It is apparent that the salutary public purpose which the Act seeks to achieve has been left unprotected in the hands of those who are statutorily obliged to protect and preserve them: Calcutta High Court

IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION APPELLATE SIDE The Hon’ble Mr. Justice Ravi Krishan Kapur W.P.A. 264606 IA CAN 1 OF 2011 Old CAN 6511) CAN 2 OF 2021 CAN 3 OF 2021 Satish Kumar Jhunjhunwala vs Regional Provident Fund Commissioner For the petitioner For the P.F Authorities Hearing concluded on Mr. Krishnendu Gooptu Mr. Chanchal Kumar Saha Mr. S.C Prasad Mr. Nikhil Kumar Gupta 23.07.2021 04.08.2021 Judgment on 18.08.2021 Ravi Krishan Kapur J.: 1. The petitioner assails an order passed under Section 8 B of the Employees’ Provident Fund and Miscellaneous Provisions Act 1985 ‘the Act’) issued by the Recovery Officer Employees’ Provident Fund Organisation which is in the nature of a warrant of arrest. 2. Admittedly the petitioner is a director of one Shri Govinda Glass Works Limited LLN 745 Regional Fund Commissioner Employees’ Organisation Hyderabad & Another Vs. M s Decan Foam Plastics Private) Ltd. Narsapur and 3 LLJ 952 D.R. Venkatesh vs. Regional Provident Fund Commissioner Hyderabad and Another to contend that the personal liability of a director cannot be straightway attracted and an order of arrest can only be issued in the event that the assets of the establishment are found to be insufficient to meet the dues payable by the establishment to the respondent authorities. 4. On behalf of the respondent Provident Fund Authorities it is submitted that in view of the provisions contained in Section 8 B of the Act the options available to the respondent authorities are concurrent and they may apply any of the modes specified under the aforesaid section and are not bound to exhaust all other remedies before issuance of a warrant of arrest. In any event it is submitted on behalf of the respondent Provident Fund Authorities that due to subsequent events and the fact that the petitioner has now approached the respondent authorities after filing of this petition and has also paid a sum of Rs.50 000 and the fact that the petitioner is now participating in the recovery proceedings the petition has become infructuous. 5. This petition was filed in 2006. Upon the petition being moved by an order dated 19th December 2006 a Learned Single Judge had granted a stay of the impugned warrant of arrest. It is pertinent to mention that by the interim order liberty was specifically granted to the respondent authorities to exhaust all other remedies for recovery of their dues and to proceed in a manner contemplated under the Act against the establishment. Subsequently the writ petition was dismissed for default on 13th December 2018 and restored only on 4th August 2021. 6. Section 8 B of the Act provides as follows: 8B. Issue of certificate to the Recovery Officer.— 1) Where any amount is in arrear under section 8 the authorised officer may issue to the Recovery Officer a certificate under his signature specifying the amount of arrears and the Recovery Officer on receipt of such certificate shall proceed to recover the amount specified therein from the establishment or as the case may be the employer by one or more of the modes mentioned a) attachment and sale of the movable or immovable property of the establishment or as the case may be the employer b) arrest of the employer and his detention in prison c) appointing a receiver for the management of the movable or immovable properties of the establishment or as the case may be the employer: Provided that the attachment and sale of any property under this section shall first be effected against the properties of the establishment and where such attachment and sale is insufficient for recovering 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. 2) The authorised officer may issue a certificate under sub section notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.] 7. In Sri Sayan Ghosh & Another vs. Regional Provident Fund Commissioner West Bengal & Ors. unreported judgment of Ruma Pal J. in it was held as follows: “Section 8 to 8E related to the civil process for recovery of the amounts due under the 1952 Act. Sections 14 to 14C deal with the punishment which may be inflicted in connection with the offence by an employer under the Act. Keeping this distinction in mind it is clear that section 14A which relates to offences by a company by reason of the nature of the proceedings makes only those persons culpable who were in charge of business of the company at the material point of time. This element of mens rea is absent from section 8 which deals with the civil modes of recovery. There is no bar under section 8B to the Revenue Officer recovering the amount due by attachment and sale of any movable and immovable property of the establishmentas well as by the arrest of the employer and their detention in prison. This detention is not a detention pursuant to the finding of guilt under section 14 but a mode of recovery similar to section 51 of the Civil Procedure Code. It cannot be said therefore that the show cause notice was invalidly or incompetently issued.” 8. Moreover in Maharashtra State Co operative Bank Ltd. vs. The Assistant Provident Fund Commissioner at para 26 the Supreme Court has held as follows: 26. “Section 8 B provides for issue of certificate by the authorised officer in respect of the amount due to the Recovery Officer so as to enable him to recover the amount specified therein by attachment and sale of movable or immovable property of the establishment or the employer or by arrest of the employer and his detention in prison or by appointing a Receiver for the management of the movable or immovable properties of the establishment or the employer as the case may be.”(emphasis supplied) 9. On a plain and proper reading of the aforesaid section I am unable to agree with the contention of the petitioner that it is incumbent on the respondent authorities to proceed against the establishment and initiate all other recovery modes of before issuing a warrant of arrest against the petitioner director. On the contrary it appears from the scheme of the section that the remedies provided to the respondent authorities for recovery of their dues are co extensive and mutually exclusive of each another. I also find the decisions relied on by the petitioner to be distinguishable and inapposite to the facts of the instant case. 10. There is also another reason as to why this petition deserves to be dismissed. It is now an admitted and indisputable fact that pursuant to the filing of the writ petition the petitioner has approached the respondent Provident Fund Authorities and has also made payment of Rs.50 000 . In view of the fact that the petitioner is now participating in the recovery proceedings I am of the view that there is no scope of challenging the impugned warrant of arrest since the petitioner has acquiescence in the steps taken by the respondent authorities and is also participating in the same. 11. I also must take note of the subsequent facts which have transpired after the filing of this petition. The aggregate dues payable by the establishment on the date when this petition was filed were approximately Rs.50 lacs in the year 2006. There is nothing on record to demonstrate nor could either of the parties show that any portion of the dues has been paid by the establishment towards satisfaction of their dues. This petition was filed sometime in 2006. Thus it would be reasonable to estimate that the aggregate dues in respect of the establishment after a period of approximately 15 years are far in excess of Rs.1 crore. Notwithstanding a specific query the petitioner could not substantiate any steps taken by the petitioner to have this petition less disposed of). Thus the petitioner and the establishment have only taken advantage of the delay in the justice delivery system whilst enjoying an interim order intentionally choosing not to have the matter heard and having a nonchalant opponent in the respondent Provident Fund Authorities. The fact that the petitioner has continued to enjoy a “status quo” of sorts since 2007 evidences that neither the petitioner nor the establishment have any bonafide intent to pay off the dues of the respondent Provident Fund Authorities. This also demonstrates bad faith beyond indifference to pay on the part of both the petitioner and the establishment. Hence I am of the view the attitude of both the petitioner and the establishment reflects a dishonest disowning of their obligation for a period of nearly two decades. Thus the conduct of the petitioner also subsequent to the filing of this petition disentitles him to any relief whatsoever. 12. In view of the aforesaid I find no merit in the writ petition and this petition stands dismissed. 13. It is significant to highlight the lackadaisical indifferent and indolent attitude of the respondent authorities in pursuing such recovery proceedings. By an ad interim order dated 19th December 2006 the respondent authorities were specifically granted liberty to exhaust all other remedies against the establishment for recovery of their dues and proceed in a manner contemplated under the Act. Notwithstanding a specific query the respondent authorities could not satisfy this Court as to what steps they had taken for recovery of their dues against the establishment. Subsequently the writ petition was also dismissed for default on 13 December 2018 and was restored only on 4th August 2021. Even during the interregnum i.e. 3 years the respondent authorities have taken no steps against the petitioner nor the establishment. It is unfortunate that a statutory organisation such as the respondent Provident Fund Authorities continues to remain oblivious and blind to the purpose for which they have been set up and the rights which they are expected to protect. It continues to remain a disturbing feature as to how a piece of social welfare legislation intended to protect the interests of a weaker section of society during the superannuated winter of their life has been stultified and made impotent because of the casual indifferent and cavalier attitude of those who are intended to protect and preserve their rights. It is apparent that the salutary public purpose which the Act seeks to achieve has been left unprotected in the hands of those who are statutorily obliged to protect and preserve them. In view of the indolent appalling and pathetic approach of the respondent authorities let a copy of this order be served by the Registrar General of this Court upon The Director General of Labour Welfare Ministry of Labour & Employment Jaisalmer House New Delhi so that a proper inquiry maybe initiated in this matter against all the errant officers of the respondent authorities and appropriate action be taken against those found guilty in accordance with law. 14. Accordingly WPA 24467 of 2006 stands dismissed. All connected applications also stand disposed of. There shall be no order as to 15. Urgent Photostat certified copy of this judgment if applied for be given to the parties on compliance of requisite formalities. Ravi Krishan Kapur J.) 

Summary: “It continues to remain a disturbing feature as to how a piece of social welfare legislation intended to protect the interests of a weaker section of society during the superannuated winter of their life has been stultified and made impotent because of the casual, indifferent and cavalier attitude of those who are intended to protect and preserve their right”, The High Court at Calcutta before the Hon’ble Mr. Justice Ravi Krishan Kapur held in the matter of Satish Kumar Jhunjhunwala vs. Regional Provident Fund Commissioner [W.P.A. 26467 of 2006]. This case relates to the fact whereby the petitioner (a director of the Shri Govinda Glass Works Limited, a.k.a., ‘the establishment’) assails an order passed under Section 8-B of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1985, issued by the Recovery Officer, Employees’ Provident Fund Organization, like a warrant of arrest, and has statutory defaults towards payment of the provident dues of an amount of Rs. 44,04,178/-, and such impugned warrant arrest dated 26th September 2006, was issued in connection with those recovery proceedings initiated by the Provident Fund Authorities. The case relied upon the facts whereby the petitioner assailed the impugned warrant arrest mainly on the ground that before issuing such warrant, which according to them, was necessary for the respondent authorities to initiate and explore all other modes of recovery against the petitioner. In support of this plea, the petitioner also brought into notice before the Hon’ble Court, relying on the decision reported in Regional Provident Fund Commissioner Employees’ Provident Fund Organisation, Hyderabad &amp; Another Vs. M/s Decan Foam Plastics (Private), Ltd. Narsapur [2005 (1) LLN 745] and D.R. Venkatesh vs. Regional Provident Fund Commissioner, Hyderabad, and Another [(2004) 3 LLJ 952], which stated that the personal liability of a director could not be straightaway attracted and an order of arrest could only be issued in the event where the assets of the establishment were found to be insufficient to meet the dues payable by the establishment to the respondent authorities. On the other hand, according to the respondent authorities, given the provisions under Section 8-B of the Act, the options which were available to them were concurrent and it was up to them to decide on the modes specified in the section and they were not bound to exhaust all other remedies before issuing a warrant of arrest. It was also submitted by the respondent that due to subsequent events, the petitioner even paid a sum of Rs. 50,000/- and that the petitioner was participating in the recovery proceedings, claiming such petition to be infructuous. It was by the order dated 19th December 2006, when a Learned Single Judge had granted a stay on the impugned arrest warrant. However, through the interim order, liberty was specifically granted to the respondent authorities to exhaust all other remedies for recovery of their dues and to proceed in such manner as contemplated under the Act against the establishment. Although, such a writ petition was dismissed for default on 13th December 2018, and restored only on 4th August 2021. The High Court at Calcutta before the Hon’ble Mr. Justice Ravi Krishan Kapur could not agree with the contention of the petitioner who claimed that the respondent authorities needed to proceed with all other modes of recovery before issuing an arrest warrant against the establishment. It was evident from the scheme of the provided section that the remedies provided to the respondent authorities of their dues were “co-extensive and mutually exclusive of each other.” The Hon’ble Judge also found the decisions relied on by the petitioner to be distinguishable and inapposite to the facts of the current case. Adding to that, the Court cited another reason as to why the petition was deemed to be dismissed, stating that, since the petitioner had already paid a sum of Rs. 50,000/-, it meant that there was no scope of challenging the impugned arrest warrant since the petitioner had already started co-operating in the steps of the respondent authorities. Furthermore, owing to the subsequent events, post the filing of the petition the aggregate dues payable for the petitioner were approximately Rs. 50 lacs in the year 2006, which have increased to an approximate Rs. 1 crore after nearly 15 years, out of which the petitioner had only paid Rs. 50,000/-, which provides even more emphasis on the fact that the petitioner and the establishment had only taken advantage of the delay in the justice delivery system whilst enjoying an interim order, intentionally choosing not to have the matter heard, and having a “nonchalant opponent in the respondent Provident Fund Authorities.” The Court was of the view that “the attitude of both the petitioner and the establishment reflects a dishonest disowning of their obligation for a period of nearly two decades. Thus, the conduct of the petitioner also subsequent to the filing of this petition disentitles him to any relief whatsoever.”  Thus, the Hon’ble Court dismissed the petition.