M/S Chatterjee Cleaning Arts ... vs Assistant Provident Fund ...
2011 Latest Caselaw 2801 Del

35.
$~
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     W.P.(C) 3613/2011 & CM No.7562/2011 (for stay).

      M/S CHATTERJEE CLEANING ARTS
      SERVICES PVT. LTD                          ..... Petitioner
                     Through: Mr. Biswajit Das & Ms. Mayarika
                              Pathak, Advocates.

                                   versus

      ASSISTANT PROVIDENT FUND
      COMMISSIONER (DAMAGE) & OTHERS      ..... Respondents
                   Through: None.
      CORAM:
      HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

                                ORDER

% 25.05.2011

1. The petition impugns the order dated 3rd March, 2011 of the

Employees' Provident Fund Appellate Tribunal, New Delhi impleaded as

respondent no.2. The said Tribunal is not required to be impleaded as a

party and is deleted from the memo of parties. An endorsement to the said

effect be made by the Court Master today itself.

2. The first contention of the counsel for the petitioner is that the

Tribunal has not heard the petitioner and refused the adjournments sought

by the petitioner.

3. No merit is found in the said contention. The petitioner has no right to

adjournment and if chooses, when the appeal comes up for hearing, to seek

adjournment, does so at its own risk and no error is found in the refusal of

adjournment and the Tribunal proceeding to reserve the order. The

contention that because the appeal had come up after five years,

adjournment should have been granted, cannot be accepted.

3. The appeal was preferred against the order dated 30th August, 2006 of

the respondent no.1 whereby the petitioner was directed to deposit a sum of

`6,60,132/- towards damages under Section 14B of the Employees'

Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) and a

sum of `2,93,229/- towards interest under Section 7Q of the Act.

4. A perusal of the paper book at pages 47 to 60 indicates that the

default for which damages and interest have been computed exists from

February, 1998 till March, 2004. It is the contention of the petitioner that

though in the order dated 30th August, 2006 it was held that the petitioner is

entitled to benefit of pre-discovery period from February, 1998 to

September, 2000 but the same has not been given while making the

computation.

5. However as far as the period from October, 2000 to March, 2004 is

concerned, the contention of the counsel for the petitioner is that since the

Section 7A assessment itself was done vide order dated 11 th April /17th June,

2002 at page 43 of the paper book; prior thereto the petitioner could not be

expected to know with respect to which employees and what amount had to

be deposited and as such there could be no default inviting damages and

interest prior to the 7A assessment vide order dated 11th April/17th June,

2002. It is contended that the petitioner since the year 1998 had been

representing to the respondent no.1 for registration but was earlier informed

that the responsibility is of the principal employer for whom the petitioner

was running services and the petitioner was registered only on 26 th

September, 2000. It is contended that the petitioner as such could not know

that the provident fund with respect to which employees was being

deposited by the principal employer and for which employees it was liable

to deposit the provident fund.

6. The contention of the petitioner aforesaid if accepted would

tantamount to no proceeding under Sections 14B and 7Q of the Act being

maintainable till the Section 7A order. The said position cannot be accepted

in law. The petitioner is to make the requisite deposit of its own and at least

since the allotment of the Code number, was required to make the said

deposit and the explanation offered for the default after September, 2000

cannot be accepted.

7. Yet another argument offered by the counsel for the petitioner is that

the petitioner pursuant to the order under Section 7A was permitted to pay

the amount in installments. The Tribunal has in the order impugned in this

petition held that no material in this regard was placed by the petitioner. The

petitioner before this Court also has not placed any such material. The

counsel for the petitioner contends that it was an informal understanding

between the petitioner and the respondent no.1. The said argument cannot

be accepted. The Section 7A order itself records that the same was "without

prejudice to the rights" of the respondent no.1 to levy and recover damages

under Section 14B and interest under Section 7Q of the Act. Had there been

any such understanding, at least the said part of the order would not have

been then in existence.

8. Even otherwise if a view were to be taken that contribution is to be

deposited only after assessment and not in advance as is required under the

law, the same would be contrary to the statutory provision and do away with

the provision of self-assessment and deposit.

9. This Court in Ajanta Offset and Packaging Ltd. Vs. RPFC 110

(2004) DLT 757 held that the provisions of the EPF Act apply proprio

vigore and all that the respondents are required to do, is to allot a Code number;

that even if there be any delay on the part of the respondents in allotting a

Code number, that will not absolve the petitioner of its liability under the

Act. The EPF Act thus applies to the notified establishments with effect

from the date from which the Notification makes the Act applicable and not

from the point of time the competent authority holds the employer of such

establishment liable and determines the amount payable. The Act comes

into operation by its own vigour and its operation is not dependent on any

decision being taken by the authorities under the Act. The petitioner was

under a legal obligation to make deposits to the Fund within the time

prescribed, the moment the Act and the Scheme became applicable to it and

no intimation or notice of any kind in that respect was necessary to be

issued by the authorities concerned. Reference may also be made to S.K.

Nasiruddin Beedi Merchant Ltd. Vs. Central P.F. Commissioner (2001) 2

SCC 612 laying down that the applicability of the Act is not determined or

decided by any proceeding under Section 7A of the EPF Act but under the

provisions of the Act itself; what is done under Section 7A is only

determination or quantification of the same; the assessee cannot rely upon

his own laches in not making the deposit.

10. Thus no merit is found in the petition in so far as impugning the levy

of damages and interest for the period after September, 2000.

11. Issue notice limited to the period February,1998 to September, 2000

to the respondents by all modes including dasti, returnable on 15th

November, 2011.

12. There shall be stay of recovery only qua damages and interest till

September, 2000.

13. It is clarified that there is no stay for recovery of damages and interest

for the balance period.

14. The petitioner is at liberty to approach the respondents for bifurcation

of the amount.

CM No.7563/2011 (for exemption).

Allowed, subject to just exceptions.

RAJIV SAHAI ENDLAW, J

MAY 25, 2011 pp..