A.Abdul Kareem vs Employees Provident Fund … on 7 September, 2011

Madras High Court
A.Abdul Kareem vs Employees Provident Fund … on 7 September, 2011




DATED: 07/09/2011


W.P.(MD)No.10479 of 2010
M.P.(MD)No.1 of 2011

A.Abdul Kareem                   ... Petitioner


1.Employees Provident Fund Appellate Tribunal,
  (Ministry of Labour and Employment)
  Government of India)
  Cire-II, 4th Floor Lakshmi Nagar District Centre,
  Lakshmi Nagar,
  New Delhi-110 092.

2.The Regional Provident Fund Commissioner,
  Lady Dock College Road,
  Madurai-625 002.

3.The Regional Provident Fund Commissioner,
  43-P/1, Trivandram Road,
  Tirunelveli-627 002.           ... Respondents


Writ Petition is filed under Article 226 of the Constitution of
India praying to issue a Writ of  Certiorari,  to call for the records of the
1st respondent made in his proceedings in ATA No.834(13)2003, dated 31.03.2010
confirming the order of the third respondent made in proceedings in
TN/24769/SRO/TNY/PDC(1)/2003, dated 24.09.2003 and quash the same.

!For Petitioner	     ... Mr.S.Silambannan
                         for M/s.Profexs Associates
^For R2 and R3       ... Mr.K.Murali Shankar


The petitioner, being aggrieved by the order, passed under section 14-B of
the Employees’ Provident Funds and Miscellaneous Provisions Act 1952
[hereinafter referred to as ‘Act’] has approached this court, with a prayer for
issuance of a writ, in the nature of certiorari, for quash the demand notice.

2.The petitioner is in the business of manufacture of beedies, and was
issued license on 9.1.1991. The petitioner commenced the manufacture of beedies
from 29.07.1991. The petitioner, therefore, was entitled to exemption from the
operation of the Act, for the period of three years, under section 16(1)(d) of
the Act.

3.However, the petitioner chose to get himself covered. The petitioner
made an application to the respondents for coverage of his establishment from
August 1991, and requested for issuance of code number for remittance of the

4.Instead of granting code number to the petitioner, he was advised to get
sub-code number TN/20221-A, as his brother was doing the same business, and was
covered under the Act.

5.The petitioner did not accept the allotment of sub code, and requested
for allotment of independent code number, on the ground that his business was
independent from that of his brother.

6.The request of the petitioner was accepted, and he was allowed code
No.TN-24769, vide letter, dated 1.04.1992.

7.It is not in dispute that the petitioner deposited the contribution
within the period stipulated i.e., within 45 days of the allotment of the code
number. The petitioner was thereafter issued a notice in the year 1994, for
imposing damages under section 14-B of the Act, for the delay in deposit of
contribution for the period 8/91 to 2/92, as the petitioner was covered with
effect from 2nd August 1991, as requested by him.

8.The petitioner replied to the show cause notice, but, no order was
passed, and another notice was issued in the year 1997, because of the
bifurcation of Madurai division.

9.The petitioner submitted reply to the show cause notice again, then he
was communicated the order, dated 19th December 1991, imposing damages, under
section 14-B of the Act.

10.The petitioner being aggrieved by the order passed under 14-B of the
Act, challenged it, before the learned Employees’ Provident Fund Appellate
Tribunal, New Delhi. The appeal was also dismissed.

11.The reason for dismissal of the appeal, is that the claim of the
petitioner, that he could not deposit the contribution for want of code number
could not be sustained.

12.The learned counsel for the petitioner challenged the impugned order
primarily on the ground that the provisions of the Act, were not applicable to
the establishment of the petitioner, as he was entitled to exemption under
section 16 of the Act.

`13.It was the request of the petitioner, that he be covered. Therefore,
in absence of automatic coverage, till the allotment of code number, it was not
possible to deposit contribution.

14.The learned counsel for the respondents has opposed the writ petition,
by contending that the facts pleaded show that the petitioner was informed, that
he could use the sub code of his brother for depositing the contribution and
therefore, it cannot be said that the petitioner was handicapped in depositing
the contribution within time, to challenge the imposition of damages.

15.The learned counsel appearing for the respondents further contends that
the brand of the beedies manufactured by the petitioner, and his brother are the
same, therefore, one code would have been sufficient for both of them.

16.On consideration, I find force in the contention raised by the learned
counsel for the petitioner.

17.The order passed by the learned Appellate Tribunal can be sustained,
only in case the establishment of the petitioner was covered under the Act, by
operation of law. Once, the petitioner was not covered under the Act, and the
request was made for coverage, then, establishment could be covered under the
Act only after the allotment of the code number.

18.It is not disputed that the contributions were deposited within time
stipulated, and there was no delay in deposit. The imposition of damages under
section 14-B on the face of it is, therefore, without jurisdiction and not
sustainable in law.

19.The contention of the learned counsel for the respondents, that an
offer for sub code was made, cannot justify, the imposition of damages under
section 14-B of the Act, as it is not disputed that the request of the
petitioner for allotment of independent code was accepted by the department, and
new code number was allotted on 1st April 1992.

20.The contention of the learned counsel for the respondents, that as both
the brothers, are manufacturing the beedies under the same brand also cannot
advance the case of the respondents, as it is establishment, which is covered
are not brand. Admittedly, the establishment of both the brothers are different
and allotted different code number.

21.Consequently, the writ petition is allowed. The impugned orders are
set aside.

22.Connected Miscellaneous Petitions are closed. No costs.


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