IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24th DAY OF JULY 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.435 OF 2011 BETWEEN:
Dayananda Sagar College of Engineering, Kumaraswamy Layout, Bangalore-560 078, By its Secretary. .. Appellant ( By Sri H.M.Muralidhar, Advocate for Sri Ranga Associates, Advocates) AND:
M/s. WE Guard Security Services, (Security House Keeping), Having its office At No.16/1, 5th Cross, 1st Main, Maruthi Extension, Bangalore -560 021, Represented by its Proprietrix Smt.U Sudha Devadas, (Since dead by her LRs.
(a) Sri U.Devadas Nayak, S/o Late U.Srinivasa Nayak, Aged about 66 years, Residing at No.1751/14, Railway Parallel Road, Ram Mohanpura, Bangalore-560 021.
(b) Sri U.Sudesh Nayak, S/o U.Devadas Nayak, Aged about 28 years, Residing at No.2900, W.High Land Street, Apartment No.285, Chandler, AZ 85224, USA.
(c) Smt.Soumya Akshay Khande Prikar, D/o U.Devadas Nayak, Aged about 27 years, Residing at No.54, Vaibhav Apartments, Near Dhempe College, Mitamar, Panjim, Goa-403 002. .. Respondents ( By Sri K. Rama Bhat, Advocate For C/R-1(a) (CP.No.1685/2010) And for R-1(b) and R-1(c).
This Regular First Appeal is filed under Section 96 of Code of Civil Procedure against the judgment and decree dated 27.8.2010, passed in O.S.No.353/2007, on the file of the XX Addl.City Civil & Sessions Judge, Bangalore, partly decreeing the suit for recovery of money.
This Regular First Appeal having been heard and reserved for judgment on 11.07.2019, coming on for pronouncement, this day, the Court delivered the following:
JUDGMENT It is the defendant’s appeal. The respondent as a plaintiff has instituted a suit against the present appellant in O.S.No.353/2007, in the Court of learned XX Addl.City Civil & Sessions Judge, Bengaluru City, (hereinafter for brevity referred to as `trial Court’), for recovery of a sum of `6,20,237/-, together with interest thereupon. The said suit came to be decreed on 27.8.2010. It is against the said judgment and decree, the defendant has preferred this appeal.
2. The summary of the case of the plaintiff in the trial Court is that, it is a Security Service Agency providing security services to various institutions, factories, organisations in and around Bengaluru. The defendant had availed the services of providing security services in their institution with effect from December 2001 to March 2005. Accordingly, the plaintiff had provided security services to the defendant’s institution. The defendant while honouring the bills raised by the plaintiff towards security services, had made a short payment. In that regard, a meeting was held between the parties, wherein it was agreed that an amount of `15,000/- shall be recovered from each monthly bill raised by the plaintiff as “Exigency Money Deposit” and the same shall be returned back to the plaintiff at the end of the contract period. It was informed to the plaintiff that the purpose of creation of Exigency Money Deposit is as security deposit against the payment of statutory liabilities, such as, Provident Fund, Employees State Insurance, unforeseen liability that may arise due to accidental claims to the security personnel engaged by the plaintiff in the services of the institution.
It is the further case of the plaintiff that the defendant started recovering the said Exigency Money Deposit at the rate of `15,000/- from the bills raised by the plaintiff from its first bill dated 7.1.2002 up to 2.4.2004. Thus, the defendant in total deducted a sum of `4,14,541/-. In spite of repeated requests and several letters written by the plaintiff calling upon the defendant to refund the said amount, the defendant failed and neglected to pay the same. The plaintiff got issued a legal notice on 22.3.2006 upon the defendant calling upon it to pay the said amount. Since the defendant gave an untenable reply and failed to repay the amount demanded in the notice, the plaintiff was constrained to institute a suit claiming refund of the principal amount of `4,14,541/-, with interest of `2,05,196/- and notice charges of `500/-, thus, in all claiming a sum of `6,20,237/-, from the defendant.
3. In response to the notice, the defendant appeared through its counsel and filed its written statement. In the said written statement, the defendant denied every plaint averments stating the same to be false. Except denying every plaint averment, the defendant has not taken any specific contention or plea in its written statement.
4. Based on the pleadings of the parties, the trial Court framed the following issues :
1. Whether the plaintiff proves the liability of defendant pay to `4,14,541/- to the plaintiff?
2. Whether the plaintiff proves that the defendant is liable to pay interest of `2,05,196/- and notice charges of `500/-?
3. What order or decree?
On behalf of the plaintiff, one Devadas Nayak was examined as PW-1 and documents from Exs.P-1 to P-15 were marked. On behalf of the defendant, its Secretary by name one Sri Galiswamy was examined as DW-1 and documents from Exs.D-1 to D-18 were marked.
After hearing both side, the trial Court by its impugned judgment and decree dated 27.08.2010, while answering issue No.1 in the affirmative and issue No.2, partly in the affirmative, partly decreed the suit of the plaintiff, directing the defendant to pay a sum of `4,83,436/- to the plaintiff and also ordered the defendant to pay the interest at the rate of 6% p.a. on `4,14,541/- from the date of the suit till realisation. It is against the said judgment and decree, the defendant has preferred this appeal.
5. Lower Court records were called for and the same are placed before this Court.
6. Heard the arguments of the learned counsel from both side and perused the materials placed before this Court.
7. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.
8. The learned counsel for the appellant in his arguments submitted that in Ex.D-4, the plaintiff has admitted that it would pay back the amount at the rate of `15,000/- per month to the defendant. Exs.D-1 and D-4 were given by the plaintiff after the order passed under the proceeding under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter for brevity referred to as `E.P.F.Act’). It is towards the repayment of the amount paid by the defendant, a sum of `15,000/- per month was deducted from the bills raised by the plaintiff. The plaintiff has not produced any document to show that the said deduction was towards Exigency Money Deposit which was refundable to the defendant.
Learned counsel for the appellant further submitted that the trial Court however proceeded on the basis that the defendant had not specifically pleaded in its written statement about the issuance of letter of deduction by the plaintiff, as well it held that any amount of evidence which were not pleaded in the pleadings cannot be considered. Stating that the said finding of the trial Court is erroneous, learned counsel for the appellant relied upon the judgment of Hon’ble Apex Court in Bhagwati Prasad –vs- Chandramaul, reported in {(1996) 2 SCR 286}.
9. Learned counsel for the respondent in his arguments submitted that the plaintiff was not intimated or notified about the proceedings initiated under Section 7A of E.P.F.Act. He was fitted in it at the instance of the defendant. Had the plaintiff been informed or impleaded in the said proceeding, they would have contested the matter and established that they had the benefit of infancy protection period of three years which exempted it from paying the provident fund contribution. As such, there is violation of nature justice.
In his support, he relied upon the judgment of this Court in M/s.Regal Fashions, Rep.by its Partner –vs- The Regional PF Commissioner (Enforcement), Employees Provident Fund Organisation and another, reported in ILR 2010 KAR 1415.
In the light of the above, the points that arise for my consideration are :
1. Whether the finding of the trial Court that the plaintiff has proved the liability of defendant to pay `4,14,541/- to the plaintiff is an erroneous finding ?
2. Whether the judgment and decree under appeal deserves an interference at the hands of this Court?
10. PW-1 in his examination-in-chief in the form of affidavit evidence has reiterated the contentions taken up by the plaintiff in its plaint. In order to show that the plaintiff was providing security services to the defendant’s institution, PW-1 has got produced a copy of its quotation dated 20.12.2001, addressed to the Secretary of the defendant, which is marked at Ex.P-1. Further in order to show that the plaintiff was a registered establishment and it had its registration with Employees State Insurance Corporation, Employees Provident Fund Organisation and with Excise Department, PW-1 has also produced and marked the relevant Registration Certificates at Exs.P-2, P-3, P-4 and P-5 respectively.
PW-1 in his cross-examination has stated that since last ten years, prior to 22.4.2010, the plaintiff has been providing security services to the defendant’s institution. The contract of providing security services to the defendant was not under any written contract. In his further cross-examination, PW-1 has admitted a suggestion as true that, earlier he was running an establishment by name M/s.Frontline Security Service and that earlier he was providing security services to the defendant through his establishment i.e., Frontline Security Service. The business of the present plaintiff i.e., M/s.WE-Guard Security Services, commenced from December 2001. He also admitted a suggestion as true that his quotation dated 20.12.2001 was accepted by the defendant enabling the plaintiff to provide security services in the defendant’s institution.
PW-1 has also stated that about fifty security guards were deployed to the defendant’s institution through his agency. He also admitted a suggestion as true that M/s.Frontline Security Service which was carried on by him from 1994 to 2001, was not having Provident Fund Code. He also admitted that he provided security services to the defendant’s institution from December 2001 to March 2005. Though he stated that he does not know whether provident fund authorities have initiated action under Section 7A of the E.P.F.Act against M/s.Frontline Security Service during September 2001 for non-payment of provident fund contribution from January 1994 to August 2001, however, he admitted that he had not remitted the provident fund contribution for the security personnel deployed during the said period. He also admitted that during the said period, he had deployed more than twenty security guards to the defendant’s institution from 1994 to August 2001 continuously.
11. From the above evidence of PW-1, it becomes very clear that the plaintiff was not just providing security services to the defendant for a period from 2001 to 2005, but, even prior to that, i.e., from 1994 till 2001 also, he had provided security services to the defendant though under different name of his establishment, which was M/s.Frontline Security Service. PW-1 has also admitted that though he was liable to pay the provident fund to the employees working under him, but, he neither had a registered code under the E.P.F.Act nor he was remitting provident fund contribution for the security personnel deployed during the said period. Therefore, the fact remains that, though twenty- plus employees were deployed by the plaintiff through his earlier establishment as security personnel to the defendant’s institution, but, he did not remit the provident fund contribution of those deployed employees with the Provident Fund Organisation.
12. In the cross-examination of PW-1, the suggestion made to the witness that by writing a letter to the defendant as per Ex.D-1, he had agreed to the defendant deducting a sum of `15,000/- every month as the payment towards the provident fund contribution to the Provident Fund Organisation on behalf of the plaintiff, was not admitted by him as true. Though he admitted that such a deduction of `15,000/- per month was being made by the defendant for several months, but, he called the same was not permitted by him to deduct. He denied a suggestion that the defendant has adjusted those deductions made at `15,000/- per month from out of the monthly security charges bills raised by the plaintiff to recover a sum of `3,41,287/- said to have been paid by the defendant to the Provident Fund Organisation. However, he stated that the said deduction was made by the defendant from December 2001.
13. In order to show that the defendant had deducted the amount from out of the payment of the bill raised by him, PW-1 has produced a copy of his letter dated 24.1.2002 as at Ex.P-6, written by the plaintiff to the defendant along with a photocopy of a cheque for a reduced sum, which according to the plaintiff, was after the alleged deduction made by the defendant. He has produced a statement of account said to have been maintained by them to show that from 7.1.2002 up to the bills raised on 2.4.2004, the defendant had deducted the amount and thus has withheld an amount of `4,14,541/-. He has also produced copies of letters dated 19.8.2003, 9.1.2004, 6.2.2004 and 29.12.2005 and got them marked at Exs.P-9, P-10, P-11 and P-12 respectively to show that objecting for the alleged unauthorised deductions made by the defendant, he had written letters to the defendant calling upon it to refund the amount deducted and not to further deduct any amount from its entitlement under the bills. PW-1 has also produced copy of the legal notice sent on his behalf by his counsel to the defendant and dated 22.3.2006, calling upon the defendant to refund a sum of `4,02,174/- with interest thereupon. A copy of the said notice is marked at Ex.P-14. The reply received by him to the said notice at Ex.P-14 was marked by PW-1 at Ex.P-15. In the said reply notice, the defendant has replied that the defendant had paid provident fund contribution which was the statutory obligation of the plaintiff to pay the said amount towards provident fund contribution which is being deducted from out of the payment to be made to the plaintiff on the bills raised by it.
14. DW-1 in his evidence has stated that the defendant’s institution was availing security services from the plaintiff since the year 1994. The earlier name of the plaintiff-firm was M/s.Frontline Security Service. Plaintiff had deployed security staff to the defendant’s premises on contract basis. He has stated that the plaintiff though had statutory obligation to comply with various labour legislations viz., The Contract Labour (Regulation & Abolition) Act, 1970, Employees’ State Insurance Act, 1948, Employees’ Provident Fund & Miscellaneous Provisions Act, 1952, Payment of Bonus Act, 1965, Industrial Disputes Act, 1947, etc., and had a duty to remit the provident fund contribution of the workers deployed by them, still, it had not remitted the same. As such, proceedings under Section 7A of the E.P.F.Act, was instituted against the defendant. The plaintiff had not even registered its establishment and obtained Provident Fund Code. The defendant being the principal employer, had to pay the provident fund contribution. The Assistant Provident Fund Commissioner & Enforcement, in his order dated 24.7.2001, has held that a sum of `3,41,287/- had to be paid towards the provident fund contribution for the period from January 1994 to August 2000 and had called upon the defendant to pay the same within fifteen days of its receipt. Even the plaintiff had also agreed to deposit the said amount and had written a letter dated 6.8.2001 to remit the amount and deduct the same at the rate of `15,000/- per month from the bills raised by the plaintiff. He also stated that plaintiff’s firm was registered on 19.5.2001 and the contract labourers were deployed through the plaintiff’s firm till the year 2005. Therefore, from September 2000 to November 2001, the provident fund contributions were paid under the defendant’s Code only as per the challan dated 13.1.2002. He also stated that the recoveries made from the monthly bills of the plaintiff is contractual and legal.
In his support, he produced a copy of the letter dated 15.2.1999, written by the plaintiff to the defendant and marked it as Ex.D-2. He produced proceedings of enquiry under Section 7A of the E.P.F.Act, dated 24.7.2001 and marked it at Ex.D-3, a letter dated 6.8.2001, issued by M/s.Frontline Security Service to the defendant has been marked at Ex.D-4, a photocopy of the letter dated 4.9.2001 issued by the defendant to Assistant Provident Fund Commissioner is marked at Ex.D-5, copy of the challan dated 8.8.2001 issued by the defendant was marked at Ex.D-6, a copy of the letter dated 18.1.2002 issued by the defendant to the Assistant Provident Fund Commissioner was marked at Ex.D-7 and copies of four challans, all dated 9.1.2002, were marked from Exs.D-8 to D-11. He also got marked their letter to Provident Fund Commissioner dated 2.7.2010 at Ex.D-12, a bank’s statement of their account at Ex.D-13 and five more copies of the challans, certified by State Bank of India, at Exs.D-14 to D-18.
He was subjected to a detailed cross-examination, wherein he has stated that the security service aspects were being dealt with by one Sri Balachandra, who was the Purchase Secretary with the defendant and that the plaintiff was not intending to examine the said witness.
He further stated that, apart from the plaintiff, who supplies security service labour force to the defendant, there are several contractors giving their services to the defendant like contractor to run Canteen, building contractor etc., whose labour force is also working for defendant’s institution. He denied a suggestion that the defendant had collected duly signed blank letterheads of the plaintiff’s firm and the same have been misused by the defendant.
15. From the above pleadings and the evidence of the parties, the undisputed fact remains that the plaintiff had been providing security services by supplying security labour force to the defendant’s institution since the year 1994. However, till the year 2001, the said supply of security personnel was through its establishment with the name M/s.Frontline Security Service. It was only from 2001 up to 2005, the supply of services was through his renamed establishment by name WE-Guard Security Services. It is also an admitted fact that till the year 2000, the said M/s.Frontline Security Service was not registered either under Employees’ State Insurance Act or under E.P.F.Act. As such, it was not given with any Code of registration under those Acts. PW-1 has also admitted in his cross-examination that, as supplier of the labour force, he was under an obligation to deposit the provident fund contribution under the E.P.F.Act, however, he had not deposited the same.
16. So far as the evidence of DW-1 is concerned, the entire examination-in-chief of DW-1 in the form of affidavit evidence was totally marking many statements on record which have found no place in their written statement i.e., all that what is not averred in its written statement, for the first time, the defendant has come up in its evidence as DW-1. His evidence that, plaintiff was an unregistered firm prior to 2001 and that it had not obtained a Code under various Labour Laws, including Employees’ State Insurance Act and E.P.F.Act and also his contention that the plaintiff was liable to pay provident fund contribution to the Provident Fund Organisation and that Assistant Provident Fund Commissioner had initiated a proceeding under Section 7A of the E.P.F.Act against the defendant, were all have come out for the first time in the evidence as DW-1 and no whisper on those aspects were there in its written statement. Further, the plaintiff had requested them to remit a sum of `3,41,287/- to the Provident Fund Organisation and had agreed to reimburse the said amount by agreeing for a deduction of `15,000/- per month from out of the bills submitted by it to the defendant, were all for the first time canvassed by DW-1 in his evidence. Nothing had prevented the defendant to make those statements or to disclose its stand in its written statement which they have not done. As already observed above, its written statement has just confined only in denying the plaint averments and nothing more than that.
17. It is a settled principle that no evidence can be looked into without there being a corresponding pleading in that regard. However, learned counsel for the appellant has relied upon a judgment of Hon’ble Apex Court in Bhagwati Prasad’s case (supra), where the Hon’ble Apex Court after observing in Para-9 of its judgment that a party cannot be permitted to justify its claim on a ground which is entirely new and which is inconsistent with the ground made by it in its pleadings, had further pleased to observe in Para-10 of the very judgment that, ”If a plea is not specifically made and yet it is covered by an issue by implication and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence.”
Further, in Para-15 of the same judgment, the Hon’ble Apex Court was pleased to observe as below :
“ The importance of the pleadings cannot, of course, be ignored, because it is the pleadings that lead to the framing of issues and a trial in every civil case has inevitably to be confined to the issues framed in the suit. The whole object of framing the issues would be defeated if parties are allowed to travel beyond them and claim or oppose reliefs on grounds not made in the pleadings and not covered by the issues. But cases may occur in which though a particular plea is not specifically included in the issues, parties might know that in substance, the said plea is being tried and might lead evidence about it. It is only in such a case where the Court is satisfied that the ground on which reliance is placed by one or the other of the parties, was in substance, at issue between them and that both of them have had opportunity to lead evidence about it at the trial that the formal requirement of pleadings can be relaxed.”
In the instant case, as already observed above, the written statement filed by the defendant was a mere denial of the plaint averments and nothing more than that. In the light of the same, the trial Court has proceeded to frame the issues which are copied above. A reading of those issues go to show that though the burden of proving the defendant’s liability towards it has been imposed upon the plaintiff, but, the specific contention of the defendant, which for the first time has come out in the evidence of DW-1 that the plaintiff was liable to pay provident fund contribution to the Provident Fund Organisation, as such, the defendant being the principal employer had paid the said sum of `3,41,287/- to the provident fund authorities, cannot be accommodated in any of the three issues framed by the trial Court.
18. Similarly, the contention of the defendant raised for the first time in the evidence of DW-1 that the plaintiff had given to it in writing requesting the defendant to pay off the alleged contribution of the provident fund of a sum of `3,41,287/- to the Provident Fund Organisation and that the plaintiff has further agreed to undergo a deduction at the rate of `15,000/- per month from out of its entitlement on the bills raised by it against the defendant, cannot be given a place in the issues framed by the trial Court.
19. No doubt, issue No.1 which casts a burden on the plaintiff to prove the alleged liability of the defendant for a sum of `4,14,541/- towards the plaintiff may enable the defendant to suggest or elicit in the cross-examination of the plaintiff’s witnesses favourable statements/ answers supporting the contention of the defendant, however, the defendant on its own for the first time in the evidence of DW-1 cannot bring on record many new averments and statements which earlier to that did not find a place in its pleading. Therefore, when neither the issues framed by the trial Court were giving any scope for the defendant to come out with its statements for the first time in its evidence which were not mentioned in its written statement and when there is no possibility of the parties to the litigation knowing anything about the contention of the defendant in the absence of its plea, then, the defendant cannot bring those statements for the first time in the evidence of DW-1. As such, the judgment in Bhatwati Prasad’s case (supra) would not enure to the benefit of the defendant/appellant.
20. The Hon’ble Apex Court in Bachhaj Nahar –vs- Nilima Mandal and another, reported in { (2008) 17 SCC 491}, at Para-16, while relying upon its previous judgment in Ram Sarup Gupta –vs- Bishun Narain Inter College, reported in {(1987) 2 SCC 555}, has reproduced the portion of the said judgment which is as below :
“ It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a far trial it is imperative that the party should settle the essential material facts so that other party may not be taken by surprise.”
The Hon’ble Apex Court further in the same judgment in Nilima Mandal’s case (supra), was also pleased to hold that the object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. The object of issues is to identify from the pleadings the questions or points required to be decided by the Courts so as to enable parties to let in evidence thereon. When the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief.
21. In the instant case, as already observed above, the defendant has tried to and placed its entire case for the first time in its evidence as DW-1 without whispering anything about its stand or contention or even the defence in its written statement. As such, the very evidence of DW-1 need not be considered.
In spite of the above, even if the evidence of DW-1 is considered and the evidence of PW-1 is also perused, what it reveals that the entire defence of defendant in the Court below was that the alleged deduction made by it in the bills raised by the plaintiff was towards reimbursement of provident fund contribution made by it to the Provident Fund Commissioner, towards which contribution, the plaintiff was liable to pay. It was in that regard, the plaintiff had requested it through its letters at Exs.D-1 and D-4 to make payment.
Both Exs.D-1 and D-4 are one and the same document. It is in the letterhead of the plaintiff and dated 6.8.2001, wherein it is shown that the plaintiff had requested the defendant to make payment of provident fund amount of `3,41,287/- demanded by the authorities and that the said amount be deducted in the installment of `15,000/- per month from the bills raised by the plaintiff. The said document has been seriously denied and disputed by the plaintiff. Even though the plaintiff has admitted his signature in Ex.D-1, but, Ex.D-4 was not confronted to PW-1 in his cross- examination. Still after taking that plaintiff has not disputed his signature even in Ex.D-4 also, but, mere non disputing of the signature on Ex.D-4 would not by itself prove that the plaintiff had written the said letter to the defendant. It is for the reason that, plaintiff has specifically stated in his evidence and has suggested to DW-1 in his cross-examination that, at the time when there was a serious strike that was going on in the campus of defendant’s institution, the defendant had obtained few blank letterheads from the plaintiff duly signed by the plaintiff on the pretext that a police complaint was required to be filed in the name of the complainant against the alleged illegal strike in the campus and the letterheads given during that occasion was misused by the defendant, however, the said suggestion was not admitted as true by the defendant.
Still, what makes the said document suspicious is the fact that about existence of the alleged letter at Ex.D-4, the defendant did not whisper anything about the same till leading of its evidence in the matter and when DW-1 produced the said document for the first time. Nothing had prevented the defendant from mentioning about the same in its reply to the legal notice sent by the plaintiff. The said reply which is at Ex.P-15 does not mention anything about the defendant making the provident fund contribution at the specific request of the plaintiff as per Ex.D-4. Further, even in his written statement also, the defendant has not whispered anything about the said document and it is for the first time, he confronted the same to PW-1 in his cross-examination with the photocopy of the said document and got it marked at Ex.D-1. Even at that time also, he did not produced Ex.D-4 in the Court. Therefore, Ex.D-4 does not inspire any confidence to believe.
22. The case of the defendant as canvassed for the first time in its evidence is that a proceeding under Section 7A of E.P.F.Act was initiated against it by the Assistant Commissioner of Provident Fund, however, the defendant has not produced any material to show that an information or intimation about the said proceeding was ever brought to the notice of the plaintiff. When a considerable amount running more than `3 lakhs was said to be liable to the payable to Provident Fund Organisation and when a proceeding was also said to be under process, it is hard to believe that the defendant, which is a recipient of the security services, would participate in the proceedings before the Provident Fund Commissioner and also proceeds to pay the contribution without bringing to the knowledge of the so called actual person liable to pay the said amount (the plaintiff in the present case) and about the pendency of the said proceeding.
23. Even though the defendant/appellant contends that the plaintiff was an unregistered establishment and it did not had any Provident Fund Code at that point of time, as such, being the principal employer, it had paid it, but, the same is not acceptable, for the reason that, as a reasonable person, before discharging somebody else’s liability, it is expected that the other person would bring the same to the notice of the actual person who is liable to pay it.
24. In the instant case, the defendant/appellant has not done this. On the other hand, in the year 2001, he claims to have paid provident fund contribution of an establish i.e., M/s.Frontline Security Service, which had ceased to be in existence at that point of time. Even if the letter at Ex.D-4 is taken to have been written by the plaintiff itself, still, a reading of the said letter no where goes to show that the plaintiff has agreed and requested to pay off the alleged provident fund contribution arrears payable by M/s.Frontline Security Service. There is no whisper of the name of M/s.Frontline Security Service in the document at Ex.D-4. As such also, Exs.D-1 and D-4 which are two copies of the same document, are not safe to believe and act upon.
25. In addition to the above, the fact that, as admitted by DW-1 in his cross-examination that at the relevant point of time, the defendant was making use of several labourers provided by different contractors working for it also cannot be ignored. Even according to DW-1, at some point of time, apart from M/s.Frontline Security Service, there were few more contractors maintaining and managing the Canteen, building etc., under the defendant’s umbrella. They too had provided a large number of labour force to the defendant. As such, in the absence of any details or proof to show that all the bills of the alleged arrears of provident fund contribution with respect to the account numbers shown in Section 7A of E.P.F.Act proceeding which is at Ex.D-3, pertains to only the labour force provided by M/s.Frontline Security Service, it cannot be taken that the entire amount of arrears shown therein were of the employees of the plaintiff or M/s.Frontline Security Service. As such also, the contention of the defendant that the alleged deductions made in the bills were towards the provident fund contribution, is not acceptable.
26. At this juncture, the argument of learned counsel for the respondent/plaintiff that had the defendant brought to its notice about the pendency of the proceedings under Section 7A of the E.P.F.Act, they would have contested the matter since they had the benefit of infancy protection period of three years which exempted it from paying the provident fund contribution, also cannot be ignored. In that regard, learned counsel for the respondent has relied upon M/s.Regal Fashion’s case (supra), wherein a Coordinate Bench of this Court was pleased to observe that at the relevant point of time, which was in the year 1996 – 1997, Section 16(1)(d) of the E.P.F.Act was in existence, as such, till 22.9.1997, when the said Section was in force, there need not be contribution for the said period for a new industry. Since there was an exemption at the infancy stage, though the said Section was later on said to have been dropped from the Act, still, as at the relevant point of time, within which period, M/s.Frontline Security Service also claims to be a new establishment and eligible for infancy protection exemption, the information given about Section 7A of E.P.F.Act proceeding by the defendant to the plaintiff would have enabled the plaintiff to contest the matter and seek exemption from the payment of provident fund contribution. For the said reason also, since the defendant has paid provident fund contribution on its own and without there being any request or consent by the plaintiff, this unilateral act of alleged recovery of the said amount from out of the bills raised upon it by the plaintiff would not hold good.
27. Lastly, even according to DW-1, the entire matter of security service to the defendant’s institution was being taken over by one Sri Balachandra, who is said to be a Purchase Secretary with the defendant’s institution. Several of the correspondences of the plaintiff, as could be seen from the documents produced by the plaintiff, more particularly, Exs.P-6, P-9, P-10, P-
11 and P-12, go to show that they were with the said Secretary. That being the case, the entire details of the contract of providing security services and alleged consent for deduction of the amount from out of the bills payable to the plaintiff by the defendant were all to the exclusive personal knowledge of the said Secretary Sri Balachandra. Since the plaintiff despite specifically asking DW-1, the said witness has categorically stated that defendants are not going to examine said Balachandra as a witness, the defendant has withheld one of the best evidence available with it pertaining to the dispute involved in the suit.
28. Thus, the evidence placed before the Court clearly go to show that the undisputed deductions made by the defendant in the bills raised by the plaintiff amounting to a sum of `4,14,541/- was without any valid reasons or justification, as such, the defendant was liable to pay that amount to the plaintiff with interest thereupon.
29. The trial Court since has appreciated the materials placed before it in its proper perspective and has arrived at the same conclusion by decreeing the suit of the plaintiff, I do not find any reason to interfere in it. The rate of interest ordered by the trial Court also being only 6% from the date of suit till its realisation, the said awarding of interest also does not warrant any interference.
30. Accordingly, I proceed to pass the following order:
ORDER The Appeal is dismissed. The judgment and decree dated 27.8.2010, passed by the learned XX Addl.City Civil Judge & Sessions Judge, Bengaluru City, in O.S.No.353/2007, is confirmed.
The amount deposited, if any, by the appellant pursuant to the order dated 17.1.2012 be released in favour of the respondents in accordance with law after the period of appeal and if no appeal is preferred.
The Registry is directed to transmit a copy of this judgment along with lower Court records to the lower Court without delay.
Sd/- JUDGE bk/