Madras High Court
N.Kannan vs The Managing Director on 1 November, 2018
Author: S.Vaidyanathan
Bench: S.Vaidyanathan
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on: 01.11.2018
Pronounced on: 18.01.2019
CORAM
THE HON'BLE MR.JUSTICE S.VAIDYANATHAN
W.P.(MD) No.1380 of 2015
N.Kannan ... Petitioner
-vs-
1. The Managing Director,
Tamil Nadu State Construction Corporation Ltd.,
Jawaharlal Nehru Salai, Jai Nagar,
Inner Ring Road, Arumbakkam,
Chennai-600 106.
2. The Chief Engineer,
Highways Rural Works and Minor Ports Department,
Chepauk, Chennai-600 005.
3. The Regional Provident Fund Commissioner-II,
Employees Provident Fund Organization,
R-40 A, TNHB Office Complex,
Mugappair (East), Chennai-600 037.
4. The Assistant Provident Fund Commissioner,
EPF Organization,
Sub-Regional Office,
PB No:588, Sree Complex,
'D' Block, 18-Madurai Road,
Trichy-620 008.
5. The Commissioner,
Hindu Religious and Charitable Endowments Department,
Government of Tamil Nadu, Uthamar Gandhi Salai,
Nungambakkam High Road, Chennai-34.
6. The Assistant Commissioner,
Hindu Religious and Charitable Endowments Department,
Government of Tamil Nadu, Thanjavur. ... Respondents
(R5 & R6 impleaded by order of this Court dated 01.11.2018)
http://www.judis.nic.in
2
Prayer: Petition filed under Article 226 of the Constitution of India, praying
for the issuance of a Writ of Mandamus, directing the respondents 1 to 3 to
settle the petitioner's contribution of Provident Fund amount of Rs.60,820/-
(approximately) along with employer contribution with due interest on both
the items and 12% subsequent interest per annum for the inordinate and
abnormal delay to settle the amounts till such time, it is fully paid and
settled.
For Petitioner : M/s.T.Banumathy
For R1 to R3 : Mr.K.Mu.Muthu
Addl. Govt. Pleader
For R4 : Mr.V.S.Karthi
For M/s.V.S.Karthik Associates
For R5 & R6 : Mr.K.Mu.Muthu, Addl. Govt. Pleader
Amicus Curiae : Mr.D.Sivaraman
*****
ORDER
This petition has been filed, seeking a direction to the respondents 1 to 3 to settle the petitioner's contribution of Provident Fund amount of Rs. 60,820/- (approximately) along with employer contribution with due interest on both the items and 12% subsequent interest per annum for the inordinate and abnormal delay to settle the amounts till such time, it is fully paid and settled.
Brief Facts:
2. The case of the petitioner was that he was initially appointed as Junior Assistant on 01.07.1984 in the Tamil Nadu State Construction Corporation Ltd., Chennai, a Public Sector Undertaking and thereafter, worked in the Hindu Religious and Charitable Endowments http://www.judis.nic.in 3 Department (HR&CE) on deputation basis from 30.12.2005. He was absorbed in the HR&CE Department from the date of joining vide G.O.No.172 dated 01.07.2009 and finally, retired from service on 30.11.2010. During his tenure of service with the 1st respondent, he was paid the salary and other allowances on due recovery of provident fund contributions from his monthly salary, which was remitted by the 1st respondent to the 3rd respondent. An amount of Rs.1,72,299/- has been settled upto 28.02.2006 towards Provident Fund amount for 21 years of service rendered by him with the 1st respondent Organization from 01.07.1984 to 28.02.2006.
2.1. It was the further case of the petitioner that since he was absorbed in the HR&CE Department as a permanent staff, as per the procedure, the 1st respondent has to recover the monthly provident fund contribution from his salary regularly and to remit the same to the account of the 3rd respondent along with the employer contribution for further disbursement and he is eligible to receive the total sum due at the time of his settlement. The 1st respondent by letter dated 17.05.2011 had advised the 3rd respondent to treat his date of relief as 28.02.2006 for accounting purpose and close the provident fund account, consequent to his deputation to HR&CE Department.
http://www.judis.nic.in 4 2.2. It was submitted that from 01.03.2006 to 31.08.2010, when he was working in the HR&CE Department under the control of the Assistant Commissioner, an approximate amount of Rs.60,820/- was recovered from his salary. Though the 3rd respondent has sent a letter dated 02.08.2012 to the 1st respondent with a copy to the petitioner, stating that the PF contributions for the period from 01.03.2006 to 31.08.2010 recovered by the Assistant Commissioner, HR&CE Department, Thanjavur, which were sent to the 1st respondent by means of Demand Draft in favour of TNSCC Limited, was not remitted to the 3rd respondent's Office towards EPF contribution and therefore, the said establishment was directed to submit returns in Form 3A and Form 6A along with a copy of remitted Challan. Subsequently, it was intimated by the 3rd respondent under RTI application dated 19.06.2012 that no contribution has been received.
2.3. It was further submitted that though the petitioner had sent repeated representations by way of RTI applications to the 1st respondent and the Secretary to the Government of Tamil Nadu, Highways Department, Chennai with regard to non-remittance of his EPF contributions, there was no proper response from their side. Thereafter, he received a reply from the 3rd respondent that the 1st respondent has not submitted the returns in full shape and that in case of default in payment of http://www.judis.nic.in 5 PF dues, the employer of the said establishment is to be held responsible. Subsequently, the petitioner had sent a representation dated 18.01.2013 to the Secretary, Highways and Rural Works and Minor Ports Department, Chennai for redressal of his grievance, pursuant to which, a detailed report has been sought for by the Government.
2.4. It was the grievance of the petitioner that on account of non remittance of contributions of the petitioner for the period from 01.03.2006 to 31.08.2010, his monthly pension was fixed at Rs.1,199/- instead of taking into account the entire eligible service of 21 years. Though he had sent several representations dated 11.09.2014, 12.09.2014 and 04.10.2014 to the 1st respondent and the Special Officer, the Hon'ble Chief Minister's Special Cell, Chennai, his efforts to get his contributions did not fructify, which resulted in filing the present writ petition.
3. The 4th respondent has filed a counter affidavit, wherein it has been inter alia stated as follows:
i) since the petitioner sought for the relief specifically against the respondents 1 to 3 in respect of settlement of his Provident Fund amount, the 4th respondent has been unnecessarily dragged on into the mater. It was admitted by the 4th respondent that the benefit accrued to http://www.judis.nic.in 6 the petitioner under the Provident Fund and Pension Schemes got reduced due to non-remittance of P.F. Contribution for the period from March, 2006 to August 2010 by the 1st respondent.
ii) the two issues, regarding remittance of P.F. Amount of Rs.
60,820/- by the 1st respondent to the third respondent and date of leaving the service on 31.08.2010 ought to be decided by the respondents 1 to 3 and the 4th respondent has no active role to play in it on account of lack of territorial jurisdiction. Any decision would be taken by the 4th respondent regarding alteration of the date of leaving service only on payment of P.F. Contribution of Rs.60,820/- along with interest and damage as required under Sections 14B and 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 for the period in question and upon furnishing the correct input data sheet, the 4th respondent will revise the calculation of quantum of pension payable to the petitioner and the revised pensionary benefits will be paid to him from the eligible date.
4. Mr.D.Sivaraman, learned counsel, who was appointed as Amicus Curiae by this Court to assist the Court, has reiterated the same stand taken in the connected W.P.No.10396 of 2015. http://www.judis.nic.in 7
5. Learned counsel for the petitioner has vehemently contended that the 1st respondent had failed to remit the amount of Rs. 60,820/-, which was deducted by the HR&CE Department from the petitioner's salary for the period from 01.03.2006 to 31.08.2010 into the account of EPF Organization. Despite several requests made by the petitioner, the 3rd respondent neither took any action against the 1st respondent nor steps taken to realize the amount due to the petitioner. Learned counsel for the petitioner has further contended that the 3rd respondent, instead of mentioning the correct date of retirement as 30.11.2010, had wrongly taken the date of cessation of work as the date of actual superannuation in the 2nd page of the Pension Payment Order. Further contending that the respondents are so lethargic in disbursement of his dues, suitable directions were sought to the respondents for settlement of the amount with interest at an early date.
6. Per contra, learned counsel for the 4th respondent has stated that though the 4th respondent is not concerned with the present issue on hand, as no amount in respect of the petitioner's contribution has yet been credited into the account of the 4th respondent, but however, the 4th respondent is ready and willing to revise the quantum of pension payable to the petitioner, provided the 1st respondent deposits the contributory amount http://www.judis.nic.in 8 of Rs.60,820/- for the period in question as per the provisions of the relevant Act on due intimation to the 4th respondent.
7. Heard the learned Additional Government Pleader appearing for R1 to R3, the learned counsel for R4, Mr.K.Mu.Muthu, Additional Government Pleader for R5 & R6 and also the learned Amicus Curiae. This Court also perused the material documents available on record.
8. To avoid technical objections, the respondents 5 & 6 have been impleaded as parties to this petition on 01.11.2018 and a composite argument on behalf of HR&CE was addressed and pleadings have been completed by the learned Additional Government Pleader, when the connected Writ Petition in W.P.(MD) No.10396 of 2015 was heard. Hence, no notice has been ordered to R5 & R6 in this petition, as they are already parties to the connected Writ Petition in W.P.(MD) No.10396 of 2015.
9. Admittedly, the petitioner was initially appointed as Junior Assistant on 01.07.1984 in the 1st respondent Corporation and subsequently, he was deputed to the Hindu Religious and Charitable Endowments Department (HR&CE) with effect from 30.12.2005, in which, he was absorbed by order dated 01.07.2009. It is seen that after rendering service http://www.judis.nic.in 9 in the HR&CE Department, the petitioner retired from service on 30.11.2010 and though he was settled the benefits of Rs.1,72,299/- upto 28.02.2006, for the period he worked in the HR&CE Department under the control of the Assistant Commissioner from 01.03.2006 to 31.08.2010, an approximate amount of Rs.60,820/-, which was recovered from his salary was not settled, on the reasoning that the PF contributions for the period from 01.03.2006 to 31.08.2010 recovered by the Assistant Commissioner, HR&CE Department, Thanjavur, which were sent to the 1st respondent by means of Demand Draft in favour of TNSCC Limited, was not remitted to the 3rd respondent's Office towards EPF contribution. Though the petitioner was made to run from pillar to post, the amount of contribution due to him has not been remitted to him.
10. Even though it was the stand of the learned Additional Government Pleader appearing for R1 to R3 that whatever amount payable to the petitioner had already been settled and there is no fault on their part, but however, there is no iota of evidence to show that the Employer and Employee Contributions had been deducted and remitted to EFP Organization. It is pertinent to mention here that in the connected writ petition in W.P.(MD) No.10396 of 2015 filed by the very same petitioner, this Court has directed the Regional Provident Fund Commissioner to initiate http://www.judis.nic.in 10 action against Tamil Nadu State Construction Corporation Ltd., Highways Rural Works and Minor Ports Department and HR&CE and it is open to the respondents 2 and 5 to produce evidence to show that the amount was duly deducted and remitted to the 1st respondent herein and in such an event, the 1st respondent / Tamil Nadu State Construction Corporation Ltd., cannot escape from the clutches of law. However, if the 6th respondent / HR&CE is unable to adduce evidence to prove the factum of deduction and remittance of the amount to the 1st respondent on and from the date of joining the petitioner in the HR&CE Department, then the HR&CE Department is responsible and liable to pay PF contributions and a reading of the Government Order in G.O.Ms.No.675 Finance (Bureau of Public Enterprises) Department dated 22.09.1993 makes it very clear that for the past period, it is the duty cast upon the 1st respondent to make necessary payment and for the future period, it is the employer, who absorbed the employee has to deduct and remit the contributions and to that extent, on and from the date of joining, the duty is cast upon the HR&CE Department to have deducted the PF contributions and remitted to the EPF Organization.
11. This Court, while disposing of the writ petition in W.P.(MD) No.10396 of 2015, has issued suitable directions to the Government, http://www.judis.nic.in 11 regarding stringent action to be taken against the Officials responsible for non-remittance of the amount, withholding their benefits etc and the same shall be taken note of by the EPF Organization. To give quietus to the issue on hand, this Court is inclined to issue following directions:
i) the amount of Rs.60,820/- as stated by the petitioner shall be remitted to the EPF Organization by the HR&CE Department / respondents 5 & 6 along with statutory interest within a period of four weeks from the date of receipt of a copy of this order;
ii) Liberty is granted to the HR&CE Department to proceed against the 1st respondent for withholding the amount together with interest @ 12% p.a. If any amount over and above Rs.60,820/- needs to be paid, the same has to be remitted by the HR&CE Department based on the arithmetic calculation that may be calculated by the EPF Authorities. It is open to the HR&CE Department to take a defence before the EPF Commissioner that the amount was not actually remitted into their account by the 1st respondent and steps may be taken to recover the amount from the 1st respondent / State Construction Corporation Ltd. If the amount has been sent to the 1st respondent by the HR&CE Department, the 1st respondent and its officials are responsible for non-remittance of the amount to the EPF Organization;
http://www.judis.nic.in 12
iii) The Regional Provident Fund Commissioner, Chennai is directed to conduct an enquiry as to who is responsible for the lapses with respect to non-remittance of the amount into EPF account, etc and application action shall be taken against such errant officials under EPF Act, 1952, including the one of sending them to Civil Prison in terms of the relevant provisions of the EPF Act, 1952;
iv) In the event of any person attempting to stall the proceedings by way of approaching the Court, the terminal benefits due to him/them need not be settled till the present issue on hand regarding payment of EPF is settled to the petitioner and other similarly placed persons. Likewise, in case if it is found that the errant official, who was responsible for non-remittance of the amount, is at present working in any other Department, suitable disciplinary action shall be initiated against them and a capital punishment shall be imposed on them for non- remittance of the amount and the same shall be entered into the Service Register so that their promotion and other benefits shall be deprived;
v) The Government, represented by the Finance Secretary is directed to issue a suitable Government Order for grant of all service benefits and continuity of service, as has been granted to the employees http://www.judis.nic.in 13 vide G.O.Ms.No.300 dated 15.12.2008 within a period of 30 days from the date of receipt of a copy of this order and report compliance on 15.03.2019;
vi) Retention of the Employer and Employee amount by the employer would amount to misappropriation of the employee's amount by the employer. When an employee misappropriates the employer's funds, he is shown the doors. Now that employees' money has been misappropriated by the employer and what is that the Government is going to do against the persons, who are responsible to remit the money to Employees Provident Fund Organization (EPFO). Should the same logic of showing the doors to Officials not apply?;
vii) In case HR&CE Department had not deducted the amount and remitted the same into the account of the 1st respondent Corporation, appropriate action may be initiated against the officials of the HR&CE Department by the EPF Commissioner;
viii) The respondents are directed to comply with the order within 30 days from the date on which this order is made ready and report compliance on 15.03.2019. The Government is expected to frame guidelines as to how the responsibility is going to be foisted on the Officials, who are http://www.judis.nic.in 14 responsible to remit PF dues of the employer and employees within time as per the PF Act, 1952 and in the event of non-remittance of the amount, the concerned Officials will have to be dismissed from service for their misconduct, dereliction of duty, showing no devotion to work, lack of integrity so as to deprive their entire gratuity and terminal benefits under the head “moral turpitude” after affording an opportunity of hearing to them;
ix) It is needless to mention that the remittance of the amount and interest would not deprive the EPFO from proceeding with the defaulter to claim damages, apart from bringing the issue to a logical conclusion, including the one of sending the errant officials to Civil Prison With these observations and directions, this Writ Petition is disposed of. No costs.
Post on 15.03.2019 for reporting compliance.
18.01.2019 Index: Yes / No Internet: Yes / No ar Note: Issue order copy on 28.01.2019 http://www.judis.nic.in 15 To:
1. The Managing Director, Tamil Nadu State Construction Corporation Ltd., Jawaharlal Nehru Salai, Jai Nagar, Inner Ring Road, Arumbakkam, Chennai-600 106.
2. The Chief Engineer, Highways Rural Works and Minor Ports Department, Chepauk, Chennai-600 005.
3. The Regional Provident Fund Commissioner-II, Employees Provident Fund Organization, R-40 A, TNHB Office Complex, Mugappair (East), Chennai-600 037.
4. The Assistant Provident Fund Commissioner, EPF Organization, Sub-Regional Office, PB No:588, Sree Complex, 'D' Block, 18-Madurai Road, Trichy-620 008.
5. The Commissioner, Hindu Religious and Charitable Endowments Department, Government of Tamil Nadu, Uthamar Gandhi Salai, Nungambakkam High Road, Chennai-34.
6. The Assistant Commissioner, Hindu Religious and Charitable Endowments Department, Government of Tamil Nadu, Thanjavur.
http://www.judis.nic.in 16 S.VAIDYANATHAN.J., ar PRE-DELIVERY ORDER IN W.P.(MD) No.1380 of 2015 18.01.2019 http://www.judis.nic.in