WP(C)/163/2023 of ST. JOHNS SCHOOL WHITEHALL, SHILLONG Vs EMPLOYEES PROVIDENT FUND ORGANISATION AND 3 ORS. on 30 October 2024

J U D G M E N T

1. This is a petition preferred under Article 226 of the Constitutionof India. On perusal of the same, it is noticed that the petitioner/school isa registered educational institution functioning in the State of Meghalayasince the year 1982. However, the school was registered with theEmployees Provident Fund Organization only in the year 2000 andnecessary payment/contributions was therefore made only from the year2000.

2. Though the school was brought within the purview of therelated Act, that is, the Employees’ Provident Fund & MiscellaneousProvisions Act, 1952 in the year 2000 but with effect from the year1982, the contention of the school is that it had 20 employees only fromthe year 1996 and as such, was liable to make deposit of the relevantcontributions only from such year.

3. It is also stated that the petitioner/school received a notice fromthe respondent authority in respect of the delay in depositing the duesetc. for which interest and penal damages with effect from February1996 to March 1999 was levied. On this Court (the then Shillong Benchof the Gauhati High Court) being approached, the matter was disposedof with a direction by the Court, dated 27.01.2012 in WP(C) No. (SH)58 of 2009 to the petitioner/school to deposit 25% of the total amount ofdamages etc. in accordance with Clause 32-A of the EmployeesProvident Fund Scheme, 1952, which was done so and dulyacknowledged by the respondents herein.4.It is also the petitioner/school’s case that the school was servedwith two orders bearing the same reference number, that is, vide Ref.No. /NESHG/4043/ENF-501/DAMAGES, both issued on 14.02.2023with a direction to pay interest under Section 7Q of the Act amounting to₹1,28,393/- (rupees one lakh twenty eight thousand three hundred ninetythree) only and the other order was for payment of damages of₹3,35,478/- (rupees three lakh thirty five thousand four hundred seventyeight) only with effect from February 1992 to April 2008. Such amountto be paid within 15 days of the said order failing which necessary actionunder Section 8 of the Act to be initiated for recovery of the same.

5. The petitioner/school not being clear on the details as to howthe respondents authority have arrived at the said amount of damagesand interest demanded has sought for clarification of the same, and onno satisfactory response being received has caused a legal notice dated23.03.2023 to be issued in this regard. However, in reply to this, therespondents authority have, through their reply dated 19.04.2023directed the petitioner/school to approach the appellate authority, if soaggrieved.

6. The respondents have then issued a certificate under Section 8of the Act, dated 17.05.2023 issued upon the Recovery Officer torecover the total sum of ₹ 4,63,871/- (four lakh sixty three thousandeight hundred seventy one) only from the petitioner/school.

7. Being aggrieved with the action of the respondents inprocessing and proceeding with the said orders dated 14.02.2023(supra)and the issuance of the said certificate dated 17.05.2023, thepetitioner/school has thus filed this instant petition with the prayer to setaside and quash the same.

8. Mr. S. Deb, learned counsel for the petitioner/school hassubmitted that as far as the due payable by the school is concerned, theperiod up to February 1999 has been covered by this Court’s order dated 27.01.2012 passed in WP(C) No. (SH) 58 of 2009, wherein thepetitioner/school was directed to deposit 25% of the total damages forthe period with effect from March 1996 to February 1999. Therefore, therespondent authority could not have demanded payment of damages etc.for the period with effect from February 1992 to April 2008.

9. Then, for the cost of damages and interest due for the period from March 2000 till 2008, the petitioner/school would be liable to paythe same at the rate of 25% for which a fresh computation of the periodof default is required to be calculated, further submits the learnedcounsel. In this regard, the case of Regional Provident FundCommissioner v. S.D. College, Hoshiarpur & Ors., (1997) 1 SCC 241,the case of Union of India & Ors. v. Mahender Singh & Ors., (1997) 1SCC 245, and the case of Halwasia Vidya Vihar (Sr. Sec. School)Haryana v. Regional Provident Fund Commissioner, (2006) 4 SCC 46,have been cited.

10. On the other hand, Ms. P. Bhattacharjee, learned counsel for therespondent/EPF, has at the outset submitted that the petitioner/school hasmisled this Court as regard the factual matrix of the case when it hasstated at para 4 of the petition that the school, although was broughtwithin the purview of the 1952 Act in the year 2000 but could effect from 1982 however, the school had 20 employees only from the year1996 and was therefore liable to deposit the EPF dues with effect from

1996.

11. However, the above statement is false inasmuch as recordswould show that the school was actually covered under the 1952 Actsince March 1982 where the number of employees are 21 teaching staffand 8 non-teaching staff in all and the monthly wages of such staff cameto 14,220/- (rupees fourteen thousand two hundred twenty) only and as₹such, the school is liable to deposit the necessary contribution on behalfof such staff as EPF.

12. The petitioner/school has therefore misled this Court as far asthe proceedings in WP(C) No. (SH) 58 of 2009 to be able to get afavourable order from this Court for payment of damages for the periodwith effect from March 1996 to February 1999 is concerned, which hascaused the respondent/EPF to issue a revised calculation sheet dated16.01.2023, the revised rate of damages to be settled by thepetitioner/school is found at para 5 of the same extracted as following:

“5. Resultantly this writ petition is allowed. The impugnednotice dated 6-3-2009 is hereby quashed. The respondentauthorities are, therefore, directed to allow the petitioner to pay25% of the total damage for the period between March, 1996and February, 1999 in accordance with Clause 32-A of theEmployees Provident Fund Scheme, 1952. The instalments(s)

already paid by the petitioner may be adjusted against thebalance payable in terms of this order. No order as to costs.”

13. It is also the submission of the learned counsel that this petitionis not maintainable since the petitioner/school cannot approach thisCourt with an application under Article 226 of the Constitution of Indiaseeking issuance of a writ against the alleged arbitrary and illegal actionof the respondent/EPF dated 14.02.2023 (supra) when there is a specificprovision under Section 7-I of the related Employees’ Provident Fundand Miscellaneous Provisions Act, 1952 which provides for an appeal tothe Tribunal set up under the Act against an order inter alia, issued underSection 14B, the proceedings thereof being quasi-judicial in nature, theimpugned orders being one issued under such provision, thepetitioner/school ought to have preferred an appeal, if so advised, whichwas not done so.

14. The learned counsel has submitted that in view of the statedposition of law and under the facts and circumstances of the case, thispetition is liable to be dismissed and the petitioner/school be directed topay the dues and damages as demanded. The case of PHR InventEducational Society v. UCO Bank & Ors., (2024) 6 SCC 579, para 30and the case of Commissioner of Income Tax & Ors v. Chhabil DassAgarwal, (2014) 1 SCC 603, para 19 have been cited in support of the EPF’s stand.

15. This Court while considering the case of the parties and thesubmission made by the learned counsel for the petitioner/school whohas contended that the respondent/EPF could not have raised anydemand for payment of the damages and dues with effect from the year1992 since the period has been covered by the judgment of this Court inWP(C) No. (SH) 58 of 2009 wherein in the said order dated 27.01.2012the petitioner/school was directed to pay 25% of the total damage for theperiod between March 1996 and February 1999 in accordance withClause 32-A of the Employees Provident Fund Scheme, 1952 and alsothe admission of the respondent/EPF of this fact inasmuch as the earliercalculation of damages due and payable by the petitioner/school waslater revised to exclude such amount, is found agreeable by this Court.The allegation of the respondent/EPF that the petitioner/school wasliable for contribution to the EPF with effect from the year 1982 cannotbe gone into by this Court in view of the judgment aforementioned.

16. This Court would however note the submission of the learnedcounsel for the petitioner/school who has fairly submitted that the schoolhas admitted that there was a default in the deposit of the contribution asfar as the requirement under the 1952 Act is concerned, however the relevant period is only with effect from March 2000. It is also thecontention of the learned counsel that the total amount is not disputed,the said amount can only mean the amount demanded by therespondent/EPF which comes to ₹ 4,63,871/- (four lakh sixty-threethousand eight hundred seventy-one) only.

17. It is the further contention of the learned counsel for thepetitioner/school that in view of the judgment in the case of HalwasiaVidya Vihar (supra) as well as in the case of S.D. College Hoshiarpur(supra) wherein the Apex Court taking note of the proviso found inSection 14B of the Employees’ Provident Funds and MiscellaneousProvisions Act, 1952 which provides for reduction or waiver of damageslevied has quantified the same at 25%. Though the respondent/EPF hascontested this contention to say that the damages, even if reduced, thesame should be at the rate of 37%, this Court under the facts andcircumstances of the case would agree that the quantum should bequalified at 25%.

It is the further contention of the learned counsel for the

18. It is also the case of the respondent/EPF that against noticeissued under Section 14B of the Act, the notice receiver ought to haveapproached the Tribunal under Section 7-I which was not done so in thiscase, even while considering the authorities cited by the respondent/EPF

which essentially speaks about the power of the High Court not toentertain a petition under Article 226 of the Constitution, particularlywhen an alternative statutory remedy is available, the fact that thismatter has travelled for quite some time before this Court to remand thesame to be freshly tried by the Tribunal would be a futile exerciseconsidering the fate of the employees of the petitioner/school who wouldbe deprived of the benefit due to them in the meantime. Accordingly, onan overall consideration of the case in hand, this Court hereby directs thepetitioner/school to ensure that 25% of the demanded amount bedeposited for the purpose it is meant to be used and the said amount is tobe deposited within 2(two) months from the date of receipt of this order.

19. As far as respondent No. 4/ State Bank of India, RynjahBranch, Shillong is concerned, Ms. N.G. Shylla, learned counsel wouldsubmit that the Bank not being directly involved in the dispute betweenthe parties but in course of these proceedings, on being directed by thisCourt has defreeze the account of the petitioner/school, therefore nopurpose would be served in joining issues in this regard.

20. accordingly disposed of with direction as aforementioned.

In view of the observations made herein above, this petition is Judge