Allowed

Principal, Awh Polytechnic College v. the Assistant Provident Fund Commissioner

Kerala HC7 Nov 2022WP(C)/4613/2020

Case brief

AI extract

What is this about?

The court disposed of two writ petitions challenging orders under Sections 14B and 7A of the EPF Act. Finding that a Receiver was appointed for the petitioner, the college could not be burdened with full damages during that period, and further reduced the awarded damages accordingly.

What did the court decide?

Orders of the appellate authorities modified to reduce damages to 25% in W.P(C) 4613/20 and 35% in W.P(C) 11651/20.

Principal, Awh Polytechnic College Vs the… — 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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MONDAY, THE 7^TH DAY OF NOVEMBER 2022 / 16TH KARTHIKA, 1944

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WP(C) NO. 11651 OF 2020

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PETITIONER:

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PRINCIPAL AWH POLYTECHNIC COLLEGE, KUTTIKATTUR, KOZHIKODE-673 008.

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BY ADVS. P.RAMAKRISHNAN SMT.PREETHI RAMAKRISHNAN (P-212) SRI.C.ANIL KUMAR SRI.PRATAP ABRAHAM VARGHESE SMT.ASHA K.SHENOY

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RESPONDENTS:

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1 THE ASSISTANT PROVIDENT FUND COMMISSIONER SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, ERANHIPALAM P.O., KOZHIKODE-673 006.

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2 THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL ERNAKULAM, KOCHI-682 018.

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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 07.11.2022, ALONG WITH WP(C).4613/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos.4613 & 11651/2020

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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 AMIT RAWAL

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MONDAY, THE 7^TH DAY OF NOVEMBER 2022 / 16TH KARTHIKA, 1944

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WP(C) NO. 4613 OF 2020

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PETITIONER:

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PRINCIPAL, AWH POLYTECHNIC COLLEGE KUTTIKATTUR, KOZHIKODE 673 008.

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BY ADVS. P.RAMAKRISHNAN SMT.PREETHI RAMAKRISHNAN SRI.C.ANIL KUMAR SMT.ASHA K.SHENOY SRI.PRATAP ABRAHAM VARGHESE

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RESPONDENTS:

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1 THE ASSISTANT PROVIDENT FUND COMMISSIONER SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, ERNAHIPALAM P.O. KOZHIKODE 673 006.

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2 HTE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, ERNAKULAM, KOCHI 682 018.

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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 07.11.2022, ALONG WITH WP(C).11651/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos.4613 & 11651/2020

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JUDGMENT

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Writ petition No.4613 of 2020 pertains to damages for the period 2016-17, whereas writ petition No.11651 of 2020 is, for the year 2017-2018, arising out of the proceedings under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (Hereinafter referred to as 'the Act'). Since common question of fact and law arises and the parties are same, I deem it appropriate to dispose of these two Writ Petitions together, which have been preferred challenging the orders of the appellate authority, whereby the damages assessed to the extent of 100% for both the assessment years 2016-17 and 2017-18 have been reduced to 60% for the year 2016-17 and 70% for the period 2017-18.

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Petitioner is a Polytechnic College, an establishment covered under the Act with code No.KR/KKD/-23658. The college is run by a Society registered under the Societies Act. A dispute amongst the office bearers of the association resulted into appointment of a Receiver by the Court of Munsiff. However, during the tenure when the Receiver was appointed, EPF contribution for the employees was not deposited resulting into proceedings under

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WP(C) Nos.4613 & 11651/2020

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Section 7A of the Act.

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Learned counsel appearing on behalf of the petitioner submitted that the Receiver did not take any permission from the Munsiff's Court to discharge the liabilities of the establishment as there was no fault in remitting the contribution, much less the consequential effect of section 7Q interest and 14B damages. The question of mens rea does not arise. But, it was an uncontrollable situation at the hands of the management in not abiding by the statutory provisions of the Act. All these points were though taken before the assessing authority, but of no avail. However, the appellate authority accepted the request in part by reducing the damages to the extent of 60% and 70% as noticed above.

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On the other hand, learned Standing Counsel for the EPF Organisation says that the management did not deposit the contribution under Section 7A for a period of five years. Therefore, the damages assessed by the assessing authority cannot be found to be faulted with or interdicted as sought to be projected in these Writ Petitions.

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Heard the learned counsel for the parties and appraised the paper-books.

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The appointment of the receiver by the Munsiff's Court

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WP(C) Nos.4613 & 11651/2020

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for running one of the institutions of the Society was not in dispute. The controversy pertains to the period 2016-17 and 2017-18, whereas the Receiver was appointed in 2018 and is still continuing the control of the institution, thus, it was not within the control and domain of the management not to comply with the statutory

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requirement, which resulted into proceedings under Section 7A of the Act. The provisions of Section 14B of the Act reads as under :

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“ 14B. Power to recover damages .—Where an employer makes default in the payment of any contribution to the Fund [the [Pension] Fund or the Insurance Fund] or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 [or sub-section (5) of section 17] or in the payment of any charges payable under any other provision of this Act or of [any Scheme or Insurance Scheme] or under any of the conditions specified under section 17 [the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf] may recover [from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme:] [Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard]:

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[Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985,subject to such terms and conditions as may be specified in the Scheme.]”

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It is not necessary for the assessing or appellate

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authority to assess the damages as mentioned, it can always be reduced if an attenuating circumstances beyond the control as in

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WP(C) Nos.4613 & 11651/2020

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the present case are proved beyond doubt. Once the order of appointment of Receiver is still continuing, in my view, the management could not have been burdened with the damages as assessed by the appellate authority. It may be noticed that this Court while admitting the writ petition, directed the petitioner to deposit the damages to the extent of 25% in W.P(C).4613/20 and 35% in W.P(C).11651/20. In my view, prima facie the amount directed to be deposited in the interim order is perfect and do not require any further interpretation to reduce it or otherwise. Accordingly, the orders of the appellate authorities are modified to the extent of 25% in W.P(C).4613/20 and 35% in W.P(C).11651/20.

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The writ petitions are allowed as above.

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Sd/- AMIT RAWAL JUDGE

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csl

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WP(C) Nos.4613 & 11651/2020

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APPENDIX OF WP(C) 4613/2020

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PETITIONER'S EXHIBITS

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EXHIBIT P1	TRUE COPY OF ORDER DATED 23/5/2017 ISSUED BY THE 1ST RESPONDENT.
EXHIBIT P2	TRUE COPY OF ORDER DATED 7/8/2017 UNDER SECTION 14 B OF THE EPF & MP ACT ISSUED BY THE 1ST RESPONDENT.
EXHIBIT P3	TRUE COPY OF ORDER DAD 7/8/2017 UNDER SECTION 7 Q OF THE EPF AND MP ACT ISSUED BY THE 1ST RESPONDENT.
EXHIBIT P4	TRUE COPY OF MEMORANDUM OF APPEAL UNDER SECTION 7 I OF THE ACT SUBMITTED BY THE PETITIONER BEFORE THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, ERNAKULAM.
EXHIBIT P5	TRUE COPY OF COUNTER-AFFIDAVIT FILED BY THE 1ST RESPONDENT IN APPEAL NO. 58/2017.
EXHIBIT P6	TRUE COPY OF ORDER DATED 16/12/2019 PASSED BY THE 2ND RESPONDENT.

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WP(C) Nos.4613 & 11651/2020

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APPENDIX OF WP(C) 11651/2020

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PETITIONER'S EXHIBITS

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EXHIBIT	P1 TRUE COPY OF ORDER DATED 7.8.2017 ISSUED BY THE IST RESPONDENT.
EXHIBIT	P2 TRUE COPY OF ORDER DATED 16.12.2019 ISSUED BY THE 2ND RESPONDENT IN APPEAL NO.58/2017.
EXHIBIT	P3 TRUE COPY OF INTERIM ORDER DATED 18.2.2020 IN WPC NO.4613/2020.
EXHIBIT	P4 TRUE COPY OF ORDER DATED 17.9.2018 ISSUED BY THE IST RESPONDENT.
EXHIBIT	P5 TRUE COPY OF MEMORANDUM APPEAL IN APPEAL NO.322/2018 FILED BY THE PETITIONER.
EXHIBIT	P6 TRUE COPY OF COUNTER-AFFIDAVIT FILED BY THE IST RESPONDENT IN APPEAL NO.322/2018.
EXHIBIT	P7 TRUE COPY OF ORDER DATED 23.1.2020 PASSED BY THE 2ND RESPONDENT IN APPEAL NO.322/2018.

Principal, Awh Polytechnic College v. the Assistant Provident Fund Commissioner

Case brief

What is this about?

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Principal, Awh Polytechnic College v. the Assistant Provident Fund Commissioner

Case brief

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