IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR FRIDAY, THE 14TH MARCH 2008 / 24TH PHALGUNA 1929 OP.No. 373 of 2000(T) ------------------------------ PETITIONERS: --------------------- 1. MYTHEEN KANNU LIYAKATH, SANU DALE, KANAKAVILA PUTHEN VEEDU, BEACH NORTH WARD, PALLITHOTTAM.P.O., KOLLAM - 691 006. 2. KHAMARUNISSA LIYAKATH, -DO- -DO-. BY ADV. SRI.S.SANTHOSH KUMAR. RESPONDENTS: ------------------------ 1. CENTRAL PROVIDENT FUND COMMISSIONER, E.P.F. ORGANISATION, 9TH FLOOR, MAYOOR BHAVAN, CONNAUGHT CIRCLE, NEW DELHI. 2. THE REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUNDS, BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM - 695 004. 3. ASSISTANT PROVIDENT FUND COMMISSIONER, OFFICE OF THE REGIONAL COMMISSIONER, EMPLOYEES PROVIDENT FUNDS, BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM - 695 004. 4. ENFORCEMENT OFFICER, O/O. ENFORCEMENT OFFICER, EMPLOYEES PROVIDENT FUNDS, CENTRAL SQUAD (SOUTH ZONE), TRIVANDRUM DIVISION, BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM - 695 004. O.P. NO. 373/2000-T: 5. RECOVERY OFFICER, (KERALA, LAKSHADWEEP & MAHI), EMPLOYEES PROVIDENT FUNDS, BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM - 695 004. 6. MOHANACHANDRAN, PROPRIETOR, PRASANTHI CASHEW COMPANY, MANGAD, KOLLAM. 7. JAMALUDEEN, NEW MANZIL, BEACH NORTH, KOLLAM - 691 006. BY ADV. SRI.N.N.SUGUNAPALAN (SR.) SRI.SANTHARAM.V., ADDL.CGSC. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 14/03/2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON C.M.P. NOS. 608/2000 & 15374/2000 IN O.P. NO. 373/2000-T DISMISSED 14/03/2008. SD/- T.R.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS : EXT.P.1: COPY OF THE SALE DEED DTD. 28/04/1999. EXT.P.2: COPY OF THE POSSESSION AND NON-ATTACHMENT CERTIFICATE DT. 14/05/99 ISSUED BY THE TAHSILDAR, SASTHAMCOTTA. EXT.P.3: COPY OF THE COMMUNICATION DT. 20/05/99 ISSUED BY THE REGIONAL PROVIDENT FUND COMMISSIONER TO MOHANACHANDRAN, PROPRIETOR, PRASANTHI CASHEW COMPANY. EXT.P.4: COPY OF THE ORDER DTD. 24/05/99 ISSUED BY THE RECOVERY OFFICER. EXT.P.5: COPY OF THE COMMUNICATION DTD. 02/12/1999 ISSUED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER. EXT.P.6: COPY OF THE LETTER DTD. 06/05/1996 SENT BY THE PROPRIETOR OF NUTS INDIA EXPORTS TO THE ASSISTANT PROVIDENT FUND COMMISSIONER. EXT.P.7: COPY OF THE CERTIFICATE ISSUED BY THE ASSISTANT ENGINEER, ELECTRICAL MAJOR SECTION, SOORANADU. EXT.P.8: COPY OF THE REPRESENTATION DT. 31/12/1999 SUBMITTED BY THE PETITIONER'S TO RESPONDENTS 2 AND 3. EXT.P.9: COPY OF THE CHALAN EVIDENCING PAYMENT OF PROVIDENT FUND CONTRIBUTION REMITTED BY THE PETITIONERS ON 14/03/2000. EXT.P.10: COPY OF THE ANNUAL STATEMENT OF ACCOUNTS FOR THE PERIOD 1993-94. EXT.P.11: COPY OF THE ANNUAL STATEMENT OF ACCOUNTS FOR THE PERIOD 1994-95. EXT.P.12: COPY OF THE ANNUAL STATEMENT OF ACCOUNTS FOR THE PERIOD 1995-96. EXT.P.13: COPY OF THE ANNUAL STATEMENT OF ACOUNTS FOR THE PERIOD 1996-97. EXT.P.14: COPY OF THE ANNUAL STATEMENT OF ACCOUNTS FOR THE PERIOD 1997-98. EXT.P.15: COPY OF THE ANNUAL STATEMENT OF ACCOUNTS FOR THE PERIOD 1998-99. O.P. NO. 373/2000-T: EXT.P.16: COPY OF THE ANNUAL STATEMENT OF ACCOUNTS FOR THE PERIOD 1999- 2000. EXT.P.17: COPY OF THE CERTIFICATE DTD. 17/05/2000 ISSUED BY THE INSPECTOR OF FACTORIES & BOILERS(CASHEW), KOLLAM. EXT.P.18: COPY OF THE INDEMNITY BOND DTD. 25/07/2001 EXECUTED BY THE P.1. EXT.P.19: COPY OF THE COMMUNICATION DTD. 24/07/2001 ISSUED BY THE R.5. EXT.P.20: COPY OF THE COMMUNICATION DTD. 22/10/2001 ISSUED TO THE P.2. BY THE KERALA FINANCIAL CORPORATION. RESPONDENT'S EXHIBITS: EXT.R4.A: COPY OF THE ORDER NO. KR/10005/ENF.II (4)/96/8403-A DTD. 18/03/1996 ISSUED BY THE R.3. EXT.R4.B: COPY OF THE LETTER NO. KR/10005/EO/CKT/99 DTD. 29/10/1999 SENT BY THE AREA ENFORCEMENT OFFICER. //TRUE COPY// prv. T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - O.P.NO.373 of 2000-T - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 14th day of March, 2008. JUDGMENT As per Ext.P1 sale deed, the petitioner had purchased a cashew factory and pursuant to the said sale deed dated 28.4.1999, he was put in possession of the factory on 1.1.2000. The issue in this case relates to the liability of the establishment towards Employees Provident Fund contribution for the period 6/1992 to 7/1995. It is seen that the establishment was originally run by one Shaji Musaliyar and by successive transfers the petitioner purchased it, as noted above. In between, it was under one S. Shihabudeen, one S. Kamaluddin, one Jamaludeen and one Mohanachandran who were the respective transferees Except Mohanachandran, all others were owning the establishment and Mohanachandran was conducting it on a lease arrangement. The last mentioned person was in possession of the factory till 25.12.1999. 2. The petitioner has produced Exts.P3 and P4 which are communications issued to the previous occupiers, viz. Mohanachandran and Jamaludeen, showing the balance amount due. After the petitioner came into possession of the establishment, he filed a detailed representation by OP 373/2000 -2- way of Ext.P8 seeking to review the order passed under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act and to forbear from taking coercive steps in the matter. It is contended by the petitioner that the arrears are for the period between 6/1992 to 7/1995 and the previous owners also are liable for the amount and steps have not been taken to realise any amount from them. Accordingly, contention taken is that the petitioners are not liable to pay the provident fund arrears for the period the cashew factory was conducted by the previous owners. 3. In C.M.P.No.877/2002, this court had passed an order on 14.1.2002 in the following terms: “The petitioners allege fraud and collusion in the transaction entered into by the 6th and 7th respondents, including the 4th respondent. The arrears in respect of the establishment is for the period 6/92 to 7/95. The transfer is on 28.4.1999 and the petitioner was put in possession on 1.1.2000. In spite of service of notice, there is no appearance on behalf of respondents 6 and 7. There will be a direction to the 4th and 5th respondents to file an affidavit as to the steps taken during the period 6/92 to 7/95 and thereafter for realisation of the alleged arrears of contribution for the said period. The affidavit shall be filed within a period of one month from today. The petitioner will produce a copy of this order before the 4th and 5th respondents.” 4. Pursuant to the same, an affidavit has been filed on behalf of respondents 4 and 5. Along with the affidavit Ext.R4(a) order dated 18.3.1996 has been produced which has been passed under Section 7A of OP 373/2000 -3- the Act directing one Kamaludeen, the proprietor of the establishment, to remit Rs.3,99,692.20 towards dues for the period 6/1992 to 7/1995. It is mentioned that by Ext.R4(b), a letter was sent to Mr. Mohanachandran Nair as per Section 17B of the Act demanding the amount and thereafter revenue recovery steps were taken in view of the non payment of the amount. Rs.25,000/- was remitted on 17.10.1997 and Rs.80,746/- was remitted on 12.12.1997. The balance amount outstanding is Rs.2,93,946.20. It is contended that as the liability is joint and several, the petitioner is bound to remit the amount. 5. Therefore, it is clear from the affidavit that during the period 6/1992 to 7/1995 and after Ext.R4(a) order was issued, the proceedings for recovery were taken only against Mr. Mohanachandran. Learned counsel for the petitioner therefore submits that the action of the authority in not taking action against the other previous owners is not correct. 5. Learned Standing Counsel for the respondents points out that in Ext.P7, the petitioner has submitted that during the period 3/95 to 9/97 the establishment was not functioning in view of disconnection of the electricity. The petitioner has sought review of the orders on various grounds. Even though it is submitted by the learned Standing Counsel that the authority has absolute discretion in the matter, it is well settled that OP 373/2000 -4- discretion vested with a statutory authority, has to be exercised reasonably and fairly and not capriciously or arbitrarily. Any way, since the matter is pending before respondents 2 and 3, it is upto them to consider the various contentions raised in Ext.P8 and pass appropriate orders. Learned counsel for the petitioner stressed one more aspect that the absence of any steps against the previous owners resulted in mounting of arrears. Any way, it is a matter for respondents 2 and 3 to consider while considering the application for review. The petitioner will be allowed to appear in person or through a representative by the competent authority, before an order is passed on Ext.P8 on its merits. Till orders are passed on Ext.P8, coercive steps against the petitioner will be kept in abeyance. Appropriate orders shall be passed as expeditiously as possible. The original petition is disposed of as above. (T.R. Ramachandran Nair, Judge.) kav/ OP 373/2000 -5- T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - O.P. No.373 of 2000-T - - - - - - - - - - - - - - - - - - - - - - JUDGMENT 14th March, 2008.