The main legal point established in the judgment is that a secured creditor may not be held liable for the outstanding dues of the respondent under the Employees Provident Fund & Miscellaneous Provisions Act, especially when the respondent no.1 has already received a major portion of the dues.

REKHA PALLI, J.

1. Vide the present petition, the two petitioners/Indian Bank and its Chief Manager Shri N.K. Sharma, seek quashing of the order dated 27th February, 2013 as also the consequential show cause notice dated 28th February, 2013 issued by the respondent no.2/Recovery Officer, Employees Provident Fund Organization, Faridabad. Vide the impugned notice dated 27th February, 2013, the petitioner no.2 was asked to show cause as to why he should not be arrested for his failure to pay the sum of Rs.95,11,346/- towards the outstanding provident fund dues of respondent no.3 in terms of the recovery notice dated 4th January, 2006.

2. The admitted case of the parties is that the respondent no.3/ M/s Usha India Limited had been declared as a “defaulter” under the provisions of Employees Provident Fund & Miscellaneous Provisions Act (hereinafter referred to as the “Act”) where after vide its order dated 27th February, 2013, the respondent no.2/Recovery Officer had declared the petitioner/Bank as a “deemed defaulter” in accordance with the provisions of Section 8-F of the Act.

3. The present petition impugning the aforesaid show cause notices was filed on the premise that the petitioner/Bank being only a secured creditor of the respondent no.3, had after selling the respondent no.3’s property at 12/1, Mathura Road, Faridabad, Haryana mortgaged with it had after adjusting its recoverable dues, deposited the entire surplus amount with the Debt Recovery Tribunal No.I (hereinafter referred to as “DRT-I”) and could, therefore, not be directed to pay the outstanding dues of the respondent no.3 or held to be a deemed defaulter.

4. During the pendency of the present petition, it transpired that after the sale of the respondent no.3’s aforesaid property, the petitioner had deposited the surplus amount of Rs.15 crores with the Debt Recovery Tribunal. In these circumstances, this Court vide its order dated 18th January, 2017, after noticing the fact that a sum of Rs.89,03,375/- was still payable by the respondent no.3 to the respondent no.1 directed the DRT-I to transfer a sum of Rs.89,03,375/- to the Registrar General of this Court within a period of four weeks. The amount so deposited with the Registrar General of this Court was thereafter released in favour of the respondent no.1 pursuant to this court’s order dated 15th September, 2017.

5. At this stage, it may also be noted that even though the surplus amount after the sale of respondent no.3’s mortgaged property, stands deposited by the petitioner with the DRT-I, the said sale was not confirmed on account of a challenge thereto by the respondent no.3 before the DRT which challenge, I am informed, now stands dismissed in default.

6. Vide order dated 19th January, 2018, this Court after noticing the fact that respondent no.1 had already received the major portion of the amount as claimed vide its recovery notice dated 04.01.2006 directed the said respondent to file an affidavit pointing out the deficiency, if any, in the amount recovered by it from the petitioner in respect of the impugned show cause notice. Pursuant to the said order, the respondent no.1 filed an additional affidavit before this Court on 21st August, 2018, stating therein that a balance sum of Rs.1,34,176/- still remained payable to it in respect of the Recovery Certificate dated 4th January, 2006 based on which the impugned show cause notices had been issued to the petitioners. At this stage, Ms. Sidhu, learned counsel for respondent nos.1 and 2 states that after the filing of the present petition, respondent no.3 has been found to pay further sums of Rs.5,73,12,517/- and Rs.3,85,40,084/- having been assessed as penal damages and interest under Sections 14B and 7Q of the Act respectively vide orders dated 22nd May, 2018. She, however, fairly states that in so far as the cause of action in the present writ petition is concerned, the only outstanding amount recoverable by the respondent no.1 from respondent no.3 is