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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH
WRIT PETITION NO. 5178 OF 2004
AND
LETTERS PATENT APPEAL NO. 204 OF 2004
(Arising out of WRIT PETITION NO. 3033 OF 2004)
The Assistant Provident Fund
Commissioner, Sub-Regional
Office, 132-A, Ridge Road,
Near Tukdoji Maharaj Square,
Raghuji Nagar, Nagpur. ... PETITIONER
Versus
1. The Agricultural Produce Market
Committee, a statutory body
incorporated and constituted
under the Provisions of the
Maharashtra Agricultural Produce
Marketing (Regulation) Act, 1963,
having its Head Office at Jawaharlal
Nehru Market Yard, Chikhali Layout,
Kalamna, Nagpur through its
Deputy Secretary Shri Manohar s/o
Sampatrao Anjankar.
2. M/s. Intelligence Security Force
(India) Private Limited, a Company
having its office at 230, Hill Road,
Shivaji Nagar, Nagpur through its
Managing Director Shri S.P. Singh.
3. The District Deputy Registrar,
Cooperative Societies, Nagpur. ... RESPONDENTS
Shri (Dr.) R.S. Sundaram with Ms. U.R. Tanna, Advocates for the
petitioner.
Shri Uday Dastane, Advocate for respondent No. 1.
Shri A.B. Balpande, AGP for respondent No. 3.
.....
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CORAM : B.P. DHARMADHIKARI &
ARUN D. UPADHYE, JJ.
AUGUST 08, 2017.
ORAL JUDGMENT : (PER B.P. DHARMADHIKARI, J.) Heard Shri (Dr.) Sundaram with Ms. Tanna, learned counsel for the petitioner, Shri Dastane, learned counsel for respondent No. 1 and Shri Balpande, learned AGP for respondent No. 3.
2. The judgment dated 02.09.2004 disposing of Writ Petition No. 3033 of 2004 finally has been questioned in Letters Patent Appeal No. 204 of 2004 by the Provident Fund department. The report submitted by the District Deputy Registrar after verifying accounts of Respondent No. 1 - APMC is questioned by the department in Writ Petition No. 5178 of 2004. Both the matters are to be heard together.
3. Dr. Sundaram, learned counsel for the department submits that inquiry under Section 7-A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 3 (hereinafter referred to as EPF Act) was conducted against Respondent No. 2 - Security Service provider for quantifying and recovering provident fund contribution in respect of security force made available by it to Respondent No. 1. According to him, Respondent No. 1 - Agricultural Produce Market Committee (APMC), is the principal employer and Respondent No. 2 - Security Service provider is immediate employer. In Section 7-A inquiry, from payments made by Respondent No. 1 - APMC to Respondent No. 2 - Agency, the amount of provident fund contribution has been proportionately worked out. He submits that for the period from September 1999 to October 2003, under inquiry, the amount payable is worked out to Rs.22,56,702/-. He further states that because of coercive action taken by the department, that amount has been recovered and received from Respondent No. 1.
4. Writ Petition No. 3033 of 2004 was filed before the learned Single Judge by Respondent No. 1 - A.P.M.C. questioning the above mentioned proceedings and the order of ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 4 adjustment issued under Section 8-F thereof. In that writ petition, learned Single Judge has, while disposing of the same, directed fresh verification of accounts at the hands of an independent and impartial authority viz., District Deputy Registrar. That authority has submitted report and pointed out that the amount of Rs.5,24,783/- is only receivable by Provident Fund Department from Respondent No. 1 - A.P.M.C. The said District Deputy Registrar has, therefore, asked the Provident Fund department to refund the balance amount of about Rs.16,51,157/-.
5. Dr. Sundaram, learned counsel, in this backdrop, submits that the inquiry under Section 7-A of the EPF Act is statutory in nature and any lacunae or illegality therein needs to be questioned in the mode and manner prescribed under EPF Act and not otherwise. The determination of liability is the obligation of the authority conducting that inquiry and hence that determination cannot be made over to the District Deputy Registrar. He contends that, therefore, the impugned direction and judgment dated 02.09.2004 is unsustainable. ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 5
6. In the alternative and without prejudice, he submits that the District Deputy Registrar has not given any notice of inspection of accounts of Respondent No. 1 and, therefore, representative of Provident Fund department was not present when he allegedly verified the same. According to him, though the period from September 1999 to October 2003 form subject matter of scrutiny, only accounts for March and April 2003 appear to have been perused by that authority and on that basis the amount of Rs.5,24,783/- is found to be receivable by the department. He contends that this exercise, therefore, is bad. Lastly, he adds that in any case said authority could not have ordered refund and hence the direction to refund is without jurisdiction.
7. Shri Dastane, learned counsel for respondent No. 1
- APMC submits that accounts of Respondent No. 1 - APMC are not in dispute. The liability of Respondent No. 2 - Security Agency was worked out earlier on the basis of the very same documents. Those documents only have been looked into by an independent officer appointed by this Court. According to him, ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 6 after hearing respective counsel, the learned Single Judge felt it proper to have accounts inspected through an independent and unconcerned person. That person, therefore, has verified the records and submitted his report. The department, therefore, cannot object to it and it is not necessary to inspect the accounts in the presence of department. He relies upon the terms and conditions of agreement between Respondent No. 1 and Respondent No. 2. The provident fund and other dues, in respect of guards to be supplied to APMC, were to be borne by respondent No. 2. He contends that thus, Respondent No. 2 has already recovered that amount from respondent No. 1 and as such, there is no question of Respondent No. 1 again paying it to the department. In this situation, the department only can have lien on the amount payable to respondent No. 2 by the APMC. This lien has been recognized by the District Deputy Registrar in his report and accordingly appropriate adjustment has been ordered. He, therefore, prays for dismissal of Letters Patent Appeal as also Writ Petition.
8. Shri Balpande, learned AGP appearing for ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 7 respondent No. 3 - District Deputy Registrar, supports the arguments of Shri Dastane, learned counsel for respondent No.1.
9. During arguments, it has been brought to the notice of this Court that Respondent No. 2 - Security Agency has also filed a writ petition against the adjudication under Section 7-A of the EPF Act and other proceedings, and the same is pending before the learned Single Judge. The arguments supra clearly show that the provident fund dues of Security guards made available by Respondent No. 2 to Respondent No. 1 form subject matter of controversy. An inquiry under Section 7-A of the EPF Act was against the establishment of Respondent No. 2. Respondent No. 1 was not subjected to that inquiry. Records of Respondent No. 1 were looked into only to find out the quantum of wages paid to Security Guards by it. On quantum of wages, proportionately the provident fund contribution payable by the employer and by the employees, could have been worked out. It appears that it has been accordingly worked out and total then, for the above mentioned period, ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 8 worked out to Rs.22,56,702/-
10. The efforts were made to recover this amount and in the process Bank account of Respondent No. 1 - APMC was attached by invoking Section 8(F) of the EPF Act. This gave rise to the challenge in Writ Petition No. 3033 of 2004. Thus, the learned Single Judge on 02.09.2004 was not considering the liability of the petitioner APMC before him, to be assessed under Section 7-A of the EPF Act. In inquiry under Section 7-A of the EPF Act, conducted against Respondent No. 2 - establishment, APMC at the most has played role of witness. The question was of correctness of statement of accounts supplied by the APMC. To verify that aspect only, an independent officer in the shape of Respondent No. 3 was appointed. However, writ petition was then disposed of.
11. The report submitted by Respondent No. 3 could have been called for in that writ petition and then writ petition could have been considered further in the backdrop of that report. In that situation, not only present appellant but ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 9 respondent No. 1 - APMC and Respondent No. 2 - Security Agency would have got an opportunity to object to that report.
12. When writ petition was disposed of and the exercise was left totally to Respondent No. 3, Respondent No. 3 should have issued notice to the Provident Fund department and also to Respondent No. 2 - Security Agency. The accounts of respondent No. 1 - APMC ought to have been verified in presence of representatives of present appellant and respondent No. 2, thereafter the report could have been drawn. Admittedly, no such notice has been issued by respondent No. 3 and hence the report has been prepared behind their back.
13. In this situation, we find that said report prepared by respondent No. 3 cannot be relied upon to the prejudice of present appellant in LPA No. 204 of 2004 and the petitioner in Writ Petition No. 478 of 2004.
14. As already mentioned supra, a substantive writ petition filed by Respondent No. 2 - Security Agency is already ::: Uploaded on - 10/08/2017 ::: Downloaded on - 12/08/2017 02:00:23 ::: wp5178.04 10 pending for consideration before the learned Single Judge. The determination of liability of respondent No. 2, therefore, is still receiving consideration. This Letters Patent Appeal and Writ Petition are a collateral proceedings arising out of that exercise.
15. In this situation, we find that the report submitted by Respondent No. 3 in Writ Petition No. 3033 of 2004 cannot be sustained and used against the petitioner by the Provident fund department. The report is accordingly quashed and set aside.
16. As the liability of Respondent No. 2 - Security Agency to pay provident fund dues is still under consideration in writ petition before the learned Single Judge, it is appropriate that Writ Petition No. 3033 of 2004 is restored to the file of learned Single Judge by setting aside judgment dated 02.09.2004. The learned Single Judge can, after hearing the respective counsel, find out necessity and legality of appointing any outsider as an independent agency to examine the accounts of APMC.
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17. Accordingly, for that purpose, we quash and set aside the judgment dated 02.09.2004 in Writ Petition No. 3033 of 2004 and restore that writ petition to file for its consideration along with Writ Petition No. 1913 of 2013 (Regional Provident Fund Commissioner vs. M/s. Intelligence Security).
18. Accordingly, both the proceedings are disposed of. However, in the facts and circumstances of the case, there shall be no order as to costs.
JUDGE JUDGE
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*GS.
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