IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF OCTOBER, 2019 BEFORE THE HON’BLE MR. JUSTICE K.SOMASHEKAR WRIT PETITION Nos. 13153 - 13154/2016 (L-PF) Between:
1. M/s Arvind Limited No.63/9, Dodda Thoguru Begur Hobli, Electronic City Bangalore – 560 100 Represented by its Head – HR Sri Chandrashekara D V.
2. Sri Sanjay Lal Bhai S/o Sri Shrenik Lal Bhai Major Chairman and Managing Director M/s. Arvind Limited Lalbaug, Shahibaug Ahmedabad – 380 004.
(By Sri. S N Murthy – Senior Counsel for ... Petitioners Smt. Roopasri S and Sri Somashekar - Advocates) And:
1. Union of India Represented by its Secretary Ministry of Labour and Employment Government of India Shram Shakthi Bhavan New Delhi – 110 001 (Judicial Challenge to Section 14 (2-A) of EPF Act).
2. The Enforcement Officer Employees Provident Fund Organisation Sub-Regional Office Bhavishyanidhi Bhavan Bommasandra Annapoorneshwari Complex Survey No.37/1, 6th Main Singasandra Bangalore – 560 068.
3. The Regional Provident Fund Commissioner – II SRO, Bommasandra Bhavishyanidhi Bhavan Annapoorneshwari Complex Survey No.37/1, 6th Main Singasandra, Bangalore - 68.
(By Smt. Irfana Nazeer – Advocate for R-1;
... Respondents Smt. Shwetha Anand – Advocate for R-2 and R-3) ****** These Writ Petitions are filed under Articles 226 and 227 of Constitution of India praying to quash Section 14(2-A) of the EPF Act insofar as punishment of compulsory imprisonment is concerned and etc., These Petitions coming on for Preliminary Hearing in ‘B’ Group, this day, the Court made the following:
ORDER Heard the learned counsel for the petitioners and learned counsel for the respondents.
2. In these petitions the petitioners have sought for writ in the nature of certiorari to quash Section 14 (2-A) of the EPF Act insofar as punishment of compulsory imprisonment is concerned and further, to quash the sanction order dated 25.08.2015 as per Annexure-D passed by the third respondent.
3. Petitioners are engaged in manufacture and export of ready-made garments. The second respondent – Enforcement Officer said to have visited the unit of first petitioner on 05.08.2015 and made certain observations as per Annexure-A stating that Form No.11 in respect of new employees appointed was not produced for inspection at the time of his visit. In this regard, a show-cause notice dated 05.08.2015 as per Annexure-B was issued to the Chief Manager – HR of the first petitioner unit. Petitioners contend that in this show cause notice there is a reference to the inspection conducted on 22.07.2015 but, whereas no such inspection was conducted on the said date by the second respondent. On an enquiry by the petitioners, the second respondent informed the first petitioner that the inspection note would be sent. When the first petitioner again visited the second respondent and sought for inspection note dated 22.07.2015, the second respondent said to have informed that there was no such inspection conducted on 22.07.2015 and that petitioners should comply with the report dated 5.8.2015. Thereafter, the first petitioner submitted a detailed reply on 27.08.2015 in respect of the inspection report as per Annexure-C. Subsequently, the third respondent issued sanction order dated 25.08.2015 to prosecute the petitioners as per Annexure-D. It is the contention of the petitioners that they are not served with copy of the report dated 13.08.2015. The sanction order without issuing show cause notice and without calling for explanation on the report dated 13.08.2015 is in total violation of the principles of natural justice. Aggrieved by the sanction order at Annexure- D, the present petition is filed by the petitioners.
4. In support of his contention, learned counsel for the petitioners has placed reliance on a decision of the Hon’ble Supreme court in Pepsi Foods Ltd and another vs. Special Judicial Magistrate and others reported in (1998) 5 SCC 749 wherein the Apex Court in paragraphs 28 and 29 has held as under:
“Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. it is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto….
No doubt the magistrate can discharge the accused at any stage of the trial if he considers the charge to be groundless, but that does not mean that the accused cannot approach the High Court under Section 482 of the Code or Article 227 of the Constitution to have the proceeding quashed against him when the complaint does not make out any case against him and still he must undergo the agony of a criminal trial.”
5. Per contra, learned counsel for the respondents while addressing her arguments contends that the prayer of the petitioners with regard to calling into question the legality and the validity of Section 14(2A) of the EPF Act in so far as punishment of compulsory imprisonment is concerned, is totally misconceived and the same does not survive for consideration as no grounds are urged with regard to the inconvenience caused to the petitioners despite their compliance with the provisions of the statute. She further contends that the petitioners have failed to appear before the competent authority and the Managing Director of the establishment is the owner of the establishment and is the main person responsible for the faults made by the establishment. Hence, the sanction order was issued in the name of the establishment as well as the managing Director and the actions taken by the Department are as per the provisions of the Act and the same is in accordance with law. The petitioners cannot complain about the actions taken by the respondent as they have failed to comply with the directions issued by the respondents. On these grounds she sought for dismissal of the writ petition.
6. In this writ petition, the petitioners have filed an affidavit along with annexures on 26.09.2019 for having complied with the obtaining and filing of declaration Form No.11 of the respective employees as stated in the petitioner’s letter dated 27.08.2015 at Annexure-C to the writ petition. It is stated in the affidavit that the alleged violation of not showing Form No.11 when the second respondent visited the first petitioner’s unit was not within the knowledge of the second petitioner and further obtaining Form No.11 has never affected the payment of EPF contribution in respect of the employees. Hence, the criminal case against the second petitioner be quashed.
7. Keeping in view the arguments advanced by the learned counsel for the petitioners and so also, the objections filed on behalf of the respondents and the affidavit filed by the petitioners for having complied with the obtaining and filing of declaration Form No.11, I deem it proper to quash the impugned sanction order. As regards the first prayer of the petitioners to quash Section 14(2A) of the EPF Act, insofar as punishment of compulsory imprisonment is concerned, does not survive for consideration. Accordingly, I proceed to pass the following:
ORDER I) Writ petitions are allowed in part.
II) The sanction order dated 25.08.2015 as per Annexure-D, passed by the third respondent – Regional Provident Fund Commissioner-II, SRO, Bommasandra, Bangalore is hereby quashed.
DKB Sd/- JUDGE