1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD //UNREPORTED/ WRIT PETITION NO.1831 of 2009 Date of decision:28/7/2010 For approval and signature HON'BLE MR. JUSTICE R.K.DESHPANDE 1. Whether the Reporters of Local Papers Yes may be allowed to see the Judgment ? 2. To be referred to the Reporter or not ? No 3. Whether Their Lordships wish to see No. the fair copy of the Judgment ? 4. Whether this case involves a substantial? No. question of law as to the interpretation of the Constitution of India, 1950, or any order made thereunder ? 5. Whether it is to be circulated to the No. Civil Judges ? 6. Whether the case involves an important No question of law and whether a copy of the Order should be sent to Bombay, Goa and Nagpur Office ? (A.G. PARALIKAR) Private Secretary agp/office/1831-09wp 2 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.1831 OF 2009 The Jalgaon District Central Co-operative Bank, Through its Manager ( Loan Recovery) Prakash s/o Baburao Patil, Age: 56 years, Occ: Service, R/o. C/o. Jalgaon District Central Cooperative Bank Ltd., Jalgaon, 27, Ring Road, Tq. and Dist. Jalgaon. ...PETITIONER VERSUS 1. The Assistant Provident Funds Commissioner/Recovery Officer (SRO), Employees Provident Funds Organization, Sub Regional Office, E-11, Bhavishya Nidhi Bhavan, MIDC Area,Satpur, Nashik 422 007. 2. Belganga Sahakari Sakhar Karkhana Ltd., Through its Chairman/Managing Director, Bhoras, Tq. Chalisgaon, Dist. Jalgaon. 3. The Union of India, Through its Principal Secretary Ministry of Consumer Affairs, Food and Public Distribution, Department of Food and Public Distribution, Krishi Bhavan, New Delhi 110 001. 4. The Chief Director of Sugar, Department of Food and Public Distribution, Krishi Bhavan, New Delhi 110001 3 5. The Commissioner of Sugar, State of Maharashtra, Pune. 6. The State of Maharashtra, Through its Principal Secretary, Department of Cooperation, Mantralaya, Mumbai 32. ...RESPONDENTS ... Mr. A.V.Deshmukh, Adv., for the petitioner. Mr. D.R.Kale, A.G.P., for respondent State. Mr. K.B.Choudhari, Adv., for R.1. Mr. Mr.V.J.Dixit, Senior Advocate, assisted by Mr.L.V.Sangit, Adv., for respondent no.2. Mr.Ruturaj Patil, Adv., for respondent Nos. 3 and 4, absent. ... CORAM: R.K.DESHPANDE, J. DATE :28/7/2010 *** ORAL JUDGMENT: 1. Heard. Rule, made returnable forthwith. Heard finally with the consent of parties. 2. This Writ Petition is preferred by the petitioner Bank, challenging the notice of attachment of moveable and immoveable properties of respondent no.2 Belganga Sahakari Sakhar 4 Karkhana Ltd., the panchnama for attachment, the advertisement for sale of the moveable property in the form of Sugar bags, containing the sugar manufactured by respondent no.2 Sugar factory. All these notices and orders are dt.11.2.2009, 12.2.2009, 2.3.2009, 20.3.2009, the advertisements are dt.23.3.2009 and 28.3.2009. 3. Notices in this matter were issued on 30.3.2009 and an order of status quo was passed. Subsequently, this Court passed an order on 21.1.2010 on Civil Application No.9065/2009 filed by the Petitioner Bank for sale of stock of sugar by public auction. The said application was allowed and an order was passed, which is reproduced below: "1. Heard learned counsel. 2. The sugar stock is pledged with the petitioner-bank and has been attached. The sugar stock is not yet sold. In the meanwhile, the Asstt. Provident Fund Commissioner has issued attachment warrant. According to the Assistant Provident Fund Commissioner, the workers provident fund amounts are to be recovered on priority basis and, therefore, the sugar stock can not be sold for the 5 recoveries of money due to the Bank. 3. The admitted position is that the sugar stock is lying and is required to be sold in order to avoid loss because of moisture and other adverse factors which are likely to cause perishment. 4. Presently the sugar stock is lying in the godown of the sugar factory though the Bank has control over the same. Considering the nature of dispute involved, the Respondent No.5 - Commissioner of Sugar shall sell the sugar stock by public auction by following necessary procedure and shall deposit the entire amount in this Court. The Public Auction sale shall be carried out within four (4) weeks and the amount shall be deposited within two (2) weeks thereafter. The question regarding disbursement of the amount will be considered thereafter. C.A.No.9065/2009 is disposed of accordingly. 5. The parties may act on authenticated copy." 6 4. Pursuant to the sale of sugar stock, an amount of Rs.1,06,96,317/- (One crore, Six lacs, ninety six thousand, three hundred seventeen) was deposited in this Court on 24.3.2010 and its disbursement was ordered to be considered at the time of disposal of the petition. Thus, the said amount is lying in deposit made in this writ petition. 5. The petitioner Bank had filed Writ Petition No.5489/2010 challenging the prohibitory order dt.28th of March, 2008, passed under Section 8-F of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 ( EPF Act, for short), asking the petitioner Bank to remit a sum of Rs.76,34,695/- by the Assistant Provident Fund Commissioner ( Recovery), Sub Regional Office, Nashik. The petitioner Bank was further directed not to discharge any liability after receipt of prohibitory order dt.28th of March, 2008. Subsequently, show cause notice dt.18th June, 2008, was also issued by the Assistant Provident Fund Commissioner, asking the petitioner Bank as to why an amount of Rs.56.02 lacs should not be recovered from the petitioner Bank towards the dues of Provident Fund payable by respondent no.2 society in accordance with the provisions of EPF Act for the period from Feb., 1997 to June, 2009 and as to why the petitioner Bank should not be treated as an employer in 7 default in terms of clause (x) of sub-section (3) of Section 8-F of the EPF Act. This prohibitory order and the show cause notice both were the subject matter of challenge in the aforesaid writ petition. This Court has decided the said writ petition by judgment and order dt.22nd July, 2010. The petition has been dismissed granting liberty to the petitioner Bank to reply to the show cause notice issued by the Assistant Provident Fund Commissioner and to raise all such defenses as are available to it in law. 6. The order of attachment of property which is impugned in this petition, can be issued or passed by the Assistant Provident Fund Commissioner only upon recording a finding that the petitioner Bank is deemed to be "an employer in default" in the proceedings of show cause under clause (x) of sub-section (3) of Section - 8-F of the EPF Act. Since this Court has dismissed Writ Petition No.5489/2008, holding that the petitioner Bank is entitled to show cause in response to show cause notice dt.18th of June, 2008, the said proceedings shall be taken up and continued by the competent authority under the EPF Act. The learned Counsel for the petitioner has urged that the attachment in question is for recovery of Provident Fund dues for the period from Feb.,1997, to June, 2009. The same is, therefore, covered by proceedings of 8 show cause notice dt.18th of June, 2008, which are pending before the competent authority under the EPF Act. In view of this, the order of attachment and the amount which has been deposited in this Court, upon sale of the stock of sugar, shall be subject to the outcome of the proceedings of show cause which are pending. If the petitioner wants to advance some additional submissions in the proceedings of show cause, then the same can be submitted to the concerned authority within a period of three weeks from today which shall be considered by the competent authority. Although several points are raised in this petition, this Court is not inclined to go into the merits of all those points and it is left open for the competent authority under the EPF Act to consider the same and pass appropriate orders in accordance with law. 7. So far as the amount of - Rs.1,06,96,317/- (Rs.one crore, six lacs, ninety six thousand, three hundred and seventeen only) deposited in this Court is concerned, the same shall be paid to the respondent no.1, who shall hold the said amount in trust, in a separate account, subject to outcome of the proceedings of show cause. The Registry is, therefore, directed to remit the said amount to respondent no.1. 9 8. Shri V.J.Dixit, learned Senior Advocate, assisted by Mr.L.V.Sangeet, learned Counsel appearing for respondent no.2 society i.e. sugar factory, has urged that the said factory is being run on lease by respondent no.2 from the petitioner Bank in terms of the lease agreement dt.11.4.2007. He submits that, in terms of the said agreement, respondent no.2 is required to pay an amount of Rs.2.5 crores per year to the petitioner Bank. The Sugar factory, which was closed down, commenced its activities w.e.f. 1.11.2007. He submits that, except an amount of Rs.20 lacs outstanding towards the dues of Provident Fund, respondent no.2 society is not now required to pay any amount towards the dues of Provident Fund to respondent no.1 after 11.4.2007. He submits that an amount of Rs. 1,06,96,317/-, which has been deposited in this Court, also consists of the sale proceeds of stock of sugar manufactured by respondent no.2 after 11.4.2007 and, hence, respondent no.2 is entitled to get the amount of sale proceeds of sugar stock produced after 11.4.2007 by deducting an amount of Rs.20 lacs. If this is the claim of respondent no.2, then it is open to it to adopt all such remedies as are available to it in law, for getting the said amount, from the amount of deposit made in this court, recovered from respondent no.1. However, no such adjudication can be done in a petition which is filed by the 10 petitioner. 9. Shri V.J.Dixit, learned Senior Advocate, has also brought to my notice order dt.17th of June, 2010, passed in Writ Petition No.3429/2009, filed by respondent no.2 for this purpose. The said writ petition was only for the purpose of issuance of release orders for sale of sugar bags. 10. It is open for respondent no.2 to intervene in the proceedings of show cause, taken up against the petitioner Bank by respondent no.1 and their representation shall be considered by the authorities if permissible, in accordance with law. 11. In the result, there is no substance in the instant writ petition and the same is dismissed. Rule is discharged. However, it is made clear that the petitioner shall be at liberty to file its additional submission before respondent no.1 in the proceedings of show cause dt.18th of June, 2008, raising the objection regarding attachment and sale of sugar bags also within a period of three weeks from today. The same shall be considered by respondent no.1 authority in accordance with law. If the petitioner Bank fails to file reply within specified period, then the concerned respondent 11 shall be at liberty to proceed in accordance with law. 12. In the proceedings of show cause notice, if an order is passed against the petitioner Bank, then the same shall not be given effect to for a period of 15 days from the date of communication of such order to the petitioner Bank, so as to enable the petitioner Bank to adopt all such remedies as are available to it in law, against such order. No order as to costs. (R.K.DESHPANDE) JUDGE ... agp/1831-09wp