Dismissed

Bhargavi Amma, v. Assistant Provident Fund Commissioner

Kerala HC1 Dec 2022WP(C)/15899/2022

Case brief

AI extract

What is this about?

In this writ petition, the Court rejected the petitioner's challenge to an order directing remittance of EPF contributions at 12%. The Court held that since all establishments were clubbed under a single code, the combined employee strength exceeded twenty, making the higher contribution rate applicable and the Tribunal's order justified.

What did the court decide?

Coercive measures stayed; 25% deposit adjusted; balance payable in six monthly instalments.

Bhargavi Amma, Vs Assistant Provident Fund… — Pension and Retirement Benefits | Kerala HC (2022)

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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 AMIT RAWAL

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THURSDAY, THE 1ST DAY OF DECEMBER 2022 / 10TH AGRAHAYANA, 1944

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WP(C) NO. 15899 OF 2022

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PETITIONER:

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BHARGAVI AMMA,
AGED 78 YEARS,
W/O. LATE N.B. KRISHNA KURUP, 1/2973, 'GAYATHRI',
MANJUNATHA RAO ROAD, EAST HILL, KOZHIKODE 673 005,
REPRESENTED BY HER SON N.B. RADHAKRISHNAN AS NEXT
FRIEND.

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BY ADVS.
C.ANIL KUMAR
A.K.PREETHA
JITHIN VARGHESE

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RESPONDENTS:

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1 ASSISTANT PROVIDENT FUND COMMISSIONER, KOZHIKODE, EMPLOYEES PROVIDENT FUNDS ORGANISATION, SUB REGIONAL OFFICE ERANHIPALAM, KOZHIKODE 673 006.

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2 THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL CUM LABOUR COURT, ERNAKULAM. 8TH FLOOR, KERALA STATE HOUSING BOARD BUILDING, PANAMPILLY NAGAR, KOCHI 682 036.

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BY ADV.

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SRI.DR.ABRAHAM P.MEACHINKARA, SC, EPFO

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
01.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 15899 OF 2022 -2-

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JUDGMENT

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Order of the appellate authority dated 13.09.2021 dismissing appeal Nos.451 of 2018 and 452 of 2018 preferred by the petitioner against the order dated 17.01.2011 directing her to remit the contribution at the rate of 12% under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as ‘ the Act’, for short) for the period from September, 1997 to February, 2009, of Rs.3,79,060/- (Rupees Three lakh seventy nine thousand sixty only) is under challenge.

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Succinctly the facts in brief are petitioner’s husband was running partnership frm i in Chalakkudy under the name and style of ‘N.B.Krishna Kurup’. Unfor tunately, he died on 24.04.2018. The aforementioned partnership firm was engaged in providing railway catering service in Palakkad Railway Station. For carrying on the aforementioned activity, the establishment was registered under the Act and having

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WP(C) NO. 15899 OF 2022 -3-

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reached the emloyment to the extent of twenty (20), establishment was registered under the Act with effect from 31.10.1981. In 1988 Railway imposed certain restrictions which led to reduction in the number of the employees in the catering service and in order to overcome the said restriction, two separate partnerships were constituted; one for Calicut Railway station and other for the Palakkad. The partnership in which the petitioner and her husband were partners was in the name of M/s.N.B.Krishna Kurup and the other, under M/s.N.B.K. Catering Services. Both were allotted different code numbers.

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After closing of the catering service at Chalakkudy in 1987, the number of employees working in Calicut Railway Station and Palakkad Railway Station were reduced to 10 and 8 respectively . In the year 1997, notification was issued whereby the contribution of the provident fund was enhanced from ten(10%) to twelve(12%) percent i.e., with effect from 22.09.1997.

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WP(C) NO. 15899 OF 2022 -4-

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The said notification also envisaged relaxation to cover the establishments employing less than twenty(20) employees to continue to pay 10% of the EPF contribution. Petitioner’s firm continued to pay 10% of the EPF contributions with effect from 22.09.1997 owing to the fact that the enhanced contribution was not applicable.

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Assessing authority under the Act initiated the proceedings under Section 7A of the Act against the partnership firms. All the records relating to the accounts/strength of employees were produced and it was also brought to the notice that closing of the business at Chalakkudy Railway Station was relating to the reduction of the staffs. But despite that the respondent authority assessed the contribution vide order dated 17.01.2 011. Appeals preferred have also been, as noticed above, dismissed.

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Learned counsel appearing on behalf of the petitioner submitted that the order is per se illegal,

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WP(C) NO. 15899 OF 2022 -5-

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arbitrary and liable to be set aside as the impugned order suffer from non application of mind. There is no reference to the record submitted by the petitioner to establish that appellants were liable to make contribution only at the rate of 10% and not 12% owing to the amendment caused with effect from 22.09.1997 as the number of employees in both the partnership firms were less than twenty(20). Therefore, there is repugnance in the order and is liable to be set aside.

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On the other hand, learned counsel appearing on behalf of the first respondent supported the impugned order and submitted that the employment strength required for statutory coverage is twenty(20) when the catering services were considered jointly. Regarding the ownership of the establishments, it revealed from the Partnership Deeds produced on record the catering service at Calicut, Chalakkudy and Palakkad Junctions were run by a single partnership firm, M/s. N.B.Krishna Kurup and his son Sri.N.B.Radhakrishnan. All these

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WP(C) NO. 15899 OF 2022 -6-

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three establishments were paying provident fund contributions and allied dues under single code number KR/ 5312. Mr.N.B.Krishna Kurup applied for a separate code number which was considered and a separate code number bearing number KR/KKD/11423 was allotted. The records reveal that the catering service at Palakkad was run by Sri.N.B.Krishna Kurup continuously, without interruption and from 13.09.1996 management of the catering unit at Palakkad Junction was taken over by partnership of M/s N.B.Krishna Kurup run by Sri.N.B.Krishna Kurup and his wife Smt.Bhargavi Amma. The combined strength of Calicut, Chalakkudy and Palakkad Junction was considered deciding the employment strength. Employer did not deny this fact. The separate code number was allotted only for administrative convenience. In the enquiry ample opportunity was provided to the employer and amount was assessed as Rs.3,79,060/-(Rupees Three lakh seventy nine thousand sixty only) i.e., 2% employee share and 2%

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WP(C) NO. 15899 OF 2022 -7-

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employer share from 22.09.1997 to 28.02.2009 and urged this Court for dismissal of the writ petition.

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I have heard learned counsel for the parties and appraised the paper books.

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Appellate authority while dealing with the contention of the petitioner has discussed in detail all the documents and the arguments of the respective parties much less the opportunity of hearing given on numerous occasions . During the participation in the enquiry partnership deeds of M/s N.B.K Catering Services executed on 01.04.1988 and that of M/s Krishna Kurup dated 13.09.1996 were produced. Both the aforementioned partnerships reveal that the real ownership vested with M/s.N.B.Krishna Kurup. They were marked before the authority i.e., Exts.R1(b) and R1(c). No finance was invested by the new partners but

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was only executed for the purpose of assisting M/s N.B.Krishna Kurup on working partnership basis. In other words, new partners were none other than the wife

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WP(C) NO. 15899 OF 2022 -8-

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and the son of N.B.Krishna Kurup. The combined strength of all the branches at Calicut, Chalakkudy and Palakkad reached eighteen(18) and the code number KR/KK/5312 was allotted to the establishment with effect from 31.10.1981. The establishments continued to comply with the code number from 01.11.1981 to 01.04.1988. It is only in the year 1988, request was submitted for allotment of the separate code number of catering service at Palakkad Junction issued with effect from 01.04.1988 for administrative convenience under Section 2A of the Act. Owing to the revision of the contribution from 10% to 12% on 02.09.1997, the establishment contributed 12% from October, 1997 to March, 1998 but from April, 1998 again reduced the contribution for the reason best known by reducing it to 10% and also adjusted the two percent (2%) contribution paid earlier. No evidence has been provided to establish that the employees were less than twenty(20) and despite having allotted two separate codes, were not

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WP(C) NO. 15899 OF 2022 -9-

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liable to pay the contribution to the extent of 12%. It is also the matter of record that the establishment run at Calicut, Chalakkudy and Palakkad were clubbed and covered under the provisions of the Act with effect from 31.10.1981, till allotment of new code in 01.04.1998. The appellate Tribunal found that the appellants therein were liable to contribute 12% with effect from 22.09.1997 i.e., the date the amendment is caused. Thus, I am of the view that there is no illegality and perversity in the order of the Tribunal warranting interference under Article 226 of the Constitution of India. Order is justified. Writ petition is accordingly dismissed.

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At the time of entertainment of the appeals appellants deposited Rs.94,765/- (Rupees Ninety four thousand seven hundred and sixty five only) being 25% of the assessed amount. That shall be ordered to be adjusted and balance is directed to be paid in six(6) equal monthly instalments. Till such time, the coercive

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WP(C) NO. 15899 OF 2022 -10-

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measures are ordered to be stayed and in case of default of two instalments respondents shall be at liberty to take

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action in accordance with law.

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AMIT RAWAL JUDGE

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VV

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WP(C) NO. 15899 OF 2022 -11-

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APPENDIX OF WP(C) 15899/2022

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PETITIONER EXHIBITS

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Exhibit P1A TRUE COPY OF THE ORDER NO.
KR/KK/5312 &
KR/KK/11423/ENF1(2)/2011/4480, 4718
DATED 14.01.2011.

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Exhibit P2MEMORANDUM OF APPEAL IN APPEAL NO.
451/2018
Exhibit P3TRUE COPY OF THE COMMON ORDER DATED
13.09.2021 PASSED BY THE 2ND
RESPONDENT IN APPEAL NO. 451/2018 AND
452/2018
Exhibit P4TRUE COPY OF THE NOTICE NO.
KR/KKD/5312/ENF. 1(2)/2021/22/172,
DATED 25.04.2022 ISSUED BY THE 1ST
RESPONDENT.

Bhargavi Amma, v. Assistant Provident Fund Commissioner

Case brief

What is this about?

What did the court decide?

Bhargavi Amma, v. Assistant Provident Fund Commissioner

Case brief

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What did the court decide?

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