EPF & MP Act - Provident Fund
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EPF & MP Act - Provident Fund

ad_puneet Started The Discussion:

Hi friendsI would feel enlightened if i may be supplied the copy of the Judgment of Kerela High Court reported as 2003 (1) LLN 692 in the case of K.V. Joseph Versus Regional Provident Fund Commissioner, Eranakulam. Bye.Puneet Gupta

Kuljit Pal Singh - Member Since: Mar 2008
Dear Friends
I hope this is the judgement u may be looking for

Equivalent Citation: (2003)ILLJ981Ker
IN THE HIGH COURT OF KERALA
O.P. No. 9528/2000
Decided On: 24.07.2002
Appellants: Joseph K.V.
Vs.
Respondent: R.P.F. Commissioner
Hon'ble Judges:
Kurian Joseph, J.
Counsels:
For Appellant/Petitioner/Plaintiff: P. Ramakrishnan, Adv.
For Respondents/Defendant: N.N. Sugunapalan, Adv.
Subject: Labour and Industrial
Catch Words:
Acts/Rules/Orders:
Employees' Provident Funds and Miscellaneous Provisions Act, 1952 - Sections 7Q and 14B
Disposition:
Petition allowed
JUDGMENT
Kurian Joseph, J.
1. Contract workers attached to the second respondent are the petitioners in the Original Petition. The issue relates to the benefits under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 in the case of the petitioners and similarly situated employees are concerned. Though the petitioners and similarly situated workmen were entitled to the coverage under the Employees' Provident Funds Scheme, the respondents took steps belatedly by proceedings dated January 11, 1991, the second respondent establishment was directed to pay an amount of Rs. 17,71,232.00. According to the petitioner, this includes the interest and penalty. However it was later learnt that the petitioners and other workmen were denied interest with effect from 1971 to 1987.
2. It is not in dispute that the coverage under the Employees' Provident Funds Scheme has been determined with effect from 1971. However, the second respondent establishment has a case that they are not liable to pay any damages for the non contribution from 1971 to 1989. The second respondent had in fact challenged the determination of contribution from 1971 to 1987 before this Court in O.P.No. 1149/1991. In the Judgment dated March 4, 1996 shANMUGAM, J. has dealt with in detail the contentions of the second respondent who was the petitioner in that case. It is observe that the second respondent was more worried about the damages under Section 14-B in respect of belated payment. It is pertinent to note that there is no reference at all with regard to the interest. It will be profitable to extract paragraphs 7 & 8 of the judgment referred to above.
"7. I felt this is a case where I do not vex my mind to go into the controversial issues as to the eligibility of the contract employees employed by the 8th respondent and I am also of the view that the petitioner is more concerned about the applicability of Section 14-B of the Act, in case if Ext. PI order is implemented without the same being challenged. In as much as the 1st respondent is now liable to be determined for the period from December, 1971 onwards, the workers as listed out in Ext. P1 would be covered by the Scheme. So to that extent this would be beneficial to the 8th respondent and the workers provided the petitioner are not made liable for the damages at this distance of time. Even now it is not clear for the petitioner the actual amount of contribution to each employee and in view of hundreds of employees involved in the dispute it is just and necessary that the order of the 1st respondent has to be confirmed subject to the condition that the petitioner cannot be faulted for not filing the return from an anterior date in the light of serious disputed facts about the coverability and particulars of the employees which were not properly made available by the 8th respondent or by the 1st respondent.
8. In these circumstances I confirm the order of the 1st respondent and the amount determined is to be transferred forthwith. However, I make it clear that the petitioner is justified in not filing the returns earlier in the light of my findings set out above. The 1st respondent shall furnish the particulars of individual liability of each worker to enable the petitioner to file the returns but that will not stand in the way of the petitioner remitting amount now determined within four weeks from the date of receipt of this judgment".
3. Section 7-Q of the Act in the matter of interest reads as follows:
"7-Q Interest payable by the employer. The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the Scheme on any amount due from him under this Act from the date on which the amount has become so due till the date of its actual payment.
Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any scheduled bank."
Section 14-B of the Act dealing with the damages reads as follows:
"14-B. Power to recover damages.- Where an employer makes default in the payment 2 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 172 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 such damages, not exceeding the amount of arrears, as it may think fit to impose;
Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard:
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 (1 of 1986), subject to such terms and conditions as may be specified in the Scheme."
It may be seen that interest and damages are two different aspects altogether. While Section 7-Q provides for interest at the rate of 12% for the belated payment in respect of any amount due from him under the Act, Section 14-B empowers the first respondent to recover damages equal to the amount of arrears. Apparently, the second respondent was worried about the damages under Section 14-B in O.P. No. 1149 of 1991 and obviously the second respondent is held not liable only for damages under Section 14-B, there is no whisper with regard to interest under Section 7-Q.
4. The first respondent has a case that the second respondent on the basis of the judgment referred to above has not paid any interest and since the employer has not paid any interest, the Fund may not be directed to pay interest to the petitioners. As already stated above, there is no interdiction from the Court in the matter of realisation of interest under Section 7-Q and interdiction is only with regard to the realisation of damages. Therefore, it is for the first respondent to take steps to realise interest under Section 7-Q from the second respondent, in case the same was not paid or otherwise held not liable.
5. Under paragraph 60 of the Employees' Provident Funds Scheme, 1952 a member is entitled to get interest at the rates determined by the Central Government in consultation with the Central Board. That can be denied only if the member waives his right to get interest. The first respondent is not justified in denying interest to the member on the ground that the employer has not paid interest. Since the judgment in O.P. No. 1149 of 1991 has become final, it is for the first respondent to realise interest under Section 7-Q of the Act from the second respondent But that shall not stand in the way of the eligible members including the petitioners being granted interest under paragraph 60 of the Scheme. It is declared accordingly.
6. Original Petition is allowed as above.


Regards

ahluwalia32 - Member Since: Jul 2008
Many many mannnnnnnnnnnnnnnnny thanks for posting the relavent judgement.It will be for the benefit of many if judgement in O.P.No.1149/1991 is also posted.
Iny other Judgement similar to the above of any High court and/or (preferably) Honble Supreme Court?If so these may also referred.
Regards

ahluwalia32 - Member Since: Jul 2008
Dear Friends, Can any one reply to querries mentioned above.It is interesting and usefull. Regards

ahluwalia32 - Member Since: Jul 2008
Refer note above,it will be for the benefit of many if judgement in O.P.No.1149/1991 is also posted.
Iny other Judgement similar to the above of any High court and/or (preferably) Honble Supreme Court?If so these may also referred.
Regards

rahulmore14 - Member Since: Nov 2008
Hello,

I have an factory which was under liquadation since 2001. Recently(2008) the company has come out of liquadation under the Mumbai High court's orders.
However, now in April 2009 we have received an demand notice from the ESIC under sec 14(b) to pay interest on delayed payment and damages thereof (period 1991 - 2001)
Failure to do this will attract action as under sec 14(B).

Further facts in our case are that our Bank had gone into DRT for recovery proceedings. and subsequently sold the assets to Arcil. Arcil is in process of selling the factory premises under SARFASI Act to a third party where we have provided no objection.


So my querry is
  • Are we liable to pay to this demand notice.
  • in case we ignore this notice what action is possible against us under this section 14 (b)
  • will the new owners of the premises (not the company though) will be liable to pay.
I solicit responses from experts in this Act.

Regs
Rahul

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