-1- IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.157/2010 Mr. Subhashchandra Roy, Age 28 years, Through his wife Mrs. Bharati S. Roy, Age 28 years, Resident of 89/51, Goa Housing Board Colony, Upasnagar, Sancoale, Mormugoa Goa. …...... Petitioner. Versus 1 The Regional Provident Fund Commissioner-II, The Employees Provident Fund Organization, Bhavishya Nidhi Bhavan, Patto, Panaji Goa 403 001. 2 The Recovery Officer, The Employees Provident Fund Organization, Bhavishya Nidhi Bhavan, Patto, Panaji Goa 403 001. …...... Respondents. Mr. G. Sardessai, Advocate with Mr. V. Palekar, Advocate with Mr. A. Naik, Advocate for the petitioner. Mr. P. P. Singh, Advocate for the respondents. CORAM :- U. D. SALVI, J. DATE : 9 th March, 2010. ORAL JUDGMENT Heard. 2. Rule, made returnable forthwith. Taken up for hearing by mutual consent. 3. The petitioner managing director of M/s Bharati Industrial -2- Services Private Limited and M/s Roy and Roy Industrial Services and Accessories Private Ltd has moved this petition challenging the Order of detention dated 14.12.2009 passed by the respondent no. 2, the Recovery Officer of the Employees Provident Fund Organisation. 4. It is not in dispute that the Order of detention in civil prison of the petitioner has been issued for recovering the dues of Rs.64,65,230/-(Rupees Sixty four lakhs sixty five thousand two hundred thirty only) payable under section 8 of the EPF & MP Act, 1952 by the employer companies. What is disputed is the act of Recovery Officer putting the petitioner under the arrest without first resorting to the attachment and sale of immovable properties of the establishment i.e. companies. 5. Learned Advocate Mr. G. Sardessai, for the petitioner submitted that the landed property admeasuring about 8125sq.mts at Velsao, Village Salcette District South Goa and a building with ground and two floors constructed thereon totally valued at Rs.2,90,13,000/- (Rupees two crores ninety lakhs thirteen thousand only) as per the valuation report dated 20.1.2010 at the annexure “R” to the petition is available for attachment and sale and consequently for recovery of the dues under section 8 of the said Act and yet the Recovery Officer the respondent no. 2 in disregard of the provisions of section 8-B of the Act rushed to arrest the petitioner and detain him in civil prison. -3- 6. Learned Advocate Mr. Singh for the respondents submitted that the property referred to by the petitioner i.e property available for attachment and sale as per provisions of section 8-B (1 )sub clause (a) of the Act, has been mortgaged to the Corporation Bank and there have been dealings of sale of flats in the said building to third party, and this has prompted the recovery officer to go ahead with the arrest and detention of the petitioner in prison by taking recourse to mode of recovery of the dues under section 8-B (1 )sub clause (b) of the said Act. 7. Learned Advocate Mr. Sardessai for the petitioner invited the attention of this Court to the provisions of Sub section 2 of section 11 of the Act and the judgment in case of Janata Sahakari Bank Ltd Versus Asst. Provident Fund Commer and Recovery Officer and ors dated 23.6.2005 passed by the Division Bench of this Court sitting at Bombay in Writ Petition no. 639/2005 interpreting the said provision Sub section 2 of section 11 of the Act in clear unequivocal terms confers precedence to the dues of any kind under the said Act from any employer over every kind of debt and declares such dues to constitute first charge on the assets of the establishment notwithstanding anything contained in any other law for the time being in force. Similar issue as in the present case arose in the case of Janata Sahakari Bank Ltd( Supra), and the Division Bench of this Court considering the nature of EPF & MP Act, as beneficial legislation was of the view that sub section 2 of section 11 -4- deals with the types of priories other than those in sub section (1) of section 11 of EPF & MP Act and declares the dues under the said Act to be first charge on the assets of the establishment. 8. Considering this position of law it can be seen that irrespective of whether the property referred to in this petition is mortgaged to any other institute or any other person, or whether any of its portion is agreed to be sold, or not, any dues under the EPF & MP Act, 1952 shall constitute first charge on the said property. This position of law ensures the recovery of dues under the said Act by the first mode under section 8-B sub clause (1) sub clause (a) of the said Act. Proviso to the sub section (1) of section 8-B of the Act in clear terms stipulates that the attachment and sale of any property under this section shall be first be effected against the properties of the establishment and where such attachment and sale is insufficient for recovery of the whole of the amount of arrears specified in the certificate, the recovery officer may take such proceedings against the property of the employer for recovery of the whole or any part of such arrears. 9. Referring to the judgment in the case of Regional Provident Fund Commissioner Versus Deccan Foam Plastics Pvt. Ltd., reported in 2005 1 CLR 793 passed by the Division Bench of the Andhra Pradesh High Court, the learned Advocate Mr. Sardessai submitted that the said proviso cannot be read in isolation but is to be read alongwith section 8- -5- B (1) sub clauses (a), (b) and (c ) of the Act. While expounding the law on the subject the Honble Division Bench of Andhra Pradesh High Court observed thus:- Para 11:- In our considered opinion, the submission is misconceived and we are not inclined to read the provision in the manner suggested by the learned Standing counsel. Under section 8-B of the Act even the movable and immovable properties of the employer cannot be attached and sold for the purposes of realization of the arrears without first exhausting the remedy of attaching and bringing the properties of the establishment for sale and, if that is so, it would be absurd to hold that employer can be arrested for the purpose of sending him to imprisonment without even finding whether the attachment and sale of the properties of establishment for realization of the arrears is sufficient or not. Para 12:- It is for that reason, this Court took the view that the arrest of the employer and his detention in prison cannot at all be made in view of the proviso to section 8-B(1) of the Act without -6- exhausting the remedy of attachment and sale of properties of establishment for realization of amounts of arrears. The proviso cannot read in isolation but is to be read along with sect 8-B(1) (a), (b), (c) of the Act. It is no doubt true that the Punjab and Haryana High Court took the view holding that nothing in section 8-B(1) and other provisions of the Act prevents Recovery Officer to adopt the method specified in clause(b) of section 8-B(1) of the Act before exhausting the other modes of recovery. Such an interpretation in our considered opinion causes hardship and inconvenience. It is settled rule of interpretation that no statutory provision can be read in such a manner, which results in hardship and inconvenience. 10. There is no reason to depart from interpretation section of 8- B of the Act as expressed in Deccan Foam Plastics Pvt. Ltd case (Supra). Admittedly, there is no material before this Court to suggest that the Recovering Officer could not recover the amount due under the said Act by resorting to mode prescribed under the sub clause (a) of 1 clause 8-B of the said Act and had therefore to resort to next coercive mode of recovery by keeping the employer in detention. Hence the Order. -7- 11. Detention Order dated 14.12.2009 passed by the respondent no. 2 is set aside with no Order as to costs. However, it is open to the respondent to attach and sale the said property or any other property of the employer establishments and to take such other steps for recovery of the dues in accordance with law. 12. Rule is made absolute in terms of said Order. Authenticated copy of this Order to be furnished to the petitioner. U. D. Salvi, J. vn*