M/S. Godwin Media Ventures Pvt. ... vs Union Of India And 6 Others
2021 Latest Caselaw 6733 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Court No. - 39
 

 
Case :- WRIT - C No. - 12980 of 2021
 

 
Petitioner :- M/S. Godwin Media Ventures Pvt. Ltd.
 
Respondent :- Union Of India And 6 Others
 
Counsel for Petitioner :- Gunjan Jadwani
 
Counsel for Respondent :- A.S.G.I.,C.S.C.,Sachindra Upadhyay
 

 
Hon'ble Mrs. Sunita Agarwal,J.

Hon'ble Mrs. Sadhna Rani (Thakur),J.

Heard Ms. Gunjan Jadwani learned counsel for the petitioner and Sri Udit Chandra learned counsel for respondent nos. 2, 3 and 7.

By means of the present writ petition, the petitioner seeks for quashing of the order dated 12.1.2021 passed by respondent no. 3 namely the Recovery Officer, Employees Provident Fund Organisation, Regional Officer, Meerut and the consequential recovery citation dated 5.3.2021 issued by respondent no. 6 namely the Tehsildar, Tehsil Meerut. The proceedings under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (In short as "the Act, 1952") (under Section 7-A) was instituted against the petitioner and the liability towards the provident fund contributions had been determined by the order dated 11.8.2017 by the Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Regional Office, Meerut.

The said order states that the petitioner-establishment will also be liable to pay interest under Section 7-Q and penal damages under Section 14-B of the Act, 1952 for belated deposits.

The admitted fact of the matter is that the order passed under Section 7-A determining the liability on the default on the part of the petitioner-establishment had not been challenged under the provisions of the Act, 1952 and the same has become final. However, the petitioner had approached this Court by filing a Writ Petition No. 17470 of 2020 (M/S. Godwin Media Ventures vs. Union of India and 2 others) with the simple prayer that it may be granted some time to make the deposits.

While disposing of the said writ petition by the judgment and order dated 18.11.2020, the learned Single Judge had made the following observations:-

"Considering the entire facts and circumstances, this Court is of the opinion that the petitioner is not entitled to any kind of abatement in his liability towards dues to be deposited by way of employer's contribution to the E.P.F. Nevertheless, some concession may be made so as to enable the employer to deposit in installment following a schedule that does not place a spine breaking burden on the employer's establishment. It is, accordingly, directed that the employer shall deposit out of the remainder of the liability, 50% of the outstanding, which for the present is reckoned to be a figure of Rs. 6 lacs, within one month of date. The remainder shall be paid in two equal installments over a period of six months each after a rest of three months, reckoned from the deposit of 50% to be made next.

It goes without saying that the Regional Provident Fund Commissioner after deposit of the 50% of the employer's liability, shall furnish a fresh account of the total outstanding that the employer's would be obliged to deposit in the remainder of the two installments, including in the figure any further accrual on account of interest and damages. In calculating the interest or damages the Regional Provident Fund Commissioner would have due regard of Section 7Q and 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

In the event, the petitioner deposits the employer's contribution according to the schedule fixed by the Court, the respondents shall not take any coercive measures against the petitioner. Once the entire deposit is made, a memo of 'acquittance and no dues' shall be issued by the Regional Provident Fund Commissioner. In the event, there is any default in adherence to the schedule, recovery proceedings, if already initiated, may be revived; if not initiated, may be initiated.

This petition is disposed of in terms of the aforesaid order."

It further appears that the petitioner did not adhere to the schedule fixed by the learned Single Judge as only 50% of the total liability fixed under Section 7-A of the Act, 1952 had been deposited. The dispute between the parties is with regard to the compliance of the order passed by the learned Single Judge.

We make it clear that we are not sitting in appeal over the decision of the learned Single Judge nor are we in the contempt proceeding.

The sole question before us is with regard to the validity of the order dated 12.1.2021 to the extent to which the amount of interest under Section 7-Q and penal damages under Section 14-B of the Act had been calculated/added.

Sri Udit Chandra learned counsel for the respondents admits that no notice or opportunity of hearing had been granted to the petitioner before making the said calculations.

He, however, states that the order passed under Section 7-Q of the Act, 1952 has been merged with the original order under Section 7-A of the Act and the petitioner had a remedy of filing appeal under Section 7-I of the Act, 1952 before the Tribunal. There is, however, no such remedy against the order of penalty imposed under Section 14-B.

As the fact that opportunity of hearing had not been granted to the petitioner before passing the order dated 12.1.2021 is admitted, we, therefore, do not find any reason to relegate the petitioner for approaching the Tribunal by filing appeal under Section 7-I.

Further, Sri Udit Chandra learned counsel for the respondents vehemently submits that no fresh opportunity of hearing was required to be given to the petitioner-establishment, inasmuch as, the judgment and order dated 18.11.2020 was a consensus order. The petitioner had admitted its liability and the extent of default. This Court had observed that while calculating the remaining two installments after deposit of 50% of the imposed liability, the Regional Provident Fund Commissioner would calculate the interest or damages having regard to Section 7-Q and Section 14-B of the Act, 1952.

The submission, thus, is that the order impugned dated 12.1.2021 had been passed taking into consideration of the said observations and the amount calculated under Section 14-B and Section 7-Q at item nos. '6' and '7' of the table cannot be disputed.

To examine this submission of the learned counsel for the respondents, the provisions of Section 7-Q and Section 14-B are to be noted hereunder:-

"7-Q. Interest payable by the employer .-The employer shall be liable to pay simple interest at the rate of twelve per cent. per annum or at such higher rate as may be specified in the Scheme on any amount due from him under this Act from the date on which the amount has become so due till the date of its actual payment:

Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any scheduled bank.]

[14-B. Power to recover damages .-Where an employer makes default in the payment of any contribution to the Fund [, the [Pension] [ Fund or the Insurance Fund] [ or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 [or sub-section (5) of section 17] [ or in the payment of any charges payable under any other provision of this Act or of [any Scheme or Insurance Scheme] [ or under any of the conditions specified under section 17, [the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by [notification] [ in the Official Gazette, in this behalf] [ may recover [from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme]:

[Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard:]

[Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a Scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), subject to such terms and conditions as may be specified in the Scheme.]"

A perusal of Section 7-Q indicates that in determination of the liability of a defaulter, it is open for the Regional Provident Fund Commissioner to calculate the interest at the rate of 12% per annum or at such higher rate as may be specified in the scheme on any amount due to the employer under the Act for the period of default.

In the order impugned, the rate of interest for the amount calculated under Section 7-Q of the Act, 1952 has not been disclosed. But, in the counter affidavit of respondents in paragraph '29', it is categorically stated that the simple interest at the rate of 12% per annum has been calculated on the admitted liability under Section 7-A of the Act, 1952. No rejoinder affidavit has been filed to deny the said averment. We, therefore, take the said statement as it is.

Looking to the mandatory provisions of Section 7-Q, in view of the admitted default, the dispute raised to the computation of the amount under Section 7-Q of the Act, 1952 as indicated at item no. 7 of the table (in the order impugned dated 12.1.2021) cannot be entertained.

However, as regards, the penal damages imposed under Section 14-B of the Act, we may note that the first proviso to Section 14-B of the Act clearly states that before levying and recovery of damages under the said provision, the employer shall be given a reasonable opportunity of hearing.

As regards the decision of the learned Single Judge, we may note that the specific direction therein was that due regard shall be given to the provisions of Section 7-Q and 14-B of the Act, 1952. It was, therefore, not open for the Regional Provident Fund Commissioner to deviate from the procedure prescribed under Section 14-B of the Act, 1952 while calculating the penal damages.

Consequently, while quashing the order dated 12.1.2021 in part, only to the extent of the amount calculated under Section 14-B at item no. 6 of the table, a liberty is granted to the Regional Provident Fund Commissioner to issue notice and pass fresh order for computation of damages under Section 14-B of the Act, 1952 after providing due opportunity of hearing to the petitioner.

We further make it clear that it is open for the respondents to proceed with the recovery of rest of the amount indicated in the table (excluding item no. '6') in the order impugned dated 12.1.2021, in accordance with law.

With the above observations and directions, the writ petition is partly allowed.

Order Date :- 29.6.2021

Brijesh