D R VENKATESH Vs. REGIONAL PROVIDENT FUND COMMR

JUDGEMENT

(1.) The petitioner is a Managing Director of M/s. SOM Phyto Pharma India Limited. He filed the writ petition challenging the order dated 18.12.2003 issued by the second respondent directing the petitioner to appear before the second respondent on 5.1.2004 to show-cause as to why the petitioner should not be committed to civil prison in execution of the certificate issued by the authorised officer of the first respondent under Section 8-C(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act, for brevity). This Court while admitting the writ petition on 8.1.2004 also passed interim orders in W.P.M.P.No.631 of 2004 suspending the impugned letter/order of the second respondent. When the application moved by the respondents being W.V.M.P. No. 1743 of 2004 was listed before this Court, with the consent of the learned Counsel for the respective parties, the matter was finally heard and this order shall dispose of the writ petition.

(2.) M/s. SOM Phyto Pharma India Limited (hereafter called, the Employer) is a public limited company, which is a registered employer with Employees Provident Fund Establishment. Alleging that contributions were not properly made by the said Company, action was initiated and the authorised officer issued a certificate under Section 8-C(2) of the Act for recovery of arrears of PF contributions and interest payable under Section 7-Q of the Act. After receipt of the certificate, the second respondent issued a demand notice dated 25.4.2001 calling upon the petitioner to pay an amount of Rs. 12,31,157.00 (Rupees twelve lakhs thirty one thousand one hundred and fifty seven only) within fifteen days from the date of receipt of the order. It appears, the petitioner paid an amount of Rs.10,528.83/- (Rupees ten thousand, five hundred twenty eight and paise eighty three only) leaving a balance amount of Rs. 12,20,628.177- (Rupees twelve lakhs twenty thousand six hundred twenty eight and paise seventeen only). Therefore, action was initiated for execution of the certificate by arrest and imprisonment of the petitioner. In that connection, the petitioner, who is a Managing Director of "the Company, was asked to appear before second respondent.

(3.) In the counter-affidavit filed by the Regional Provident Fund Commissioner (Legal) on behalf of all the respondents, it is stated that the employer is a covered establishment under the Act. As the employer failed to comply with the provisions of the Act, enquiry was initiated under Section 7-A of the Act. Though the Accountant of the employer appeared in the enquiry, records were not produced on different occasions. Therefore, the dues were assessed as per the records available with the respondents as Rs. 12,31,157.00 (Rupees twelve lakhs thirty one thousand one hundred and fifty seven only) and proceedings were issued on 4.9.2000. Later, prohibitory order was issued under Section 8 of the Act on 2.11.2000, but still no amount was paid. The Recovery Officer then issued recovery certificate No.7/ 2001 dated 3.4.2001 followed by a demand notice dated 24.5.2001, in vain. When the respondent issued another prohibitory order dated 8.4.2002, an amount of Rs. 10,528.83.00 (Rupees ten thousand five hundred twenty eight and paise eighty three only) was paid by the employer. The cheque for an amount of Rs.25,000.00 (Rupees twenty five thousand only) was returned by the Bank with endorsement "account freezed no operation allowed". The department thereafter issued a warrant of attachment of movables/immovables on 30.7.2002 but the same could not be executed as the employer informed on 13.9.2002 that the properties of the employer are covered by pan passu charged in favour of financial institutions, namely, Industrial Development Bank of India (IDBI) and State Bank of Hyderabad (SBH). The show-cause notice dated 24.11.2003 issued to the petitioner was returned with remarks "party out of station" and lastly when the impugned letter was issued asking the petitioner to appear before the second respondent, the petitioner approached this Court.