It is unfortunate how a piece of social welfare legislation intended to protect a voiceless section of society is sought to be circumvented by filing such frivolous petitions : Calcutta High Court

The entire object of filing such petition was to procrastinate and delay the recovery proceedings initiated by the respondent authorities. The Hon’ble High Court at Calcutta before The Hon’ble Mr. Justice Ravi Krishan Kapur held such an opinion in the matter of  Ontrack Systems Limited vs.  The Regional Provident Fund Commissioner-II, Employees’ Provident Fund Organisation & Ors [W.P.A.13339 of 2019].

The facts of the case are associated with the petitioner’s primary grievance which was directed against an order passed under section 8B of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1985. The petitioner also challenged the orders passed under section 7Q and 14B of the Act.  It was alleged that, by a notice dated 13 March, 2014, the petitioner establishment was directed to participate in a proceeding under Sections 7Q and 14B of the Act which pertained to defaults in making statutory payments by the establishment under the Act. It was alleged by the petitioner that, The respondent authorities have refused to consider the prayer of the petitioner establishment despite making several representations on the ground that the establishment was facing acute financial problems. Eventually, considering the defaults committed by the establishment, levied damages under Section 14B of the Act assessed at Rs 48,37,497/- and interest was also assessed under Section 7Q of the Act for an amount of Rs 18,88,529/-, the respondent authorities by an order dated 16 September 2014.

Subsequently,  the establishment failed to make the payments towards their provident fund dues in terms of the aforesaid orders. Therefore, a certificate of recovery dated 6 May 2015 was issued against the establishment, by which the Enforcement Officer requested the establishment to submit diverse documents. On alleged grounds, the bankers of the establishment had declared the establishment to be a non performing asset and that the Income Tax Department had also attached all the bank accounts of the establishment in March 2014, from a representation dated 8 May 2015. Thereupon, on 9 June 2015, a payment notice was issued by the respondent authorities. Afterwards, another representation was made by the establishment on 3 August 2015 highlighting their poor financial condition.

A show cause notice was issued on 14 August 2017, to the establishment demanding an explanation concerning why the directors of  the establishment should not be committed to civil imprisonment for failing to comply with the recovery certificate dated 6 May 2015. Eventually, the respondent authorities also issued an order of attachment under section 8B of the Act on 25 July 2018. The petitioner urged that the establishment was going through an acute financial crisis and were unable to even pay their operational expenses, on the background that the petitioner assails the consequential order of attachment issued under Section 8B of the Act.

The respondent authorities on behalf of the establishment submitted, they had failed to consider the representations made by them and to take into account the financial hardship which the establishment was undergoing. It is contended that the establishment is a regular and habitual defaulter of the dues payable to the respondent authorities. It is further alleged that the establishment has chosen not to avail of the alternative statutory remedy provided under the Act.

Considering the submissions made on behalf of the parties, the Hon’ble Court was of the view that a specific statutory appeal mechanism provided under the act wherein the establishment had deliberately chosen not to prefer any appeal challenging any of the previous orders passed by the respondent authorities. This was deliberated in order to avoid the mandate under section 70 of the Act and with the aim of circumventing the statutory obligations of the establishment to deposit an amount of 75% as precondition to the filing of any appeal.

The Hon’ble Court found no grounds to seek any interference with the steps taken by the Respondent Provident fund authorities. The court also found that there had been no illegality nor irrationality nor procedural impropriety in the actions of the respondent authorities. Furthermore, there has been no ground urged by the petitioner which justified even consideration of the impugned actions of the respondent authorities. The entire object of filing such petition was to procrastinate and delay the recovery proceedings initiated by the respondent authorities.

The Hon’ble Court also found it disturbing to note the indifferent attitude shown by the respondent authorities in recovering their dues from the establishment. However, there was no stay or any kind of restraint in such proceedings and the respondent authorities had not taken any step in the matter during the pendency of such proceedings. The Hon’ble Mr. Justice Ravi Krishan Kapur stated, “In view of the unmeritorious, misadventure and kite flying exercise undertaken on behalf of the petitioner to procrastinate the recovery proceedings, costs are assessed at Rs.5,00,000/- (Five lacs) payable to the West Bengal State Legal Services Authority, Kolkata towards the cause of welfare and treatment of acid attack victims within a period of four (4) weeks from date. Moreover, The Hon’ble Court directed The Advocate-on-Record on behalf of the respondent Provident Fund Authorities is directed to serve a copy of this order on the Member Secretary, State Legal Services Authority, West Bengal, who has been further directed to seek compliance thereof concerning the direction of costs.

Thus, the matter was dismissed by the Hon’ble Court, directing the respondent authorities “to take all possible steps as expeditiously as possible for recovery of their dues from the establishment in accordance with law”. 

Click here to read the judgment.

Judgment Reviewed by Bipasha Kundu

Leave a Reply

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

Open chat