IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 19429 of 2010(C)
1. THE QUILON DISTRICT ENGINEERING
... Petitioner
Vs
1. THE REGIONAL PROVIDENT FUND COMMISSIONR,
... Respondent
2. THE RECOVERY OFFICER, EMPLOYEES'
3. KOLLAM DISTRICT CO-OPERATIVE BANK LTD.,
For Petitioner :SRI.S.P.ARAVINDAKSHAN PILLAY
For Respondent :SRI.M.K.CHANDRA MOHANDAS
The Hon'ble MR. Justice C.T.RAVIKUMAR
Dated :11/10/2010
O R D E R
C.T. RAVIKUMAR, J.
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W.P.(C). NOS.19429 & 28804 OF 2010
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Dated this the 11th day of October, 2010
JUDGMENT
Common facts and issues involve in these Writ Petitions and
therefore, they were heard jointly and are being disposed by this common
judgment.
2. The Quilon District Engineering Technicians Industrial
(Workshop) Co-operative Society Ltd. (QETCOS) is the petitioner in W.P.
(C).NO.19429/2010. The petitioner in W.P.(C).NO.28804/2010 is a
retired employee of the QETCOS. QETCOS is the second respondent
therein. According to the petitioner in W.P.(C).NO.19429/2010, the
Society was in the red and subsequently, a revival scheme was evolved. It
is prayed therein, inter alia, for issuance of a writ of mandamus
commanding the QETCOS to pay off all the amount due to him by way of
arrears of salary, DCRG, PF etc. forthwith. In the former Writ Petition,
QETCOS challenges the prohibitory order dated 9.6.2010 issued by the
second respondent, Recovery Officer of the Employees Provident Fund
Organisation by which the third respondent namely, the Kollam District
Co-operative Bank Ltd., has been interdicted from releasing funds to
W.P.(C) Nos.19429 &
28804/2010 2
QETCOS from the cash credit facility sanctioned as per Ext.P4. The
further prayer is for issuance of a writ of mandamus commanding
respondents 1 and 2 viz., the Commissioner and the Recovery Officer, of
the Employees Provident Fund Commission to lift the prohibitory order
issued against QETCOS, the petitioner and to direct the third respondent
to make payments to QETCOS out of the cash credit facility sanctioned as
per Ext.P4.
3. Ext.P1 in W.P.(C).NO.19429/2010 is relevant for the purpose
of disposal of these Writ Petitions. It carries certain conditions as
hereunder:-
1. Current contributions (both employees and
employers share) shall be paid promptly and
regularly on or before the stipulated dates.
2. The instalment amount shall also be remitted on or
before the prescribed date along with current dues
and chalan forwarded to your office.
3. A bank guarantee for an amount of Rs.4.00 lakhs
(Rupees Four Lakhs only) equal to one instalment to
the satisfaction of the Regional Provident Fund
Commissioner has been furnished.
4. Contributions due in respect of outgoing/deceased
shall be remitted in addition to the current dues and
the amount of instalment.
W.P.(C) Nos.19429 &
28804/2010 3
5. We undertake to pay such damages plus interest at
the rate of 12% per annum on all belated remittances
as may be levied by the Regional Provident Fund
Commissioner in accordance with the provisions of
section 14B/7Q of the Employees Provident Fund
and Miscellaneous Provisions Act, 1952.
6. The legal costs if any that may be determined by the
Provident Fund Authorities shall be paid.
7. The instalment amount and the number of
instalment can be decided by the competent
authjority and shall be binding on us.
4. Admittedly, in terms of Ext.P1, QETCOS gave a bank
guarantee to the first respondent, the Regional Provident Fund
Commissioner. The period of the bank guarantee had expired on
30.9.2010. In Ext.P2, it has been stated thus:-
“Notwithstanding anything contained in the foregoing,
our liability hereunder is limited to a maximum of
Rs.4.00 lakhs (Rupees Four lakhs only) and to a
maximum period of 16 months expiring on 30th
September 2010 after which date no claim will be
entertained by us unless the guarantee has been
extended by mutual agreement.”
(emphasis supplied)
W.P.(C) Nos.19429 &
28804/2010 4A perusal of the above extracted portion from Ext.P2 would reveal that the
guarantee is extendable by mutual agreement. Evidently, QETCOS and
the first respondent therein are the parties referred to the said guarantee.
When these Writ Petitions are taken up today, the learned counsel for the
petitioner and also the learned standing counsel for the first respondent in
the former Writ Petition, upon instructions, submitted that the petitioner
and the first respondent have mutually agreed to extend the period of
Ext.P2 guarantee and it would be kept alive till the entire arrears due to the
petitioner are cleared.
5. Going by the conditions in Ext.P1, QETCOS has to pay the
current contributions (both employees and employers share) and amount of
instalments besides contributions due in respect of outgoing/deceased
employees. Towards such contributions ie., including the current
contribution and the contributions in due, the learned counsel for
QETCOS submitted that the petitioner is prepared to pay Rs.4,00,000/- per
month as agreed in Ext.P1. The learned counsel for the first respondent
submitted that the petitioner may be directed to pay the same without any
failure on or before tenth day of every month. The learned counsel for the
W.P.(C) Nos.19429 &
28804/2010 5
first respondent also prayed that opportunity may be given to the first
respondent to proceed against the petitioner in case of any failure on the
part of the petitioner in making the contributions as agreed above. As
already noticed, the petitioner in W.P.(C).NO.28804/2010 is a retired
employee of the QETCOS and the learned counsel for the petitioner
therein fairly submitted that the petitioner therein is also well wisher of
QETCOS and did not want to do anything to ruin the industry and his main
concern is only to get the amount due to him on his retirement.
Admittedly, several employees of the QETCOS are yet to get their terminal
benefits. Indisputably, the first respondent in W.P.(C).NO.19429/2010
has to disburse the benefits due under the Provident Fund Act to the
employees, in accordance with law, reckoning the date of their retirement
as directed in Ext.P3 judgment. In the light of Ext.P3 judgment, there
cannot be any doubt with respect to the mode of disbursement of the
amount once it is received by the first respondent. At the same time, based
on the submission made by the learned counsel in the latter writ petition,
this Court directed the first respondent to ascertain whether QETCOS has
paid or any amount has been recovered from QETCOS towards the
W.P.(C) Nos.19429 &
28804/2010 6
provident fund dues. Accordingly, the learned counsel for the first
respondent, on instructions, submitted that already an amount of
Rs.6,77,332/- has been recovered towards the Employees’ Provident Fund
dues in respect of the employees of QETCOS from 2002. The said
amount is credited to the members’ account and consequently, payment in
respect of the retired employees of QETCOS would be made shortly,
strictly in terms of Ext.P3 judgment referred above. It is further submitted
that the retired employees were granted pension despite the fact that the
establishment has not deposited the Pension Fund Contribution. In view
of the above facts and submissions and also the understanding arrived at
between the parties, I am inclined to dispose of this writ petitions as
hereunder:
QETCOS shall pay Rs.4,00,000/- per month on or before 10th day of
every month commencing from the month of December, 2010 to the first
respondent. It is made clear that in the case of failure on the part of
QETCOS to effect payment as directed above, it will be open to the first
respondent in W.P.(C).No.19429/2010 to initiate coercive steps for the
realisation of the dues in accordance with law. Since the second
W.P.(C) Nos.19429 &
28804/2010 7
respondent therein has issued prohibitory order dated 9.6.2010 to the third
respondent interdicting the third respondent viz., the Kollam District Co-
operative Bank Ltd., from releasing funds to the QETCOS from the cash
credit facility sanctioned as per Ext.P4, there will be a further direction to
the first and second respondents to issue appropriate orders lifting the
prohibitory order dated 9.6.2010 and this shall be done within a period of
one week from the date of receipt of a copy of the judgment. In view of
the mutual consent recorded earlier, the parties to Ext.P2 bank guarantee
shall see that its period is extended till the entire dues are cleared.
Needless to say that in view of the above directions, respondents 1 and 2 in
W.P.(C).NO.19429/2010 shall keep all coercive steps initiated against
QETCOS in abeyance and they shall proceed against QETCOS only in
case of failure to effect payment as mentioned above. Admittedly, the first
respondent in W.P.(C).NO.19429/2010 has recovered an amount of
6,77,632/- towards the EPF dues in respect of the employees of QETCOS.
The first respondent shall disburse the amount expeditiously at any rate,
within a period of one month from the date of receipt of a copy of the
judgment, in accordance with the directions in Ext.P3 judgment. Needless
W.P.(C) Nos.19429 &
28804/2010 8
to say that in terms of the directions issued in W.P.(C).NO.19429/2010, as
and when the petitioner effects payment, the same shall also be disbursed
to the retired employees in terms of Ext.P3 judgment within one month
from the date of remittance of the amount, in accordance with the
provisions.
Subject to the above observations, these writ petitions are disposed
of.
(C.T. RAVIKUMAR, JUDGE)
spc
W.P.(C) Nos.19429 &
28804/2010 9
C.T. RAVIKUMAR, J.
JUDGMENT
September, 2010
W.P.(C) Nos.19429 &
28804/2010 10