Back
High Court Of Calcutta
A. K. CHAKRAVARTY
POYSHA INDUSTRIAL COMPANY LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
C. O. 4562 Of 1994
Decided On : 08/11/1994
SICK INDUSTRIAL COMPANY - EMPLOYEES' PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 14B - ASSESSMENT OF DAMAGES - WAIVER OR REDUCTION OF DAMAGES - JURISDICTION OF CENTRAL BOARD - S.I.C. (S.P.) ACT, 1985 - SECTION 22(1) - NO BAR TO RECOVERY OF STATUTORY DUES - CENTRAL BOARD'S JURISDICTION TO WAIVE OR REDUCE DAMAGES UNDER SECTION 14B OF THE E.P.F. AND M.P. ACT.
Fact of the Case:
The petitioner, a sick industrial company, challenged the order of the Regional Provident Fund Commissioner assessing damages under Section 14b of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, for delayed payment of provident fund dues. The petitioner argued that the delay was due to non-receipt of a separate code number from the authorities and that the company was declared sick under the Sick Industrial Companies (Special Provisions) Act, 1985, which barred any proceedings against the company's properties without the consent of the Board of Industrial and Financial Reconstruction (BIFR).
Finding of the Court:
The court held that the non-receipt of a code number was not a valid ground for deferred payment of provident fund dues, as the petitioner could have deposited the amount in the code number of the principal establishment. However, the court also noted that the authorities had not considered the fact that the company was a sick industrial company and that a scheme for rehabilitation had been sanctioned by the BIFR. The court held that the Central Board had the jurisdiction to waive or reduce damages under Section 14b of the E.P.F. and M.P. Act in relation to sick industrial companies.
Issues: 1. Whether the non-receipt of a code number was a valid ground for deferred payment of provident fund dues? 2. Whether the provisions of Section 22(1) of the S.I.C. (S.P.) Act barred the recovery of statutory dues from a sick industrial company? 3. Whether the Central Board had the jurisdiction to waive or reduce damages under Section 14b of the E.P.F. and M.P. Act in relation to sick industrial companies?
Ratio Decidendi: 1. The court held that the non-receipt of a code number was not a valid ground for deferred payment of provident fund dues, as the petitioner could have deposited the amount in the code number of the principal establishment. 2. The court held that the provisions of Section 22(1) of the S.I.C. (S.P.) Act did not bar the recovery of statutory dues from a sick industrial company, as there was a specific provision in Section 14b of the E.P.F. and M.P. Act dealing with the assessment of damages in relation to sick industrial companies. 3. The court held that the Central Board had the jurisdiction to waive or reduce damages under Section 14b of the E.P.F. and M.P. Act in relation to sick industrial companies.
Final Decision: The court set aside the impugned order and referred the matter back to the appropriate authority for disposal of the matter by passing a reasoned order in the light of the observations made within two months from the date of the order.
( 1 ) THIS writ petition is directed against the order (under section 14b of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 dated 13. 12. 93) passed by the Regional Provident Fund Commissioner, West Bengal, the Andaman and Nicobar Islands which was communicated to the petitioner by Memo No. A/045/wb /25896/damage /50/35 dated 25. 1. 94.
( 2 ) THE petitioner Company's case is that it has its factory at Budge Budge Trunk Road, Post Office-Maheshtolla, District-24 Parganas (S ). The company was having business of manufacturing different types of goods. It was alleged that it wanted a separate provident code number. The said authorities did not allot the Same initially for its Budge Budge factory. Petitioner thereafter deposited a sum of Rs. 41,987. 30 paise with the Provident Fund Authorities towards its provident fund dues from September, 1987 to July, 1988 and the said authorities was informed about the matter on 31. 8. 88. On November, 11, 1988 a separate code number being WB/25896 was allotted in the name of the petitioner. The petitioner further alleged that after the payment of above mentioned amount the petitioner was regularly depositing the provident fund contribution as required under the provisions of law. The petitioner's further case is that the initial delay in depositing the provident fund contribution from 1987 to 1989 was mainly due to the non-receipt of the code number. The petitioner was thereafter served with a notice under Section 14b of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter to be stated as 'the Act') and the Regional Provident Fund Commissioner without proper consideration of the said fact assessed such damage at Rs. 33,419/- levied the same on the petitioner. The further case of the petitioner is that the employees were recruited from April 1, 1987, so they could not be brought under the purview of the Act with effect from December, 1986. It was further alleged that the company is a sick unit and the case of the petitioner was referred to the Board of Industrial and Financial Reconstruction (in short BIFR ). The proceeding was started by Case No. 58/83. On October 26, 1993 the company was declared to the sick industrial company within the meaning of Section 3 (1) (2) of the Sick Industrial Companies (Special Provisions) Act, 1985 [in short S. I. C. (S. P.) Act]. It was also alleged that the matter is now pending for final disposal before the bench of the BIER. It was accordingly claimed that the respondent authorities cannot take any step against the petitioner under section 22 (1) of the S. I. C. (S. P.) Act, 1985. The petitioner accordingly filed the writ application praying for rule in the nature of mandamus commanding the respondents to withdraw/cancel/rescind impugned notice.
( 3 ) IN the affidavit-in-opposition it is alleged by the respondents that the Calcutta unit of the petitioner was started as a part and parcel of its principal establishment in Maharashtra and so though no separate code number could be issued initially still such code number was allotted subsequently to the petitioner for administrative reasons. The petitioner did not pay the provident fund contribution within due date. It was further alleged that the plea of sickness of the company, even if true, cannot absorb the petitioner from the responsibility of making the payment of statutory dues in time. It was also alleged that the respondent were not informed that the company was declared as a sick industrial company.
( 4 ) MR. L. C. Bihani, learned Advocate appearing with Ms. Suchandra Mukherjee, submitted that since admittedly the code number was supplied to the petitioner company by the respondent authority on 11. 12. 88 it could not be a saddled with the responsibility of non-payment of provident fund dues in time from December 1986 to December 1988.
( 5 ) THE main thrust of Mr. Bihani's argument, however, is that by an order dated 26. 10
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
