IN THE HIGH COURT OF JUDICATURE AT PATNA
CWJC NO.5611 OF 2005
1. M/S SONE VANASPATI LTD. HAVING ITS REGISTERED
OFFICE AT WEST MORABADI MAIDAN, RANCHI THROUGH
ITS ONE OF THE DIRECTORS MR. INDU BHUSHAN JHA.
2. MR. INDU BHUSHAN JHA SON OF LATE DAROGA JHA
AGED ABOUT 63 YEARS, RESIDENT OF 202, MALABAR
RESORT, ANANTPUR, P.S.- DORANDA, P.O.- DORANDA,
DISTRICT-RANCHI, ONE OF THE DIRECTORS M/S SONE
VANASPATI LTD.
..... PETITIONERS.
VERSUS
1. UNION OF INDIA THROUGH COMMISSIONER, EMPLOYEES
PROVIDENT FUND ORGANISATION, REGIONAL OFFICE,
BHAVISHYA NIDHI BHAWAN, 'R' BLOCK ROAD NO.-6
PATNA.
2. THE RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND
ORGANISATION, REGIONAL OFFICE, BHAVISHYA NIDHI
BHAWAN, 'R' BLOCK ROAD NO.-6, PATNA.
.... RESPONDENTS.
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For the petitioners : Mr. Gajendra Pratap Singh, Advocate.
For the respondents : Mr. R.S.Pradhan, Senior Advocate with
Mr. Rajeev Lochan, Advocate.
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PRESENT
HON'BLE MR. JUSTICE S.N.HUSSAIN
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ORDER
06/ 07.07.2011 Petitioner is no.1 is a Joint Sector Undertaking being
Public Limited Company registered under the provisions of the
Companies Act, 1956, whereas petitioner no.2 is one of the
Directors of the said Company.
2. This writ petition has been filed by the petitioners
challenging the entire proceeding of Certificate Case No.2076 of
2001 which was initiated against the petitioners for recovery of
Rs.12, 90, 317.00 and also challenging warrant of arrest issued
against petitioner no.2 in the aforesaid case.
3. The petitioners have challenged the said proceeding
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on the ground that there was a labour unrest in the petitioner-
company which was declared sick and for its liquidation Company
Petition No.06 of 2009 was filed by the petitioners and winding up
order was passed and Official Liquidator was appointed for the
company who submitted his report on 05.07.2010 annexing the
statement of affairs, whereafter by order dated 09.07.2010
(Annexure-A series), the High Court of Jharkhand at Ranchi
appointed valuer and directed the Official Liquidator to invite
claims for sale of the assets of the company by public notice in the
newspaper. He thus claimed that once a company is declared sick
under the Sick Industrial Companies (Special Provisions) Act,
1985 (hereinafter referred to as ‘SICA’ for the sake of brevity), no
proceeding for realisation of any amount from the company can be
initiated without taking recourse to the said law. In this
connection, he relied upon Section 32 of the SICA in which it has
been provided that the provision of the Act and of any Rules and
scheme made thereunder shall have effect notwithstanding
anything inconsistent therewith contained in any other law except
the provision of Foreign Exchange Regulation Act, 1973 and
Urban Land (Ceiling and Regulation) Act, 1976. He also relied
upon a decision of the Apex Court in case of Bharat Singh & Ors
Vs. State of Haryana and Ors, reported in A.I.R. 1988 S.C. 2181
as well as a decision of Division Bench of this High Court in case
of Kanhaiya Lal Vs. The State of Bihar & ors, reported in 2002
(2) P.L.J.R.553.
4. In connection with the question of alternative remedy
available to the petitioners against the order passed in the
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certificate case, learned counsel for the petitioners submitted that
when the pleadings have changed hands and substantial progress
has been made in the case, there is no occasion for the court to
throw out the writ petition on the ground of alternative remedy. In
this connection, he relied upon a decision of Ranchi Bench of this
Court in case of Oriental Insurance Company Ltd. Vs. Lal Muni
Devi and another, reported in 1998(2) P.L.J.R. 154.
5. On the other hand, learned counsel for the
respondents submitted that the petitioner-company was covered
under the Employees Provident Fund and Miscellaneous
Provisions Act, 1952 (hereinafter referred to as ‘EPF & MP Act’
for the sake of brevity) with effect from 20.09.1996 and when it
was reported to be in default of payment of dues with respect to
employees provident fund a proceeding was initiated for
determination of the dues for the period concerned and during the
course of hearing Area Enforcement Officer submitted dues and
deposit statement against which no dispute was raised by the
petitioners and the Assistant Provident Fund Commissioner vide
his order dated 30.08.2000 determined the payable dues at
Rs.12,90,317.00 directing the petitioners to pay the same within
fifteen days indicating the consequences of failure. He further
submitted that the said order having not been challenged by the
petitioners either in appeal under Section 7-I of the EPF & MP Act
or even in the writ petition, the writ petition is not maintainable.
He further submitted that where the question of employees
provident fund is concerned, the provision of Section 27 of the
SICA is not applicable. In this connection, he relied upon a
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decision of Orissa High court dated 09.10.2001 in O.J.C. No.2851
of 2001 (Industrial Development Corporation Orissa Ltd. and
another Vs. Regional Provident Fund Commissioner-II and
another).
6. From the pleadings of the parties as well as from the
materials on record it is quite apparent that neither order dated
30.08.2000 passed by the Assistant Provident Commissioner
determining the payable EPF dues at Rs.12,90,317.00 has been
annexed, nor any order of the Recovery Officer in the certificate
case for issuance of warrant against the petitioner has been
annexed, nor even the date of issuance of warrant of arrest has
been mentioned in the writ petition which was filed on 02.05.2005,
annexing copy of notice dated 29.04.2002 issued by the Recovery
Officer in the certificate case (Annexure-2) without any statement
as to what happened in the interregnum three years.
7. It is not in dispute that petitioner no.1 is a Public
Limited Company registered under the provisions of the
Companies Act, 1956 having six partners including officers of the
Government and its Corporation and it was covered under the EPF
& MP Act with effect from 20.09.1996. Subsequently, the
petitioners defaulted in payment of dues and hence the authorities
under the said Act initiated a proceeding and in course of its
hearing, the Area Enforcement Officer submitted his statement
regarding dues and deposit which was not deposited by the
petitioners and finally the Assistant Provident Fund Commissioner
by his order dated 30.08.2010 determined the payable dues at
Rs.12,90,317.00. The aforesaid determination was made under
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Section 7A of the EPF & MP Act which was never challenged by
the petitioners, nor any appeal was filed by them as has been
provided under Section 7-I of the said Act. The said order has not
even been challenged in the instant writ petition and as such the
same has attained finality.
8. In the said circumstances, Certificate Case No.2076
of 2001 for recovery of the said amount was rightly initiated in
April, 2001 by the Recovery Officer, whereafter notice of demand
was served upon the petitioner, but no compliance having been
received from the petitioner summon dated 29.04.2002 (Annexure-
2) was issued by the Recovery Officer requiring the petitioner to
appear on 30.05.2002 along with documents/information relating
to petitioners’ assets failing which the petitioner has become
subject to procedure as laid down under Order XVI Rule 12 of the
Code of Civil Procedure which is for appearance of witnesses. The
petitioners have not stated anything with respect to any step taken
thereafter by the Recovery Officer in the certificate case, although
a period of more than three years had lapsed before the filing of the
writ petition. Hence, there appears to be no reason for the
petitioners to file a writ petition challenging a non existent warrant
of arrest against petitioner no.2 in connection with the aforesaid
certificate case.
9. The petitioners are relying upon a much subsequent
order dated 16.08.2002 passed in petitioners’ Case No.89 of 1993
by the Board for Industrial and Financial Reconstruction
(hereinafter referred to as ‘the Board’ for the sake of brevity) in
which it was mentioned that on account of complete erosion of its
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network, the company was referred to the Board and was declared
sick under the SICA at the hearing held on 21.05.1998 and
subsequently on 31.05.2001 O.A. submitted its final report
containing the scheme, envisaging substantial capital expenditure
along with OTS for the dues of the involved Bank and Institution.
This followed certain clarifications and correction from O.A. vide
letters dated 30.11.2001 and 27.05.2002. By the said letter Draft
Rehabilitation Scheme (DRS) was approved by the Board and
direction was given to publish the said scheme in the newspaper,
whereafter the final scheme incorporating the statement of the dues
was to be considered. Hence, the entire matter before the aforesaid
Board was initiated and proceeded much after final order was
passed by the Assistant Provident Commissioner and the Recovery
Officer. Furthermore, although in the said order dated 16.08.2002
(Annexure-1) the next meeting of the Board was fixed on
11.11.2002, but neither any further order has been annexed to the
writ petition nor the pleading reveals what had happened thereafter
in the case before the Board, although writ petition was filed more
than 2 ½ years thereafter.
10. From the draft rehabilitation scheme annexed along
with the order of the Board dated 16.08.2002 (Annexure-1), it is
quite apparent that cut off date has been fixed for the EPF
authorities to consider the instalment facility for payment of
arrears of dues and to consider waiver of damages levied on
delayed payment of EPF contributions, but the petitioners have not
produced any document whatsoever to establish that the said draft
scheme had been approved and is under implementation, nor the
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petitioners have produced any application filed by them for grant
of instalment for liquidating the arrears/ dues in question. In the
said circumstances, there appears to be no genuine cause shown by
the petitioner to quash the certificate case which was instituted in
lawful discharge of the statutory duties cast upon the Regional
Provident Fund Commissioner to determine the contributions/dues
in respect of the employees and to take prompt action for its
recovery by invoking jurisdiction under Section 8 B to 8 G of the
Act. Hence, the said proceeding under the EPF &MP Act cannot
be legally assumed to be barred due to the pendency of BIFR case
under the SICA.
11. The parties are not disputing the fact that the
employees provident fund scheme under the EPF & MP Act is
applicable to the employees of the petitioner-company and hence it
is liable to pay its contribution, but the petitioner-company has
defaulted in payment of the same, although it has continued to
deduct the employees contribution towards provident fund from
their wages for several years and had not deposited the same even
after specific direction of the authorities concerned and hence
petitioners were duty bound to deposit the employees’ contribution
and the employer contribution as well as administrative charges in
the provident fund. In the said circumstances, the provision of
Section 22(1) of the SICA cannot be of any help to the petitioner
and such provision cannot act as a bar to the recovery proceeding
under the EPF & MP Act. According to mandate enshrined in EPF
& MP Act a certificate proceeding is initiated to secure the
statutory contribution of poor worker of the establishment which is
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directly related to the livelihood of such poor person and hence the
financial position of the establishment or any rehabilitation cannot
come in the way of securing fundamental rights of the workers of
the petitioner establishment. Hence, the impugned action has been
taken by the authorities concerned in the lawful discharge of their
duties cast under the provisions of the Act after following the
procedure prescribed in law.
12. So far the point raised by learned counsel for the
petitioners that out of six Directors of the petitioner-company,
three of them are from the State Government or its Corporation is
concerned, the said plea is similarly frivolous and misconceived as
existence of such Directors does not entitle the petitioner-company
to commit default in payment of the dues of the EPF, nor can it
legally stop the authorities from taking any action either against
the petitioner-company or against its Directors in accordance with
law and hence the Provident Fund Authorities have rightly taken
the aforesaid steps.
13. No doubt the question of alternative remedy was
raised by learned counsel for the respondents which was objected
to by learned counsel for the petitioners, but this court also thinks
that considering the special facts of this case as well as the
completion of the pleadings and arguments at length on behalf of
the parties, there is no question of disposing of this case merely on
the ground of alternative remedy, especially when the alternative
remedy cannot be treated as an absolute bar to entertain a writ
petition so as to amount to denudation of the power of the High
Court under Articles 226 and 227 of the Constitution of India
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which power the High court can always exercise in the facts and
circumstances of a given case notwithstanding availability of any
alternative remedy provided in the Statute. In this connection,
learned counsel for the petitioner has rightly relied upon a decision
of a Division Bench of this Court in case of Kanhaiya Lal (supra).
14. Learned counsel for the petitioners relied upon a
decision of the Ranchi Bench of this Court in case of Oriental
Insurance Company Ltd.(supra), but the said decision was with
respect to certain facts and provisions which are not at all
applicable to the facts and circumstances of this case.
15. Learned counsel for the petitioners has referred to
Section 32 of SICA and has also relied upon a decision of the
Apex Court in case of Bharat Singh (supra), but in the aforesaid
facts and circumstances of this case mentioned above, the
provision of Section 32 cannot be used as a bar to the impugned
action of the authorities concerned which was legal and justified as
per the findings of this court in the above paragraphs. Furthermore,
the abovementioned decision cited by the petitioners does not help
them at all rather it goes against the petitioners as it has been held
therein that in a writ petition not only the facts, but the evidence in
proof of such facts have to be pleaded and annexed to it, but in this
case the petitioners have miserably failed in that regard as has been
discussed above.
16. So far reliance of the petitioners’ counsel on an
order of a Division Bench of this Court dated 28.01.2002
(Annexure-3) passed in CWJC No.1419 of 2002 as well as upon a
decision of the Apex Court in case of Tata Davy Ltd. Vs. State of
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Orissa and others, reported in (1997) 6 Supreme Court Cases 669
is concerned, it is quite apparent from a bare perusal of the same
that the said cases were with respect to arrears of sales tax which
was directed to be recovered without the consent of the Board. In
those cases the arrear was with respect to sales tax and the law is
settled in that regard that once the industry has been declared sick
under the provision of the SICA and steps have been taken for
formation of the scheme, the State Government cannot recover the
arrears of sales tax prior to declaration of the industry as a sick
industry without taking consent of the Board. But here the matter
is completely different as it concerns the fundamental right of
livelihood of the workers in the establishment of the petitioner-
company and non-fulfillment of the statutory obligation with
respect thereto by the petitioner company. Hence, these two
matters cannot be legally equated.
17. So far the plea of the petitioners that Company
Petition No.06 of 2009 in which Official Liquidator has been
appointed, and winding up order has been passed is concerned, it
had been filed at the instance of the petitioners in the year 2009
after about seven years of the impugned action taken against the
petitioners and it transpires from order dated 09.07.2010 by which
notice inviting claims was directed to be issued that the facts which
are involved in the instant writ petition had not been brought to the
notice of the High Court of Jharkhand at Ranchi where the
aforesaid company petition is pending.
18. Considering the entire facts and circumstances of
the case as well as the pleadings and evidence of the parties on
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record as well as the position in law, this court does not find any
reason to interfere with the impugned order of the authority
concerned and accordingly this writ petition is dismissed.
However, if the petitioners, so like, they may bring the entire facts
and circumstances of this case mentioned above to the notice of the
High Court of Jharkhand where Company Petition no.06 of 2009 is
pending.
(S. N. Hussain, J.)
Sunil