State Consumer Disputes Redressal Commission
Liquidator, The Kotkapura Cooperative ... vs Chamkaur Singh, & Ors. on 8 November, 2010
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SCO NO.3009-12, SECTOR 22-D, CHANDIGARH.
First Appeal No.167 of 2010.
Date of Institution: 05.02.2010.
Date of Decision: 08.11.2010.
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. Chamkaur Singh, aged about 52 years, son of Sh. Ajaib Singh, Resident
of village Dhiman Wali, Tehsil and District Faridkot.
(Wrongly mentioned in Appeal as : Harinder Sigh, aged about 54 years,
son of Sh. Nand Lal, r/o Old City Kotkapura, Tehsil and Distt. Faridkot.
....Respondent
2. Regional Commissioner, EPF, Backside Kali Mata Mandir, near TV
Tower, Model Town, Bathinda.
3. Commissioner, Employees Provident Fund, Bhavishya Nidhi Bhawan, 14,
Bhikaji Cama Place, New Delhi-110066.
.....Performa Respondents.
First Appeal against the order dated
17.12.2009 of the District Consumer
Disputes Redressal Forum, Faridkot.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Baldev Singh Sekhon, Member.
Present:-
For the appellant : Sh. Puneet Kansal, Advocate .
Respondent no.1 : Exparte.
For respondent no.2&3 : 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 17.12.2009 passed by the learned District Consumer Disputes Redressal Forum, Faridkot (in short "the District Forum").
2. Facts in brief are that Sh. Chamkaur Singh, respondent no.1/complainant (hereinafter called as respondent no.1) filed a complaint, pleading that he was employee of Kotkapura Co-operative Spinning Mill Limited, Sandhwan, District Faridkot (hereinafter called as "the Mill"). The Mill was closed First Appeal No. 167 of 2010 2 and the employees including respondent no.1 were retrenched in Fabruary, 1999 and a liquidator was appointed for settlement of liabilities of the Mill. The EPF account number of the respondent no.1 was 9529/39.
3. During the service period of respondent no.1, the Mill regularly deducted EPF from his salary and it was the duty of the Mill to deposit the EPF with respondents no.2 & 3 along with employer's share equal to the amount deducted from the salary of respondent no.1.
4. After retrenchment, the respondent no.1 withdrew his EPF but later on, came to know that the amount of Rs.15,130/- and Rs.6706/- pertaining to the period 1996 to 1998 were not deposited by the appellant Mill with respondents no.2 & 3. The respondent no.1 requested the appellant and respondents no.2 & 3 as well as also made written applications to pay the said amount along with interest and ultimately, in May, 2007, appellant deposited Rs.15,130/- in the EPF account of respondent no.1 i.e. 9529/39 but the interest from the date of deduction of EPF from the salary of respondent no.1, was not paid and there is deficiency in service on the part of the appellant and respondents no.2 & 3, for causing delay in paying the above mentioned amount of EPF as well as interest. The amount of Rs.6706/- and employer's share equal this amount was also not deposited by the appellant.
5. The respondent no.1 suffered financial loss, inconvenience and mental agony on account of the deficiency of service on the part of the appellant as well as respondents no.2 & 3 and they are liable to pay compensation to the tune of Rs.50,000/-. The respondent no.1 is consumer of the appellant and respondents no.2 & 3, being beneficiary of services provided by respondents no.2 & 3 and prayed that the appellant and respondents no.2 & 3 be directed to pay interest on the amount of Rs.15,130/- @ 12% p.a. from the date of deduction of EPF till realization and pay Rs.6707/- + Rs.6706/- total Rs.13,412/- along with Rs.50,000/- as compensation and further to pay litigation expenses. First Appeal No. 167 of 2010 3
6. In the reply filed on behalf of the appellant, legal objections were taken that respondent no.1 is not consumer of the appellant and the complaint is liable to be dismissed. The complaint is not within limitation and is bad for mis- joinder of parties, as the respondent no.1 has admitted that he is consumer of respondents no.2 & 3.
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 respondent no.1 has 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 respondent no.1 is ex-employee of the Mill and he was 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. It was admitted that the EPF account number of the respondent no.1 was 9529/39 and the appellant has deposited the share of EPF of the employees with respondent no.2. 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 respondent no.1 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.2 on 22.06.2006 and not in May, 2007 and Rs.36,550/- of respondent no.1 First Appeal No. 167 of 2010 4 were deposited by the Mill with respondent no.2 in the year 1996 to February, 1999, as per the list enclosed.
10. The amount of EPF of respondent no.1 has already been deposited by the original employer of respondent no.1 as well as by the appellant with respondent no.2 and as such, there is no deficiency in service on the part of the appellant. The respondent no.1 is entitled to receive the same from respondent no.2. The respondent no.1 has 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 respondent no.1 has dragged the appellant unnecessarily into the litigation and prayed that the complaint be dismissed.
11. In the reply filed on behalf of respondents no.2 & 3, it was admitted that the respondent no.1 is having EPF account no.9529/39 and it was the responsibility of the establishment, to deduct and deposit the dues with respondents no.2 & 3. The interest amounting to Rs.37,950/- has been paid vide cheque no.215683 dated 30.04.2009. Rs.6706/- + employer's share have not been shown in the manual return i.e. Form 3A/6A for the year 1996-97, 1997-98 and 1998-99 by the appellant.
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 respondent no.1 is consumer of the Co-operative Mill, being an employee. The appellant stepped into the shoes of the Mill that makes out that respondent no.1 is consumer of the appellant. The appellant is deficient in providing service to respondent no.1, by not depositing the EPF amount collected from its employees, for about eight years, and accepted the complaint against the appellant and directed the appellant to pay Rs.1000/- as compensation to respondent no.1 for causing him harassment, within one month First Appeal No. 167 of 2010 5 from the receipt of copy of the order, failing which the appellant was further directed to pay interest @ 12% p.a. on the above amount from the date of filing the complaint till realization.
14. Aggrieved by the impugned order dated 17.12.2009, 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.2 & 3.
16. It was contended on behalf of the appellant that respondent no.1 was employee 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 respondent no.1, were retrenched. The respondent no.1 has filed this complaint for the payment of EPF dues for the period 1996 to 1998 and the complaint is hopelessly time barred. Respondent no.1 has no cause of action to file the present complaint. It was further contended that respondent no.1 was employee of the Mill and is not covered under the definition of 'consumer'. The Mill was depositing the share deducted from the salary of respondent no.1 after adding its own share, with respondents no.2 & 3 and there is no deficiency in service, nor the deduction and deposit was for any consideration and the relation of the Mill and respondent no.1, is that of master and servant. The finding of the District Forum that being an employee, respondent no.1 is a consumer, 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.2 on 22.06.2006 and the balance amount of EPF along with interest has already been paid to respondent no.1. No harassment was caused and the appellant or the Mill was not liable to pay any compensation.
17. Respondent no.1 has not contested the appeal in any manner. First Appeal No. 167 of 2010 6
18. On behalf of respondents no.2 & 3, it was contended that entire dues of EPF as well as interest have already been paid to respondent no.1. 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 parties.
20. Admittedly, respondent no.1 was employee of the Mill and was a member of Employees Provident Fund Scheme. The Mill was deducting the share of EPF from the salary of respondent no.1 and after adding its own share, was depositing the EPF amount with respondent no.2. 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. Respondent no.1 along with other employees, was 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 interest amounting to Rs.37,950/- was paid to respondent no.1 vide cheque no.215683 dated 30.04.2009.
21. The 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 lastly made on 30.04.2009, whereas the present complaint was filed on 17.03.2009. 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.
22. 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 First Appeal No. 167 of 2010 7 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.
23. The next question to be decided is whether respondent no.1 was consumer of the Mill or not and whether the Mill was doing it for some 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 First Appeal No. 167 of 2010 8 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 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.2 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, respondent no.1 was a 'consumer' of the Mill in whose steps the appellant has stepped in.
24. The District Forum awarded Rs.1000/- as compensation to respondent no.1 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.2 on 22.06.2006 and respondent no.2, 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 First Appeal No. 167 of 2010 9 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 respondent no.1 has 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.
25. Accordingly, the appeal is accepted and the impugned order under appeal dated 17.12.2009 passed by the District Forum, is set aside. Consequently, the complaint filed by respondent no.1 (complainant) is dismissed. No order as to costs.
26. 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.
27. The arguments in this appeal were heard on 28.10.2010 and the order was reserved. Now the order be communicated to the parties.
(Inderjit Kaushik) Presiding Member (Baldev Singh Sekhon) Member November 8 , 2010.
(Gurmeet Singh)