The main legal point established in the judgment is the constructive liability of persons responsible for the conduct of the business of the company under the EPF & MP Act, particularly in relation to the recovery of outstanding dues.

P.B. Bajanthri, J.

1. In the instant writ petition, the petitioners have sought for quashing warrant of detention of civil prison dated 6.12.2010 (Annexure P-7), issued by respondent No. 1.

2. The petitioner No. 1 is stated to be Director of M/s. Bawa Shoes Pvt. Limited, Goindwal Sahib, District Tarn Taran, which is an establishment covered under the provisions of Employees Provident Fund and Misc. Provisions Act, 1952 (for short, the EPF & MP Act). The establishment failed to deposit provident fund dues from November 2001 to January 2004, even though it was duty of the establishment to deposit provident fund under Section 6 read with para 38 of the EPF & MP Act. The establishment delayed payment of EPF & MP dues even for the period from March 98 to October 2001. Thus, the respondent-EPF department issued a show cause notice on 18.3.2003 calling upon the establishment as to why damages under Section 14-B should not be levied on the defaults committed in delaying the payments of the aforesaid dues. After following due procedure and also giving ample opportunity of hearing to the petitioner-establishment, the competent authority proceeded to impose damages to the tune of Rs.48,07,047/- and interest amounting to Rs.16,01,490/-. In this regard, petitioner was directed to deposit the assessed amount, damages and interest with the department within 15 days, failing which the department would initiate proceedings under Sections 8B to 8G of the EPF & MP Act. On 23.2.2005, the Assistant Provident Fund Commissioner assessed the amount payable under Section 7A of the EPF & MP Act, for the period commencing from November 2001 to January 2004, while assessing an amount of Rs.1,73,90,305/- and the establishment was directed to deposit the said amount within a period of 15 days. When the assessed amount, damages and interest was not deposited with the department, criminal proceeding were launched under Section 406/409 IPC, under Section 14 of the EPF & MP Act, 1952. The establishment did not challenge the order dated 23.9.2004 or 23.2.2005 by filing an appeal before the Appellate Tribunal. Thus the order have attained finality. In view of facts and circumstances, the respondent-department further proceeded to initiate proceedings under Section 8B to 8G of the EPF & MP Act, read with Schedule 2 and 3 of the Income Tax Act, for recovery of the amount. Petitioner No. 1 was arrested on 6.12.2010 in execution of certificate No. 858, 709 and 678 dated 6.4.2005, 6.4.2005 and 5.4.2006, respectively. The warrants of detention in civil imprisonment were passed by the Recovery Officer and petitioner No. 1 was confined to civil imprisonment vide Annexure P-7. The petitioners aggrieved by Annexure P-7 presented this petition.

3. Learned counsel for the petitioners submitted that while passing the impugned warrants of detention in civil prison, provisions of the Act and Rules are not adhered. Respondent – department without exhausting other remedies available for recovery of the outstanding dues, as laid down in the statutes, resorted to Section 8B (1) (b) “(b) arrest of the employer and his detention in prison.” Under Section 8B, the respondent can resort to attachment and sale of the movable or immovable property of the establishment or arrest of the employer and his detention in prison or in appointing a receiver for the management of the movable or immovable properties of the establishment or, as the case may be, the employer. In the present case, the respondents have already attached the immovable property of the establishment. Therefore, question of invoking Section 8B (1) (b), arrest of the employer and his detention in prison may not arise. Therefore, impugned action is contrary to Section 8B. It was further pointed out that impugned action is contrary to Section 8-G, that before impugned action is taken, notice should have been issued. Thus there is a violation of Section 8-G of the EPF & MP Act read with para 5 of the 2nd Schedule of the