1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.4894 OF 1993 Abhyudaya Co-operative Bank Ltd. ...Petitioner. Vs. Manjit Singh. ...Respondent. .... Mrs.Meena Doshi for the Petitioner. None for the Respondent. ..... CORAM :DR.D.Y.CHANDRACHUD, J. June 23, 2008. P.C.: The Petitioner is a Co-operative Bank. The challenge in these proceedings is to an order dated 23rd August 1993 passed by the Regional Provident Fund Commissioner claiming damages in the amount of Rs.1,47,815/-. The petition was originally filed by the Poona Contractors' Co-operative Bank Ltd. (renamed as Citizens' Co-operative Bank Ltd. 2 since 1997) and in pursuance of an order passed by the Commissioner for Co-operation, the original Petitioner came to be amalgamated with the Abhyudaya Co-operative Bank Ltd. The transferee Bank has been brought on record by an amendment of pleadings. The case of the Petitioner is that the transferor Bank had less than 50 employees prior to 1982 and was, therefore, not covered under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Bank, however, is stated to have had its own Provident Fund Scheme and continued to deduct contributions from its employees. These contributions were deposited with the District Central Co-operative Bank Ltd. together with the contribution of the Bank. This arrangement continued until 1987. Thereafter, it has been stated, even after the number of employees increased, the Bank at no time withdrew any part of the money which was deposited with the District Central Co-operative Bank. In 1987, an Inspector appointed under the Act visited the Bank after which, a report was made and a Code number was alloted to the Bank in 1988. It has been averred that after the allotment of the Code, the Bank has 3 been regularly making payment of the P.F. Contribution to the office of the Regional Provident Fund Commissioner without default. It has also been averred that after the allotment of the Code number, the P.F. contribution that was accumulated in the account maintained in the District Central Co-operative Bank was transferred to the office of the Regional Provident Fund Commissioner along with interest which had accrued on the amount. It has been stated that no withdrawals were ever made, nor were the amounts of interest ever used by the Bank. The Bank is also stated to have deposited administrative charges for the period upto June 1982 with the office of the Provident Fund Commissioner. An enquiry was commenced under Section 7A in respect of the coverage of the Bank. In pursuance of the enquiry it was held that the Bank was covered under the provisions of the Act and a code number was allotted. On 20th June 1989, a show cause notice was issued to the Bank to explain why damages should not be levied under Section 14-B. The damages which were sought to be levied 4 were for the alleged defaults made by the Bank for the period July 1982 to October 1987. The notice to show cause resulted in the impugned order dated 23rd August 1993 by which damages of Rs.1,47,815/- came to be levied. The petition was admitted by an order dated 8th December 1993 and interim relief was granted subject to a condition of deposit of the amount of damages. On 9th December 1997, an order was passed for the investment of the amount in a fixed deposit of a Nationalized Bank. This Court has been informed that the amount as directed in the interim order has been deposited and invested. It has been urged on behalf of the Petitioner that in pursuance of the notice to show cause, correspondence was exchanged and the documents on which the Petitioner relied upon were as follows : 1. Proforma for intimation of coverage of establishment under the Act dated 18-3-1987; 2. Letter dated 2nd August 1988 addressed to the Respondent in respect of the past accumulations of P.F. 5 Contributions together with a summary statement showing the total accumulation together with interest; 3. The challan of the State Bank of India showing the amount paid into the P.F. Account on 30th July 1988; 4. A certificate issued by the District Central Co- operative Bank dated 11th July 1989 in respect of the fixed deposits invested by the Bank with the District Central Co- operative Bank; 5. A letter dated 16th August 1989 addressed by the Petitioner to the Respondent in respect of deposit made by the Petitioner of the interest amount by cheque into the P.F. Account; and 6. A letter dated 20th September 1989 in respect of the administrative charges deposited by the Petitioner into the P.F. Account for the period commencing from June 1982. It has been urged on behalf of the Petitioner that the order claiming damages is ex-facie erroneous and without jurisdiction. It has been submitted that the Petitioner has maintained a separate Bank Account into which a regular deposit has been made of P.F. Contribution representing the share of the employees and the employer. Moreover, it has been submitted that no withdrawal has been made 6 therefrom and no interest amount was ever utilized. Consequently, it was submitted that there was no delay or default on the part of the Petitioner for the period prior to 1982 or even thereafter. No part of the contributions was utilized by the Petitioner for conducting its banking business. Reliance is placed on the judgment of a Division Bench of this Court in Abhijat Samayadarshika (Maharashtra) Ltd. vs. Union of India.1 No reply has been filed to these proceedings on behalf of the Respondent. The averments of the Petitioner and the documents produced on record have remained to be challenged or controverted. The documentary material which has been relied upon by the Petitioner, as noted above, includes a letter dated 2nd August 1988 addressed to the RPFC furnishing a statement of the details of the past accumulation with interest as on 30th June 1982. The total undistributed amount was Rs.1,02,273/- which was deposited in the Employees' Provident Fund under a challan of the State Bank of India, a copy of which has been produced on the record. The District Central Co-operative Bank issued a certificate dated 11th July 1989 1 1999-III LLJ (Supp) 144 7 showing the investment of the P.F. Contribution in a Fixed Deposit Account. On 16th August 1989, the Bank had intimated to the Regional Provident Fund Commissioner that it had deposited the entire interest amount of Rs.1,89,624.96 by cheque. By a further letter dated 20th September 1989, the Bank has also stated that it has also deposited the administrative charges from the month of June 1982. Having regard to the aforesaid material which is, as noted above, has remained to be controverted, there is merit in the contention that no case was made out for the exercise of the jurisdiction by the Respondent to levy damages under Section 14-B. The impugned order of the Respondent has been passed almost mechanically without application of mind. The Petition will have to be allowed and is accordingly allowed. Rule is made absolute in terms of prayer clause (a). In the circumstances, the Petitioner will be entitled to a refund of the amount deposited in this Court in pursuance of the interim order dated 8th December 1993 together with the accrued 8 interest, if any, thereon. In the circumstances of the case, there shall be no order as to costs. .....