with immediate effect.
With the above directions and observations, the writ petition would stand allowed.
Sd/-
K. VINOD CHANDRAN, JUDGE SB // True Copy // P.A To Judge.