The Assistant Provident Fund vs The Agricultural Produce Market & ...
2017 Latest Caselaw 5751 Bom

   wp5178.04                                                                   1



             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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    wp5178.04                                                                       2




                               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,

(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

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.

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,

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

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,

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

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

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.

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
                                               ******

  *GS.