It is apparent that the salutary public purpose which the Act seeks to achieve has been left unprotected in the hands of those who are statutorily obliged to protect and preserve them: Calcutta High Court

“It continues to remain a disturbing feature as to how a piece of social welfare legislation intended to protect the interests of a weaker section of society during the superannuated winter of their life has been stultified and made impotent because of the casual, indifferent and cavalier attitude of those who are intended to protect and preserve their right”, The High Court at Calcutta before the Hon’ble Mr. Justice Ravi Krishan Kapur held in the matter of Satish Kumar Jhunjhunwala vs. Regional Provident Fund Commissioner [W.P.A. 26467 of 2006].

This case relates to the fact whereby the petitioner (a director of the Shri Govinda Glass Works Limited, a.k.a., ‘the establishment’) assails an order passed under Section 8-B of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1985, issued by the Recovery Officer, Employees’ Provident Fund Organization, like a warrant of arrest, and has statutory defaults towards payment of the provident dues of an amount of Rs. 44,04,178/-, and such impugned warrant arrest dated 26th September 2006, was issued in connection with those recovery proceedings initiated by the Provident Fund Authorities.

The case relied upon the facts whereby the petitioner assailed the impugned warrant arrest mainly on the ground that before issuing such warrant, which according to them, was necessary for the respondent authorities to initiate and explore all other modes of recovery against the petitioner. In support of this plea, the petitioner also brought into notice before the Hon’ble Court, relying on the decision reported in Regional Provident Fund Commissioner Employees’ Provident Fund Organisation, Hyderabad & Another Vs. M/s Decan Foam Plastics (Private), Ltd. Narsapur [2005 (1) LLN 745] and D.R. Venkatesh vs. Regional Provident Fund Commissioner, Hyderabad, and Another [(2004) 3 LLJ 952], which stated that the personal liability of a director could not be straightaway attracted and an order of arrest could only be issued in the event where the assets of the establishment were found to be insufficient to meet the dues payable by the establishment to the respondent authorities.

On the other hand, according to the respondent authorities, given the provisions under Section 8-B of the Act, the options which were available to them were concurrent and it was up to them to decide on the modes specified in the section and they were not bound to exhaust all other remedies before issuing a warrant of arrest. It was also submitted by the respondent that due to subsequent events, the petitioner even paid a sum of Rs. 50,000/- and that the petitioner was participating in the recovery proceedings, claiming such petition to be infructuous.

It was by the order dated 19th December 2006, when a Learned Single Judge had granted a stay on the impugned arrest warrant. However, through the interim order, liberty was specifically granted to the respondent authorities to exhaust all other remedies for recovery of their dues and to proceed in such manner as contemplated under the Act against the establishment. Although, such a writ petition was dismissed for default on 13th December 2018, and restored only on 4th August 2021.

The High Court at Calcutta before the Hon’ble Mr. Justice Ravi Krishan Kapur could not agree with the contention of the petitioner who claimed that the respondent authorities needed to proceed with all other modes of recovery before issuing an arrest warrant against the establishment. It was evident from the scheme of the provided section that the remedies provided to the respondent authorities of their dues were “co-extensive and mutually exclusive of each other.” The Hon’ble Judge also found the decisions relied on by the petitioner to be distinguishable and inapposite to the facts of the current case.

Adding to that, the Court cited another reason as to why the petition was deemed to be dismissed, stating that, since the petitioner had already paid a sum of Rs. 50,000/-, it meant that there was no scope of challenging the impugned arrest warrant since the petitioner had already started co-operating in the steps of the respondent authorities. Furthermore, owing to the subsequent events, post the filing of the petition the aggregate dues payable for the petitioner were approximately Rs. 50 lacs in the year 2006, which have increased to an approximate Rs. 1 crore after nearly 15 years, out of which the petitioner had only paid Rs. 50,000/-, which provides even more emphasis on the fact that the petitioner and the establishment had only taken advantage of the delay in the justice delivery system whilst enjoying an interim order, intentionally choosing not to have the matter heard, and having a “nonchalant opponent in the respondent Provident Fund Authorities.” The Court was of the view that “the attitude of both the petitioner and the establishment reflects a dishonest disowning of their obligation for a period of nearly two decades. Thus, the conduct of the petitioner also subsequent to the filing of this petition disentitles him to any relief whatsoever.”  Thus, the Hon’ble Court dismissed the petition.

Commenting on the respondent authorities, the Hon’ble Court highlighted the “lackadaisical, indifferent and indolent attitude… in pursuing such recovery proceedings” of the respondent authorities, since they failed to satisfy the Court as to what steps they had taken for recovery of their dues against the establishment, as was mentioned in the interim order dated 19th December 2006. Even during the interregnum period of 3 years, the respondent authorities had taken no steps against the petitioner or the establishment. The Hon’ble Court expressed its disappointment saying that “It is unfortunate that a statutory organization such as the respondent Provident Fund Authorities continues to remain oblivious and blind to the purpose for which they have been set up and the rights which they are expected to protect.” Given the “indolent, appalling and pathetic approach”, the Hon’ble Court strictly stated that a copy of the order should be served by the Registrar General of the Court upon The Director-General of Labour Welfare, Ministry of Labour & Employment, Jaisalmer House, New Delhi, so that a proper inquiry would be initiated in such matter against all the errant officers of the respondent authorities, and appropriate action would be taken against those found guilty under the law.

Click here to read the Judgment.

Leave a Reply

Your email address will not be published. Required fields are marked *