The Regional Provident Fund ... vs Sri B.Vijaya Kumar
2022 Latest Caselaw 5144 Tel

     HON'BLE SMT. JUSTICE G. ANUPAMA CHAKRAVARTHY

                 SECOND APPEAL No.25 of 2013

JUDGMENT :

This Second Appeal is arising out of the judgment and

decree dated 22.08.2007 in A.S.No.201 of 2005 on the file of XIII

Additional Chief Judge (FTC) City Civil Court, Hyderabad, which

is arising out of the judgment and decree dated 28.09.2004, passed

in O.S.No.1197 of 1992 on the file of IV Senior Civil Judge, City

Civil Court, Hyderabad.

2. For the sake of convenience, the parties are referred to as

arrayed before the trial Court.

3. Heard learned Counsel for the appellant as well as the

counsel for the respondents and perused the record.

4. The appellant is the plaintiff. The plaintiff is the Regional

Provident Fund Commissioner. The brief facts of the case of the

plaintiff is that Employee Fund Organization which is established

under the Employees Provident Fund and Miscellaneous Provisions

Act, 1952 (for short 'the Act') to maintain the Provident Fund

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Accounts and subscribers. The defendant was appointed as Lower

Division Clerk in the year, 1982 in the office of plaintiff and he

worked in the Accounts Section. One Sri Jose Mathews is an

employee of M/s. Warner Hindustan Limited and was the member

of EPF bearing A/c.No.AP/2756/166 and submitted his claim in

1986 for refund of PF amount and his claim was settled for

Rs.60,209/- which was sent to Cash Section on 26.11.1986 and the

same was received by the defendant and entered in the inward

registered vide Sl.No.642 at pg.No.194 on the same day. But the

defendant altered SB A/c.No.73 to 173 in the claim form and not

knowing the same, a cheque bearing No.632094 dated 28.11.1986

was sent to Federal Bank, Mettada Brach, Trivendrum. It is the

further case of the plaintiff that the defendant having knowledge

that the cheque will be returned, he opened SB A/c.No.1627 in

Central Bank of India on 17.12.1986 by forging signature of

Mr.Mathews by giving false address and the defendant submitted a

letter on 17.12.1986 to the plaintiff's office in the name of

Mathews with a request to credit the amount into A/c.No.1627

treating the said letter as genuine. Further, the plaintiff prepared

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another cheque bearing No.635357 dated 09.02.1987 and sent it to

Central Bank of India and the amount was withdrawn by the

defendant through Andhra Bank, Chikkadpally, another through

SBH, Chikkadpally and finally through Syndicate Bank,

Nallakunta. Further, one Mr. Sharma, an employee of Transport

Corporation of India claimed his provident fund in 1986 and

plaintiff settled his claim for Rs.68,762/-. The defendant on

receiving the said claim on 17.12.1986 entered in inward register

and altered SB A/c.No.3450 in the claim form as 184500 and the

said cheque was returned. Further, the defendant opened SB

A/c.No.1756 by forging the signature of the said Mr.Sharma and

withdrew the said amount through Central Bank of India and

Andhra Bank. Likewise, the defendant also withdrew the amounts

of one Dr.Srinivas Deshmukh on 17.03.1987, 18.03.1987 and

19.03.1987 of Rs.3,000/-, Rs.6,000/- and Rs.1800/- respectively,

totally misappropriating an amount of Rs.1,39,765/- for which he is

liable to return the said amount with interest. Basing on the

complaint of the plaintiff, the matter was referred to Deputy

Director (Vigilance) and on investigation, the above facts were

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revealed. Further, the plaintiff handed over the case to CBI,

Hyderabad and the defendant was removed from service for

mis-conduct and suppressing his employment in Army before

joining in the plaintiff's organization. Therefore, the suit is filed

for recovery of amount with interest.

5. On the other hand, the defendant filed a detailed written

statement contending that there is no cause of action and the suit is

barred by limitation and is not maintainable.

6. It is the specific case of the defendant that he worked in

Cash Section in plaintiff's office for reconciliation work from

01.08.86 to 17.03.87 and from 17.03.87 to till his removal from

service, he worked in the Insurance Section. Further, though CBI

investigated about misappropriation of funds in the plaintiff's

office from November, 1987 to August, 1990, no charge sheet was

filed against the defendant and the present suit was filed on

19.08.1992 and the same is barred by limitation. It is the further

case of the defendant that the plaintiff demanded bribe of

Rs.20,000/- for his promotion, because of which plaintiff bore

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grudge and filed the present suit and prayed for dismissal of the

suit.

7. Basing on the pleadings on record, the trial Court has framed

the following issues:-

"1. Whether the defendant while working with the plaintiff organization misappropriated the amounts?

2. Whether the suit is within limitation?

3. Whether the plaintiff is entitled for suit claim?

4. To what relief?"

8. During the course of the trial, on behalf of the plaintiff,

PWs.1 and 2 were examined and Exs.A-1 to Ex.A-24 were marked

and on behalf of the defendants DW.1 was examined and Exs.B-1

to Ex.B-4 were marked.

9. The trial Court after considering the oral and documentary

evidence dismissed the suit with a finding that evidence of PWs.1

and 2 disclose that misappropriation of amounts by altering the SB

Account numbers in the claim forms of three P.F. claimants and

withdrawing the amount from the banks relate to the year, 1986

and therefore, the suit is barred by limitation as it is not filed within

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three years from that date and was filed in the year, 1992 i.e., after

lapse of more than 5 years after withdrawing the amounts.

10. Being aggrieved by the said judgment and decree of the trial

Court, the plaintiff had filed an Appeal vide A.S.No.201 of 2005

on the file of XIII Additional Chief Judge (FTC), City Civil Court,

Hyderabad. The appellate Court after hearing the parties, framed

the following points for consideration:-

"1. Whether the plaintiff is entitled for recovery of suit amount?

2. Whether the suit is barred by limitation?

3. Whether there is cause of action to file the suit?

4. To what relief?"

11. After considering the material on record, the appellate Court

dismissed the appeal confirming the judgment and decree dated

28.09.2004 in O.S.No.1197 of 1992, on the file of IV Senior Civil

Judge, City Civil Court, Hyderabad.

12. Being aggrieved by the said judgment and decree of the

appellate Court, the unsuccessful plaintiff has filed the present

Second Appeal with the following substantial questions of law:-

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"2. Both the courts failed to take into consideration the fact that the amounts due to the employees i.e., Mr.Jose Mathews, an employee of M/s. Warner Hindustan Lt., Sri Ammilal Sharma, an employee of M/s. Transport Corporation of India, one Sri Srinivas Deshmukh, an employee of M/s. Warner Hindustan Ltd., in all Rs.2,76,036/- that is Rs.1,39,765/- principle amount and Rs.1,36,271/- interest as Employees Provident Fund Subscription, which was infact found deposited in the bogus accounts opened by the respondent. Hence, the burden of proof is on the respondent/defendant to prove how those amounts came to that account opened respectively in S.B.Acccount No.1627 of Central Bank of Inida, Warner Hindustan Extension Counter, Secunderabad on 17-12-1986 in the name of Mr.Jose Mathew's by forging his signature and giving false address and other acoutns in Andhra Bank, Chikkadpally and S.B.H., chikkadpally and finally in Syndicate Bank, Nallakunta.

3. Both the lower courts ought to have seen that when it was proved that the respondent alone has access to alter S.B.Account Nos., of those employees and accordingly in all the 3 instances he changed S.B.Account Nos., he has to prove that he has not misappropriated the funds.

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4. Both the lower courts ought to have seen that it is not possible to plaintiff/appellant to produce the forged cheques which were created by the defendant.

5. Both the lower courts ought to have seen that the respondent's removal from service on the report of the CBI and copy of the FIR and charge sheet is nothing to do with the claim of the plaintiff/appellant against the defendant/respondent.

6. Both the lower courts have laid much stress on the report given by CBI in respect of three provident fund claimants which is not relevant for the purpose of plaintiff/appellants claim.

7. The approach of both the lower courts is wrong as they failed to evolve and appreciate evidence both oral and documentary independently without any reference to CBI enquiry and other proceedings.

8. Finding of both the lower courts that suit is barred by limitation on the ground that it was filed after 3 years is not valid as the suit was filed within 3 years from the detection of misappropriation of funds. Hence, it is within 3 years."

13. On perusal of the substantial questions of law raised by the

appellant, they are all related to the fact findings of the Court

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below, except the substantial question of law raised in ground

No.8, which disclose that the suit is filed within 3 years from the

date of detection of misappropriation of funds.

14. On perusal of the record, it is evident that Exs.A-1 to A- 3

relate to Mr.Jose Mathews and of the year, 1986 and Exs.A-3 relate

to cheques which are alleged to be cancelled, Ex.A-7 and Ex.A-11

relate to year, 1986 and 1987 and Ex.A-9 disclose that the

defendant was removed from service basing on the memorandum

dated 19.09.1989 and after entire investigation, CBI has filed final

report on 20.08.1990. Though the evidence of PWs.1 and 2 reveal

that the defendant has misappropriated the funds, they are the

persons who have seen the defendant altering the SB Account Nos.

in the claim forms. Apart from that, the suspension order under

Exs.B-3 and B-4 dated 06.07.1987 and 09.07.1987 do not contain

the allegations made in the plaint for which the defendant was

suspended.

15. On the other hand, it is the specific evidence of PWs.1 and 2

that there are 7 staff members who handle claim forms before

dispatching the cheques and the report of the CBI do not disclose

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that the defendant have opened bank Accounts in the name of 3

P.F. claimants. There is no incriminating evidence against the

plaintiff to prove that the defendant have opened the Bank

Accounts. Therefore, the trial Court as well as the Appellate Court

have rightly held that the defendant shall not be liable for

misappropriation of amounts of plaintiff's organization and in the

absence of proper evidence against the defendant for

misappropriation of amounts, the said amount cannot be recovered

from the defendant. Moreover, both the Courts rightly held that the

suit is barred by limitation as the last transaction alleged to have

done by the defendant was on 19.03.1987. Even as per the

evidence and averments of the plaintiff, if limitation is calculated

from 19.03.1987, the plaintiff organization ought to have to filed

the suit against the defendant for recovery of alleged amounts on or

before 19.03.1990. Admittedly, the suit is filed in the year, 1992

i.e., on 19.08.1992. Therefore, the suit is barred by limitation and

the other grounds do not relate to any substantial question of law.

16. It is pertinent to mention that there is limited scope under

Section 100 of CPC while dealing with the appeals by the High

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Courts. In a Second Appeal, if the High Court is satisfied that the

case involves a substantial question of law, only then, this Court

can interfere with the orders of the Courts below. On perusal of

the entire material on record, this Court is of the considered view

that the orders of the Courts below are not perverse and there is no

misreading of evidence, and therefore in the absence of substantial

question of law, it is not proper to interfere with the concurrent fact

findings of the Courts below. Therefore, the Second Appeal

deserves to be dismissed.

17. In the result, the Second Appeal is dismissed at the stage of

admission confirming the judgment dated 22.08.2007 in

A.S.No.201 of 2005 on the file of XIII Additional Chief Judge

(FTC) City Civil Court, Hyderabad. No order as to costs.

Pending miscellaneous applications, if any, shall stand

closed.

________________________________ G.ANUPAMA CHAKRAVARTHY, J Date: 17.10.2022 dv