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2010 Supreme(Cal) 1442
High Court Of Calcutta
B. Bhattacharya, Sambuddha Chakrabarti, JJ.
M/S. Paramount Leathers : Appellant
Versus
The Regional Provident Fund Commissioner : Respondent
Decided On : Dec 14,2010
Mrinal Kanti Das, Subhabrata Das, Mihir Kundu
The availability of alternative remedy is not an absolute bar to the invocation of the writ jurisdiction, and that in cases where the order impugned is without jurisdiction or is made in violation of the principles of Natural Justice, the writ jurisdiction can be invoked.
Headnote:
EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - CLUBBING OF ESTABLISHMENTS - UNITY OF OWNERSHIP, MANAGEMENT, SUPERVISION, CONTROL, INFRASTRUCTURE, EMPLOYABILITY, AND SAME NATURE OF PRODUCTION - FUNCTIONAL INTEGRALITY AND INTER-DEPENDABILITY - AVAILABILITY OF ALTERNATIVE REMEDY - WRIT JURISDICTION.
Fact of the Case:
Two partnership firms, M/s. Paramount Leathers and M/s. Wu Leathers, were jointly served with a notice by the Provident Fund authorities, informing them that they had employed 24 persons in April 1999 and were thus covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act). The firms challenged the notice, contending that they were not liable to be covered under the Act. The Assistant Provident Fund Commissioner, in an order dated December 14/18, 2007, held that the two firms were rightly covered by the department by clubbing their entities, as there was unity of ownership, management, supervisory control, infrastructure, employability, and same nature of production in both the units. The firms challenged this order in two writ petitions, which were dismissed by the trial court on the ground of availability of alternative remedy.
Finding of the Court:
The High Court held that the order impugned in the writ petitions was not convincing and did not appear to have been borne by the records. There was hardly anything to justify that one establishment was a part of or even remotely connected with the other establishment. The partners of the two firms were different, so also were the employees except a part-time Accountant. The Provident Fund authorities did not record any material which might suggest that there was any unity of ownership in these two establishments or they have common employees. The authorities had merely relied upon the Enforcement Officer's report without providing any further details or basis for their conclusions.
Issues: 1. Whether the two partnership firms, M/s. Paramount Leathers and M/s. Wu Leathers, were rightly covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act) by clubbing their entities? 2. Whether the order of the Assistant Provident Fund Commissioner, dated December 14/18, 2007, was justified? 3. Whether the writ petitions filed by the firms were maintainable in light of the availability of alternative remedy?
Ratio Decidendi: 1. The court held that the order impugned in the writ petitions was not supported by any evidence or material on record and was thus unsustainable. 2. The court found that there was no unity of ownership, management, supervisory control, infrastructure, employability, or same nature of production between the two firms, and that the authorities had failed to consider the relevant areas of major differences between the two establishments. 3. The court held that the availability of alternative remedy is not an absolute bar to the invocation of the writ jurisdiction, and that in the present case, the writ jurisdiction should be invoked as the order impugned was without jurisdiction and was made in violation of the principles of Natural Justice.
Final Decision: The court allowed both the appeals, quashed and set aside the order impugned in both the writ petitions, and directed the respondents to refund the amount deposited by the appellants with interest.
Chakrabarti, J.
These two appeals arise out of a judgment and order, dated October 26, 2009 passed in M/s. Paramount Leathers v. The Regional Provident Fund Commissioner and another (W.P. No. 1318 (W) of 2008) and out of an order of the same date passed in M/s. Wu Leathers v. The Regional Provident Fund Commissioner and another (W.P. No. 1312 (W) of 2008). The learned Trial Judge had dismissed the first writ petition and by a subsequent order His Lordship dismissed the second writ petition also holding that in view of the dismissal of the writ petition filed by M/s. Paramount Leathers nothing remained to be done in the second writ petition. The petitioners of the two writ petitions feeling aggrieved have filed two appeals which have been re-numbered as F.M.A. No. 65 of 2010 and F.M.A. No. 66 of 2010 respectively. Since both these appeals raise the same questions of law they were analogously taken up for hearing and are being disposed of by a common Judgment and Order.
2. M/s. Paramount Leather and M/s. Wu Leathers are two partnership firms having their respective offices in Matheswartala Road, Tiljala, Kolkata- 16, in close proximity to each other. There is still another similarity between these two partnership firms i.e. both deal in leather and leather products. They have a common part-time employee as an Accountant as well.
The Provident Fund authorities sent a squad of officials in 2001 to these two establishments. They collected and seized some documents and registers. In 2003 these two establishments were jointly served with a notice whereby they were informed that as they had employed 24 persons in April 1999 the provision of Section 1(3) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act, for short) was attracted and as such a Code number was allotted to both these establishments together and the appellants were directed to remit the dues and arrears as mentioned in the notice. The appellants made their respective representations to the authorities contending inter-alia that they were not liable to be covered under the Act. Again the Provident Fund authorities in exercise of the power under Section 7A of the Act by another Memo of 2003 summoned them to appear before the authorities on May 27, 2003 and asked them to give evidence and produce the documents mentioned in the notice and other relevant documents "for conducting an enquiry and determining the amount due" from them.
3. ULTIMATELY, the Assistant Provident Fund Commissioner passed an order, dated December 14/18, 2007, by which he inter-alia held that real management and control belonged to the same owners and due to common supervision and control clubbing these two units was the right approach to extend the benefits of the Act and the scheme. He further held that the unity of ownership, management, supervisory control, infrastructure, employability etc. in both these units had been proved conclusively and hence these two establishments were rightly covered by the department by clubbing their entities. The Assistant Provident Fund Commissioner in exercise of the powers vested under Section 7A of the Act accepted the request of the department and determined the dues to be paid by these two establishments from April 1999 to August 2001 to the Provident Fund authorities.
4. THIS order, as already mentioned, was assailed in two writ petitions by the appellants. The Provident Fund authorities had contested the writ petition by filing an Affidavit-in-Opposition. The learned Trial Judge dismissed the writ petitions on the ground of availability of alternative remedy.
We have gone through the relevant records, the writ petitions, the affidavits and have considered the submissions of the learned Advocates for the respective parties.
5. THE order impugned in the writ petitions is neither convincing nor does it appear to have been borne by the records. In other words, there is hardly anything to justify that one establishment is a part o
