IN THE HIGH COURT OF JUDICATURE AT PATNA
SAMARENDRA PRATAP SINGH, JJ.
M/S Sri Hanuman Sugar & Industries Limited & Ors. - Petitioners
Versus
Regional Provident Fund Commissioner, Patna, Bihar - Respondents
Civil Writ Jurisdiction Case No.7425 of 2013
Decided On : 05-08-2013
Indian Companies Act - Employees Provident Fund and Miscellaneous Provisions Act - 1952 - Sections 8B, 11, 29 - The judgment discusses the rights of a landholder under the Ceiling Act, 1961, and the power of the Collector to refuse permission for the sale of land during a ceiling proceeding. It also addresses the authority of the Recovery Officer under the E.P.F. Act, 1952 to attach and recover arrears of Provident Fund dues.
Fact of the Case:
The petitioners, a company and its shareholder, sought direction to prevent the liability of the Employees Provident Fund and Miscellaneous Provisions Act from being fastened on the shareholder. They also sought permission to sell land to clear dues and challenged the refusal of permission for sale by the District Magistrate.
Finding of the Court:
The court held that the landholder's right to transfer land is limited by the Ceiling Act, and the Collector can refuse permission for sale only if it is made with a malafide intention of defeating the object of the Act. The Recovery Officer was found to have the authority to attach and recover arrears of Provident Fund dues.
Issues: The issues included whether a landholder can transfer land during a ceiling proceeding, and whether the Recovery Officer's actions were valid.
Ratio Decidendi: The court interpreted the provisions of the Ceiling Act, 1961, and the E.P.F. Act, 1952 to determine the rights and limitations of landholders and the authority of the Recovery Officer.
Final Decision: The court upheld the District Magistrate's refusal of permission for sale and quashed the warrant of arrest issued by the Recovery Officer, while affirming the Recovery Officer's authority to attach and recover arrears of Provident Fund dues.
The petitioner no.1 is a Company within the Meaning of Indian Companies Act, 1956 and owns Sugar Factory. Petitioner no.3, the Eastern Sugar & Industries Ltd. Unit is a lessee of petitioner no.1.
2. Petitioner no.2 is the share holder as well as Chairman of both petitioner nos. 1 and 3.
3. (a). The petitioners seek direction to respondent nos. 1 and 2 not to fasten the liability of Employees Provident Fund and Miscellaneous Provisions Act against petitioner no.2, the Chairman of the petitioner nos.1 and3, as well as for quashing of Warrant of Arrest issued under Section 8 B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “E.P.F. Act, 1952”). Prayer has also been made for fixation of easy instalments for clearing Provident Fund dues.
(b) They further seek directions to the respondents to register the sale deeds as contained in Annexure-7 and 7/A and also to quash the order dated 18.02.2013 contained in Memo no.741 dated 19.02.2013 passed by District Magistrate, East Champaran, Motihari (Annexure-15), by which he has declined to approve permission for registration of sale deeds contained in Annexure-7 and 7/A.
4. In course of hearing of this application, I.A. No.3576 of 2013 has been filed for amendment of relief, seeking quashing of order dated 18.04.2013 passed by Recovery Officer, Employee Provident Fund Organization, Sub-Regional Office, Muzaffarpur, contained in Annexure-20, by which land belonging to petitioner no.1 measuring 5 Bighas, 5 Kathas and 10 Dhurs have been attached. The amendment sought in relief portion is allowed as cause of action arose subsequent to filing of writ application.
5. Before I take up the issues raised by the parties, it would be relevant to notice the facts of the case in short. (a) Earlier petitioner nos. 2 and 3 moved this Court in C.W.J.C. No.8734 of 2009 against the order passed under Section 8-B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 whereby recovery proceeding was initiated for non-payment of Provident Fund dues under section 7-A of the Act to the tune of Rs.80,88,709/-. The petitioners pleaded that on account of weak financial position of the company, it is not able to liquidate the entire dues at a time, nonetheless intended to generate funds by disposing some of its properties. The petitioners sought co-operation of the registering authorities in selling some land of the companies as well as private land of Nopani family.
(b) During the pendency of the writ application, the Sugar Mill Labour Union and the Cane Grower Labour Association filed Interlocutory applications for being impleaded as parties. They too had certain money claim against the petitioners. The intervenors were allowed to be added as parties. In course of hearing “Hanuman Sugar and Industries Ltd.” (petitioner no.1 of the instant case), was also added as a party in C.W.J.C. No.8734 of 2009 on pleadings of respondents as being lessor of petitioner Eastern Sugar Industries Ltd. (c) The Court observed that the petitioners could sell properties of Nopani family and other properties which were free from encumbrances to pay off the dues of labourers, Cane Growers and P.F. Department. (d) It was further case of the petitioners that pursuant to order of this Court they had negotiated and received a sum of Rs. 1 crore against sale of land which has been referred before and has distributed the same as follows: (a) Rs.30 lacs has been paid by the petitioner towards clearance of arrears of cane price. (b) Rs.51.36 lacs has been paid by the petitioner towards clearance of arrears of wages as well as current wages of the workers. (c) Rs.30.44 lacs has been paid by the petitioner towards the Provident Fund dues and (d) Rs.33.60 lacs has been spent by the petitioner in repair, working and maintenance of the factory.
6. The District Magistrate, East Champaran, Motihari in his counter affidavit stated that a Land Ceiling case being Ceiling Case n
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