Conceria Viriginia Chennai Private Limited, Rep. by its Managing Director, Mohammed Yavan Dhala vs Enforcement Officer/Provident Fund Inspector Employees-Provident Fund Organization, Tambaram, Chennai

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Mad) 2235

IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. KARTHIKEYAN, J.
Conceria Viriginia Chennai Private Limited, Rep. by its Managing Director, Mohammed Yavan Dhala & Another - Appellant
Versus
The Enforcement Officer/Provident Fund Inspector Employees-Provident Fund Organization, Tambaram, Chennai - Respondent
Crl.OP. Nos. 19893 to 19902, 16518 to 16535 & 16578, 15045 to 15059, 16519 to 16535 & 16578, 21266 to 21270, 15046 to 15049 & 15051 to 15053 & 15055 to 15059 of 2015 & MP. Nos. 1 & 2 of 2015
Decided on : 26-10-2021

Advocate Appeared:
For the Petitioner:Harron for M/s. T.S. Gopalan & Co., Advocates
For the Respondent:R. Vishnu, K. Ramu, Advocates

Headnote:
Criminal Procedure Code,1973 - Section 357 - Employees’ Provident Funds and Miscellaneous Provisions Act, 1952- Section 7A, 8C, 14and 6C – Order to Pay compensation - Petitioners pointed out that they could not pay amount owing to their properties being attached and owing to fact that they had suffered economic loss and they had no money to pay - It is complained by petitioners that however, respondent continued to pass orders under Section 7A of Employees Provident Funds and Miscellaneous Provisions Act, 1952 claiming contribution to be paid - Since amounts demanded had not been paid in spite of orders passed under Section 7A of Act, 1952 respondent issued Recovery Certificates under Section 8C of Act, 1952 - Respondent also attached properties of petitioners – Held, Court would interfere with continuation of all above Calendar Cases and would allow above petitions - But at same time Court would place a caveat that petitioners herein in each one of case should pay as compensation under Section 357 Cr.P.C., to Employees Provident Funds Organization and to credit of Employees Provident Funds Account maintained with State Bank of India - Compensation should be paid within a period of two months from date of receipt of a copy of order – Court hold that they should still be called upon to pay compensation to respondent for loss and expenses incurred in initiating criminal proceedings – Court also hold that continuation of prosecution would not be to any advantage to either petitioners or respondent herein It has now become a redundant exercise - Even before Trial Court petitioners would naturally be putting forward their case that nothing survives for prosecution since they have paid entire dues - Miscellaneous Petitions closed

JUDGMENT :

(Common Prayer: Criminal Original Petitions filed under Section 482 Cr.P.C., to call for the records in CC.Nos.455/2014, 456/2014, 476/2014, 458/2014, 477/2014, 480/2014, 502/2014, 503/2014, 504/2014, 505/2014506/2014 [Crl.OP.Nos.19893 to 19902/2015] ; 444/2014, 445/2014, 446/2014, 447/2014, 448/2014, 468/2014, 469/2014, 470/2014, 488/2014, 489/2014, 466/2014, 467/2014, 490/2014, 491/2014 and 492/2014 [Crl.OP.Nos.15045 to 15059/2015] ; 455/2014, 456/2014, 457/2014, 478/2014 and 479/2014 [Crl.OP.Nos.21266 to 21670/2015] now pending on the file of the learned Judicial Magistrate, Tambaram and STC.Nos.604/2014, 605/2014, 607/2014, 608/2014, 609//2014, 610/2014, 611/2014, 612/2014, 613/2014, 614/2014, 617/2014, 618/2014, 615/2014, 616/2014, 619/2014, 620/2014, 621/2014, 622/2014 and 606/2014 [Crl.OP.Nos.16518 to 16535 & 16578/2015] now pending on the file of the learned Judicial Magistrate No.2, Chengalpattu and quash the same.)

1. Arguments were advanced with respect to all the above Criminal Original Petitions and both the learned counsels stated that the point involved in all the cases, is similar. This has given rise to the necessity of passing a common order in all the petitions.

2. The petitioners in all the above cases are Companies which are inter-linked with each other. They are manufacturers of full shoes, shoes upper and also own tanneries.

3. In all the cases, the employer/petitioners Companies, employed large number of employees and there was an obligation on their part to pay Provident Fund contribution with respect to their employees.

4. It is claimed that the Companies suffered loss and the properties were also attached by Financial Institutions. The petitioners had also borrowed money and also had overdrawn their accounts. They were all not in a position to even pay salary. They could not pay the Provident Fund dues. The respondent had issued notices to the petitioners to pay contribution for the default period.

5. The petitioners pointed out that they could not pay the amount owing to their properties being attached and owing to the fact that they had suffered economic loss and they had no money to pay.

6. It is complained by the petitioners that however, the respondent continued to pass orders under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, [hereinafter referred as ‘the Act, 1952’] claiming contribution to be paid. Since the amounts demanded had not been paid in spite of orders passed under Section 7A of the Act, 1952, the respondent issued Recovery Certificates under Section 8C of the Act, 1952. The respondent also attached the properties of the petitioners.

7. It is claimed that the business operations of the petitioners Companies came to a halt in the year 2012.

8. The respondent then issued Proclamations for sale of the properties. Notices were issued in the newspapers. This was questioned by the Bank Authorities who were also secured creditors. A writ petition was filed. The Bank, namely, the State Bank of India, was directed to proceed with the sale of the attached properties by an order of this Court. It was directed that the sale proceeds can be adjusted towards the Provident Fund dues. The properties could not be brought for sale since there were no bidders. The respondent, therefore, issued a Show Cause Notice as to why the Managing Director of the petitioners’ Companies should not be prosecuted under Section 14 of the Act, 1952. The petitioners then filed an application before this Court questioning the Show Cause Notice.

9. However, the respondent had filed complaints before the competent Court under Section 14 of the Act, 1952. The present Criminal Original Petitions have been filed seeking to quash those proceedings.

10. Mr.Harron, learned counsel appearing on behalf of the petitioners stated that the dues payable to the respondent have now been paid and therefore, urged that this Court should quash the criminal prosecution. It is pointed out by the learne

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