Madras High Court
M/S.G.T.K.Textiles vs The Assistant Provident Fund ... on 29 September, 2021
W.A.No.168 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.09.2021
CORAM
THE HONOURABLE Mrs.JUSTICE PUSHPA SATHYANARAYANA
and
THE HONOURABLE Mr.JUSTICE KRISHNAN RAMASAMY
W.A.No.168 of 2020
M/s.G.T.K.Textiles,
Rep by its Managing Director,
102, Dhali Road,
Udumalpet – 642 126,
Tiruppur District ... Appellant
vs
1. The Assistant Provident Fund Commissioner,
Employees Provident Fund Organization,
Dr.Balasundaram Road,
Coimbatore.
2. Employees Provident Fund Appellate Tribunal,
(Minister of Labour and Employment),
Government of India,
Scope Minar Core II, 4th Floor,
Lakshmi Nagar, District Centre,
New Delhi – 110 092 ... Respondents
****
Prayer : Writ Appeal filed under clause 15 of the Letters Patent to set aside the
order dated 27.09.2019 made in W.P.No.4634 of 2012.
****
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W.A.No.168 of 2020
For Appellant : Mr.Gopalakrishnan for
Mr.B.Kumarasamy
For Respondent-1 : Ms.R.Meenakshi
For Respondent-2 : Court
JUDGMENT
[Judgment of the Court was delivered by PUSHPA SATHYANARAYANA, J.]
This Writ Appeal is directed against the order of the learned Single Judge
dated 27.09.2019 made in W.P.No.4634 of 2012.
2. The appellant is a Textile Corporation. In W.P.No.4634 of 2012, an
order was passed on 27.09.2019 at the instance of the writ petitioner, who is the
Assistant Provident Fund Commissioner, Employees' Provident Fund
Organization, challenging the order passed by the Employees Provident Fund
Appellate Tribunal, namely the second respondent in ATA.No.364(13)/2005
dated 07.07.2009. There was a delay in payment of employees provident fund
contributions by the appellant herein for the period between January 1999 and
February 2002. The contributions were made belatedly on various reasons like
continuous loss etc. Therefore, the Writ Petitioner/first respondent herein had
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W.A.No.168 of 2020
issued show cause notices on 03.10.2001 and 25.12.2004 under Section 14-B of
the Employees' Provident Funds and Miscellaneous Provisions Act, 1952
(hereinafter referred to as 'the Act') and the appellant was given an audience.
Thereafter, an order was passed by the writ petitioner on 17.03.2005 under
Section 14-B of the Act, levying a sum of Rs.3,14,834/- towards damages. The
appellant also preferred an appeal before the Second respondent, namely
Employees Provident Fund Appellate Tribunal under Section 7(1) of the Act.
The Appellate Tribunal remanded the matter back to the first respondent herein,
for fresh enquiry, wherein, the appellant had put-forth the reasons for delay in
remittance of the provident fund dues.
3. According to the first respondent herein, the appellant-Company is a
defaulter in payment of contribution as per the provisions of the Act and that
the authorities are empowered to quantify the damages, considering the factual
aspects. Thus, a sum of Rs.3,14,834 was quantified as damages under Section
14-B of the Act. After contest, the learned Single Judge had elaborately
discussed the various aspects and granted time to the appellant for paying the
damages quantified by the authorities in five equal installments, starting from
01.11.2019, with a default clause.
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W.A.No.168 of 2020
4. The learned counsel appearing for the first respondent would contend
that after the order was passed by the Regional Provident Fund Commissioner-
II, Employees' Provident Fund Organization on 07.09.2021, an amount of
Rs.3,14,834/- was paid by the appellant herein on various dates, viz.,
02.01.2020, 25.09.2020 and 03.10.2020. The same is produced before this
Court in Proceedings No.TN/RO/CBE/RECOVERY/CC-24/10643/2021 dated
07.09.2021.
5. The learned counsel for the appellant states that the said amounts were
paid only because of an order of attachment that was to be passed. He further
tried to persuade this Court by stating that the appellant-Company is a sick unit
facing financial crisis. However, he is unable to produce even a piece of paper
to show that the case is before the NCLT or a Resolution Professional has been
appointed in that regard.
6. The proviso to Section 14-B of the Act, contemplates waiver of
damages, which is extracted hereunder:
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W.A.No.168 of 2020
14-B Power to recover damages
“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”
7. The learned counsel for the first respondent brought to the notice of
this Court an order passed by the Hon'ble First Bench of this Court in
W.A.No.101 of 2020 dated 12.02.2020 in the case of M/s.PGC Textile
Corporation (P) Ltd., -vs- The Regional Provident Fund Commissioner and
another, wherein, the power to recover damages under Section 14-B of the Act
were discussed and it was specifically pointed out that, unless the defaulting
Company establishes that it is scheme for rehabilitation, which has been
sanctioned by the Board of Industrial and Financial Reconstruction (BIFR), the
proviso to Section 14-B of the Act, cannot be applied. It is also held that the
appellant-Company therein is not a sick Company, entitling them for waiver of
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W.A.No.168 of 2020
damages under Section 14-B of the Act.
8. In the light of the above and also taking into account the fact that the
appellant-Company has already paid the entire amount quantified by the
authorities for damages, we see no reason to interfere with the order of the
learned Single Judge and accordingly, the Writ Appeal is dismissed. No costs.
[P.S.N., J.] [K.R., J.]
29.09.2021
Index : Yes/No
srn
To
1. The Assistant Provident Fund Commissioner,
Employees Provident Fund Organization,
Dr.Balasundaram Road,
Coimbatore.
2. The Employees Provident Fund Appellate Tribunal,
(Minister of Labour and Employment),
Government of India,
Scope Minar Core II, 4th Floor,
Lakshmi Nagar, District Centre,
New Delhi – 110 092
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W.A.No.168 of 2020
PUSHPA SATHYANARAYANA, J.
and
KRISHNAN RAMASAMY, J.
srn
W.A.No.168 of 2020
29.09.2021
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