IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE SEVENTEENTH DAY OF SEPTEMBER TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE N.V. RAMANA WRIT PETITION No.18360 of 2009 Between: Sai Rayalaseema Paper Mills Limited ..... PETITIONER AND The Assistant Provident Fund Commissioner, Sub Regional Office, Railwa Station Road, Cuddapah and others. .....RESPONDENTS ORDER: The petitioner is a public limited company incorporated under the provisions of the Companies Act, 1956. It was originally set up as a joint venture of Andhra Pradesh Industrial Development Corporation Limited with M/s.T.G. Vasanth Gupta and Associates during 1974-75 and ran profitably till 1986. Later on, it started incurring losses and finally closed down in November, 1989. Thereafter, the petitioner- company was referred to BIFR, which declared the company as sick and sanctioned rehabilitation scheme. Ultimately, in the light of the orders of the Supreme Court, the AAIFR has sanctioned a smodified rehabilitation scheme and envisaged procedure for settlement of entire dues payable to Secured Creditors by way of One Time Settlement based on the payment of net principle amounts dues/arrears without interest and penal charges. As per the said scheme, the dues payable to the respondent-Provident Fund Organisation are Rs.65.74 lakh, for which, the petitioner-company claims to have made a representation dated 06.11.2006, expressing its intention to the respondent-Provident Fund Organisation to clear the arrears and requested for instalment facility. Thereafter, the respondent-Provident Fund Organisation issued a demand notice, dated 07.11.2006, raising a demand for Rs.1,01,74,904/- and also issued another letter, dated 14.03.2007, directing the petitioner-company to comply with the list of terms and conditions for grant of 36 instalments. The petitioner claims to have complied with the terms and conditions stipulated by the respondent- Provident Fund Organisation and also furnished a bank guarantee for Rs.1,92,000/- on 02.06.2007 and for Rs.10,315/- on 10.02.2008. Thereafter, in response to the numerous representations made by the petitioner-company, as the respondent-Provident Fund Organisation vide letter, dated 20.02.2008, informed that unless the current contributions are paid regularly, the request for grant of instalments cannot be considered, has cleared the current arrears and also paid an amount of Rs.24,12,000/- towards arrears. While so, it is the grievance of the petitioner-company that without considering its request for grant of instalments, the respondent- Provident Fund Organisation issued the impugned proceedings, dated 06.07.2009, directing the petitioner-company to pay a sum of Rs.72,82,262/- within fifteen days and also sent a letter, dated 05.08.2009, to the Oriental Bank of Commerce for invoking bank guarantee of Rs.1,92,000/- and Rs.10,315/- furnished by the petitioner- company for grant of instalment facility. Hence, the present writ petition. A counter affidavit is filed by the respondent-Provident Fund Organisation denying the allegations made by the petitioner and stating that the following PF arrears are outstanding from the petitioner-company: Arrears outstanding: Sl. No. R.C.No./Period Dues as per Certificate Remitted and Date Balance 1. 117/97, 03/80 to 03/81 & 03/86 to 07/89 (penal damages) Rs.6,59,540-00 - Rs.6,59,540-00 2. 33/2000, 12/96 to 02/98 (contributions and other charges) Rs.81,46,019- 00 Rs.8,62,655-00 On various dates Rs.2,02,315 Dt.8.06.2009 Realised by invoking the bank Guarantee) Rs.70,81,049-00 Balance outstanding (Arrares) Rs.77,40,589-00 Current dues outstanding: Period Dues outstanding (7A Order, dt.27.07.2009 03/08 to 01/09 Rs.68,921=00 As per 7A Order, dt.27.07.2009 02/09 to 04/09 Rs.6,40,231=00 Total outstanding dues (Arrears + Current) Rs.84,49,741=00 At this stage, the learned counsel for the petitioner submitted that Insofar as the penal damages of Rs.6,59,540/- is concerned, the petitioner has got an effective remedy of appeal and that the petitioner would like to avail the same. The learned counsel also submitted that the petitioner-company is not disputing the arrears of contributions and charges, for the period 33/2000 and 12/96 to 02/98, amounting to Rs.70,81,049/-and is willing to pay the same. But, however, he submitted that the company is still under financial crisis, and as such, it is not in a position to pay the same at a time. He, therefore, sought 36 instalments for payment of Rs.70,81,049/-. However, the learned Standing Counsel appearing for the respondent-Provident Fund Organisation has opposed the request of the petitioner-company for grant of 36 instalments for payment of Rs.70,81,049/-. Insofar as the current dues outstanding are concerned, it is submitted by the learned Standing Counsel that the Regional Provident Fund Commissioner, after conducting enquiry, passed orders, dated 27.07.2009, under Section 7-A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short ‘the Act’) determining the current liability of the petitioner- company as Rs.84,49,741/- and if the petitioner-company feels aggrieved, it can file an appeal before the appellate authority under Section 7-I of the Act. Taking into consideration the facts and circumstances of the case, I deem it appropriate to dispose of the writ petition with the following directions: (i) The petitioner-company is directed to avail the remedy of appeal provided to it under Section 7-I of the Act against the orders passed by the Regional Provident Fund commissioner under Section 7-A of the Act and also against determination of penal damages under Section 14-B of the Act, within a period of six weeks from today and filing such an appeal, the appellate authority shall consider and dispose of the same as expeditiously as possible; (ii) The petitioner-company is also directed to deposit half of the penal damages and current dues outstanding within a period of six weeks from today. On such deposit, the respondents shall not take coercive steps pursuant to the impugned order pending appeal; and (ii) The petitioner-company is further directed to pay the arrears of contributions and charges, for the period 33/2000 and 12/96 to 02/98, amounting to Rs.70,81,049/-, in 24 equal monthly instalments and shall pay the same on or before 5th of every succeeding month, in default, the respondent-Provident Fund Organisation is at liberty to initiate appropriate proceedings in accordance with law. Accordingly, the writ petition is disposed of. No costs. ___________________ N.V. RAMANA, J. Date:17.09.2009 VGB