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2012 Supreme(Online)(KER) 12442
HIGH COURT OF KERALA
P.N.RAVINDRAN, J
M/S MATHSTRAMAN MANUFACTURES AND TRADERS – Appellant
Versus
THE REGIONAL PROVIDENT FUND COMMISSIONER Advocate - S GOPAKUMARAN NAIR (SR ), ,S GOPAKUMARAN NAIR (SR ),SRI T RAJESH, SC, HDFC BANK LTD – Respondent
WRIT PETITION (CIVIL) 35278/2011
The legal principle established is that an order's enforcement can be stayed to prevent prejudice against the employer when they are within their appeal period.
Headnote:
Recovery - Employees Provident Fund - Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Sections 7A, 7-I, 8, 8F, 7-O - The court held that enforcement of an order must await appeal period expiration, allowing the employer to retain funds to ensure employee salary payments and access to interim judicial reliefs.
Fact of the Case:
The petitioner, a company under the Employees Provident Funds and Miscellaneous Provisions Act, was ordered to pay a sum to the Employees Provident Fund Organisation due to non-payment of contributions. The company challenged this order and sought to stay its enforcement while they filed an appeal.
Finding of the Court:
The court found that the enforcement of the order under appeal should be temporarily suspended to allow the petitioner to file their appeal and not obstruct salary payments to employees, emphasizing the right to seek interim relief.
Issues: Whether the enforcement of the payment order against the petitioner can proceed while the time for appealing has not expired.
Ratio Decidendi: The court determined that the enforcement of the order must be stayed until the appeal period has lapsed, allowing the petitioner to operate their bank account and ensuring employee salaries are paid.
Final Decision: The writ petition is disposed of with directions to await the appeal outcome before enforcing the payment order.
J U D G M E N T
The petitioner is a company registered under the Companies Act, 1956 engaged inter alia in the business of assembly and sale of diesel generators. Its establishment is covered under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act' for short).
2. By Ext.P1 order passed on 18.11.2011 under section 7A of the Act, the first respondent herein held that the petitioner is liable to pay the sum of Rs.9,98,806/- under various heads to the Employees Provident Fund Organisation. Such an order happened to be passed on the finding that the petitioner had not paid the contribution in respect of the wages actually paid to the employees by treating a substantial portion of the wages as other allowances. Shortly after Ext.P1 order was served on the petitioner on 22.11.2011, the petitioner sent Ext.P2 letter dated 30.11.2011 requesting the first respondent to keep Ext.P1 in abeyance till the period of limitation prescribed for filing the appeal expires. The first respondent in turn sent Ext.P3 letter dated 20.12.2011 wherein he took the stand that the fact that the petitioner has been given 60 days time to file an appeal does not proscribe the Employees Provident Fund Organisation from recovering the amount due in terms of section 8 of the Act and therefore the petitioner’s request cannot be entertained. On the same day he passed Ext.P4 dated 20.12.2011 under section 8F of the Act whereby he directed the second respondent to pay over the sum of Rs.9,98,806/- to the Regional Provident Fund Commissioner from out of the amounts lying in deposit in the account maintained by the petitioner with the second respondent bank. This writ petition was thereupon filed on 29.12.2011 challenging Ext.P1 order, Ext.P3 letter and Ext.P4 order and seeking consequential reliefs.
2. When this writ petition came up for admission hearing on 6.1.2012 the learned counsel appearing for the second respondent submitted that pursuant to Ext.P4 order the sum of Rs.1,47,318.71 was paid over to the first respondent by pay order but the pay order has not so far been encashed. Taking note of that fact, this Court after hearing the learned counsel on both sides passed the following interim order.
“Admit. Sri.A.Rajasimhan, learned standing counsel, takes notice for the first respondent. Sri.T.Rajesh, learned standing counsel, takes notice for the second respondent.
2. Heard learned counsel appearing for the petitioner and the learned standing counsel appearing for the first respondent on the interim relief prayed for.
3. In this writ petition, the petitioner inter alia seeks an order restraining the first respondent from taking coercive steps to enforce payment of the amount assessed as per Ext.P1 order before the period of limitation prescribed for filing an appeal therefrom in the Employees Provident Funds Appellate Tribunal, New Delhi expires. It is stated that pursuant to the order passed by the first respondent under section 8 F of the Act, a copy of which is on record as Ext.P4, the second respondent has paid over to the first respondent the sum of Rs.1,47,318.71 by pay order, but the pay order has not so far been encashed. The petitioner submits that even before the period of limitation prescribed for filing the appeal has expired, Ext.P1 has been enforced by attaching the amounts lying in deposit in the bank account maintained by the petitioner with the second respondent bank and consequently, the petitioner is disabled from paying salary to its employees. It is stated that salary for the month of December 2011 has to be paid on the 9th of January, 2012 and in such circumstances, if the operation of Ext.P4 is not stayed and the first respondent is not directed to return the pay order for Rs.1,47,318.71 to the second respondent and the second respondent is not direct to cancel that pay order and to credit the proceeds to the petitioner's bank account and the petitioner is not permitted t
