Allowed

Bihar State Co-Operative Bank v. the Regional Provident Fund Co.

Patna HC21 Feb 2013L.P.A/469/2011

Case brief

AI extract

What is this about?

In this Letters Patent Appeal, the Patna High Court allowed the appeal filed by the Bihar State Co-operative Bank against an order holding the Bank liable to make good loss recovered from its account by the Provident Fund Commissioner. The Court set aside the lower court's findings, holding that without proof of service of alleged notices, the Bank could not be held liable.

What did the court decide?

The Letters Patent Appeal was allowed. The impugned order dated 19th January 2011 in CWJC No. 82 of 2006 was set aside, and CWJC No. 82 of 2006 was allowed.

Bihar State Co-Operative Bank Vs the Regional… — Execution and Attachment | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA

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Letters Patent Appeal No. 469 of 2011

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Civil Writ Jurisdiction Case No. 82 of 2006

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======================================================

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Bihar State Co-Operative Bank, Bankipur Branch, Patna through its Branch Manager,

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The Branch Manager, Bihar State Co-operative Bank, Bankipur Branch, Ashok Raj Path, Patna

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.... .... Appellants / Petitioners.

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Versus

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The Regional Provident Fund Commissioner-II (Bihar), Regional Office, R-Block, Road No. 6, Patna,

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The Assistant General Manager, Reserve Bank of India, Deposit Accounts Department, South Gandhi Maidan, Patna – 800 001,

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Bihar Rajya Beej Nigam Ltd. Agricultural Forum, Mithapur, Patna – 800 001 through Managing Director

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.... .... Respondents / Respondents.

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====================================================== Appearance:

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For the Appellant/s : Mr. Kishore Kumar Sinha, Advocate. For the Respondent no. 1: Mr. R.S. Pradhan, Sr. Advocate and Mr. Jainandra Kumar, Advocate. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE

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and

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HONOURABLE MR. JUSTICE AHSANUDDIN AMANULLAH

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ORAL ORDER

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(Per: HONOURABLE THE CHIEF JUSTICE)

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9 21-02-2013 Feeling aggrieved by the judgment and order dated 19^th January 2011 passed by the learned single Judge in CWJC

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Patna High Court LPA No.469 of 2011 (9) dt.21-02-2013

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No. 82 of 2006, the petitioner Bihar State Co-operative Bank (hereinafter referred to as „the Bank‟) and the Branch Manager of the Bankipur Branch, Patna have preferred this Appeal under Clause 10 of the Letters Patent.

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The matter at issue is the liability of the Bank to make good the loss to the Regional Provident Fund Commissioner (hereinafter referred to as “the Commissioner”) in accordance with Clause (x) of sub-section (3) of Section 8-F of The Employee‟s Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as „the Act‟).

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It appears that the Bihar Rajya Beej Nigam Limited was, at the relevant time, in default of deposit of provident fund amount with the Regional Provident Fund Commissioner, Bihar. The Commissioner exercised his power to recover the outstanding dues of the Bihar Rajya Beej Nigam Limited by attaching its Bank Account and by recovery from the Bank Account.

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The Commissioner took action to recover the amount in question from the Bank Account in exercise of powers conferred by sub-section (2) of Section 8-F of the Act. Notices issued by the Commissioner to the Bank on 22^nd December 2004 and 21^st February 2005 were not responded to by the Bank. In view of the Bank‟s inaction to carry out the instructions issued under the notice, the Bank has been saddled with the liability in exercise of power conferred by Clause (x) to sub-section (3) of Section 8-F of the Act.

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The action was challenged by the Bank under Article 226 of the Constitution in above CWJC No. 82 of 2006. According to the Bank, the Bank had never received the notices

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Patna High Court LPA No.469 of 2011 (9) dt.21-02-2013

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dated 22^nd December 2004 and 21^st February 2005. The only notice received by the Bank was that of 20^th July 2005 which was promptly acted upon.

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The petition was contested by the Commissioner. He asserted that the Bank had received the notices issued on 22^nd December 2004 and 21^st February 2005.

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The learned single Judge has believed that earlier notices were indeed received by the Bank, but the Bank ignored to act upon it. The Bank was, therefore, liable to make good the loss suffered by the Commissioner. The learned single Judge has accordingly allowed the Writ Petition and has directed the Bank to make good the loss suffered by the Commissioner. Therefore, this Appeal.

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We have heard the learned advocates extensively and have perused the record.

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We are of the opinion that the finding recorded by the learned single Judge is based on inferences and surmises. The Bank, in its reply dated 16^th November 2005, did categorically say that no notice allegedly issued on 22^nd December 2004 and 21^st February 2005 was received by the Bank, and that the Bank had promptly acted upon the notice dated 20^th July 2005. In view of the categorical denial by the Bank and in absence of any proof of service by the Commissioner, in our opinion, the learned single Judge has manifestly erred in drawing adverse inference against the Bank and in holding that the Bank was liable to make good the loss.

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For the aforesaid reasons, the Appeal is allowed. The impugned order dated 19^th January 2011 passed by the learned single Judge in CWJC No. 82 of 2006 is set aside.

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Patna High Court LPA No.469 of 2011 (9) dt.21-02-2013

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CWJC No. 82 of 2006 is allowed. The impugned orders dated 30^th November 2005 and the order dated 9^th December 2005 are quashed and set aside.

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(R.M. Doshit, CJ)

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(Ahsanuddin Amanullah, J)

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Dilip.

Bihar State Co-Operative Bank v. the Regional Provident Fund Co.

Case brief

What is this about?

What did the court decide?

Bihar State Co-Operative Bank v. the Regional Provident Fund Co.

Case brief

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