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2020 DIGILAW 264 (KER)

Sanjo Charitable and Educational Trust v. Assistant Provident Fund commissioner

2020-03-02

RAJA VIJAYARAGHAVAN V.

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JUDGMENT : Raja Vijayaraghavan V., J. 1. The petitioner is the Sanjo Charitable and Educational Trust and they are running an educational institution. The said establishment is covered under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ('Act 19 of 1952' for short). Towards belated remittances of contributions to the Provident Fund, Pension Fund and Deposit Linked Insurance Fund Contributions and administrative charges for the period from 9/2014 to 4/2019, proceedings under Section 14B and 7Q were initiated and the amounts were determined by Ext. P1 and P1(a) orders. Challenging the orders referred to above, the petitioner herein has preferred an appeal before the Central Government Industrial Tribunal-cum-Labour Court, Ernakulam and the same is said to be pending as Appeal No. 22 of 2020. It is submitted that the petitioner has preferred a stay petition as well. However, the stay petition has not been taken up and considered by the Tribunal as on date. While so, coercive proceedings were initialed and Exts. P3 and P3(a) prohibitory orders have been issued under Section 8F of the Act putting on hold the accounts maintained by the petitioner herein in the Federal Bank and Union Bank of India, Rajakkad Branch. The bankers have been directed to transfer the amounts mentioned in Exts. P3 and P3(a) to the account of the 1st respondent. According to the petitioner, if Exts. P3 and P3 (a) are allowed to stand, it would cause grave hardship. It is further contended that the petitioner has raised valid objections to the amount assessed by the 1st respondent. In this Writ Petition, the petitioner has sought for a direction to quash Exts. P3 and P3(a) and also for incidental reliefs. 2. I have heard the submissions of Sri. Paulson C Varghese and Sri. Joy Thattil lttoop, the learned counsel appearing for the 1st respondent. 3. Insofar as Ext. P1(a) order is concerned, the amount assessed is under Section 7Q of the Act against which no appeal is maintainable. The petitioner has no case that the principles of natural justice were violated or that he was not permitted to file even an objection prior to assessing the compensation under Section 7Q. The Hon'ble Supreme Court in Arcot Textile Mills has held that once the amount due is determined under Section 7Q, levy of interest is automatic. It is a statutory power which is exercised by the competent authority under the Act. The Hon'ble Supreme Court in Arcot Textile Mills has held that once the amount due is determined under Section 7Q, levy of interest is automatic. It is a statutory power which is exercised by the competent authority under the Act. It has also been held that an independent order passed under Section 7Q is not appealable. In that view of the matter, the petitioner cannot be heard to contend that the issuance of a prohibitory order to realise the amount under Section 7Q is illegal on any count. Insofar as the order passed under Section 14B is concerned, since the appeal is pending before the Tribunal, issuance of prohibitory order during the pendency of the stay petition will result in injustice. 4. The learned counsel appearing for the petitioner submitted that insofar as the amount of Rs. 7,21,711 which has been assessed under Section 7Q is concerned, the petitioner be permitted to pay the same in 15 equal monthly installments. The learned counsel appearing for the Organization has opposed the prayer. 5. Having considered all the relevant facts and taking note of the fact that the petitioner is a Society which is under severe financial crisis, I direct the 1st respondent to keep Exts. P3 and P3(a) in abeyance on the following conditions. (i) The petitioner shall remit a sum of Rs. 7,21,711 with the respondents 1 and 2 in 12 equal monthly installments, the first of which shall be payable on 1.4.2020 and followed up on the 1st working day of every month. If the amount is paid as aforesaid without default, Ext. P3(a) proceedings shall remain stayed. On the petitioner committing default of payment of any two installments, the respondents may recommence the recovery proceedings. (ii) The proceedings pursuant to Ext. P3 shall remain stayed for a period of two months from today to enable the petitioner to move an application for stay before the Tribunal. If an application is filed, the same shall be taken up and orders shall be passed by the Tribunal expeditiously, within the period above mentioned. (iii) It is made clear that this order is made on the submission of the learned counsel that the petitioner is facing grave financial hardship and therefore, no further extension will be granted. If an application is filed, the same shall be taken up and orders shall be passed by the Tribunal expeditiously, within the period above mentioned. (iii) It is made clear that this order is made on the submission of the learned counsel that the petitioner is facing grave financial hardship and therefore, no further extension will be granted. This order is passed without prejudice to the right of the respondents to proceed against the petitioner for realization of amount, if any, or on any other heads. This petition is dispose of.