High Court of KeralaSingle Judge2023-02-28Writ petition disposed of in terms of the order...

V.P. Ahamad Shareef v Union of India & Others

Case / Petition Number:WP(C) No. 6700 of 2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Raja Vijayaraghavan V
Judgment Date: 2023-02-28
Court Decision / Holding: disposed of by: (i) granting six monthly installments for payment of dues starting 15.03.2023; (ii) stay of recovery so long as installments are paid timely; (iii) recovery to revive on default; (iv) interest to be computed as per the EPF & MP Act; (v) upon full payment of arrears, recovery becomes unenforceable; respondents free to proceed if conditions are not met.
Final Disposition: Writ petition disposed of in terms of the order; petitioner's challenge to 7Q/14B orders rejected to the extent of the writ petition, with directions for installment payments and retention of recovery subject to timely compliance; appellate remedy for 14B indicated.

Parties to the Case

Appellants / Petitioners

V.P. Ahamad Shareef

Respondents

Union of India
Assistant Provident Fund Commissioner
The Southern Railway

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Nabil Khader

Counsels for Respondents

• Adv. Abraham P. Meachinkara, SC
• Adv. S ManU, DSGI

Case Synopsis & Summary

V.P. Ahamad Shareef, the manager of M/s Clearing and Forwarding Agency, an establishment covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, challenged four notices/orders issued by the EPF authorities in relation to remittance and damages for periods dating from 2006 to 2022. The contractor served with notices under the EPF Act and its schemes, and after submitting Exts. P3, P4 and P6 replies, the authorities issued Exts. P5, P7 and P8, culminating in an assessment of Rs. 2,76,774 and orders imposing liability for interest under Section 7Q and damages under Section 14B. The petitioner argued that remittances had been effected in full and that the contentions raised had not been considered, thereby violating the principles of natural justice and entitling him to relief under Article 226 notwithstanding an alternative remedy. The respondents contended that an order under Section 7Q is automatic and not appealable, citing Arcot Textile Mills v. Regional Provident Fund Commissioner to support the position; and that 14B damages are appealable under Section 7-I of the Act. The High Court, recognizing the availability of appellate relief for 14B, directed six-monthly installment payments from March 15, 2023, with the recovery stay contingent on timely payments; it held that default would revive recovery, and that interest would be computed under the Act. The petition is disposed of accordingly, with liberty to pursue appellate remedies for 14B and with the EPF Act provisions guiding the computation of interest.

Provisions of Law Cited

Employees Provident Fund and Miscellaneous Provisions Act, 1952Section 7QSection 14BSection 7-IEPF Appellate Tribunal (Procedure) Rules 1997 Rule 7(2)

Legal Doctrines & Maxims

Principles of natural justice
Automatic nature of interest under Section 7Q (as discussed in Arcot Textile Mills)
Appellate remedy for damages under Section 14B (under Section 7-I)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contended that the records showed full remittance and that the explanation offered was not considered, violating the principles of natural justice. He argued that Exts. P5, P7 and P8 were issued after ignoring his submissions (Exts. P3, P4, P6) and sought quashing of Exts. P1, P7, and P8 and a declaration that no damages or interest under 7Q/14B were payable; he urged that there existed an equally efficacious remedy and that extraordinary jurisdiction under Article 226 should not be invoked. He also pressed for quashing based on improper consideration of facts and non-application of natural justice.

Contentions of Respondents

The respondents argued that the 7Q interest is automatic, citing Arcot Textile Mills; 14B damages are subject to appellate remedy under Section 7-I. They asserted that Ext. P8 (14B damages) falls within the appellate framework and that the 7Q interest is a consequence of statutory provisions; the petition’s challenge to the orders was inappropriate given the existence of statutory remedies and the standard that recovery can proceed subject to conditions.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Arcot Textile Mills v. Regional Provident Fund Commissioner	(2013) 16 SCC 1	Positive	The court cites Arcot Textile Mills to support the proposition that 7Q interest is automatic and not ordinarily subject to appeal; the decision uses this authority to frame the respondents’ position on 7Q.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against V.P. Ahamad Shareef v Union of India & Others and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ## **`THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V`** ``` TUESDAY, THE 28[TH]DAY OF FEBRUARY 2023 / 9TH PHALGUNA,1944 WP(C) NO. 6700 OF 2023 ``` ## **`PETITIONER/S:`** ``` V.P. AHAMAD SHAREEF AGED 59 YEARS MANAGER, M/S. CLEARING AND FORWARDING AGENCY, 42/413 (8/8) RED CROSS ROAD OPPOSITE CH AUDITORIUM KOZHIKODE - 673032 RESIDING AT 9/108, VP HOUSE, SILK STREET CALICUT -, PIN - 673032 BY ADV NABIL KHADER RESPONDENT/S: 1UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF LABOUR AND EMPLOYMENT CENTRAL SECRETARIAT NEW DELHI - 110001 2ASSISTANT PROVIDENT FUND COMMISSIONER REGIONAL OFFICE, BHAISHYANIDHI BHAVAN PB NO. 1806 ERANHIPALAM PO, KOZHIKODE - 673006, PIN - 673006 3THE SOUTHERN RAILWAY REPRESENTED BY GENERAL MANAGER EGMORE, CHENNAI - 600008 BY ADV ABRAHAM P.MEACHINKARA, SC ADV. SRI S MANU, DSGI THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSION ON28.02.2023,THECOURTONTHESAMEDAYDELIVEREDTHE FOLLOWING: ``` W.P.(C) No.6700 of 2023 2 ## **JUDGMENT** The petitioner herein states that he is the manager of M/s Clearing and Forwarding Agency, an establishment covered under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The above agency was appointed as a contractor for the southern railway for the period from 28.02.2011 to 24.05.2014. 2. According to the petitioner, proceedings were initiated under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, and the Schemes framed thereunder, on the premise that the petitioner had failed to make prompt remittances for the period from 01.06.2006 to 31.03.2022. On receipt of the notice, the petitioner is stated to have submitted Exts.P3 and P4 replies showing the remittances made by the petitioner and contended that no dues were outstanding on any of the heads. It is stated that the clarification submitted by the petitioner was considered, and Ext.P5 letter was issued assessing an amount of Rs.2,76,774/-. 3. The petitioner asserts that they responded to Ext.P5 by furnishing Ext.P6 reply. However, ignoring all the legitimate contentions W.P.(C) No.6700 of 2023 3 advanced by the petitioner, Exts.P7 & P8 orders were issued, imposing liability to pay interest and damages under Section 7Q and Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. 4. It is in the afore circumstances that this writ petition is filed seeking to quash Exts.P1, P7, and P8 and for a declaration that the petitioner is not liable to pay any damages or interest either under Sections 14B or 7Q of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. 5. Sri. Nabil Khader, the learned counsel appearing for the petitioner, submitted that the records furnished by the petitioner before the respondents would reveal that the petitioner had effected the entire payments towards contribution and no further amount is due. It is further submitted that the explanation offered by the petitioner was not considered by the respondents while issuing the impugned order. According to the learned counsel, as none of the contentions raised by the petitioner was adverted to, the principles of natural justice stand violated, and hence, this Court will be well justified in entertaining this writ petition notwithstanding the fact that the petitioner has an equally efficacious remedy. 6. Mr.Abraham P. Meachinikara, the learned counsel, submitted that in the instant case, Ext.P7 is the order ordering the payment of interest W.P.(C) No.6700 of 2023 4 under Section 7Q of the Act, and Ext.P8 is the order fixing the compensation under Section 14B. Relying on **Arcot Textile Mills v. Regional Provident** **Fund Commissioner** [(2013) 16 SCC 1], it is submitted that an order passed under Section 7Q is not appealable, whereas an order passed under Section 14B can be the subject matter of an appeal under Section 7-I of the Act. 7. Exhibit P8 order under Section 14B is seen issued on 04.01.2023. As per Rule 7(2) of EPF Appellate Tribunal (Procedure) Rules 1997, any person aggrieved by an order passed under the Act may prefer an appeal to the Tribunal within 60 days from the date of issue of the order provided that the Tribunal may if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the prescribed period, extend the said period by a further period of 60 days. In such circumstances, the petitioner would be entitled to avail of the appellate remedy on Section 14B ordering damages, and there is no reason why this Court should invoke the extraordinary jurisdiction under Article 226 of the Constitution of India to adjudicate upon Ext.P8 in so far as Section 14B damages are concerned. With respect to Ext.P7 demand made of Section 7Q, it is to be noticed that the interest levied under Section 7Q is automatic as W.P.(C) No.6700 of 2023 5 has been held by the Hon'ble Supreme Court in **M/s.Arcot Textiles Mills Ltd** (supra). 8. Considering the facts of the case and the alleged impecunious circumstances of the petitioner, I dispose of this writ petition by ordering as under : (i) The respondent shall grant six monthly installments for the payment of the dues, as seen from Ext.P7, starting from 15.03.2023 and continuing on the 15th of the succeeding months. - (ii) The recovery process will be put on hold as long as the payments set out in this order are made without any default. (iii) If the petitioner commits default in payment, the recovery steps if any are initiated, shall revive and continue. - (iv) The interest liability will be computed as per the EPF & MP Act. (v) On the petitioner satisfying the entire arrears, the recovery proceedings shall be unenforceable. W.P.(C) No.6700 of 2023 6 This Writ Petition is disposed of as above, making it clear that the respondents shall be free to proceed with the recovery if the above conditions are not complied with. Sd/- **RAJA VIJAYARAGHAVAN V, JUDGE** ``` NS ``` W.P.(C) No.6700 of 2023 7 ## **`APPENDIX OF WP(C) 6700/2023`** ``` PETITIONER EXHIBITS ``` |`Exhibit P1`|`TRUE COPY OF THE SUMMONS BEARING NO.`| |---|---| ||`KR/KKD/0023140/000/ENF 501/DAMAGES/ DATED`| ||`04.07.2022 ALONG WITH ANNEXURE ISSUED BY THE`| ||`2ND RESPONDENT TO THE PETITIONER`| |`Exhibit P2`|`TRUE COPY OF THE NOTICE ISSUED BY THE 2ND`| ||`RESPONDENT BEARING NO.`| ||`KK/KKD/23140/RECOVERY/2022-23 DATED`| ||`13.06.2022 THAT WAS RECEIVED BY THE`| ||`PETITIONER ON 21.06.2022`| |`Exhibit P3`|`TRUE COPY OF THE LETTER DATED 06.08.2022`| ||`ISSUED BY THE PETITIONER TO THE 2ND`| ||`RESPONDENT`| |`Exhibit P4`|`TRUE COPY OF THE REPLY DATED 04.01.2019 ALONG`| ||`WITH ITS ANNEXURE ISSUED FROM THE OFFICE OF`| ||`THE 2ND RESPONDENT TO THE RTI ENQUIRY MADE BY`| ||`THE PETITIONER`| |`Exhibit P5`|`TRUE COPY OF THE LETTER BEARING NO.`| ||`KR/KKD/23140/RECOVERY/2022-23 DATED`| ||`25.08.2022 ISSUED BY THE 2ND RESPONDENT TO`| ||`THE PETITIONER`| |`Exhibit P6`|`TRUE COPY OF THE LETTER DATED 21.12.2022`| ||`PRODUCED BEFORE THE 2ND RESPONDENT`| |`Exhibit P7`|`TRUE COPY OF THE ORDER BEARING NO.`| ||`KR/KKD/ENF.1(1)/23140/DAMAGES/2022-23/6159`| ||`DATED 04.01.2023 ISSUED BY THE 2ND RESPONDENT`| ||`TO THE PETITIONER DIRECTING THE PETITIONER TO`| ||`PAY INTEREST PAYABLE U/S 7Q`| W.P.(C) No.6700 of 2023 8 ``` Exhibit P8 ``` ``` TRUE COPY OF THE ORDER BEARING NO. KR/KKD/ENF.1(1)/23140/DAMAGES/2022-23/6159 DATED 04.01.2023 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER DIRECTING THE PETITIONER TO PAY DAMAGES U/S 14B ```