Disposed

M/S Kanoi Plantation Pvt. Ltd. and Anr. v. the State of Assam and 5 Ors.

Gauhati HC9 Jun 2022WP(C)/3809/2022

Case brief

AI extract

What is this about?

The Guwahati High Court disposed of a writ petition filed by a tea estate company against recovery proceedings initiated by the Assam Tea Employees Provident Fund Organization due to dishonoured cheques caused by the pandemic. The Court directed immediate partial payment and deposit of remaining dues to stay further coercive action.

What did the court decide?

Director to deposit 50% of dues and charges within 15 days, balance within one month; stay of further recovery proceedings if complied; reconsideration of cancellation of installment order after compl

M/S Kanoi Plantation Pvt. Ltd. and Anr. Vs… — Pension and Retirement Benefits | Gauhati HC (2022)

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GAHC010111262022

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WP(C)/3809/2022

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M/S KANOI PLANTATION PVT. LTD. AND ANR.

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A REGD. COMPANY HAVING ITS OFFICE AT 22 SARAT BOSE ROAD, SUNNY CORNER, 2ND FLOOR, KOLKATA, WEST BENGAL, PIN-700020 REP. BY ITS AUTHORIZED GENERAL MANAGER, DOOLAHAT TEA ESTATE.

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2: THE GENERAL MANAGER DOOLAHAT T.E LAKHIMPUR

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R/O. DOOLHAAT T.E. P.O. SINGRA P.S. LALUK DIST. LAKHIMPUR ASSAM PIN-787023

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VERSUS

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THE STATE OF ASSAM AND 5 ORS.

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REP. BY THE PRINCIPAL SECRETARY TO THE GOVT. OF ASSAM, LABOUR WELFARE DEPTT., DISPUR, GUWAHATI-781006.

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2:THE CHAIRMAN

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ASSAM TEA EMPLOYEES PROVIDENT FUND ORGANIZATION NIDHI BHAWAN BASISTHA LALMATI N.H.-37 GUWAHATI-781029 ASSAM.

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3:THE SECRETARY CUM PROVIDENT FUND COMMISSIONER BOARD OF TRUSTEES ASSAM TEA EMPLOYEES PROVIDENT FUND ORGANISATION NIDHI BHAWAN BASISTHA

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LALMATI N.H.-37 GUWAHATI-781029. 4:THE ADDL. PROVIDENT COMMISSIONER BOARD OF TRUSTEES ASSAM TEA EMPLOYEES PROVIDENT FUND ORGANISATION NIDHI BHAWAN BASISTHA LALMATI N.H.-37 GUWAHATI-781029. 5:THE RECOVERY OFFICER ASSAM TEA EMPLOYEES PROVIDENT ORGANIZATION TEZPUR ZONE ASSAM. 6:THE FUND CONTROL OFFICER NORTH LAKHIMPUR ATEPF ORGANIZATION D.K. ROAD WARD NO.7 P.O. AND P.S. NORTH LAKHIMPUR DIST. NORTH LAKHIMPUR ASSAM-787001

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Advocate for the Petitioner : MR B D DAS Advocate for the Respondent : GA, ASSAM

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BEFORE HONOURABLE MR. JUSTICE MANISH CHOUDHURY

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ORDER

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09.06.2022

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Heard Mr. B.D. Das, learned senior counsel assisted by Mr. D. Kalita, learned counsel for the petitioner; Mr. K. Goswami, learned senior counsel and Additional Senior Government Advocate, Assam for the respondent no. 1; and Mr. N.C. Das, learned senior counsel assisted by Mr. A. Das, learned counsel for the respondent nos. 2 – 6.

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The petitioner no. 1 company [hereinafter referred to as ‘the petitioner company’, for convenience] is a private limited company incorporated under the provisions of the Companies Act and the petitioner no. 2 is its General Manager. The petitioner company is

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engaged in the business of cultivation, manufacture, sale of tea, etc. The petitioner company has been running a tea estate by the name of Doolahat Tea Estate [‘the Tea Estate’, for short] in Lakhimpur District since the year 1971. Because of the nature of its business, the petitioner company comes under the provisions of the Assam Tea Plantations Provident Fund and Pension Fund and Deposit Linked Insurance Fund Scheme Act, 1955 [‘the 1955 Act’ or ‘the Act, 1955’, for short]. As per the provisions of the 1955 Act, the petitioner company is required to deposit provident fund contributions in respect of its workers on 50:50 basis to the respondent no. 1, Assam Tea Employees Provident Fund Organization [‘the ATEPFO’, for short], who operates the Provident Fund and Pension Fund Scheme and other allied schemes.

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The petitioner company has approached this Court by this writ petition under Article 226 of the Constitution of India, after being served with [i] one Order of Cancellation of Installment Orders dated 13.05.2022 [Annexure-12] by the respondent no. 3 against arrear provident fund contributions in connection with the Tea Estate; [ii] one Recovery Certificate dated 13.05.2022 [Annexure-13] issued by the respondent no. 5 under Section 15 of the Act, 1955; and [iii] a Notice of Demand dated 25.05.2022 [Annexure-15] issued by the respondent no. 5. By the Order of Cancellation of Installment Orders, the respondent no. 3 had informed the petitioner company to the effect that the post-dated cheques submitted by the petitioner company against Installation Orders for realization of arrear provident fund contributions for different periods were being dishonoured continuously and for that reason, the Installment Orders dated - 18.01.2013, 16.09.2017, 02.07.2018, 01.06.2019, 25.02.2019, 30.12.2020 and 09.07.2021 – for payment of arrear provident fund, etc. contributions relating to the Tea Estate were cancelled with immediate effect. The Recovery Certificate dated 13.05.2022 under Section 15 of the Act, 1955 has been issued certifying that a sum of Rs. 4,69,43,141.84 is due from the Tea Estate as arrears against the provident fund contributions and provident fund administration cost, payable under the 1955 Act, and the respondent no. 4 i.e. the Recovery Officer, ATEPFO has been asked, thereby, to recover the aforesaid sum by taking steps under the provisions of the 1955 Act. By the Notice of Demand dated 25.05.2022, the petitioner company has been asked to take notice of the fact of issuance of the Recovery Certificate dated 13.05.2022. It has been informed that the petitioner company is required to pay the sum of Rs. 4,69,43,141.84 within a period of 15 [fifteen] days to the

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ATEPFO and in the event of failure to deposit the said sum, steps would be taken to realize the same in accordance with the provisions of Section 15B to Section 15G of the Act, 1955.

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Mr. Das, learned senior counsel appearing for the petitioner has submitted that during the period from October, 2002 to June, 2009, the Tea Estate had to face closure because of many insurmountable difficulties including labour unrest and as a result, it had run into financial problems. A number of untoward incidents like vendalization of the factory, looting of machineries, cutting/uprooting of tea plants, etc. took place during the afore-mentioned period. A rebuilding process had to be undertaken from the year 2009 onwards and it took about more than 5 years till 2016 to restore the Tea Estate into its original position. From the year 2017 onwards, the petitioner company undertook the process of replacement of old/uprooted plants. During the said period, the petitioner company was making payment of wages to its workers/employees, 1119 in nos., from the payments received from selling green leaves. As on date, there are 1203 workers and about 70 nos. of staffs. During the period of disturbances, mentioned above, the statutory dues under the 1955 Act accumulated substantially but from the year 2009 onwards, the petitioner company was making all efforts to clear such statutory dues to the best extent possible but despite such efforts, it failed to clear the dues totally. As the result of such failure, the respondent ATEPFO authorities started proceedings for recovery of the accumulated statutory dues. When the petitioner company received a Demand Notice dated 25.05.2017 from the respondent no. 5 under Section 15B to Section 15G of the 1955 Act for an amount of Rs. 1,02,00,742.00, the petitioner company approached this Court by a writ petition, W.P.[C] no. 3464/2017 with a prayer to allow the petitioner company to deposit the employer’s share of the provident fund dues on installment basis in terms of a Circular dated 11.04.2022 of the Employees’ Provident Fund Organization [EPFO], Ministry of Labour & Employment, Government of India [GoI]. The said writ petition was disposed of by an order dated 09.06.2017 directing the respondent no. 3 to consider the prayer of the petitioner company to make payment of the dues on installment basis as per the Circular dated 11.04.2022 in respect of the Employer’s 50% share of the provident fund dues by taking into account the financial help of the petitioner company.

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It transpires from a Communication bearing no. PF/Recovery/2022/L-05 dated

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13.05.2022 [Annexure-11] of the respondent no. 3 and the Order of Cancellation of Installment Orders dated 13.05.2022 [Annexure-12] that the petitioner company was extended the benefit of depositing the arrear provident fund dues on installment basis by the respondent ATEPFO authorities by various installment orders dated - 18.01.2013, 16.09.2017, 02.07.2018, 01.06.2019, 25.02.2019, 30.12.2020 and 09.07.2021. In connection with such Installment Orders accompanied with respective installment payment schedule, the petitioner company had deposited a number of post-dated cheques for different amounts in favour of the respondent ATEPFO. Annexure-11 further goes to indicate that the petitioner company had defaulted in depositing a number of installments in that a number of post-dated cheques, 14 to be precise, stood dishonoured due to insufficiency of fund when they were presented for collection by the respondent ATEPFO. The last of such post-dated cheques which stood dishonoured was a cheque bearing no. 689079 dated 30.04.2022 for an amount of Rs. 3,64,176.32. With the said communication dated 13.05.2022 the respondent no. 3 had returned the remaining 47 nos. of post-dated cheques including 14 nos. of dishonoured cheques to the petitioner company.

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It is submitted by Mr. Das, learned senior counsel appearing for the respondent ATEPFO authorities that such events of repeated dishonoured cheques had led the respondent ATEPFO authorities to proceed in accordance with the provisions of the 1955 Act and to take appropriate steps for recovery of the outstanding arrear provident fund dues, etc. as these are statutory dues and are meant for the benefit of the workers of the Tea Estate belonging to the economically weaker strata of the society.

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In response, Mr. Das, learned senior counsel appearing for the petitioner company has submitted that the petitioner company was/is making all out efforts not to make defaults of the Installment Orders [supra] but the efforts were halted in the early part of 2020 due to advent of Covid-19 pandemic. As the pandemic continued for the period till the end of 2021, the business of the petitioner company relating to tea production, manufacture and sale had/have suffered to a great extent. Though the petitioner company had managed to honour most of the post-dated cheques but due to pandemic and post-pandemic situations, it had failed in its endeavour to honour 14 nos. of post-dated cheques during the period from

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October, 2021 to April, 2022. He has, however, submitted that the petitioner company is presently making all efforts to clear the outstanding arrears dues to the respondent ATEPFO authorities. He has submitted, on instruction, that if the petitioner company is allowed to deposit the total amount of those 14 nos. of cheques which stood dishonoured, along with the concomitant charges within a period of 1 [one] month from today, the same would be deposited.

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Mr. Das, learned senior counsel appearing for the respondent ATEPFO authorities has submitted that the total amount of those 14 nos. of dishonoured cheques, with the first one dated 30.10.2021 and the last one dated 30.04.2022, is Rs. 51,86,750.92. That apart, the respondent ATEPFO authorities had to incur an amount of Rs. 5,600.00 towards bounced cheque charges. Responding to the submissions of the learned senior counsel for the petitioner company regarding allowing the petitioner to pay the outstanding dues against the 14 nos. of dishonoured cheques, Mr. Das has submitted that the petitioner has to demonstrate their action in a bonafide manner. He has submitted that if the amount of Rs. 51,86,750.92 plus Rs. 5,600.00 is deposited by the petitioner company within a short period, the respondent ATEPFO authorities will consider to exercise its discretion to restore the installment schedule in terms of the Installment Orders [supra].

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I have duly considered the submissions of the learned counsel for the parties and have also perused the materials on record.

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The demands made by the respondent ATEPFO authorities through the Notice of Demand dated 25.05.2022 and incorporated in the Recovery Certificate dated 13.05.2022 are statutory dues payable under the provisions of the 1955 Act. From the projections made in the writ petition, it transpires that the Tea Estate ran into problems during the period from 2002 to 2016 due to various problems, as referred above. It has been stated on behalf of the petitioner company that it has been making all out efforts to restore the business of the Tea Estate and has also been making progress. The petitioner company was extended the benefit of depositing the arrear outstanding provident fund dues, etc. accumulated under the 1955 Act by the respondent ATEPFO authorities on installment basis and the petitioner company

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was able to make deposits of a number of such installments regularly. It cannot be denied that with the advent of Covid-19 pandemic in the first part of the year 2020, the commercial activities all over the world as well as in India, more particularly, in the tea sector in the State of Assam were adversely affected and the position has not been restored to its original position till date as all the sectors are still undergoing the consequences arising out of the Covid-19 pandemic. A number of ameliorative and remedial measures have been undertaken by the Government of India and the State Government for revival of the economy and to increase the industrial and commercial activities.

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Having considered all the relevant aspects and the peculiar fact situation obtaining in the case in hand, this Court is of the considered view that instead of proceeding as per the provisions of 1955 Act to realize the outstanding dues in any coercive manner, an opportunity shall be granted to the petitioner to make payment of the dues which resulted into passing of the Order of Cancellation of Installment Orders dated 13.05.2022, issuance of the Recovery Certificate dated 13.05.2022 and issuance of the Notice of Demand dated 25.05.2022. It has emerged from the submissions of the learned counsel for the parties that dishonour of 14 nos. of post-dated cheques had led the respondent ATEPFO authorities to pass/issue the above orders/recovery certificate/demand notice. From the letter no. PF/[R]/2022/L-005/1158 dated 08.06.2022 of the respondent ATEPFO, addressed to the learned senior counsel appearing for the respondent ATEPFO authorities, it is reflected that the total amount that was payable by the petitioner company as per the installment schedule granted to it earlier by the respondent ATEPFO till 30.04.2022 was Rs. 51,86,750.92. The respondent ATEPFO had incurred a further amount of Rs. 5,600.00 towards charges for dishonoured cheques. Taking note of all the aspects in its entirety, this writ petition is disposed of with the following directions :-

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[i] The petitioner company shall deposit an amount equal to 50% of Rs. 51,92,350.92 [=Rs. 51,86,750.92 + Rs. 5,600.00] within a period of 15 [fifteen] days from today by way of a demand draft drawn in favour of the respondent ATEPFO;

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[ii] Along with such demand draft, the petitioner shall also deposit the post-

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dated cheques for the remaining periods in terms of the Installment Orders [supra] and the repayment schedules appearing in the communication bearing no. PF/Recovery/2022/L-05 dated 13.05.2022;

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[iii] The petitioner company shall deposit the balance 50% of Rs. 51,92,350.92 [=Rs. 51,86,750.92 + Rs. 5,600.00] on or before 15.07.2022 by another demand draft drawn in favour of the respondent ATEPFO;

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[iv] In the event the petitioner company adheres to [i] and/or [ii] and/or [iii], the respondent ATEPFO authorities shall not proceed further in terms of the Recovery Certificate dated 13.05.2022 [Annexure-13] and the Notice of Demand dated 25.05.2022 [Annexure-15] till 15.07.2022; and

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[v] In the event of compliance of the aforesaid conditions by the petitioner company, the respondent ATEPFO authorities shall, after 15.07.2022, consider about recall or otherwise of the Order of Cancellation of Installment Orders dated 13.05.2022 [Annexure-12] as well as the Recovery Certificate dated 13.05.2022 [Annexure-13] and the Notice of Demand dated 25.05.2022 [Annexure-15] till 15.07.2022.

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It is made clear that in the event of non-deposit of the amounts indicated hereinabove, on or before 15 [fifteen] days from today or 15.07.2022, the respondent ATEPFO authorities shall be at liberty to proceed in accordance with law to realize the amounts mentioned in the Recovery Certificate dated 13.05.2022 [Annexure-13] and the Notice of Demand dated 25.05.2022 [Annexure-15] without any restriction and without any further reference to this Court.

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With the observations made and the directions given above, this writ petition stands disposed of.

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JUDGE

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Comparing Assistant

M/S Kanoi Plantation Pvt. Ltd. and Anr. v. the State of Assam and 5 Ors.

Case brief

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M/S Kanoi Plantation Pvt. Ltd. and Anr. v. the State of Assam and 5 Ors.

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