Malappuram District ... vs The Regional Provident Fund ...
2022 Latest Caselaw 11173 Ker

                 IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                  PRESENT
                  THE HONOURABLE MR. JUSTICE AMIT RAWAL
    FRIDAY, THE 2ND DAY OF DECEMBER 2022 / 11TH AGRAHAYANA, 1944
                         WP(C) NO. 38282 OF 2022
PETITIONER:

              MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD
              REPRESENTED BY ITS GENERAL MANAGER
              MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD-4329
              HEAD OFFICE, PB NO.8
              MALAPPURAM, PIN - 676501

              BY ADV ESM.KABEER


RESPONDENTS:

              THE REGIONAL PROVIDENT FUND COMMISSIONER
              EPFO, SUB REGIONAL OFFICE,
              ERNAHIPALAM, KOZHIKODE, PIN - 673006

              BY ADV ABRAHAM P.MEACHINKARA
              SRI.SUNIL KURIAKOSE - GP


     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
02.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 38282 OF 2022
                                 2


                           JUDGMENT

Petitioner, a Co-operative Bank, has assailed the order of the

Tribunal dated 13.04.2022 under the Employees Provident Fund

and Miscellaneous Provisions Act, 1952, whereby the order dated

09.12.2016 of the assessing authority assessing the damages

under Section 14B has been partly modified by reducing to 70%.

The Bank having more than 20 employees was allotted a code by

the EPF for depositing of the EPF contribution. There was a default

in deposit of the contributions despite the fact that the salary was

paid on time resulting into initiation of proceedings under Section

7A of the EPF & MP Act for the period July 2009 to June 2015. As a

consequential effect, the penal provisions under Sections 7Q and

14B were initiated. Assessing Authority after affording opportunity

of hearing to the petitioner assessed the damages to the tune of

Rs.5,92,000/-. In the appeal preferred by the petitioner, it was

reduced to 70%.

2. Learned counsel appearing on behalf of the petitioner

submitted that there was no delay and laches on the part of the WP(C) NO. 38282 OF 2022

petitioner bank in remitting the contribution till 2009 as the State

Government had issued notification dated 01.04.2005 excluding

the District Co-operative Banks from the purview of the Employees

Provident Fund Act. On 29.04.2005, petitioner bank became the

member of the Pension Board and the contribution of the

employees was being remitted to the said Board. Some of the

employees of the petitioner bank along with the Co-operative

Banks filed separate writ petitions which were disposed of by

setting aside the order of the exclusion vide judgment dated

31.01.2012 Ext.P2. Matter was taken in Writ Appeal, Division

Bench confirmed the judgment and gave the options to the

employees either to choose payment of contribution to the EPF or

to the State Pension Board. Matter also reached the Supreme

Court which is stated to be pending. It is in that aspect, petitioner

cannot be saddled with the negligence of not depositing the EPF

contributions of the employees. Later on, petitioner had deposited

the EPF contributions and therefore the proceedings under Section

14B were initiated. It was not intentional, but there was some

confusion. Learned Tribunal did not examine the aforementioned WP(C) NO. 38282 OF 2022

contentions and therefore the order is liable to be set aside

without fastening any liability of damages.

3. On the other hand, learned counsel appearing on behalf

of the respondent opposed the aforementioned prayer. Petitioner,

without taking any legal opinion intentionally stopped making the

contributions and started making the remittances with the Pension

Board but the notification only pertained to the pension and not

with regard to the payment of the EPF contribution.

Misinterpretation of the notification cannot be a ground of claiming

exemption from payment of damages as petitioner had, at later

point of time, deposited the contributions after the culmination of

the proceedings under Section 7A of the Act.

4. I have heard the learned counsel for the parties and

appraised the paper book.

5. It is a matter of record that the Government came out

with a notification excluding the District Co-operative Banks from

the purview of the EPF, but the tenor and mode of the notification

was only with regard to the pension but not to the payment of the

contribution. Petitioners were not diligent in reading the contents WP(C) NO. 38282 OF 2022

of the notification and there was series of litigations by the

different employees. It is also matter of record that petitioners

were put to notice by the Assessing Officer with regard to the non-

payment of contribution and in a proceeding under Section 7A,

contribution was later on deposited. The penal provisions of

Sections 7Q and 14B are sine qua non on account of not depositing

of the contribution in time. The language of Section 14B do not

prescribe any mandatory provisions of payment of damages, the

expression 'may' cannot be said to be read to be 'shall'. In other

words, the discretion is vested with the Assessing Officer to assess

the damages after taking into consideration the attenuating

circumstances explained by the parties. The reasoning given by

the petitioner in not depositing the EPF contribution owing to the

promulgation of notification appears to be justiciable. The

Appellate Tribunal, noticing all these facts, in my view, ought to

have been reduced the damages to the extent of only 25% instead

of 70%.

Accordingly, the order of the Appellate Tribunal is modified.

The liability of the petitioner towards damages under Section is WP(C) NO. 38282 OF 2022

assessed to 25%. Writ petition is partly allowed with the

aforementioned modification. Petitioners are directed to deposit

the amount of Rs.1,25,000/- in three equal monthly instalment

commencing from 15.12.2022. In case of default of one instalment

respondent will be at liberty to take action. Till such time, no

coercive action shall be taken against the petitioner.

Sd/-

AMIT RAWAL JUDGE nak WP(C) NO. 38282 OF 2022

APPENDIX OF WP(C) 38282/2022

PETITIONER EXHIBITS

Exhibit P1 TRUE COPY OF THE NOTIFICATION DATED 26.05.2009

Exhibit2 TRUE COPY OF THE JUDGMENT DATED 31.01.2012 IN WPC NO.1992/2010 WITH TYPED COPY

Exhibit P3 TRUE COPY OF THE JUDGMENT IN WA NO.36/2014 DATED 10.03.2014

Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 23.10.2013 IN WPC NO.17617/2012

Exhibit5 TRUE COPY OF THE ORDER IMPOSING DAMAGES TO THE PETITIONER DATED 09.12.2016 WITH TYPED COPY

Exhibit6 TRUE COPY OF THE ORDER OF HON'BLE TRIBUNAL DATED 13.04.2022 IN APPEAL NO.219/2018