Full Judgment Text
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 29 DAY OF JANUARY 2018
BEFORE
THE HON’BLE MR.JUSTICE RAGHVENDRA S. CHAUHAN
RIT ETITION O OF
W P N . 1082 2018 (L-PF)
BETWEEN:
M/S G4S SECURE SOLUTIONS
INDIA PRIVATE LIMITED,
TH ST
# 744, 10 ‘A’ MAIN, 1 STAGE,
TH
4 BLOCK, OUTER RING ROAD,
HBR LAYOUT,
BENGALURU-560043
REP. BY ITS HUB LEGAL HEAD
BENGALURU, CHENNAI AND HYDERABAD,
MR. R. GUNASHEKARAN
... PETITIONER
(BY SRI K. KASTURI, SR. COUNSEL FOR
SRI MOHAN KUMAR K., ADV.)
AND:
1. THE REGIONAL PROVIDENT FUND
COMMISSIONER -I,
EMPLOYEES’ PROVIDENT FUND ORGANISATION,
REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN,
# 13, RAJARAM MOHAN ROY ROAD,
BANGALORE-560025.
2. THE RECOVERY DEPARTMENT ORGANISATION
REGIONAL OFFICE,
BHAVISHYANIDHI BHAVAN,
# 13, RAJARAM MOHAN ROY ROAD,
BANGALORE-560025.
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3. THE HSBC BANK
NO.7, MAHATMA GANDHI ROAD,
BANGALORE-560001,
REPRESENTED BY ITS BANK MANAGER.
... RESPONDENTS
(BY SMT. NALINI VENKATESH, ADV. FOR R1 & R2
R3 - SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
ATTACHMENT OF THE ACCOUNTS OF THE PETITIONER BY R-1
& 2 TO THE R-3 PRODUCED AS ANNEXURE-D TO THE W.P.
DATED 02.01.2018 (COPY OF THE ATTACHMENT ORDER DATED
02.01.2018 NOT PROVIDED TO PETITIONER BY NONE OF THE
RESPONDENTS AND ISSUE A STAY AND SUSPEND THE
OPERATION OF THE ORDER DATED 15.12.2017 AT
ANNEXURE-C UNTIL THE APPEAL IS HEARD BY THE EPF
APPELLATE TRIBUNAL ON THE APPLICATION FOR STAY AND
ETC.
THIS WRIT PETITION COMING ON FOR HEARING THIS
DAY, THE COURT MADE THE FOLLOWING:
O R D E R
With the consent of the learned counsel for the
parties, this case is being decided at this stage itself.
2. The petitioner, M/s. G4S Secure Solutions
India Private Limited has challenged the legality of the
order dated 02.01.2018, the attachment order issued by
the respondent No.1, against the petitioner. The
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petitioner is also aggrieved by the order dated
15.12.2017, passed by the respondent No.1, whereby
the respondent No.1 has directed the petitioner to pay
an amount of ` 16,31,58,755/- (Rupees Sixteen Crore
Thirty-One Lakh Fifty-Eight Thousand Seven Hundred
& Fifty-five only), under Section 7A of the Employees’
Provident Funds and Miscellaneous Provisions Act,
1952 (‘the Act’ for short).
3. Briefly the facts of the case are that the
petitioner happens to be a private Company
incorporated under the Indian Companies Act, 1956.
Amongst other services, the petitioner provides security
services by employing guards as its employees. For this
purpose, it has established its offices in different parts
of the country, including Bengaluru. The petitioner is
not employing guards through contractors. According
to the petitioner, it has been remitting the provident
fund contribution, which it is legally bound to pay for
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its employees. Furthermore, according to the petitioner,
the employees are paid a total remuneration consisting
of the basic wage (earned), house rent allowance,
conveyance and washing allowance in order to enable
them to defray the actual expenses. Moreover, for
certain specific locations, which may entail certain
difficulties or dangers, “site allowance” is also paid to
the employees. The issue involved in the present case,
according to the petitioner, is with regard to the amount
paid by the petitioner as “site allowance”: whether the
same shall be included while calculating the amount of
salary, as the basic wage, paid to the petitioner or not ?
On 12.01.2017, the respondent No.1, the Regional
Provident Fund Commissioner-I, issued a notice to the
petitioner alleging “Subterfuge of wages”, without
assigning any reasons for the said allegation. The
petitioner immediately appeared before the respondent
No.1, and filed his objections. Subsequently, a team of
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enquiry officers visited the petitioner’s establishment,
and submitted their report before the respondent No.1.
Based on the said report, the respondent No.1 issued an
order dated 15.12.2017.
The petitioner also claims that when the enquiry
officers were visiting its establishment, it had clearly
explained to them that “the site allowance” is paid to the
employees, based on the requirement of the client.
Therefore, “the site allowance” is purely a temporary
allowance paid to an employee. The same can be
changed, or withdrawn, when the employee is deputed
to another site. Therefore, according to the petitioner,
“the site allowance” does not fall under the definition of
basic wages, as contained under Section 2(b) of the Act.
Notwithstanding the submissions made by the
petitioner, the respondent No.1 passed the order dated
15.12.2017, whereby the respondent No.1 directed the
petitioner to deposit a sum of ` 16,31,58,755/-.
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According to the petitioner, he has sixty days time,
under the Act, to file an appeal against the impugned
order. The petitioner had exercised his right to file the
appeal before the Appellate Authority, within the
stipulated period of sixty days. However, on
05.01.2018, he was informed that by order dated
15.12.2017, the respondent No.1 had directed the
respondent No.3, the HSBC Bank, to attach the entire
amount of ` 16,31,58,755/-. Hence this petition before
this Court.
4. Relying on the case of M/ S . M ASCON G LOBAL
L TD . VS . T HE R EGIONAL PF C OMMISSIONER -II & A NOTHER
O DECIDED BY THIS OURT ON
(W.P.N .32600/2012, C
31.08.2012) , Mr. Kasturi, the learned Senior Counsel,
has pleaded that since there is statutory period of sixty
days for filing an appeal, the respondent No.1 should
have stayed its hands, and should not have proceeded
to attach the account belonging to the petitioner.
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Secondly, the right to access justice is a
fundamental right under Article 21 of the Constitution
of India, and is available to juristic persons. Therefore,
the petitioner has right to file an appeal. The said right
is not only a fundamental right, but is also a statutory
right, as the Act does contain sufficient provision for
filing an appeal under Section 7-I of the Act. Therefore,
neither the statutory right, nor the fundamental right,
can be scuttled by the respondent No.1. Therefore, the
order attaching the account of the petitioner should be
set aside by this Court.
5. On the other hand, Ms. Nalini Venkatesh, the
learned counsel for the respondent No.1, has relied on
the case of E MPLOYEES ’ P ROVIDENT F UND O RGANISATION
VS OLL ELL ORGE TD ANK TD ETTERS
. R W F L . & HDFC B L . (L
P ATENT A PPEAL N O . 12 OF 2010, DECIDED BY THE
H ON ’ BLE G UJARAT H IGH C OURT ON 15.06.2011) , in order
to plead that unless and until there is a specific
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provision in the Act, preventing the respondent No.1
from attaching the account of the petitioner, the
respondent No.1 is well within its power to attach the
same. Therefore, the Commissioner need not wait for
the lapse of sixty days before moving against the
defaulting party. Hence, the order passed by the
respondent No.1, attaching the petitioner’s account, is
legally valid. Therefore, the learned counsel has
supported the impugned orders.
6. Heard the learned counsel for the parties, and
perused the case laws cited at the Bar.
7. It is, indeed, trite to state that Article 21
bestows the right to access justice upon the people.
Moreover, Section 7-I of the Act also bestows the right to
file an appeal before the Tribunal, by the aggrieved
party, within a period of sixty days from the passing of
the impugned order. The right to have access to justice
is part of right to life, and right to livelihood. Therefore,
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the right to have access to justice cannot be scuttled
lightly by the respondent No.1.
8. Although the Commissioner does have the
power to attach the property of a defaulting party, the
said power is not an absolute one. The exercise of
power is limited by the fact that Section 7-I of the Act
bestows a right upon the defaulting party to approach
the Tribunal, and to challenge an order passed by the
Commissioner. In case the Act were to be interpreted to
the extent that a specific provision is required to limit
the power of the Commissioner, such an interpretation
would make Section 7-I of the Act redundant and otiose.
Therefore, the Commissioner cannot scuttle, and cannot
violate the right to have access to justice by passing an
order of attachment, immediately after passing the
impugned order for recovery of amount. It is for this
reason that this Court, in the case of M/ S . M ASCON
G LOBAL L TD . (supra), had clearly opined that since sixty
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days period is granted to the defaulting party to
challenge the order, the Provident Fund Commissioner
cannot pass any order of attachment during that period.
Hence, with all humility, this Court disagrees with their
Lordships of Hon’ble Gujarat High Court, according to
whom, a specific provision of law is needed to limit the
power of the Commissioner. Any interpretation that
would make a provision of law redundant, has to be
avoided. Therefore this Court is of the firm opinion that
the Commissioner cannot pass an order of attachment
within the period of sixty days granted to the defaulting
party to approach the Tribunal under Section 7-I of the
Act.
9. In case such an order is passed, it would
scuttle the entire judicial process. Moreover, it would
prevent the defaulting party from challenging the order.
Furthermore, it would bestow uncontrolled power in the
hands of the Commissioner. For, even before the order
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passed by the Commissioner can be challenged
judicially, by passing an order of attachment, a fait
accompli would be achieved. The Parliament could not
have intended such a consequence while bestowing a
power on the Commissioner to order attachment.
10. The learned Senior Counsel also points out
that by order dated 09.01.2018, this Court had not only
stayed the operation of the order dated 15.12.2017, but
it also stayed the operation of the attachment order
dated 02.01.2018. But, notwithstanding the order
passed by this Court on 09.01.2018, the demand draft
has been encashed by the respondent No.3, in favour of
respondent No.1. Although the petitioner had tried his
level best to bring the order dated 09.01.2018, to the
notice of the respondent No.1, however, the respondents
have taken a stand that the order could not be brought
to the notice of the respondent No.1 prior to the
encashment of the demand draft.
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11. Be that as it may, as of today, the demand
draft has been encashed. According to the learned
counsel for the respondent No.1, the amount of
` 16,31,58,755/- has been deposited by the respondent
No.1 with SBI Bank, St. Marks Road Branch. Therefore,
the respondent No.1 is directed to withdraw the said
amount from the SBI Bank, St. Marks Road Branch,
and to deposit the said amount in the petitioner’s
account held with the respondent No.3, the HSBC
Bank. The respondent No.1 is also directed to deposit
the said amount along with the interest earned from the
said amount. The respondent No.1 is further directed
not to attach the account of the petitioner, till the
appeal is heard by the learned Tribunal.
12. The learned counsel for the respondent No.1
seeks one week’s time to carry out this exercise by the
respondent No.1. The time so prayed for is, hereby,
granted.
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13. For the reasons stated above, this writ
petition is allowed . The order dated 02.01.2018,
passed by the respondent No.1 is quashed, and set
aside.
D
S /-
J UDGE
RD