Allowed

Central Travancore Specialists Hospital, v. the Regional Provident Fund Commissioner

Kerala HC8 Sept 2020WP(C)/16049/2020

Case brief

AI extract

What is this about?

In a writ petition challenging interest levied under Section 7Q of the EPF Act, the Court allowed the petitioner's request to pay dues in installments due to financial constraints. Recovery proceedings were kept in abeyance pending compliance with installment terms.

What did the court decide?

Petitioner granted twelve monthly installments to clear dues; recovery proceedings kept in abeyance subject to payment without default for two installments.

Central Travancore Specialists Hospital, Vs… — Pension and Retirement Benefits | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V

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TUESDAY, THE 08TH DAY OF SEPTEMBER 2020 / 17TH BHADRA, 1942 WP(C).No.16049 OF 2020(E)

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PETITIONER:

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M/S CENTRAL TRAVANCORE SPECIALISTS HOSPITAL, MULAKUZHA, CHENGANNUR, ALAPPUZHA-689505, REPRESENTED BY ITS EXECUTIVE DIRECTOR SRI.PAUL KURIAN.

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BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN

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RESPONDENTS:

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1 THE REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANIZATION, REGIONAL OFFICE, 36/685, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI-682017.

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2 THE ASSISTANT PROVIDENT FUND COMMISSIONER AND RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND ORGANIZATION, REGIONAL OFFICE, 36/685, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI-682017.

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BY SRI.SAJEEV KUMAR K. GOPAL, SC, EPFO

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.16049 OF 2020

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JUDGMENT

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M/s. Central Travancore Specialists Hospital Ltd., Mulakuzha, the petitioner herein, is a Public Limited Company functioning since 2000 and is registered under the Companies Act, 1956. The company is running a 160 bedded hospital at Chengannur. Being covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, proceedings were initiated under Section 7Q of the Act to realise interest for the default in paying contributions payable for the period from 4/12/2014 to 31/7/2019 (6/14 to 11/2018). By Ext.P2 proceedings dated 25.11.2019, a sum of Rs.9,86,872/- was found due from the Company.

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According to the petitioner, the functioning of the hospital came to a

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grinding halt due to severe financial crisis. It became impossible for the petitioner to generate any amount and the respondents, without considering the aspects, have levied interest from the establishment without any justification. It is further stated that the initiation of proceedings to realize the amount by way of interest at a time when the entire nation is facing the specter of a pandemic is unfortunate. Finally, it is submitted that the hospital has been taken over by the Health Department in exercise of powers under the Disaster Management Act, 2005, and therefore, there is no justification in issuing the notice of demand.

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WP(C).No.16049 OF 2020

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I have heard Sri.M.Gopikrishnan Nambiar, the learned counsel appearing for the petitioner and Sri.Sajeev Kumar K. Gopal, the learned standing counsel appearing for the respondents.

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Ext.P2 is an order passed under Section 7Q of the EPF Act. The petitioner has no case that the principles of natural justice were violated or that they were not granted an opportunity to object to the quantum fixed. The default is for the period from 2014 to 2019. The defaulter is under an unqualified statutory obligation to pay the dues and their failure to pay within the stipulated periods would make them liable to pay interest. It needs to be borne in mind that any delay in payment of contribution to the fund causes loss to the beneficiaries which is sought to be prevented by the legislature by incorporating such strict provisions in the statute. The Hon’ble Supreme Court in Arcot Textile Mills vs

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Regional Provident fund Commissioner [(2013) 16 SCC 1] has held that once the amount due is determined under Section 7Q, levy of interest is automatic. It is a statutory power which is exercised by the competent authority under the Act. It has also been held that an independent order passed under Section 7Q is not appealable. In that view of the matter, the petitioner cannot be heard to contend that the issuance of a prohibitory order to realize the amount under Section 7Q is illegal on any count. In that view of the matter, I find no reason to interfere with the impugned order.

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At this stage, the learned counsel appearing for the petitioner

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WP(C).No.16049 OF 2020

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submitted that in view of the severe financial difficulties faced by the petitioner, they may be permitted to clear off the amount in installments. The learned counsel appearing for the respondents has opposed the prayer.

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Having considered all the relevant facts and taking note of the fact that the petitioner is running a hospital and that they are cash strapped and also the state of the economy at present, I am of the considered opinion that an opportunity can be granted to the petitioner to clear off the amount in installments.

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In the result, this writ petition is disposed of on the following terms:

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i) The petitioner shall produce the certified copy of this judgment before the respondents within two weeks from today.

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ii) The 1st respondent shall quantify the amounts due from the petitioner and inform the petitioner in writing, within a week therefrom, detailing the amount due along with interest as on 11.9.2020.

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iii) The respondents shall grant twelve equal monthly installments and the first installment shall be payable on 1.10.2020.

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iv) The recovery proceedings shall be kept in abeyance if the petitioner continues to pay the amounts as ordered by this Court without any default.

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WP(C).No.16049 OF 2020

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v) On the petitioner committing default of payment of any two installments, the respondents may recommence the recovery proceedings.

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vi) If any further amount towards interest is due, the respondents shall inform the petitioner before the payment of the 12th installment is made and the petitioner will be bound to clear the same within a period of 30 days.

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Sd/-

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RAJA VIJAYARAGHAVAN V

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JUDGE

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sru

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WP(C).No.16049 OF 2020

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE COMMUNICATION DATED 26.3.2020 SENT BY THE SECRETARY, MULAKUZHA GRAMA PANCHAYAT TO THE PETITIONER. EXHIBIT P2 TRUE COPY OF THE ORDER DATED 25.11.2019 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE NOTICE OF DEMAND DATED 23.7.2020 ISSUED BY 2ND RESPONDENT TO THE PETITIONER.

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RESPONDENTS EXHIBITS:NIL

Central Travancore Specialists Hospital, v. the Regional Provident Fund Commissioner

Case brief

What is this about?

What did the court decide?

Central Travancore Specialists Hospital, v. the Regional Provident Fund Commissioner

Case brief

What is this about?

What did the court decide?

What the court decided

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