Calcutta High Court (Appellete Side)
Agricultural And Rural ... vs The Union Of India & Anr on 19 July, 2023
Form No. J.(2)
Item No.7
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
HEARD ON: 19.07.2023
DELIVERED ON: 19.07.2023
CORAM:
THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
W.P.A. 10557 of 2016
North 24-Parganas Co-operative
Agricultural and Rural Development Bank Limited
Vs.
The Union of India & Anr.
Appearance:-
Mr. Pabitra Charan Bhattacharya ...........for the petitioner
Mr. Satyendra Aggarwal .........for the Provident Fund
Authorities
JUDGMENT
(Judgment of the Court was delivered by HIRANMAY BHATTACHARYYA, J.)
1. North 24-Parganas Co-operative Agricultural and Rural Development Bank
Limited (for short 'the Bank') filed this writ petition challenging the order of
the Regional Provident Fund Commissioner, Barrackpore dated June 1,
2016. By the said order, the Bank was directed to pay a sum of Rs.
1,45,97,661/-(Rupees one crore forty five lakhs ninety seven thousand six
hundred and sixty one) .
2. The proceeding under section 7A of Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 (hereinafter referred to as the '1952
Act') was initiated against the Bank alleging default in payment of
employees provident fund and allied dues since September 1979. Summons
under section 7A of the 1952 Act was issued and an opportunity of hearing
was afforded to the petitioner/Bank. Thereafter the Regional Provident
Fund Commissioner passed an order dated December 31, 2014
determining the dues in respect of the petitioner/Bank as Rs.
1,70,49,681/- (Rupees one crore seventy lakhs forty nine thousand six
hundred eighty one) out of which the petitioner/Bank has already
deposited a sum of Rs. 24,52,020/- (Rupees twenty four lakhs fifty two
thousand twenty) leaving a balance of Rs. 1,45,97,661/- (Rupees one crore
forty five lakhs ninety seven thousand six hundred sixty one) to be paid
within 50 days of receipt of the said order. Thereafter in exercise of powers
under section 7B of the 1952 Act, the order dated December 31, 2014 was
sought to be reviewed.
3. The Regional Provident Fund Commissioner upon hearing the learned
advocates of the respective parties, disposed of the review proceedings upon
holding that there is no cogent reason to interfere with the order passed
under section 7A of the 1952 Act on December 31, 2014.
4. Mr. Bhattacharya, learned senior counsel representing the petitioner
submits that the petitioner/Bank being an establishment registered under
the Co-operative Societies Act, 1912, the provisions of the 1952 Act do not
have any manner of application to the petitioner/Bank. In support of his
contention, he places reliance upon the provisions laid down under section
16(1)(a) of the 1952 Act.
5. Mr. Bhattacharya further submits that pursuant to a certificate proceeding
being initiated, the sum of Rs. 1,45,97,661/- (Rupees one crore forty five
lakhs ninety seven thousand six hundred sixty one) has already been
realised from the petitioner/Bank.
6. Mr. Satyendra Aggarwal, learned advocate representing the provident fund
authority submits that the petitioner on an earlier occasion filed W.P.
4097(W) of 2011praying for a writ of mandamus commanding the
respondents to show cause as to why the respondent authorities shall not
treat the petitioner exempted from the provisions of the 1952 Act. He
submits that such writ petition stood dismissed by a judgment dated May
3, 2012.
7. He thus submits that after dismissal of the said writ petition, it does not
lie in the mouth of the petitioner/Bank to contend that the provisions of
the 1952 Act cannot be applied to the petitioner/Bank.
8. Heard the learned advocates for the parties and perused the materials
placed. It appears from the statements made in the writ petition that the
Board of Directors of the petitioner/Bank decided to deposit the
contributions to the Employees Provident Fund Organisation from January
2007, which continued up to 2008. It further appears therefrom that the
month-wise statements/returns were also filed and a sum of Rs.
24,52,020/- (Rupees twenty four lakhs fifty two thousand twenty) was
admittedly deposited with the Employees Provident Fund Organisation.
Before the Regional Provident Fund Commissioner, learned advocate
representing the petitioner/Bank submitted that the employees were
applying for exemption of their dues as per the 1952 Act and the Board of
Directors was considering their representations.
9. The Regional Provident Fund Commissioner, after taking into consideration
the submissions of the learned advocates of the respective parties and upon
considering the report dated May 17, 2013 of the Area Enforcement Officer,
which revealed that the Bank concerned was working with the aid of power,
observed that although the Bank employed less than 50 persons but no
documentary evidence was produced by the petitioner/Bank in support of
their claim that the Bank was running without the aid of power.
10. Section 17 of the 1952 Act states that the appropriate government may, by
notification in the Official Gazette, and subject to such conditions as may
be specified in the notification, exempt, whether prospectively or
retrospectively, from the operation of all or any of the provisions of any
Scheme:
(a) any [establishment] to which such Act applies if, in the opinion of the
appropriate government, the rules of its provident fund with respect to the
rates of contributions are not less favourable than those specified in section
6 and the employees are also in enjoyment of other provident fund benefits
which on the whole are not less favourable to the employees than the
benefits provided under this Act or any Scheme in relation to the employees
in any other [establishment] of a similar character, or
(b) any [establishment] if the employees of such [establishment] are in
enjoyment of benefits in the nature of provident fund, pension or gratuity
and the appropriate government is of opinion that such benefits, separately
or jointly, are on the whole not less favourable to such employees than the
benefits provided under this Act or any Scheme in relation to the employees
in any other [establishment] of a similar character.
11. Upon reading the provisions laid down in Section 17, this Court is of the
considered view that the power to exempt can be exercised in respect of an
establishment to which the 1952 Act applies.
12. A Co-ordinate Bench of this Court by a judgement dated May 3, 2012 in
W.P. No.4097 (W) of 2011 after taking into considerations the reliefs
claimed therein observed that there is nothing to show that the
petitioner/Bank ever disputed the applicability of the Act and the schemes
framed thereunder to such establishment. The Co-ordinate Bench further
noted that since the petitioner stopped compliance after some time and did
not deposit contributions from September 1, 1979, the provident fund
authority issued summons under Section 7A of the 1952 Act. The Co-
ordinate Bench further noted that the petitioner/Bank wanted exemption
from the conditions of the 1952 Act and in order to be favoured with such
exemption, it was required to submit the requisite application therefor. It
would be relevant to extract the relevant portion of the said order:-
"The Court:- The petitioner in this WP under art.226 dated February
28, 2011 is seeking the following principal reliefs:-
"a) A writ in the nature of mandamus commanding the respondents, their
men, agents and servants specially the respondent nos.2 and 3 to show
cause as to why the respondent authorities shall not treat the petitioner
exempted from the Employees Provident Fund and Miscellaneous
Provisions Act, 1952.
b) A writ in the nature of mandamus commanding the respondent
authorities to refund the entire amount of Rs.26,65,333.00 deposited so far
with interest at the rate of 9.5% per annum".
By a letter dated February 7, 2007 the Regional Provident Fund
Commissioner, West Bengal informed the petitioner that the provisions of
the Employees' Provident Funds and Miscellaneous Provisions Act, 1952
and the schemes framed thereunder were applicable to its establishment.
Allotting the requisite code number the RPFC directed the petitioner to pay
statutory and other allied dues with effect from September 1, 1979.
The case stated in para. 7 of the WP shows that from January 2007
the petitioner started depositing contributions in the statutory fund.
Since the petitioner stopped compliance after sometime and did not
deposit contributions from September 1, 1979, the authority issued
summons under s.7A of the Act for determining its liability. There is
nothing to show that it ever disputed applicability of the Act and the
schemes framed thereunder to its establishment.
In response to the summons, in stead of appearing before the
authority, the petitioner submitted a letter dated March 29, 2010 asking the
RPFC to refund the deposited amount on the grounds that the amount was
to be invested by it in a nationalised bank. Since the demand was not met,
it gave a lawyer's notice and then brought this WP.
Mr. Bhattacharjee appearing for the petitioner has submitted that the
petitioner was never served with any coverage letter, and that the
provisions of the Act and the schemes framed thereunder were not
applicable to the establishment of the petitioner.
In the opposition filed by the respondents it has been stated that the
s.7A proceedings were initiated on September 22, 2009 for determination of
dues payable from September 1, 1979 from which date the provisions of the
Act and the schemes framed thereunder were applicable to the establishment
of the petitioner.
Over the course of hearing Mr. Kundu appearing for the respondents
has produced a copy of the coverage letter dated February 7, 2007. It is,
therefore, evident that the petitioner has deliberately suppressed this letter.
The respondents ought to have produced the letter with their opposition.
No explanation has been given why the coverage letter was issued
only on February 7, 2007 when, according to the RPFC, the provisions of
the Act and the schemes framed thereunder were applicable to the
establishment of the petitioner with effect from September 1, 1979.
If the provisions of the Act and the schemes framed thereunder were
not applicable to its establishment, then the petitioner ought to have raised
the applicability question and thus created an obligation of the RPFC to
decide the question in proceedings initiated under s.7A of the Act.
In stead of taking this natural lawful course, the petitioner chose to
approach the High Court under art.226 alleging that the RPFC did not
meet its demand for refund. It also wanted exemption. For this, it was
required to apply. There is nothing to show that it submitted the requisite
application."
13. The Regional Provident Fund Commissioner rightly held that the prayer of
the establishment to be excluded from the purview of the 1952 Act
simultaneously with the prayer for exemption under section 17 of the 1952
Act is patently self-contradictory as exemption under section 17 can be
sought only by the establishment already covered by the 1952 Act.
14. In the review proceeding, the Regional Provident Fund Commissioner
observed that the petitioner/Bank failed to produce any document either
during the proceedings under section 7A or under section 7B of the 1952
Act to show that the employees of the establishment and/or employer had
contributed to a fund, which can be treated as a kind of provident fund as
mentioned under section 15 of the 1952 Act. On such ground, the
Regional Provident Fund Commissioner observed that there is no cogent
reason to interfere with the order passed under section 7A of the 1952 Act
on December 31, 2014.
15. The Provident Fund Commissioner after taking note of the submissions of
the respective parties and the materials on record, passed the orders dated
December 31, 2014 and June 1, 2016.
16. After hearing the learned advocates for the respective parties, this Court is
of the considered view that the petitioner/Bank has failed to satisfy that
the provisions of the 1952 Act cannot be applied to the petitioner/Bank.
17. The orders passed by the Regional Provident Fund Commissioner dated
December 31, 2014 are reasoned orders. It is well-settled that judicial
review is not a review against the decision but a review of the decision
making process. This Court is of the considered view that there is no
infirmity in the decision making process warranting interference under
Article 226 of the Constitution of India.
18. For the reasons as aforesaid, the writ petition stands dismissed.
19. There shall be, however, no order as to costs.
20. After this order was dictated, Mr. Bhattacharya submits that the
petitioner/Bank has made some payments, which, according to him, is a
double payment. The petitioner will be at liberty to raise such issue with
regard to the alleged double payment before the authorities and if such a
representation is made, the authorities shall consider and dispose of the
same in accordance with law.
21. Urgent Photostat certified copy of this order, if applied for, be furnished to
the parties expeditiously upon compliance of all legal formalities.
(HIRANMAY BHATTACHARYYA, J.)
Pallab AR(Ct.)
