1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CIVIL JURISDICTION WRIT PETITION NO. 6825 OF 2005 WITH CIVIL APPLICATION NO. 3062 OF 2009 WITH WRIT PETITION NO. 730 OF 2004 WITH WRIT PETITION NO. 734 OF 2004 WITH WRIT PETITION NO. 735 OF 2004 WITH WRIT PETITION NO. 736 OF 2004 WITH WRIT PETITION NO. 745 OF 2004 WITH WRIT PETITION NO. 3413 OF 2005 WITH WRIT PETITION NO. 4575 OF 2008 WITH WRIT PETITION NO. 5258 OF 2003 WITH CIVIL APPLICATION NO. 2432 OF 2004 AND CIVIL APPLICATION NO. 2567 OF 2007 WITH WRIT PETITION NO. 5835 OF 2008 WITH CIVIL APPLICATION NO. 236 OF 2010 WITH WRIT PETITION NO. 6820 OF 2005 WITH CIVIL APPLICATION NO. 3063 OF 2009 WITH WRIT PETITION NO. 6821 OF 2005 WITH WRIT PETITION NO. 6823 OF 2005 WITH WRIT PETITION NO. 6824 OF 2005 WITH CIVIL APPLICATION NO. 2739 OF 2006 AND CIVIL APPLICATION NO. 49 OF 2010 WITH WRIT PETITION NO. 6826 OF 2005 2 WITH WRIT PETITION NO. 6827 OF 2005 WITH CIVIL APPLICATION NO. 3066 OF 2009 WITH WRIT PETITION NO. 6828 OF 2005 WITH CIVIL APPLICATION NO. 3065 OF 2009 WITH WRIT PETITION NO. 9208 OF 2003 WITH WRIT PETITION NO. 10103 OF 2004 WITH CIVIL APPLICATION NO. 2362 OF 2008 WITH LETTERS PATENT APPEAL NO. 27 OF 2004 WITH LETTERS PATENT APPEAL NO. 28 OF 2004 WITH LETTERS PATENT APPEAL NO. 29 OF 2004 WITH LETTERS PATENT APPEAL NO. 30 OF 2004 WITH WRIT PETITION NO. 10493 OF 2004 WITH CIVIL APPLICATION NO. 28 OF 2006 The Maharashtra State Co-op. Bank Ltd. ... Petitioner. V/s. The Assistant Provident Fund Commissioner & Recovery Office & Ors. ... Respondents. Mr. Vijay Thorat, Sr. Counsel with Mr. Vaibhav Sugdare and Ms. Prachi Tatake for the Petitioner in WP 6828/05, 6827/05, 6821/05, 6824/05 and 6820/05 and i L.P.A.27/05, 28/05 and 30/05. Mr. Umesh Mankapure for the Petitioner in WP2848/09. Mr. Vijay Patil for the Petitioner in WP 3413/05. Ms. Varsha Palav for the Petitioner in WP5835/08 with CA236/10. Mr. A.Y. Sakhare, Sr. Counsel for the Petitioner in WP 10103/04 with CA 2362/08. Mr. R.M. Pethe for the Applicant in CAW 138/09. Ms. Suchitra Kambli h/w. Mr. Suresh Kumar for the 3 Respondent. Mr. R.M. Patne, AGP for the State. Mr. S.U. Bharucha for Respondent Nos.2,3,4 and 5. in WP 9208/03. Mr. Uday Warunjikar for the Petitioner. Mr. Umesh Mankapure for Respondent No.4. Mr. Suresh Kumar for Union of India. CORAM : ANIL R. DAVE, C.J. & S.C. DHARMADHIKARI,J. JUDGMENT RESERVED ON : 10th MARCH 2010. JUDGMENT PRONOUNCED ON : 7th APRIL 2010. ORAL JUDGMENT :- These Petitions have been placed before us pursuant to an application made by the Provident Fund Commissioner. The Provident Fund Commissioner has stated that the controversy in these petitions is covered by a Judgment of the Hon’ble Supreme Court reported in (2009) 10 SCC 123 (Maharashtra State Co-op. Bank Ltd. V/s. Assistant Provident Fund Commissioner & Ors.). He submits that the Appellant before the Hon’ble Supreme Court and before this Court is identical. Further, even the Respondent and other parties are identical. 2. With the consent of the parties, each of these Petitions are taken up for hearing and final disposal. 4 3. The Maharashtra State Co-operative Bank had filed these Petitions contending that the action of the Assistant Provident Fund Commissioner and Recovery Officer, under Section 8(B) and (2) of the Employees’ Provident Fund and Misc. Provisions Act, 1952 is bad in law because the Respondent sugar factories had for manufacturing sugar borrowed monies from the Petitioner. The sugar factories pledged stocks of sugar with the Petitioner Bank. The pledged sugar is the property of the Petitioner. It is against this pledge and other security that they had advanced various amounts to the sugar factories. Therefore, if there was a default in payment of the monies due and payable to the Petitioner, then, under the pledge, the Petitioner was authorized to sell the stocks of sugar. If Respondent No.1 is a statutory authority and it has to recover amounts due and payable under the Employees’ Provident Fund Act, 1952 for which it has initiated recovery proceedings and measures, then, the rights to execute and enforce these orders would not mean that the pledged goods can be attached and seized by the Provident Fund Authorities. All their acts in that behalf are illegal and violative of the mandate of Article 14 of the 5 Constitution of India. 4. It has been contended by Mr. Thorat, learned Senior Counsel appearing on behalf of some of the Petitioners so also Mr. Sakhare, learned Senior Counsel appearing in other Petitions that the Judgment of the Hon’ble Supreme Court (Supra) which has been relied upon is per-incuriam. In the Appeals filed in the Supreme Court from an order passed by this Court, it was directed by this Court to sell the sugar jointly and the amount of sale proceeds was to be deposited in this Court. Thereafter, this Court permitted withdrawal of the amount by the Provident Fund Authority and therefore, the matter was carried to the Hon’ble Supreme Court. In the Judgment delivered by the Hon’ble Supreme Court, it is only these peculiar facts which have been considered and therefore, the larger issue could not have been decided and considered. There was no proper adjudication and therefore, the Judgment is not binding on this Court. 5. It was then contended that the Hon’ble Apex Court has decided the said Civil Appeal by interpreting the Pledge Deed alone, which was produced before it. However, neither Pledge 6 Deed was adjudicated by this Hon’ble High Court as Petition is pending, nor necessary documents were placed in that case before this Hon’ble High Court, which passed interim order on Civil Application, nor the said decision given is on the basis of all the relevant facts and documents and provisions of law being placed before either this Hon’ble High Court when the order passed in the Civil Application or by the Hon’ble Apex Court and therefore, the said judgment is in the peculiar facts of the said case of Kannad Sahakari Sakhar Karkhana Ltd. and therefore, is per-incuriam. In the said Judgment, Pledge Deed alone has been interpreted without considering the fact that the said Godowns are mortgaged with the Petitioner – Bank and as per the Mortgage Deed, every manufacturer namely respondent No.3 had to maintain the repair and insure the said Godowns. Therefore, in the said Pledge Deed, the said clauses are incorporated that doesn’t mean that the said Godowns are under the Control of Respondent No.3 – Sugar Factory. But, on the contrary, it was not pointed out to the Hon’ble Apex Court that, there is a B.R.I.O. appointed in each factory a employee of Petitioner – Bank and posted by the Petitioner – Bank for each Sugar Factory like the Respondent 7 No.3. The Petitioner states that, accordingly, Respondent No.3 – Sugar Factory has issued a Certificate on 03.11.2009. Thus, the Sugar and godowns are exclusively in the possession of petitioner – Bank through its B.R.I.O. who has lock and keys of the said godowns. One set of key as per the rules is kept with Petitioner – Bank and it is his duty, as prescribed by the Rules, to keep the custody of said sugar, which is pledged with the Petitioner – Bank. Therefore, the Petitioner – Bank has exclusive custody of the said sugar and Respondent No.3 – Sugar Factory has no concern whatsoever with the said sugar. Therefore, as per the Pledge Deed, the Petitioner – Bank alone is in exclusive possession of the said sugar through its B.R.I.O. The said B.R.I.O. submits daily report of stock of sugar in his possession, weekly report, fortnightly report and monthly report, which are only by way of illustration for the month of August 2009. Thus, the B.R.I.O. who is in exclusive possession of the sugar as well as godowns, which are pledged with the Petitioner – Bank. Therefore, it cannot be said that, possession of the Petitioner – Bank is only symbolic and not actual and physical. The Petitioner states that, all these facts were not placed before the Hon’ble Apex Court and without 8 placing these facts before the Hon’ble Apex, the above decision has been given. Therefore, the said decision is per- incuriam and applicable only to the case of said Kannad Sahakari Sakhar Karkhana Ltd. While deciding the said issue, the provisions of Essential Commodities Act, 1955, Sugarcane (Control) Order, 1966 and Sugar (Control) Order, 1966 are not considered for regulating the sub-demands, supply and price of the essential commodities like sugar, is enacted and object of the said act is in view of the provisions of Article 369 of the Constitution of India to control in the interest of general public, production, supply and distribution of certain essential commodities is to be regulated and therefore, the said Act has been enacted. The said Act was enacted with a view of Act providing in the interest of general public for the control of production, supply and distribution and trade & commerce in the certain commodities. Therefore, the provisions of Special Law i.e. E.C. Act were not considered in the case of Kannad Sahakari Sakhar Karkhana Ltd. by the Hon’ble Apex Court. 6. It was then contended that the action of the Provident Fund Authorities is malafide. They have been silent throughout. They have taken action only after 10 to 15 years 9 and when their dues is of 1994-95. In such circumstances, there is belated action and only when the Petitioner – Bank was enforcing its Pledge. Thus, it is malafide, arbitrary and they cannot be permitted to take advantage of their own wrong. A faint attempt was made to urge that the amendments made to the Essential Commodities Act have not been considered and therefore, the Supreme Court Judgment in (2009) 10 SCC 123 (Maharashtra State Co-op. Bank Ltd. V/s. Assistant Provident Fund Commissioner & Ors.) is per-incuriam and in any event not applicable to the facts of this case. 7. It was urged that the banking system and operation of co-operative sugar factories in the State of Maharashtra is peculiar and that also should be considered in these cases. 8. For all these reasons, Mr. Thorat submits that reliance by the Provident Fund Authorities on this Judgment is improper and this Court should decide the matters independently of the same. 9. We are unable to accept these contentions of the learned Senior Counsel. In the decision of the Hon’ble 10 Supreme Court in Maharashtra State Co-operative Bank V/s. Assistant Commissioner (Supra), the issue was whether the expression “all other debts” appearing in Section 11(1) and (2) of the Employees’ Provident Fund and Misc. Provisions Act, 1952 containing a priority clause would operate against statutory as well as non-statutory and secured as well as unsecured debts including the mortgages or pledges. That issue has been answered by the Supreme Court by holding that first charge created on assets of establishment by Section 11(2) and priority given to the amount due from employer would operate against all types of debt. 10. The Hon’ble Supreme Court held that the Provident Fund Authorities can proceed against pledged goods. Further, the Hon’ble Supreme Court held that the expression “any amount due from a employer” appearing in Section 11(2) is not confined to amount determined under Section 7-A or contribution payable under Section 8 but covers even interest payable under Section 7-Q, damages leviable under Section 14-B and accumulation required to be transferred under Section 15(2) of the Employees’ Provident Fund and Misc. Provisions Act, 1952. 11 11. In our opinion, a reading of the Supreme Court decision in this case would demonstrate that the questions raised before us are squarely covered and answered therein. In this behalf, reference can be made to the following observations in the Hon’ble Supreme Court decision :- “66. Section 11 gives statutory priority to the amount due from the employer vis-a-vis all other debts. Clause (a) of sub-section (1) of Section 11 is applicable to cases where an employer is adjudicated insolvent or, being a company, an order of its winding up is made. In that situation, the amount due from the employer in relation to an establishment to which any scheme or the Insurance Scheme applies in respect of any contribution payable to the Fund or, as the case may be, the Insurance Fund, damages recoverable under Section 14-B, accumulations required to be transferred under Section 15(2) or any other charges payable by him under any other provision of his Act or of any provision of the Scheme or the Insurance Scheme. Clause (b) is applicable to cases where the amount is due from the employer in relation to exempted establishment in respect of any contribution to the provident fund or any insurance fund insofar it relates to exempted employees under the rules of 12 provident fund or any insurance fund, any contribution payable by him towards the Pension Fund under Section 17(6), damages recoverable under Section 14-B or any charges payable by him to the appropriate Government under the Act or under any of the conditions specified in Section 17. This sub-section then lays down that such amount shall be paid in priority to all other debts in the distribution of the property of the insolvent or the assets of the company being wound up. Sub-section (2) lays down that any amount due from the employer whether in respect of the employees’ contribution deducted from the wages of the employee or the employer’s contribution shall be deemed to be the first charge on the assets of the establishment, and shall be paid in priority to all other debts. 67. The expression “any amount due from an employer” appearing in sub-section (2) of Section 11 has to be interpreted keeping in view the object of the Act and other provisions contained therein including sub-section (1) of Section 11 and Sections 7-A, 7-Q, 14-B and 15(2) which provide for determination of the dues payable by the employer, liability of the employer to pay interest in case the payment of the amount due is delayed and also pay damages, if there is default in making contribution 13 to the Fund. If any amount payable by the employer becomes due and the same is not paid within the stipulated time, then the employer is required to pay interest in terms of the mandate of Section 7-Q. Likewise, default on the employer’s part to pay any contribution to the Fund can visit him with the consequence of levy of damages. 68. As mentioned earlier, sub-section (2) was inserted in Section 11 by Amendment Act 40 of 1973 with a view to ensure that payment of provident fund dues of the workers are not defeated by the prior claims of the secured and/or of the unsecured creditors. While enacting sub-section (2), the legislature was conscious of the fact that in terms of existing Section 11 priority has been given to the amount due from an employer in relation to an establishment to which any scheme or fund is applicable including damages recoverable under Section 14-B and accumulations required to be transferred under Section 15(2). The legislature was also aware that in case of delay the employer is statutorily responsible to pay interest in terms of Section 17. Therefore, there is no plausible reason to give a restricted meaning to the expression “any amount due from the employer” and confine it to the amount determined under Section 7-A or the contribution payable under Section 8. 14 69. If interest payable by the employer under Section 7-Q and damages leviable under Section 14(sic Section 14-B) are excluded from the ambit of expression “any amount due from an employer”, every employer will conveniently refrain from paying contribution to the Fund and other dues and resist the efforts of the authorities concerned to recover the dues as arrears of land revenue by contending that the movable or immovable property of the establishment is subject to other debts. Any such interpretation would frustrate the object of introducing the deeming provision and non obstante clause in Section 11(2). therefore, it is not possible to agree with the learned Senior Counsel for the appellant Bank that the amount of interest payable under Section 7-Q and damages leviable under Section 14-B do not form part of the amount due from an employer for the purpose of Section 11(2) of the Act.” 12. We are in agreement with Mr. Suresh Kumar, learned Advocate appearing for the Provident Fund Department that the decision in the case of the very Petitioner – Bank binds it and it would not be permissible for the Bank to now urge anything to the contrary. 15 13. Further, Mr. Thorat’s submissions overlook the principle that a binding decision of the Hon’ble Supreme Court cannot be brushed aside on the specious plea that a particular argument was not considered or some facet of the controversy has been not noticed by the Hon’ble Supreme Court. This is contrary to judicial discipline. The Supreme Court decision in the present case is binding on us. It will not be possible for us to hold that some argument that is canvassed before us by Mr. Thorat is not considered or some aspect of the controversy is not noticed in the Supreme Court decision. Far from holding that the decision is per-incuriam as urged, in our opinion, this decision concludes the controversy before us. We cannot now permit the Petitioners to argue that the decision is per-incuriam or that the entire facts including provisions of Essential Commodities Act were not placed or not noticed by the Hon’ble Supreme Court. 14. In the case of M/s. Fuerst Day Lawson Ltd. V/s. Jindal Exports Ltd. reported in AIR (2001) SC 2293 with regard to the binding effect of a Judgment of the Hon’ble Supreme Court, this is what is observed :- 16 “18. In Mamleshwar Prasad V/s. Kanhaiya Lal (Dead) through L.Rs., (1975) 2 SCC 232 : (AIR 1975 SC 907) reflecting on the principle of judgment per incuriam, in paras 7 and 8, this Court has stated thus :- “7. Certainly of the law, consistency of rulings and comity of Courts – all flowering from the same principle – converge to the conclusion that a decision once rendered must later bind like cases. We do not intend to detract from the rule that, in exceptional instances, where by obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have the sway of binding precedents. It should be a glaring case, an obtrusive omission. No such situation presents itself here and we do not embark on the principle of judgment per incuriam. 8. Finally it remains to be noticed that a prior decision of this Court on identical facts and law binds the Court on the same points in a later case. Here we have a decision admittedly rendered on facts and law, indistinguishably identical, and that ruling must bind.” 17 19. This Court in A.R. Antulay V/s. R.S. Nayak, (1988) 2 SCC 602 : (AIR 1988 SC 1531 : 1988 Cri. LJ 1661) in para 42 (of SCC) : (Para 44 of AIR Cri. LJ) has quoted the observations of Lord Goddard in Moore V/s. Hewitt, (1947) 2 All ER 270 and Penny V/s. Nicholas, (1950) 2 All ER 89 to the following effect :- “ per incuriam are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the Court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based, is found, on that account to be demonstrably wrong...............” 20. This Court in State of U.P. V/s. Synthetics & Chemicals Ltd. (1991) 4 SCC 139 in para 40 has observed thus :- “40. ‘Incuria’ literally means ‘carelessness’. In practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The ‘quotable in law’ is avoided and ignored if it is rendered. ‘in ignoratium of a statute or other binding authority’. (Young V/s. Bristol Aeroplane Co. Ltd.)......” 18 22. A prior decision of this Court on identical facts and law binds the Court on the same points of law in a latter case. This is not an exceptional case by inadvertence or oversight of any judgment or statutory provisions running counter to the reasons and result reached. Unless it is a glaring case of obtrusive omission, it is not desirable to depend on the principle of judgment ‘per incuriam’. It is also not shown that some part of the decision based on a reasoning which was demonstrably wrong, hence the principle of per incuriam cannot be applied.” 15. In another decision reported in AIR (2002) SC 1598, (Director of Settlements, A.P. and Ors. V/s. M.R. Apparao and Anr.) the Hon’ble Supreme Court observed thus :- “7. So far as the first question is concerned, Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts of two cases 19 may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole. In the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has ‘declared law’ it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An ‘obiter dictum’ as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a bind effect as a precedent, but it cannot be denied that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot 20 be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court. (See AIR 1970 SC 1002 and AIR 1973 SC 794). When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See 1984 (2) SCC 402 and 1984 (2) SCC 324).” 16. In such circumstances, we cannot accede to the submissions of Mr. Thorat and Mr Sakhare and hold that the controversy in each of these Petitions stands concluded by the decision of the Hon’ble Supreme Court reported in