DAYAWATHI
V.
 EDIRISINGHE AND 4 OTHERS

SUPREME COURT
S.N. SILVA.C.J.
SHIRANEE THILAKAWARDANE,J.AND
SRIPAVAN.J.
S.C.(F.R.)NO.241/2008
MAY 4th, 2009.

Employees Provident Fund Act No. 15 of 1958-Section 17- The Principal provision which sets out the procedure for the recovery of E.P.F. Contributions - Section 38(1) - If recovery under Section 17 is for whatever reason, impracticable or inexpedient, recovery can be made under Section 38(1) and 38(2) - Section 34 - Offences under E.P.F. Act - Section 37 -punishment for offences - Section 40 - Where an offence under the Act is committed by a body of persons Directors of a company can be brought to the Magistrate's Court for the prosecution of an offence under the Employee's Provident Fund Act.

The petitioner was a Director of a company and she was 61 years old and mother of four children. While the petitioner was at home on that particular day, three police officers arrived with a warrant issued by the Magistrate of Colombo for her arrest on the basis that she had defaulted the payment of E.P.F. dues. She had produced a photo-copy of a receipt for payment of E.P.F. amounting to Rs.29,850/ - to the Magistrates' Court Colombo in case No. 93750/5.

However she was taken to the Police Station and kept under police custody and subsequently produced before the Magistrate and remanded and finally produced under remand custody before the Magistrate, Colombo. The learned Magistrate having perused the facts realized that she had no outstanding E.P.F. dues and accordingly discharged the petitioner.

Held :

(1) The 1st, 2nd and 3rd Respondents are required to institute action in accordance with Section 17. However, if and only if, the Commissioner is of the opinion that recovery under Section 17 of the Act is (1) impracticable and inexpedient, and/or (2) where the full amount due has not been recovered by seizure and sale, and only then can recovery be made, and only if the Commissioner complies with the certificate issuance requirements of Section 38(1) and 38(2).

(2) The 3rd Respondent (the Assistant Commissioner of Labour Colombo) had no jurisdiction or power under the said statute to file a certificate in the Magistrate's Court in terms of Section 38(2) of the E.P.F. Act without first proceeding under Section 17 and thereafter under Section 38(1) of the said Act.

(3) In terms of Section 40 of the Employee's Provident Fund Act, where an offence under the said Act is committed by a body of persons, then if such body of persons is a body corporate, every Director and officer of such body corporate shall be deemed to be guilty of the offence. It is clear that apart from the recovery procedure set out in Section 17,38(1) and 38(2) of the said Act as amended, the Commissioner has to institute separate action in the relevant Magistrate's Court to punish the employer who has defaulted.

(4) Directors of a company can be brought to the Magistrate's Court for the prosecution of an offence only in terms of Section 40 only in proceedings where an action has been instituted in terms of Section 34 and 37 of the EPF Act.

(5) In the present case, certificate marked 'R 3' was filed by the 3rd Respondent in terms of Section 38(2) read with Section 15 of the EPF Act and the Directors (in this case, Director of another Company) were added in the proceedings under Section 38(2), which was patently illegal and contrary to the procedure established under the statute.

(6) The illegal and wrongful procedures followed by the 3rd Respondent had led to the illegal arrest and detention of the Petitioner. Hence the Petitioner's Fundamental Rights as guaranteed by Article 12(1) of the Constitution had been violated.

Application in terms of Article 126 of the Constitution.

Cases referred to:

(1) Narthupana Tea and Rubber Estate v. The Commissioner General of Labour -SC 510/74 decided on 13.03.1978

Uditha Egalahewa for the Petiti