M/S Shri Ashutosh Structures Pvt. Ltd vs State Of Chhattisgarh

Ramesh Sinha, CJ

Heard Mr. Ajay Pal Singh, learned counsel for the appellant. Also heard Mr. Vikram Sharma, learned Deputy Government Advocate appearing for Respondent No.1/State and Mr. Sunil Pillai, learned counsel appearing for Respondent No. 2.

The appellant has filed this writ appeal against the order dated 10.10.2023 (Annexure A/1) passed by the learned Single Judge in WPL No. 120 of 2023 by which the learned Single Judge has dismissed the writ petition filed by the appellant herein.

Brief facts necessary for the disposal of this writ appeal are that the appellant is a private limited company incorporated under the relevant provisions of the Companies Act, 1952, and having its registered office at 434/9, 431/6 Industrial Area, Village-Jarwah Hirapur, District-Raipur (C.G). An erstwhile proprietorship firm M/s Ashutosh Engineering Industries entered into a partnership with M/s Shri Aashutosh Structures Pvt. Ltd. i.e. the appellant company on 01.05.2003 and later the said partnership was dissolved on 01.06.2003 with the consent of both the parties and the appellant company named M/s Ashutosh Structures Pvt. Ltd. is running the business of the present appellant company. Mr. Haldhari Lal Vyas is one of the directors of the company and the instant appellant is being filed by the appellant company through Mr. Haldhari Lal Vyas. The provisions of Employees Provident Fund & Misc. Act and Employee Provident Scheme, 1952, were applicable in the establishment of appellant and therefore, the appellant has obtained a PF code from the Employee Provident Fund Organisation. The PF code of the appellant company is CG/RAI/17175 and the same was allotted to thed appellant company on 09.01.2002. It is pertinent to mention here that this PF code was generated in the name of Shri Ashutosh Engineering Industries.

Respondents No. 5, 6 and 7 after leaving the company made a written complaint to respondent no. 2 that the appellant company has not remitted their PF contribution since their joining in the appellant company. The complaint of respondent nos. 5, 6 and 7 was later forwarded to respondent no. 2 by the respondent no. 3 vide his letter dated 24.06.2021. Respondent no. 2 taking a swift action on the letter of respondent no. 3 issued a show cause to the appellant on the same dated i.e., 24.06.2021. Respondent no. 2 directed to the appellant by the said show cause notice to remit the PF Contribution in respect of the complainants and show cause as to why penal action against the appellant under EPF and IPC should not be initiated against the appellant. It is further case of the appellant that the appellant has replied to said show cause notice vide its reply dated 19.07.2021 explaining that the complainants do not come under the definition of employee under the EPF & MP Act, 1952 and hence, the appellant company did not remitted the EPF contribution of the complainants. Respondent no. 2 without considering the relevant facts and legal provision as enumerated in reply dated 19.07.2021, again issued another show cause notice on the same subject-matter and directed the appellant to remit an amount of Rs.9,21,159/- towards the EPF contribution of respondents No. 4, 5, 6 and 7 and also give the reason for not taking any penal action against the appellant under section 14 of the EPF & MP Act, 1952 and to register an FIR under Sections 406 and 409 of the IPC. The appellant replied to this show cause notice vide its reply dated 12.11.20221 and an additional submission on 16.11.2021 by referring its earlier reply dated 19.07.2021 clarifying that the complaints are excluded employees and therefore, they cannot be entitled for EPF deduction from their salary and further, the appellant has not deducted any contribution any contribution from their salary benefits. The respondent no. 2 again ignoring the fact that the complainants do not fall under the eligibility of the EPF & MP Act, issued yet another show cause notice dated 07.02.2022, once again directing the appellant to remit the amount of Rs. 9,21,159/- immediately and show cause as to why not to take penal action under EPF & MP Act and Indian Penal Code against the appellant. The appellant reiterated vide its reply dated 10.02.2022 that the complainant do not fall under the eligibility of getting benefit of EPF Scheme and hence they were not eligible any deduction in respect of EPF. The appellant’s detailed replies not considered by respondent no. 2 and he kept issuing one after another show cause and threatening the appellant to take penal action against the appellant under the IPC. The appellant repeatedly clarified that the complainants are not eligible for EPF benefits and therefore, the EPF deduction has not been made from their salary, consequently, the show cause notice not hold water. But respondent. no. 2 under the influence of respondent no. 3 kept harassing the appellant by its show cause notices which compelled the appellant to approach this Hon’ble Court by way to writ petition WPC No. 1243/2022. The Hon’ble Court by its order dated 07.04.2022 was pleased to direct respondent No. 2 to consider and take decision on the reply submitted by the appellant at the earliest preferably within a time limit of 60 days.

The appellant made a representation before the respondent No. 2 on 12.04.2023. Respondent no. 2 again issued a notice dated 30.06.2022 to the appellant after 79 days from the date of submission of the representation dated 12.02.2022 for initiation of an inquiry under section 7A of the Act. The said proceeding is currently going on. This proceeding has been initiated by respondent No. 2 to resolve the issue whether the complainants are entitled to become a member of EPF scheme or not.

Learned Single Judge by impugned order dated 10.10.2023 dismissed the writ petition filed by appellant by observing as under:-

“10. In this case also, respondent No.2 only issued a show cause notice (Annexure P/1) to the petitioner. No final order was passed against the petitioner. Therefore, in the given facts and circumstances of the case and in view of the aforesaid decision of the Hon’ble Apex Court wherein it is held that in the event of an adverse decision, it will certainly be open to the petitioner, to assail the same either in appeal or revision, as the case may be, or in appropriate cases, by invoking the jurisdiction under Article 226 of the Constitution of India, the present petition is not maintainable and is liable to be dismissed. It is accordingly dismissed.”

Learned counsel for the appellant submits that the learned Single Judge has failed to consider the fact that respondent no. 2 has issued the notice dated 30.06.2022 in a very prejudicial and arbitrary manner. The learned Single Judge has failed to consider the fact that respondent No. 2 without conducting any inquiry determined the amount of Rs. 9,21,159/- for remittance towards EPF contribution of the complainants. This act of respondent No.2 reveals that respondent No.2 is functioning in a very biased manner against the appellant. He further submits that the learned Single Judge failed to consider the fact that it is clearly stated in the notice dated 30.06.2022 that Area Enforcement in his report dated 25.10.2021 has mentioned that respondents Nagendra Tiwari and Sanjay Sharma were getting higher salary on joining than the ceiling limit. Therefore, they cannot be come under the definition of employee as defined in Section 2(f) of the EPF & MP Act. He contended that the learned Single Judge failed to consider that respondent No.2 has initiated action against the appellant on a letter of respondent No.3 without considering the fact that all the complainants are raising the issue of non deduction of their EPF contribution after leaving the appellant company. The learned Single Judge has not considered the observation made by the Hon’ble Supreme Court in its order dated 01.12.2006 in Appeal (Civil) No.5295/2006 (M/s Siemens Ltd. v. State of Maharashtra & Others), wherein it is held by the Supreme Court that when a notice is issued with pre-meditation, a writ petition would be maintainable. As such, the writ appeal deserves to be allowed and the impugned order passed by the learned Single Judge deserves to be set aside.

On the other hand, learned Deputy Government Advocate appearing for respondent No.1/State and Mr.Sunil Pillai, learned counsel for respondent No.2 support the impugned order and submit that the learned Single Judge has rightly dismissed the writ petition filed by the appellant herein, in which no interference is called for.

From perusal of the impugned order, it transpires that the learned Single Judge has recorded the finding that respondent No.2 only issued a show cause notice to the appellant. No final order was passed against the appellant and in the event of an adverse decision, it will certainly be open to the appellant to assail the same either in appeal or revision.

Considering the submissions advanced by the learned counsel for the parties, perusing the impugned order and the finding recorded by the learned Single Judge while dismissing the writ petition, we are of the considered opinion that the learned Single Judge has not committed any illegality or infirmity in the impugned order warranting interference by this Court.

Accordingly, the writ appeal being devoid of merit is liable to be and is hereby dismissed.