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High Court of Judicature at Madras
V. DHANAPALAN & G. CHOCKALINGAM, JJ.
TTG Industries Limited
Versus
Regional Provident Fund Commissioner Employees Provident Fund Organisation & Others
W.A.No.1577 of 2011 in W.P.No.18800 of 2007
Decided on: 19-09-2014
Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Section 14-B - Sick Industrial Companies Act - Section 3(1)(o) - Employees State Insurance Act, 1948 - Section 85-B - E.P.F. Act - Section 7A - ESI Act - Section 85(B) - Constitution of India, 1950 - Article 226 – Employment and service – Quash of order – Condo nation of delay - According to appellant company its original name was T.T.G. Machinery Manufacturing Company Limited and it was changed to T.T.G. Industries Limited vide Resolution passed at Extra-ordinary General Meeting and a fresh Certificate of Incorporation was obtained from Registrar of Companies - Appellant Company remains covered under Act and Code remains allotted to it - As there was recession in capital goods industry operating results suffered a serious setback and Company become a sick company - Board for Industrial and Financial Reconstruction at its hearing held declared appellant Company as a Sick Industrial Company in terms of Section 3(1)(o) of Sick Industrial Companies Act 1985 - Losses suffered by appellant Company during Nineties resulted in default of payment of dues by appellant to its creditors and also resulted in delay in payment of its statutory dues to respondent Employees Provident Fund Organisation - Pursuant thereto consortium of Banks classified accounts of appellant as Non Performing Assets and refused to advance further loans which further aggravated financial position of appellant as even then ongoing projects could not be completed – Held, Had appellant been really aggrieved over said proceedings of authorities nothing prevented it from approaching Tribunal under Section 7-I as above - When there is a specific provision under Act for appeal against orders of respondent authorities it was wrong on part of appellant to approach High Court under Article 226 by filing a writ petition which in court considered opinion was not maintainable - In other words appellant instead of approaching Appellate Tribunal had moved High Court by way of a writ petition which was not permissible - More importantly authorities before levying damages and interest had directed appellant to appear before either in person or through authorised representative to put forth his case as against proposed levy but appellant did not choose to appear before authorities – So appellant was given sufficient opportunity of being heard under Section 14-B and only thereafter damages were recovered by authorities as per law which act of authorities in court view cannot be faulted with - Further though according to appellant establishment was declared as a sick unit by BIFR and matter was pending before it no scheme was framed by BIFR in spite of a lapse of so many years and also appellant was not able to get any interim order from BIFR or any other appropriate authority as against recovery - Though interim order was passed by writ court as against recovery during pendency of writ petition same was only subject to condition of deposit of amount and said interim order also got vacated virtually by dismissal of writ petition - Writ Appeal is dismissed
V. Dhanapalan, J.
1. Heard Mr. S. Vijayakumar, learned counsel with Mr. G. Bharadwaj, learned counsel for the appellant and Mr. K. Vishnu, learned counsel for Mr. K. Ramu learned counsel appearing for respondents 1 & 2.
2. The Writ Appeal is directed against the judgment dated 07.06.2011 made in W.P.No.18800 of 2007, whereby, the relief sought by the petitioner to quash the impugned order bearing No.TN/SRO/AMB/SDC/19910/2006 dated 10.07.2006 as well as the recovery certificate dated 07.04.2007 for recovery of Rs.48,83,968/- from the period 03/1990 to 02/2005, issued by the 1st respondent insofar as it demands payment of damages under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (in short “the Act”) to the tune of Rs.48,83,968/-, was dismissed by the learned Single Judge.
3. The petitioner in W.P.No.18800 of 2007 is the appellant herein. Therefore, for the sake of convenience, the said petitioner is hereinafter referred to as the appellant. The respondents in the Writ Petition are the same in this appeal also.
4. According to the appellant company, its original name was T.T.G. Machinery Manufacturing Company Limited and it was changed to T.T.G. Industries Limited vide the Resolution passed at the Extra-ordinary General Meeting held on 13.01.1992 and a fresh Certificate of Incorporation dated 16.03.1992 was obtained from the Registrar of Companies, Chennai. The appellant Company remains covered under the Act and Code No.TN/19910 remains allotted to it. As there was recession in the capital goods industry, the operating results suffered a serious setback and the Company become a sick company. The Board for Industrial and Financial Reconstruction (BIFR), at its hearing held on 17.08.2005, declared the appellant Company as a Sick Industrial Company in terms of Section 3(1)(o) of the Sick Industrial Companies Act (in short 'SICA'), 1985. The losses suffered by the appellant Company during the Nineties resulted in default of payment of dues by the appellant to its creditors and also resulted in delay in payment of its statutory dues to the respondent Employees' Provident Fund (EPF) Organisation. Pursuant thereto, in the year 1999, the consortium of Banks classified the accounts of the appellant as 'Non Performing Assets' and refused to advance further loans, which further aggravated the financial position of the appellant, as even the then ongoing projects could not be completed.
5. Later, the appellant received a letter bearing No.TN/SRO/AMB/19910/CC1(5)/2006, dated 16.05.2006, addressed to the Directors of M/s. T.T.G. Machinery Manufacturing Company Limited, with a copy marked to the General Manager, M/s. IFCI Limited (Operating Agency appointed by the BIFR) from the Assistant Provident Fund Commissioner (Compliance & Recovery), informing him to pay an amount of Rs.44,45,577/- towards Damages for the period March, 1997 to February, 2005 and Rs.14,54,143/- towards interest for the period from June 1997 to February 2005. Shocked by the said demand, the appellant replied to the same vide its letter dated 18.05.2006, intimating that it has already made payment upto June 2004 towards interest and damages, and requested for break-up details of the demand. In reply, the appellant received a letter bearing No.TN/SRO/AMB/19910/PDC/2006, dated 22.05.2006, from the 1st respondent, which too did not contain any details regarding the amount of damages and interest claimed.
6. Thereafter, the appellant received a Notice bearing No.TN/SRO/AMB/19910/SDC/2006, dated 29.05.2006 from the 1st respondent, proposing levy of damages, totalling Rs.48,28,584/-for the alleged default in payment of contributions for the periods 03/97 to 02/04 and 07/04 to 02/05, stating that the damages leviable work out to Rs.26,51,440/- in A/c No.1; Rs.2,16,712/-in A/c No.2; Rs.18,50,897/- in A/c.No.10; Rs.1,07,429/- in A/c.No.21 and Rs.2,106/- in A/c.No.22. Through the said notice, the appellant had been directed to show cause a
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