IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF AUGUST, 2017 BEFORE THE HON' BLE MR. JUSTICE B. VEERAPPA WRIT PETITION NO.53172/2014(L-PF) BETWEEN:
M/S KARUNA TRUST®, B.R.HILLS, YELANDUR TALUK, CHAMARAJANAGAR DISTRICT-571 441, REPRESENTED BY ITS JOINT SECRETARY, SRI. VENKATA NARAYANA CHEKURI. (BY SRI SOMASHEKAR, ADVOCATE) AND:
THE CENTRAL BOARD OF TRUSTEES, PROVIDENT FUND DEPARTMENT, NEW DELHI, REPRESENTED BY THE REGIONAL PROVIDENT FUND COMMISSIONER-II, EMPLOYEES’, PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, "BHAVISHYA NIDHI BHAVANA"
2ND STAGE, GAYATHRIPURAM, MYSORE-570 019.
... PETITIONER ... RESPONDENT (BY SMT. SUMANGALA A. SWAMY, ADVOCATE) … THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 9.6.14, AT ANNEXURE-J, PASSED BY THE RESPONDENT. QUASH THE ORDER DATED 30.9.14, AT ANNEXURE-L, PASSED BY THE EPF APPEALLATE TRIBUNAL, NEW DELHI.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioner - M/s. Karuna Trust ®, who is a Public Charitable Trust is before this Court for issue of writ of certiorari quashing the order dated 9.6.2014 passed by the respondent vide Annexure-J and the order dated 30.9.2014 passed in ATA No.544(6)/2014 by the Employees Provident Fund Appellate Tribunal, New Delhi vide Annexure-L.
2. It is the case of the petitioner that it is a Public Charitable Trust affiliated to Vivekananda Girijana Kalyana Kendra located at B.R. Hills, Chamarajanagar District, which has been constituted in 1986 with response to the high prevalence of Leprosy in Yelandur Taluk, Chamarajnagar District and over the years, the Trust has expanded its scope of work to health, education, livelihoods and advocacy areas. It believes in providing need based, people oriented and culturally acceptable methods using appropriate technology with minimum cost to the community. It strives to provide an equitable and integrated model of health care, education and livelihoods by empowering marginalized people to become self reliant.
3. It is the further case of the petitioner that the Government of Karnataka has handed over the Management of Gumballi PHC to it as an unique and pioneering example to engage with the Government to reach the unreached to provide health programs (Tuberculosis, Malaria, Leprosy, HIV, Anemia, Blindness control, etc.) which are important component provided free of cost. The standard features of a model PHC Managed by it under Public Private Partnership are:
Total responsibility of preventive, promotive, curative and rehabilitative health services to 5,00,000 to 6,00,000 population.
24x7 emergency/casualty services Outpatient department Five to ten bed inpatient facility Minor operation theatre facilities Availability of essential medicines and laboratory tests.
Management of Sub centres attached to the PHC Community participation through strengthening VHSCs and PHC committees.
4. It is a further case of the petitioner that for the aforesaid activities, its key members have been honoured with many awards by the Central and State Governments. One of its Founder Member – Dr. H. Sudarshan has been awarded Padmasree by the Central Government. Further National and International agencies have also honoured the Founder Member/Hon’ble Secretary – Dr. H. Sudarshan. It is further contended that it has undertaken 26 Primary Health Centers (PHCs) in the State of Karnataka and the Government of Karnataka has been funding 100% grant in respect of Honorarium, POL, Electricity and Telephone Charges and Untied funds from NRHM, Government of India through the State Government. In order to monitor each PHCs., the District Health Officers of the respective District of the PHCs are monitoring by obtaining periodical and monthly progress reports from petitioner Medical Officer and Field Health Workers. It is the further case of the petitioner that the State Government is not releasing the grant regularly every month. The grants are released once in three months, six months and in some cases yearly.
5. When the things stood thus, the petitioner received a notice dated 15.1.2014 from the respondent claiming a sum of Rs.13,91,780/- towards damages for the period from 1.1.2008 (wrongly mentioned as 1998) to 30.11.2013 and Rs.6,23,248/- towards interest for the said period.
6. The respondent by an order dated 9.6.2014 under Section 14(B) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 proceeded to pass the impugned order directing the petitioner to pay an amount of Rs.13,91,780/- within 15 days failing which action under Section 8 of the Employees Provident Fund and Miscellaneous Provisions Act will be initiated to recover the amount of damages. Aggrieved by the said order, the petitioner filed an appeal before the Employees Provident Fund Appellate Tribunal, New Delhi, who after hearing both the parties, by the impugned order dated 30th September, 2014 dismissed the appeal confirming the order passed by the Original Authority. Hence, the present writ petition is filed.
7. I have heard the learned Counsel for the parties to the lis.
8. Sri Somashekar, learned Counsel for the petitioner contended that the Employees Provident Fund Appellate Tribunal has dismissed the appeal referring to irrelevant facts not pleaded by the petitioner and without application of mind. The Tribunal has also proceeded on the basis that the petitioner has not challenged the order impugned therein on the ground that there was intense competition from machine made factories and slowdown in demand and increase in cost of raw materials which forced the petitioner to delay the remittance of provident fund dues. The said finding of the Appellate Authority is contrary to the grounds urged by the petitioner in the memorandum of appeal as per Annexure-K. He further contended that the State Government was not releasing the grants in time and were released once in three months, six months and in some cases yearly. There was delay in payment of salary and whenever grant was received, the salary was paid to the employees, provident fund was deducted and paid to the department within the stipulated period. Thus there was no delay in remitting the provident fund contribution. Therefore, the impugned order passed by the Employees Provident Fund Appellate Tribunal is erroneous and contrary to the material on record. He further contended that though before the Appellate Tribunal, a specific ground had been taken that the petitioner- Public Charitable Trust is running based on the grants received from the State Government, the State Government was not releasing the grant regularly in time as is established vide Annexures-E, E1 to E14. Therefore, there was some delay in payment of provident fund contribution which is not intentional, but due to bonafide and unavoidable circumstances. Therefore, there was a delay not on account of the petitioner’s negligence, but on account of the delay in payment made by the Government. The said material aspect has not been considered by the Appellate Tribunal while confirming the impugned order passed by the original authority and the same is without application of mind and contrary to the very material on record. Therefore, he sought to quash the impugned order passed by the Appellate Tribunal and remand the matter to the Appellate Tribunal for fresh consideration by allowing the present writ petition.
9. Per contra, Smt. Sumangala A. Swamy, learned Counsel for the respondent sought to justify the impugned order.
10. Having heard the learned Counsel for the parties to the lis, it is an undisputed fact that the petitioner is a Public Charitable Trust affiliated to Vivekananda Girijana Kendra located at B.R. Hills, Chamarajanagar District and has been constituted in the year 1986 with high prevalence of Leprosy in Yelandur Taluk, Chamarajanagar District and the Government of Karnataka has been funding 100% of grant to the petitioner-trust in respect of Honorarium, POL, Electricity and Telephone Charges and untied funds from NRHM, Government of India through the State Governments. It is the specific case of the petitioner before the Authorities that the State Government was not releasing the grant regularly every month and was releasing once in three months, six months and in some cases yearly. Whenever the petitioner receives the grant, the wages are paid to the employees and the provident fund contribution was remitted within 15 days of payment of wages to the employees. It is the specific case of the petitioner that the State Government was not releasing the amount within the time prescribed which reads as under:-
re 11. It was the specific contention of the petitioner that as per Annexure-K, the Government of Karnataka has been funding 100% grant to the petitioner – Trust in respect of Honorarium, electricity, telephone charges etc., The District Health Officers of the respective districts are monitoring Primary Health Centers by obtaining periodical and monthly progress reports {i.e., IDSP Reports, HMIS reports, MCS reports, T.B. Reports, Leprosy reports, Malaria reports, HIV/AIDS reports, Chiken gunya reports, Dengue reports, Thyroid reports etc.,} from the concerned Medical Officers and Field Health Workers. The State Government was not releasing the grant regularly/monthly and instead paying once in three months, six months, and in some cases releasing the grant yearly. Copies of the grant release orders issued by the Government of Karnataka are at Annexures-E, E1 to E14. The said documents clearly establish regarding the delay in release of grants. Therefore the petitioner was unable to remit the P.F.
contribution in time and remitted as and when grant received from the Government. It was further contended that the order passed by the respondent is not a speaking order and the respondent has not assigned any reasons for imposing the huge damages for the alleged delay in payment of contribution. It was also contended that the respondent has not given any reason for not considering the contentions urged by the petitioner in the reply dated 3.3.2014.
12. The material documents stated supra have not been considered by the Appellate Authority in the proper perspective. The Appellate Authority in the impugned order has observed that the representative of the petitioner initially attended the enquiry proceedings and later on remained absent and the respondent authority heard the submissions of the department’s representative and after going through the records passed the order. The Appellate Authority further observed that the petitioner challenged the said order on the grounds that there was intense competition from machine made factories and further slow-down in demand and increase in cost of raw materials etc., has forced the petitioner to delay the remittance of PF dues. The said finding is contrary to the very grounds urged before the Appellate Authority as per Annexure-K. Except the said finding, the Appellate Authority has not recorded any other reasons. The Appellate Authority extracted the provisions of Section 14-B of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 and proceeded to dismiss the appeal confirming the order passed by the Original Authority.
13. The material documents produced as per Annexures-E, E1 to E14 and the extract made by the petitioner in paragraph-6 of the writ petition as per Annexures-D, D1 to D14 clearly depict that there was a delay in release of grant by the Government. The said aspect of the matter has not been considered by the Tribunal. It was the specific case of the petitioner before the Tribunal that the State Government was not releasing the grant in time and therefore there was some delay in payment of EPF contribution. The Appellate Authority has not considered the same in the appeal. Therefore the impugned order passed by the Appellate Authority cannot be sustained and the matter requires reconsideration by the Appellate Authority on the material documents produced by the petitioner and grounds urged in the memorandum of appeal.
14. In view of the aforesaid reasons, the writ petition is allowed in part. The impugned order dated 30.9.2014 passed by the Appellate Authority in ATA No.544(6)2014 vide Annexure-L on the file of the Employees Provident Fund Appellate Tribunal, New Delhi, is quashed. The matter is remanded to the Appellate Authority for fresh consideration of the appeal in the light of the grounds urged in the memorandum of appeal and the documents produced as per Annexures- E, E1 to E14 and pass orders after giving opportunity to both the parties strictly in accordance with law.
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