Partly allowed

M/S.Sarabhai Institute of Science & Tech v. Assistant Provident Fund Commissioner

Kerala HC7 Dec 2022WP(C)/5845/2011

Case brief

AI extract

What is this about?

Single judge disposed of three connected writ petitions challenging appellate remand orders remanding assessment of damages under Section 14B of EPF Act. Court held assessing authority must reconsider liability in light of Harrisons malayalam dictum regarding discretion and compensatory elements, setting aside 22% assessment direction.

What did the court decide?

Petitions allowed in part; Exhibits set aside; assessing authority directed to reconsider matter in light of Harrisons malayalam decision.

M/S.Sarabhai Institute of Science & Tech Vs… — 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 P.V.KUNHIKRISHNAN

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WEDNESDAY, THE 7^TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 WP(C) NO. 5845 OF 2011

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PETITIONER:

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M/S.SARABHAI INSTITUTE OF SCIENCE & TECHNOLOGY (SIT), URIYACODE, VELLANAD,, THIRUVANANTHAPURAM-695 543, REPRESNTED BY ITS SECRETARY, K.R.KAIMAL. BY ADVS. SRI.G.P.SHINOD SRI.RAM MOHAN.G.

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RESPONDENT:

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ASSISTANT PROVIDENT FUND COMMISSIONER E.P.F.O., BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM-695 004. BY ADVS. SMT.NITA.N.S., SC - EPF SRI.N.N. SUGUNAPALAN, SC, P.F. SMT.T.N.GIRIJA SCEPF ORGANISATION

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH WP(C).6525/2011, 6582/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos. 5845, 6525 & 6582/2011

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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 P.V.KUNHIKRISHNAN WEDNESDAY, THE 7^TH DAY OF DECEMBER 2022 / 16TH

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AGRAHAYANA, 1944

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WP(C) NO. 6525 OF 2011

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PETITIONER:

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M/S. SOFT LAND INDIA LTD., ST.XAVIER'S COLLEGE, THUMBA P.O., THIRUVANANTHAPURAM, REP. BY ITS MANAGING DIRECTOR, G.MURALI. BY ADVS. SRI.G.P.SHINOD SRI.RAM MOHAN.G.

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RESPONDENT:

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ASSISTANT PROVIDENT FUND COMMISSIONER E.P.F.O., BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM-4, 695004.

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BY ADVS. SMT.NITA.N.S., SC - EPF SRI.N.N. SUGUNAPALAN, SC, P.F. SMT.T.N.GIRIJA SCEPF ORGANISATION

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH WP(C).5845/2011 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos. 5845, 6525 & 6582/2011

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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 P.V.KUNHIKRISHNAN WEDNESDAY, THE 7^TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944

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WP(C) NO. 6582 OF 2011

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PETITIONER:

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M/S.SREE AVITTOM THIRUNAL HOSPITAL HEALTH EDUCATION SOCIETY, SAT HOSPITAL, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY CUM TREASURER & SUPERINTENDENT, DR.G.M.ASHOK KUMAR.

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BY ADVS. SRI.G.P.SHINOD SRI.RAM MOHAN.G.

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RESPONDENT:

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ASSISTANT PROVIDENT FUND COMMISSIONER E.P.F.O.BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM-695 004.

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BY ADVS. SMT.NITA.N.S., SC - EPF SRI.N.N. SUGUNAPALAN, SC, P.F. SMT.T.N.GIRIJA SCEPF ORGANISATION

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.12.2022, ALONG WITH WP(C).5845/2011 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) Nos. 5845, 6525 & 6582/2011

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P.V.KUNHIKRISHNAN, J.

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-----------------------------W.P.(C).Nos. 5845, 6525 and 6582 of 2011

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---------------------------------------------Dated this the 07^th day of December, 2022

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JUDGMENT

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These three writ petitions are connected and therefore, I am disposing of these three writ petitions by a common judgment.

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Petitioners in these writ petitions are suffered by an order of damages under Section 14B of the Provisions of Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short 'Act'). The petitioners filed separate appeal before the appellate authority and the appellate authority as per the impugned orders remanded the matter to the assessing authority to assess the liability @ 22%. The remand orders are challenged in these writ petitions.

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Heard counsel appearing for the petitioners and the Standing counsel appearing for the respondent.

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WP(C) Nos. 5845, 6525 & 6582/2011

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The main contention of the petitioners is that the appellate authority has not considered the dictum laid down by this Court in Regional Provident Fund Commissioner v. Harrisons malayalam Ltd. and others [2013 KHC 3331] while assessing the liability. The Standing counsel appearing for the respondent submitted that, there is nothing to interfere with the impugned orders and the appellate authority already reduced the liability to 22%.

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This Court considered the contentions of the petitioners and the respondent. In all these cases, the appellate authority remanded the case to the assessing authority to assess the liability @ 22%. All the decisions passed by the appellate authority are before the decision in Harrisons malayalam 's case (supra). In Harrisons malayalam 's case (supra) , this Court observed like this:

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“22. We are of the definite opinion that the amendment definitely provided substantial changes in the scope and content of Section 14B and the decision in

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WP(C) Nos. 5845, 6525 & 6582/2011

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Organo's case (supra) and Hindustan Times (supra) will not strictly apply. The decision in HMT Limited (supra) has distinguished the decision in Hindustan Times (supra) to come to the above conclusion. In such circumstances, we find that what has been effectively intended by the amendment to Section 14B is to take out the compensatory element and disrobe the authority of any discretion with respect to that and provide automatic imposition of interest by Section 7Q. Under Section 14B, the authorised officer necessarily has a discretion to impose damages, by way of penalty or not to impose it altogether. In the circumstance of a finding that penalty has to be imposed, then, the authorised officer has to go to the Scheme; more specifically paragraph 32A of the sliding table provided thereunder, which is in the manner of guidelines.

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23. Going by the specific words employed in paragraph 32A again, the officer has to exercise his discretion while looking at the mitigating circumstances, which includes financial difficulties projected by an employer and the quantum to be imposed has to be decided. The only fetter is on the upper limit of rates provided in Section 14B and the table under paragraph 32A. The discretion granted by the enactment under Section 14B to the authorized officer to either levy or not to levy penalty cannot be fettered by a provision in the subordinate legislation, (ESI Corporation v. HMT Limited). We also notice that while the sliding table under paragraph 32A provided for the rate of damages for various periods as 17, 22, 27 and 37 the same was

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WP(C) Nos. 5845, 6525 & 6582/2011

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amended with effect from 26.9.2008, reducing it to 5,10, 15 and 25. This reduction by 12 is again a confirmation of the intention of the legislature of compensatory element being taken out of Section 14B. Though higher rates were provided under paragraph 32A initially, latter it was noticing the automatic levy of 12% under Section 7Q, that, the reduction was brought in.”

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Since the matter is remanded to the assessing authority, I think the direction by the appellate authority to assess @ 22% also can be set aside and the assessing authority can be directed to consider the matter in the light of the dictum laid down by this Court in Harrisons malayalam 's case (supra) . I make it clear that the assessing authority is free to pass appropriate orders in accordance to law. I only make it clear that the assessing authority will consider the dictum laid down by this Court and find out whether the same is applicable to the facts and circumstances of these cases.

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Therefore, these writ petitions are disposed of in the following manner:

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i ) W.P.(C)No.6582/2011 is allowed in part

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WP(C) Nos. 5845, 6525 & 6582/2011

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and Ext.P3 is set aside. The assessing authority is directed to reconsider the matter as directed by the appellate authority in the light of the decision in Harrisons malayalam 's case (supra) .

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ii ) W.P.(C)No.6525/2011 is allowed in part

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and Ext.P2 is set aside. The assessing authority is directed to reconsider the matter as directed by the appellate authority in the light of the decision in Harrisons malayalam 's case (supra) .

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iii) W.P.(C)No.5845/2011 is allowed in part

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Sd/-

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P.V.KUNHIKRISHNAN JUDGE

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WP(C) Nos. 5845, 6525 & 6582/2011

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APPENDIX OF WP(C) 6525/2011

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PETITIONER EXHIBITS

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EXHIBIT P1 A TRUE COPY OF THE ORDER NO. KR/16590/RO/TVM/PD/NS/2009 DATED 25.11.2009 PASSED BY THE RESPONDENT. EXHIBIT P2 A TRUE COPY OF THE ORDER DATED 13.01.2011 OF THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL, NEW DELHI IN ATA NO.403(7)/2010. EXHIBIT R1(A) TRUE COPY OF THE CALCULATION SHEET OF PROVIDENT FUND DUES.

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WP(C) Nos. 5845, 6525 & 6582/2011

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APPENDIX OF WP(C) 6582/2011

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PETITIONER EXHIBITS

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EXHIBIT P1	A TRUE COPY	OF THE	LETTER NO.
	KR/16904/ENF.I	(1)/2007	DATED
	05.06.2007 INT	IMATING T	HE WAIVER OF
	EMPLOYEE SHAR	E OF CONT	RIBUTION FOR
	THE PRE DISCOV	ERY PERIOD
EXHIBIT P2	A TRUE COPY	OF THE	ORDER NO.
	KR/16904/RO/TV	M/PD/NS/201	0 DATED
	15.04.2010 PAS	SED BY THE	RESPONDENT.
EXHIBIT P3	A TRUE COPY	OF THE	ORDER DATED
	12.01.2011 OF	THE EMPLOY	EES PROVIDENT
	FUND APPELLATE	TRIBUNAL,	NEW DELHI IN
	ATA NO. 289(7)	/2010.

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WP(C) Nos. 5845, 6525 & 6582/2011

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APPENDIX OF WP(C) 5845/2011

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PETITIONER EXHIBITS

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EXHIBIT P1 A TRUE COPY OF THE ORDER NO. KR/22173/RO/TVM/PD/NS/2009 DATED 31.11.2009 PASSED BY THE RESPONDENT EXHIBIT P2 A TRUE COPY OF THE ORDER DATED 13.01.2011 OF THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL, NEW DELHI IN ATA NO. 6(7)/2010. EXHIBIT R(A) TRUE COPY OF THE LETTER NO.SIS/EPF/142/09 DT.5.11.09 EXHIBIT R(B) TRUE COPY OF THE CALCULATION SHEET //TRUE COPY// PA TO JUDGE

M/S.Sarabhai Institute of Science & Tech v. Assistant Provident Fund Commissioner

Case brief

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What did the court decide?

M/S.Sarabhai Institute of Science & Tech v. Assistant Provident Fund Commissioner

Case brief

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