JUDGMENT :

VIKRAM NATH, J.

1. Leave granted.

2. The present appeal assails the correctness of the judgment and order dated 01.02.2024 passed by the Karnataka High Court in Writ Petition No.2543 of 2023 (L-PF), whereby the High Court dismissed the writ petition filed by the present appellant and further directed that the amount deposited, vide order dated 02.02.2023, be transmitted to the account of the respondent no.1 herein, i.e., the sole respondent before the High Court. Brief facts giving rise to the present appeal are narrated hereunder:

2.1. M/s Acropetal Technologies Pvt. Ltd. (hereinafter referred to as the 'Establishment') was covered under the ambit of EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT , 1952^1.[For short, “PF Act”]. The Establishment defaulted in payment of provident fund dues since July, 2013 and accordingly an enquiry was initiated under Section 7(A) of the PF Act. After due enquiry and affording opportunity of hearing to the Establishment, the Regional Provident Fund Commissioner-II, Bangalore, vide order dated 08.06.2015, determined a liability of Rs.1,28,90,486/- against the Establishment and accordingly directed it to deposit the same within 15 days. The order further indicated that any default or failure may entail prosecution under Section 14/14(A) of the PF Act in addition to recovery proceedings under Section 8(B) to 8(G) of the PF Act. It was also clarified that the above quoted amount did not include the interest and the damages under Sections 7(Q) and 14(B) of the PF Act.

2.2. The Establishment, vide communication dated 29.06.2015, informed that all its bank loan accounts with the Bank had been declared NPA (Non-Performing Asset) and that the Banks had initiated recovery process by auctioning their property. It was also mentioned in the said communication that Axis Bank Ltd. had initiated recovery process for auction of their property at 255- B in Bommasandra Industrial Area, Attibele Hobli, Anekal Taluk, Bangalore (hereinafter referred to as the 'Attibele property'). The communication further mentioned that the auction date fixed by the Bank was 29.07.2015 and also that they would have sufficient balance after settling the bank loan and accordingly would address the statutory dues from the sale amount.

2.3. It further requested the Employees’ Provident Fund Organisation²[In short, “EPFO”] to communicate to the Axis Bank Ltd. for making payment directly to them towards the dues. Upon receipt of the aforesaid communication, the EPFO, vide letter dated 08.07.2015, addressed to the Axis Bank Ltd. referring to Section 11(2) of the PF Act and the judgment of this Court in the case of Maharashtra State Co-operative Bank vs. Assistant PF , Commissioner asked the Bank to remit a total amount of Rs.2,96,76,656/- as outstanding dues on 08.07.2015 by way of Demand Draft in favour of Regional Provident Fund, Commissioner payable at Bangalore out of the sale proceeds of the auction scheduled on 29.07.2015.

2.4. The Axis Bank in response, vide letter dated 20.07.2015, claimed first charge by referring to Section 35 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002³[In short “SARFAESI Act”]. Immediately, on 23.07.2015, the EPFO re-asserted its priority under Section 11(2) of the PF Act and further issued an order of attachment of the immovable property i.e. the 'Attibele property'.

2.5. The EPFO issued a reminder dated 06.08.2015 to the Axis Bank which in response issued a communication informing that the auction could not take place as the same was stayed by an order of status quo pass