M/S Central Travancore Specialists Hospital Ltd. v. Assistant Provident Fund Commissioner, Employees' Provident Fund Organisation (EPFO), Regional Office, Kochi; Central Government Industrial Tribunal; Sub Registrar, Registration Office, Chengannur

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **WEDNESDAY, THE 09TH DAY OF DECEMBER 2020 / 18TH AGRAHAYANA, 1942** ## **W.P.(C)No.9220 OF 2020(B)** ## **PETITIONER/S:** **M/S.CENTRAL TRAVANCORE SPECIALISTS HOSPITAL LTD** **MULAKUZHA, CHENGANNUR, ALAPPUZHA 689 505 REPRESENTED BY ITS EXECUTIVE DIRECTOR, PAUL KURIEN PALACHIRACKAL.** **BY ADVS.** **SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN** ## **RESPONDENT/S:** - **1 ASSISTANT PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION, REGIONAL OFFICE, 36/685A, BHAVISHYANIDHI BHAWAN, KALOOR, KOCHI 682 017** - **2 CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, 38/277,A2, KARITHALA LANE, KARSHAKA ROAD, ERNAKULAM , KOCHI 682 016** **R1 BY ADV. SRI.SAJEEV KUMAR K.GOPAL** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.12.2020, ALONG WITH WP(C).20613/2020(B), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** -2- W.P.(C)No.9220 & 20613 of 2020 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **WEDNESDAY, THE 09TH DAY OF DECEMBER 2020 / 18TH AGRAHAYANA, 1942** ## **W.P.(C)No.20613 OF 2020(B)** ## **PETITIONER/S:** **M/S. CENTRAL TRAVANCORE SPECIALISTS HOSPITAL LTD, MULAKUZHA, CHENGANNUR, ALAPPUZHA-689 505, REPRESENTED BY ITS EXECUTIVE DIRECTOR, PAUL KURIEN POLACHIRACKAL.** **BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN** ## **RESPONDENT/S:** **1 ASSISTANT PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION, REGIONAL OFFICE, 36/685A, BHAVISHYANIDHI BHAWAN, KALOOR, KOCHI-682 017. 2 ASSISTANT PROVIDENT FUND COMMISSIONER AND RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND ORGANISATION, REGIONAL OFFICE, 36/685A, BHAVISHYANIDHI BHAWAN, KALOOR, KOCHI-682 017. 3 CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, 38/277,A2, KARITHALA LANE, KARSHAKA ROAD, ERNAKULAM-682 016.** W.P.(C)No.9220 & 20613 of 2020 -3- **4 THE SUB REGISTRAR, REGISTRATION OFFICE, CHENGANNUR-689 501, DEPARTMENT OF REGISTRATION, GOVERNMENT OF KERALA.** **R1-2 BY SRI.SAJEEV KUMAR K. GOPAL, SC, EPFO** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.12.2020, ALONG WITH WP(C).9220/2020(B), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C)No.9220 & 20613 of 2020 -4- ## **JUDGMENT** Since the issues raised in these writ petitions arise out of the shortfall in remitting contributions under the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 by the petitioner establishment, for the period from 1/2016 to 9/2018, the writ petitions are heard together. 2. W.P.(C)No.9220 of 2020:- The petitioner has filed this writ petition on 20.03.2020 seeking an appropriate order or direction enabling the petitioner to comply with Ext.P8 order dated 03.12.2019 of the 2[nd] respondent Central Government Industrial Tribunal in easy installments, considering the financial constraints faced by the petitioner. By Ext.P8 order, the Tribunal admitted the appeal, subject to the remittance of 30% of the dues, under Section 70 of the EPF Act, within one month from the date of that order. 2.1. On 23.03.2020, when this writ petition came up for admission it was ordered to be posted on 30.03.2020. On 25.11.2020, when this writ petition came up for consideration, Registry was directed to list this matter on 27.11.2020, along with connected case. W.P.(C)No.9220 & 20613 of 2020 -5- 2.2. On 02.12.2020, the petitioner has filed I.A. No.1 of 2020 producing Exts.P10 to P13 as additional respondents, in order to show that the petitioner's hospital has been taken over by the State Government during COVID 19 pandemic and the petitioner has submitted a representation dated 08.08.2020 before the District Collector, Alappuzha, to sanction reasonable amount towards compensation/rental for taking over the hospital. 3. W.P.(C)No.20613 of 2020:- The petitioner establishment, namely, M/s.Central Travancore Specialists Hospital Ltd., is covered under the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for brevity, 'the EPF Act') with Code No.KR/19227. The enquiry conducted for determining the amount due from the employer under Section 7A of the EPF Act, for the period 01/2016, 03/2016 to 08/2018 and 09/2018, culminated in Ext.P5 proceedings dated 17.09.2019 of the 1[st] respondent Assistant Provident Fund Commissioner, whereby the Chairman of the petitioner establishment or any other responsible person in that establishment was directed to remit an amount of Rs.1,89,01,935/-, within a period of 7 days of the issue of that proceedings, failing which, recovery proceedings will be initiated for W.P.(C)No.9220 & 20613 of 2020 -6- recovery of the said amount as arrears in the manner specified under Section 8B to 8G of EPF Act and prosecution under Section 14/14A of the said Act. As amount assessed as above is exclusive of penal damages to be levied under Section 14B and Section 7Q of the said Act, which will be determined and intimated separately. 3.1. The petitioner challenged Ext.P5 proceedings of the 1[st] respondent by filing appeal under Section 7I of the EPF Act, before the 3[rd] respondent Central Government Industrial Tribunal. The Tribunal by the order dated 03.12.2019 admitted Appeal No.471 of 2019 subject to the remittance of 30% of the dues, under Section 70 of the EPF Act, within one month from the date of that order, and adjourned the matter to 05.03.2020 for appearance of the respondent therein, the Regional Provident Fund Commissioner. The petitioner filed Ext.P6 miscellaneous application in Appeal No.471 of 2019 seeking enlargement of time to comply with the said condition stipulated by the Tribunal. On 05.03.2020, the 2[nd] respondent issued Ext.P8 order of attachment of the property of the petitioner, having an extent of 12 acres, as specified in that order. On 05.03.2020, in Ext.P6 miscellaneous application filed in Appeal No.471 of 2019, the Tribunal enlarged the time till W.P.(C)No.9220 & 20613 of 2020 -7- 15.04.2020 for the remittance of 30% of the dues. Based on that order, the petitioner submitted Ext.P7 letter dated 12.03.2020 before the Assistant Provident Fund Commissioner and Recovery Officer to defer recovery proceedings. 3.2. The petitioner did not comply with the order of the Tribunal for remittance of 30% of the dues, even after granting enlargement of time till 15.04.2020. The petitioner submitted Ext.P9 request dated 08.08.2020 before the 2[nd] respondent to recall Ext.P8 order of attachment, in view of the enlargement of time granted by the Tribunal till 15.04.2020. While discussions were going on with a prospective investor, during the 'due diligence process' the prospective investor noticed the order of attachment, which is reflected in Ext.P10 series of encumbrance certificates issued by the 4[th] respondent Sub Registrar. During COVID 19 pandemic, the petitioner's hospital has been taken over by the State Health Department, initially for quarantine facility and later upgraded as first line treatment centre. The petitioner submitted Ext.P11 representation dated 08.08.2020 before the District Collector, Alappuzha to sanction reasonable amount towards compensation/rental for taking over the hospital. Thereafter, the W.P.(C)No.9220 & 20613 of 2020 -8- petitioner has filed this writ petition under Article 226 of the Constitution of India, on 22.09.2020, seeking an order to quash Ext.P8 order of attachment issued by the 2[nd] respondent, dated 05.03.2020; and for an order directing respondents 1 and 2 to cancel, rescind and recall Ext.P8 order of attaching all the immovable properties of the petitioner situated at Mulakuzha Village in Chengannur Taluk, under the 4[th] respondent Sub Registrar. 3.3. On 15.10.2020, when this writ petition came up for admission, the learned Standing Counsel for the Employees Provident Fund Organisation sought time to get instructions and file statement. 3.4. On 30.10.2020 a statement has been filed by the learned Standing Counsel for the Employees Provident Fund Organisation, opposing the reliefs sought for in this writ petition. 4. On 08.12.2020, during the course of arguments, the learned counsel for the petitioner submitted that, for remitting 30% of the amount in terms of the order of the Central Government Industrial Tribunal, which is the appellate authority, the petitioner requires a breathing time. The learned Standing Counsel for EPF -9- W.P.(C)No.9220 & 20613 of 2020 Organisation sought time to get instructions. 5. Heard the learned counsel for the petitioner and also the learned Standing Counsel for the Employees Provident Fund Organisation. 6. The challenge made in W.P.(C)No.20613 of 2020 is against Ext.P8 order of attachment dated 05.03.2020 and in W.P. (C)No.9220 of 2020 the petitioner is seeking an opportunity to comply with Ext.P8 order dated 03.12.2019 of the Central Government Industrial Tribunal in Appeal No.471 of 2019 in easy installments, considering the financial constraints faced by the petitioner. By that order, the Tribunal admitted the appeal filed by the petitioner, subject to the remittance of 30% of the dues, under Section 70 of the EPF Act, within one month from the date of that order. The said time limit was later enlarged by the Tribunal till 15.04.2020 by an order dated 05.03.2020. However, the petitioner did not comply with that order. 7. The proceedings dated 17.09.2019 of the Assistant Provident Fund Commissioner determining the amount due from the petitioner, under Section 7A of the EPF Act, for the period 01/2016, 03/2016 to 08/2018 and 09/2018, as Rs.1,89,01,935/-, W.P.(C)No.9220 & 20613 of 2020 -10- is under challenge in Appeal No.471 of 2019 filed before the Central Government Industrial Tribunal. By the order dated 03.12.2019, the Tribunal admitted Appeal No.471 of 2019, subject to the remittance of 30% of the dues, under Section 70 of the EPF Act, within one month from the date of that order. 8. As per Section 70 of the EPF Act, no appeal by the employer shall be entertained by a Tribunal unless he has deposited with it seventy-five per cent of the amount due from him as determined by an officer referred to in Section 7A. As per the proviso to Section 70, the Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. 9. Invoking the provisions under the proviso to Section 70 of the EPF Act, the Tribunal by order dated 03.12.2019, admitted Appeal No.471 of 2019, subject to the remittance of 30% of the dues, within one month from the date of that order. On 05.03.2020, the Recovery Officer issued the order of attachment of the property of the petitioner, having an extent of 12 acres. On 05.03.2020, in Ext.P6 miscellaneous application filed in Appeal No.471 of 2019, the Tribunal enlarged the time till 15.04.2020 for W.P.(C)No.9220 & 20613 of 2020 -11- the remittance of 30% of the dues. 10. As already noticed, the Tribunal by the order dated 03.12.2019 admitted Appeal No.471 of 2019 filed by the petitioner herein, subject to the remittance of 30% of the dues, within one month from the date of that order, and adjourned the matter to 05.03.2020 for appearance of the respondent therein, the Regional Provident Fund Commissioner. Along with the statement filed in W.P.(C)No.20613 of 2020, by the learned Standing Counsel for the EPF Organisation, a copy of the order dated 02.01.2020 passed by the Tribunal in I.A.No.1 of 2020 in Appeal No.471 of 2019 is placed on record as Annexure R1(a), as per which the Tribunal granted enlargement of time up to 29.02.2020. In paragraph 9 of the statement, the petitioner has not produced any order of the Tribunal, whereby the Tribunal enlarged the time till 15.04.2020, as stated in Ext.P9 letter dated 08.08.2020 in W.P.(C)No.20613 of 2020, before the respondents and therefore, it is not within the knowledge of the respondents. In the statement, the respondents have stated that, the petitioner establishment is a chronic defaulter, as shown in the table below paragraph 12. 11. **M/s. Muthoot Pappachan Consultancy and** W.P.(C)No.9220 & 20613 of 2020 -12- ## **Management Services v. Employees Provident Fund** **Organization and others [2009 (1) KHC 362]** a Division bench of this Court held that, the deposit of 75% under Section 70 of the EPF Act is a pre-condition for maintaining the appeal and not a condition for staying the operation of the order under appeal. Under Section 70, the normal rule is deposit of 75% of the amount assessed under Section 7A. However, under the proviso, the Tribunal is given a power to either waive or reduce the deposit. For the exercise of the power under the proviso the Tribunal has to record its reasons as to why the pre-deposit is waived or reduced. Since the proviso to Section 70 has given a wide discretion to the Tribunal either to reduce or even to waive the pre-deposit as such, the statute has insisted that the Tribunal should record its reasons in writing, lest the Tribunal should exercise its power arbitrarily. Therefore, in cases where the Tribunal intends to exercise its power under the proviso to Section 70 of the EPF Act, the Tribunal should record its reasons for the exercise of its power either for reducing the percentage of pre-deposit or for waiving the same. 12. In the instant case, the Tribunal by the order dated 03.12.2019 admitted Appeal No.471 of 2019 subject to the W.P.(C)No.9220 & 20613 of 2020 -13- remittance of 30% of the dues, under Section 70 of the EPF Act, within one month from the date of that order. It is stated in the said order, which is placed on record as Ext.P8 in W.P.(C)No.9220 of 2020 that, as per Section 70 of the EPF Act, an appeal can be admitted only on payment of 75% of the assessed dues. However, on the basis of the grounds pleaded by the learned counsel for the appellant, the appeal is admitted subject to remittance of 30% of the dues, within one month from the date of order. The Tribunal passed the order dated 03.12.2019 in Appeal No.471 of 2019, in exercise of the powers under the proviso to Section 70 of the EPF Act, showing scant regard to the law laid down by the Division Bench of this Court in **M/s. Muthoot Pappachan Consultancy and Management Services** , which can only be terms as an arbitrary exercise of power by the Tribunal. The petitioner, the beneficiary of such an arbitrary order, has not chosen to make any payment towards the said dues for the last more than 7 months. The said order of the Tribunal is one issued much prior to COVID 19 pandemic and the subject matter of that appeal is the amount due from the petitioner under Section 7A of the EPF Act, for the period 01/2016, 03/2016 to 08/2018 and 09/2018. The petitioner, after W.P.(C)No.9220 & 20613 of 2020 -14- deducting statutory provident fund dues from the wages of the employees, failed to remit the said amount with the EPF Organisation. Therefore, the petitioner is not entitled to seek installment facility to comply with the order dated 03.12.2019 of the Tribunal in Appeal No.471 of 2019, as sought for in W.P.(C). No.9220 of 2020, invoking the discretionary jurisdiction of this Court under Article 226 of the Constitution of India. Since the petitioner has not complied with the condition stipulated in the order of Tribunal dated order dated 03.12.2019 by remitting 30% of the dues, within the time limit fixed by the Tribunal, no interference is warranted on the order of attachment dated 05.03.2020, which is under challenge in W.P.(C)No.20613 of 2020. In the result, both the writ petitions fail and they are accordingly dismissed. No order as to costs. **Sd/ANIL K.NARENDRAN JUDGE** das W.P.(C)No.9220 & 20613 of 2020 -15- ## **APPENDIX OF WP(C) 9220/2020** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE BALANCE SHEET OF THE PETITIONER FOR THE YEAR 2015-16** **EXHIBIT P2 TRUE COPY OF THE BALANCE SHEET OF THE PETITIONER FOR THE YEAR 2016-17 EXHIBIT P3 TRUE COPY OF THE BALANCE SHEET OF THE PETITIONER FOR THE YEAR 2017-18** **EXHIBIT P4 TRUE COPY OF THE AUDITED REPORT WITH FINANCIAL STATEMENTS FOR TJHE YEAR 201819 EXHIBIT P5 TRUE COPY OF THE COMPANY PETITION C.P NO. 34/2011 FILED BEFORE THE HON'BLE HIGH COURT OF KERALA BY THE GROUP OF SHARE HOLDERS WHICH IS STILL PENDING DATED 1010-2011 (WITHOUT ANNEXURES)** **EXHIBIT P6 TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 24-09-2019 UNDER SECTION 7A OF THE EPF AND MP ACT EXHIBIT P7 TRUE COPY OF THE APPEAL MEMORANDUM DATED 14-10-2019 AS NUMBERED AS APPEAL NO. 471/2019 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT (WITHOUT ANNEXURES) EXHIBIT P8 TRUE COPY OF THE ORDER DATED 03-12-2019 PASSED BY THE 2ND RESPONDENT IN APPEAL NO. 471/2019. EXHIBIT P9 TRUE COPY OF THE PETITION AND AFFIDAVIT FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 1-1-2020 IN APPEAL NO. 471/2019** W.P.(C)No.9220 & 20613 of 2020 -16- ## **APPENDIX OF WP(C) 20613/2020** ## **PETITIONER'S/S EXHIBITS:** |**EXHIBIT P1**||**TRUE COPY OF THE RELEVANT PAGES OF ANNUAL**| |---|---|---| |||**REPORT ALONG WITH BALANCE SHEET OF THE**| |||**PETITIONER FOR THE YEAR 2015-16 DATED**| |||**23.8.2016**| |**EXHIBIT P2**||**TRUE COPY OF THE RELEVANT PAGES OF ANNUAL**| |||**REPORT ALONG WITH BALANCE SHEET OF THE**| |||**PETITIONER FOR THE YEAR 2016-17 DATED**| |||**22.8.2017**| |**EXHIBIT P3**||**TRUE COPY OF THE RELEVANT PAGES OF ANNUAL**| |||**REPORT ALONG WITH BALANCE SHEET OF THE**| |||**PETITIONER FOR THE YEAR 2017-18 DATED NIL**| |**EXHIBIT P4**||**TRUE COPY OF THE AUDITED REPORT WITH**| |||**FINANCIAL STATEMENTS FOR THE YEAR 2018-19**| |||**DATED NIL**| |**EXHIBIT P5**||**TRUE COPY OF THE ORDER PASSED BY THE 1ST**| |||**RESPONDENT DATED 17.9.2019 UNDER SECTION 71**| |||**OF THE EPF AND MP ACT**| |**EXHIBIT P6**||**TRUE COPY OF THE PETITION FILED BEFORE THE**| |||**3RD RESPONDENT DATED 1.1.2020 FOR ENLARGING**| |||**THE TIME**| |**EXHIBIT P7**||**TRUE COPY OF THE LETTER DATED 12.3.2020 TO**| |||**THE 2ND RESPONDENT**| |**EXHIBIT P8**||**TRUE COPY OF THE ATTACHMENT ORDER AND MAHASAR**| |||**OF THE 2N RESPONDENT DATED 5.3.2020**| |**EXHIBIT P9**||**TRUE COPY OF THE REPRESENTATION OF THE**| |||**PETITIONER TO THE 2ND RESPONDENT DATED**| |||**8.8.2020**| |**EXHIBIT P10**||**TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN**| |||**RESPECT OF THE PROPERTY IN PETITION NO**| |||**2762/20 DATED 27.8.2020**| |**EXHIBIT P10**|**(A)**|**TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN**| |||**RESPECT OF THE PROPERTY IN PETITION NO**| |||**2763/20 DATED 27.8.2020**| -17- W.P.(C)No.9220 & 20613 of 2020 **EXHIBIT P10 (B) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2761/20 DATED 27.8.2020** - **EXHIBIT P10 (C) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2760/20 DATED 27.8.2020** - **EXHIBIT P10 (D) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2746/20 DATED 27.8.2020** - **EXHIBIT P10 (E) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2758/20 DATED 27.8.2020** - **EXHIBIT P10 (F) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2753/20 DATED 27.8.2020** - **EXHIBIT P10 (G) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2756/20 DATED 27.8.2020** - **EXHIBIT P10 (H) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2754/20 DATED 27.8.2020** - **EXHIBIT P10 (I) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2752/20 DATED 27.8.2020** - **EXHIBIT P10 (J) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2751/20 DATED 27.8.2020** - **EXHIBIT P10 (K) TRUE COPY OF THE ENCUMBRANCE CERTIFICATES IN RESPECT OF THE PROPERTY IN PETITION NO 2750/20 DATED 27.8.2020** **EXHIBIT P11** **TRUE COPY OF THE REPRESENTATION OF THE PETITIONER TO THE DISTRICT COLLECTOR, ALAPPUZHA DATED 8.8.2020**