Karnataka High Court
M/S G4S Secure Solutions vs The Regional Provident Fund on 29 January, 2018
Author: Raghvendra S.Chauhan
Bench: Raghvendra S. Chauhan
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF JANUARY 2018
BEFORE
THE HON'BLE MR.JUSTICE RAGHVENDRA S. CHAUHAN
WRIT PETITION NO. 1082 OF 2018 (L-PF)
BETWEEN:
M/S G4S SECURE SOLUTIONS
INDIA PRIVATE LIMITED,
# 744, 10TH 'A' MAIN, 1ST STAGE,
4TH BLOCK, OUTER RING ROAD,
HBR LAYOUT,
BENGALURU-560043
REP. BY ITS HUB LEGAL HEAD
BENGALURU, CHENNAI AND HYDERABAD,
MR. R. GUNASHEKARAN
... PETITIONER
(BY SRI K. KASTURI, SR. COUNSEL FOR
SRI MOHAN KUMAR K., ADV.)
AND:
1. THE REGIONAL PROVIDENT FUND
COMMISSIONER -I,
EMPLOYEES' PROVIDENT FUND ORGANISATION,
REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN,
# 13, RAJARAM MOHAN ROY ROAD,
BANGALORE-560025.
2. THE RECOVERY DEPARTMENT ORGANISATION
REGIONAL OFFICE,
BHAVISHYANIDHI BHAVAN,
# 13, RAJARAM MOHAN ROY ROAD,
BANGALORE-560025.
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3. THE HSBC BANK
NO.7, MAHATMA GANDHI ROAD,
BANGALORE-560001,
REPRESENTED BY ITS BANK MANAGER.
... RESPONDENTS
(BY SMT. NALINI VENKATESH, ADV. FOR R1 & R2
R3 - SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
ATTACHMENT OF THE ACCOUNTS OF THE PETITIONER BY R-1
& 2 TO THE R-3 PRODUCED AS ANNEXURE-D TO THE W.P.
DATED 02.01.2018 (COPY OF THE ATTACHMENT ORDER DATED
02.01.2018 NOT PROVIDED TO PETITIONER BY NONE OF THE
RESPONDENTS AND ISSUE A STAY AND SUSPEND THE
OPERATION OF THE ORDER DATED 15.12.2017 AT
ANNEXURE-C UNTIL THE APPEAL IS HEARD BY THE EPF
APPELLATE TRIBUNAL ON THE APPLICATION FOR STAY AND
ETC.
THIS WRIT PETITION COMING ON FOR HEARING THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
With the consent of the learned counsel for the parties, this case is being decided at this stage itself.
2. The petitioner, M/s. G4S Secure Solutions India Private Limited has challenged the legality of the order dated 02.01.2018, the attachment order issued by the respondent No.1, against the petitioner. The -3- petitioner is also aggrieved by the order dated 15.12.2017, passed by the respondent No.1, whereby the respondent No.1 has directed the petitioner to pay an amount of `16,31,58,755/- (Rupees Sixteen Crore Thirty-One Lakh Fifty-Eight Thousand Seven Hundred & Fifty-five only), under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ('the Act' for short).
3. Briefly the facts of the case are that the petitioner happens to be a private Company incorporated under the Indian Companies Act, 1956. Amongst other services, the petitioner provides security services by employing guards as its employees. For this purpose, it has established its offices in different parts of the country, including Bengaluru. The petitioner is not employing guards through contractors. According to the petitioner, it has been remitting the provident fund contribution, which it is legally bound to pay for -4- its employees. Furthermore, according to the petitioner, the employees are paid a total remuneration consisting of the basic wage (earned), house rent allowance, conveyance and washing allowance in order to enable them to defray the actual expenses. Moreover, for certain specific locations, which may entail certain difficulties or dangers, "site allowance" is also paid to the employees. The issue involved in the present case, according to the petitioner, is with regard to the amount paid by the petitioner as "site allowance": whether the same shall be included while calculating the amount of salary, as the basic wage, paid to the petitioner or not ?
On 12.01.2017, the respondent No.1, the Regional Provident Fund Commissioner-I, issued a notice to the petitioner alleging "Subterfuge of wages", without assigning any reasons for the said allegation. The petitioner immediately appeared before the respondent No.1, and filed his objections. Subsequently, a team of -5- enquiry officers visited the petitioner's establishment, and submitted their report before the respondent No.1. Based on the said report, the respondent No.1 issued an order dated 15.12.2017.
The petitioner also claims that when the enquiry officers were visiting its establishment, it had clearly explained to them that "the site allowance" is paid to the employees, based on the requirement of the client. Therefore, "the site allowance" is purely a temporary allowance paid to an employee. The same can be changed, or withdrawn, when the employee is deputed to another site. Therefore, according to the petitioner, "the site allowance" does not fall under the definition of basic wages, as contained under Section 2(b) of the Act.
Notwithstanding the submissions made by the petitioner, the respondent No.1 passed the order dated 15.12.2017, whereby the respondent No.1 directed the petitioner to deposit a sum of `16,31,58,755/-. -6-
According to the petitioner, he has sixty days time, under the Act, to file an appeal against the impugned order. The petitioner had exercised his right to file the appeal before the Appellate Authority, within the stipulated period of sixty days. However, on 05.01.2018, he was informed that by order dated 15.12.2017, the respondent No.1 had directed the respondent No.3, the HSBC Bank, to attach the entire amount of `16,31,58,755/-. Hence this petition before this Court.
4. Relying on the case of M/S. MASCON GLOBAL LTD. VS. THE REGIONAL PF COMMISSIONER-II & ANOTHER (W.P.NO.32600/2012, DECIDED BY THIS COURT ON 31.08.2012), Mr. Kasturi, the learned Senior Counsel, has pleaded that since there is statutory period of sixty days for filing an appeal, the respondent No.1 should have stayed its hands, and should not have proceeded to attach the account belonging to the petitioner. -7-
Secondly, the right to access justice is a fundamental right under Article 21 of the Constitution of India, and is available to juristic persons. Therefore, the petitioner has right to file an appeal. The said right is not only a fundamental right, but is also a statutory right, as the Act does contain sufficient provision for filing an appeal under Section 7-I of the Act. Therefore, neither the statutory right, nor the fundamental right, can be scuttled by the respondent No.1. Therefore, the order attaching the account of the petitioner should be set aside by this Court.
5. On the other hand, Ms. Nalini Venkatesh, the learned counsel for the respondent No.1, has relied on the case of EMPLOYEES' PROVIDENT FUND ORGANISATION VS. ROLL WELL FORGE LTD. & HDFC BANK LTD. (LETTERS PATENT APPEAL NO. 12 OF 2010, DECIDED BY THE HON'BLE GUJARAT HIGH COURT ON 15.06.2011), in order to plead that unless and until there is a specific -8- provision in the Act, preventing the respondent No.1 from attaching the account of the petitioner, the respondent No.1 is well within its power to attach the same. Therefore, the Commissioner need not wait for the lapse of sixty days before moving against the defaulting party. Hence, the order passed by the respondent No.1, attaching the petitioner's account, is legally valid. Therefore, the learned counsel has supported the impugned orders.
6. Heard the learned counsel for the parties, and perused the case laws cited at the Bar.
7. It is, indeed, trite to state that Article 21 bestows the right to access justice upon the people. Moreover, Section 7-I of the Act also bestows the right to file an appeal before the Tribunal, by the aggrieved party, within a period of sixty days from the passing of the impugned order. The right to have access to justice is part of right to life, and right to livelihood. Therefore, -9- the right to have access to justice cannot be scuttled lightly by the respondent No.1.
8. Although the Commissioner does have the power to attach the property of a defaulting party, the said power is not an absolute one. The exercise of power is limited by the fact that Section 7-I of the Act bestows a right upon the defaulting party to approach the Tribunal, and to challenge an order passed by the Commissioner. In case the Act were to be interpreted to the extent that a specific provision is required to limit the power of the Commissioner, such an interpretation would make Section 7-I of the Act redundant and otiose. Therefore, the Commissioner cannot scuttle, and cannot violate the right to have access to justice by passing an order of attachment, immediately after passing the impugned order for recovery of amount. It is for this reason that this Court, in the case of M/S. MASCON GLOBAL LTD. (supra), had clearly opined that since sixty
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days period is granted to the defaulting party to challenge the order, the Provident Fund Commissioner cannot pass any order of attachment during that period. Hence, with all humility, this Court disagrees with their Lordships of Hon'ble Gujarat High Court, according to whom, a specific provision of law is needed to limit the power of the Commissioner. Any interpretation that would make a provision of law redundant, has to be avoided. Therefore this Court is of the firm opinion that the Commissioner cannot pass an order of attachment within the period of sixty days granted to the defaulting party to approach the Tribunal under Section 7-I of the Act.
9. In case such an order is passed, it would scuttle the entire judicial process. Moreover, it would prevent the defaulting party from challenging the order. Furthermore, it would bestow uncontrolled power in the hands of the Commissioner. For, even before the order
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passed by the Commissioner can be challenged judicially, by passing an order of attachment, a fait accompli would be achieved. The Parliament could not have intended such a consequence while bestowing a power on the Commissioner to order attachment.
10. The learned Senior Counsel also points out that by order dated 09.01.2018, this Court had not only stayed the operation of the order dated 15.12.2017, but it also stayed the operation of the attachment order dated 02.01.2018. But, notwithstanding the order passed by this Court on 09.01.2018, the demand draft has been encashed by the respondent No.3, in favour of respondent No.1. Although the petitioner had tried his level best to bring the order dated 09.01.2018, to the notice of the respondent No.1, however, the respondents have taken a stand that the order could not be brought to the notice of the respondent No.1 prior to the encashment of the demand draft.
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11. Be that as it may, as of today, the demand draft has been encashed. According to the learned counsel for the respondent No.1, the amount of `16,31,58,755/- has been deposited by the respondent No.1 with SBI Bank, St. Marks Road Branch. Therefore, the respondent No.1 is directed to withdraw the said amount from the SBI Bank, St. Marks Road Branch, and to deposit the said amount in the petitioner's account held with the respondent No.3, the HSBC Bank. The respondent No.1 is also directed to deposit the said amount along with the interest earned from the said amount. The respondent No.1 is further directed not to attach the account of the petitioner, till the appeal is heard by the learned Tribunal.
12. The learned counsel for the respondent No.1 seeks one week's time to carry out this exercise by the respondent No.1. The time so prayed for is, hereby, granted.
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13. For the reasons stated above, this writ petition is allowed. The order dated 02.01.2018, passed by the respondent No.1 is quashed, and set aside.
SD/-
JUDGE RD