Partly allowed

Sathyadhara Communications (P) Ltd., v. the Asst. Provident Fund Commissioner

Kerala HC1 Dec 2022WP(C)/2028/2020

Case brief

AI extract

What is this about?

The High Court modified the appellate authority's order under Sections 7Q and 14B of the EPF Act by further reducing damages from 70% to 50% due to the petitioner's three-year losses, directing payment in six monthly instalments.

What did the court decide?

Damages reduced from 70% to 50% payable in six monthly instalments commencing 31.12.2022; balance payment liberty granted; coercive measures stayed.

Sathyadhara Communications (P) Ltd., Vs the Asst. Provident Fund… — Corruption | 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 1^ST DAY OF DECEMBER 2022 / 10TH AGRAHAYANA, 1944

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WP(C) NO. 2028 OF 2020

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PETITIONER:

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SATHYADHARA COMMUNICATIONS (P) LTD., DARSHANA.T.V., ORCHID GARDEN, ERANHIPALAM, KOZHIKODE, REPRESENTED BY ITS CHAIRMAN

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BY ADV V.KRISHNA MENON

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RESPONDENTS:

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1 THE ASST. PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, P.B.NO.1806, ERANHIPALAM, KOZHIKODE-673 006

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2 THE RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, P.B.NO.1806, ERANHIPALAM, KOZHIKODE-673 006

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3 CENTRAL GOVT.INDUSTRIAL TRIBUNAL AND LABOUR COURT, ERNAKULAM, 38/77, A-2,KARTHIKA LANE, KARSHAKA ROAD, KOCHI-682 016

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BY ADV DR.ABRAHAM P.MEACHINKARA, SC, EPF ORG.

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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.2028/2020 2

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JUDGMENT

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The order of the appellate authority dated 16.12.2019 in partly accepting the appeal of the petitioner preferred against the order dated 09.08.2018 of the assessing authority assessing damages to the tune of Rs.2,75,589/- is under challenge before this Court.

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The short contention as noticed in the present Writ Petition is that on account of default to pay contribution of the employees, 1952 in respect of the period from May 2017 to March 2018 , were made to face the proceedings under Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act, and the consequential penal proceedings under Sections 7Q and 14B were also initiated to the extent of Rs.2,75,589/- and interest of Rs.1,34,973/-. The petitioner has already paid the interest under Section 7Q in instalments. The appellate authority noticing that the petitioner Company had been in losses for three years, reduced the compensation to the extent of 70%. The language of Section 14B do not envisage any mandate of imposition of the damages as defined under the Act and leave the scope of discretion. The discretion can be though exercised with circumspection, but the attenuating circumstances like the losses cannot be ignored.

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WP(C)No.2028/2020 3

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Learned counsel appearing on behalf of the respondents submitted that the petitioner had been making the payment of the salaries of the employees in time, but intentionally did not make the EPF contributions. Even the revenue generation is almost Rs.2.5 Crores per annum, which fact has been noticed by the appellate authority while accepting the request in reducing the damages to the extent of 70%. The impugned order is justiciable and do not warrant any interference.

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I have heard the counsel for the parties and appraised the paper book.

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The facts noticed above are not in dispute. This is a matter on record that the petitioner has been granted liberty to deposit the liability of interest to the tune of Rs.1,34,973/- in instalments which itself is a pointer that Company had been running into losses. The factum of losses for three consecutive years has also been noticed.

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In my view the appellate authority ought to have reduced the damages to the extent of 50% instead of 70% for the reason that the language in Section 14B leave the scope of discretion taking into consideration the attenuating circumstances where the parties have been able to prima facie prove some

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losses. The petitioner Company had already been running into losses for three years and the amount of damages goes to the general corpus and not to the benefit of the employees.

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I am of the view that the order of the appellate authority is liable to be modified to the extent that the damages, though reduced from 100% to 70%, are further liable to be reduced to 50%. The amount of 50% is ordered to be paid in six equal monthly instalments commencing from 31.12.2022. Writ Petition is partly allowed with the aforementioned modification. The petitioner is granted liberty to deposit the balance amount in six instalments. In case of default of instalments, the respondents will take action in accordance with law. In the meantime, the coercive measures, if any, are ordered to be kept in abeyance.

Sd/-

AMIT RAWAL JUDGE

csl

PETITIONER'S EXHIBITS

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EXHIBIT P1	TRUE COPY OF THE AUDITED BALANCE SHEET AS AT 31.3.2015
EXHIBIT P2	TRUE COPY OF THE BALANCE SHEET AS AT 31.3.2016
EXHIBIT P3	TRUE COPY OF THE BALANCE SHEET AS AT 31.3.2017
EXHIBIT P4	TRUE COPY OF THE NOTICE NO.KR/KKD/0028147/000/ENF.501/DAMAGES/ (4)/2018/1246 DATED 24.5.2018 PASSED BY THE RESPONDENT
EXHIBIT P5	TRUE COPY OF THE OBJECTION OF THE APPELLANT
EXHIBIT P6	TRUE COPY OF THE ORDER NO.KR/KK/28147/ENF-1(4)/14B/3904 DATED 9.8.2018
EXHIBIT P7	TRUE COPY OF THE ORDER NO.KR/KKD/28147/ENF/(4)/7Q/APFC/2018/3905 DATED 9.8.2018
EXHIBIT P8	TRUE COPY OF THE MEMORANDUM OF APPEAL (LESS ANNEXURES)
EXHIBIT P9	TRUE COPY OF THE NOTICE DATED 11.6.2019 ISSUED BY THE SECOND RESPONDENT
EXHIBIT P10	TRUE COPY OF THE NOTICE DATED 11.6.2019 ISSUED BY THE SECOND RESPONDENT
EXHIBIT P11	TRUE COPY OF THE JUDGMENT IN W.P(C) NO.18569/2019

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WP(C)No.2028/2020 6 EXHIBIT P12 TRUE COPY OF THE ORDER OF THE THIRD RESPONDENT IN APPEAL NO.291/2018 EXHIBIT P13 TRUE COPY OF THE ORDER DATED 10.01.2020 ISSUED BY THE FIRST RESPONDENT

Sathyadhara Communications (P) Ltd., v. the Asst. Provident Fund Commissioner

Case brief

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Sathyadhara Communications (P) Ltd., v. the Asst. Provident Fund Commissioner

Case brief

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What did the court decide?

What the court decided

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