Provident fund amount is payable even after dismissal of the employee- Madras HC

Entitlement for Payment of provident fund — Respondent refusing to pay the provident fund amount payable to him on the ground that the petitioner misappropriated huge amount and caused loss to the Society. — Whether the petitioner can be deprived of the provident fund. — Section 72 of the Act, that was extracted above, makes it clear that the provident fund shall not be liable to attachment or be subject to any other process of any court or other authority. — Furthermore, when the facts are also not in dispute, no useful purpose would be served in driving the petitioner to the revisional authority after two years of filing of the writ petition for claiming provident fund.

(2014) 8 MLJ 439 : (2014) 18 SCT 736

MADRAS HIGH COURT

SINGLE BENCH

( Before : D. Hari Paranthaman, J )

K. RAMAMURTHY — Appellant

Vs.

REGISTRAR OF CO-OPERATIVE SOCIETIES — Respondent

Writ Petition No. 26351 of 2012

Decided on : 25-09-2014

Constitution of IndiaIndia Bharat Varsha (Jambu Dvipa) is the name of this land mass. The people of this land are Sanatan Dharmin and they always defeated invaders. Indra (10000 yrs) was the oldest deified King of this land. Manu's jurisprudence enlitened this land. Vedas have been the civilizational literature of this land. Guiding principles of this land are : सत्यं वद । धर्मं चर । स्वाध्यायान्मा प्रमदः । Read more, 1950 – Article 21

Cases Referred

K. Marappan Vs. The Deputy Registrar of Co-operative Societies and The Special Officer, Vattur Co-operative Agricultural Bank, (2006) 134 CompCas 204 : (2006) 4 CTC 689 : (2006) 4 LW 495 : (2006) 4 MLJ 641

ORDER

D. Hariparanthaman, J.—The petitioner was employed as a Manager in the second respondent Co-operative Society. He rendered 30 years of service. However, he was dismissed from service, by an order dated 14.02.2012 for the alleged mis-appropriation of huge amount along with the co-employee. This Court is not concerned about the dismissal in this writ petition, as the claimA Claim A claim is “factually unsustainable” where it could be said with confidence before trial that the factual basis for the claim is entirely without substance, which can be the case if it were clear beyond question that the facts pleaded are contradicted by all the documents or other material on which it is based. of the petitioner is only for payment of Provident Fund payable under Section 72 of the Pondicherry Co-operative Societies Act, 1972 (for short “Act”).

2. The petitioner earlier made a representation dated 21.05.2012 to the second respondent, to disburse the Provident Fund and other amounts due to him. Since no order was passed, he approached this Court by filing a writ petition in W.P. No. 16827 of 2012 for issuance of a writ of mandamus to direct the respondent to disburse the provident fund and other amounts due to him. This Court, by an order dated 06.07.2012 directed the second respondent to consider the representation of the petitioner dated 21.05.2012 and pass appropriate orders on meritsMerits Strict legal rights of the parties; a decision “on the merits” is one that reaches the right(s) of a party as distinguished from a disposition of the case on a ground not reaching the rights raised in the action; for example, in a criminal case double jeopardy does not apply if charges are nolle prossed before trial commences, and in a civil action res judicata does not apply if a previous action was dismissed on a preliminary motion raising a technicality such as improper service of process., within a period of four weeks from the date of receipt of a copy the order.

3. It is relevant to extract the following passages found in paragraphs 3 and 4 of said order:-

“3. Since the provident fund amount is payable even after dismissal of the employee, Mr. Tamilvanan, learned counsel for respondents, on taking notice, submitted that four weeks timeTime Where any expression of it occurs in any Rules, or any judgment, order or direction, and whenever the doing or not doing of anything at a certain time of the day or night or during a certain part of the day or night has an effect in law, that time is, unless it is otherwise specifically stated, held to be standard time as used in a particular country or state. (In Physics, time and Space never exist actually-“quantum entanglement”) may be granted to the second respondent to consider and dispose of the representation of the petitioner on merits.

4. In such circumstances, the writ petition is disposed of, giving direction to the second respondent to consider the representation of the petitioner dated 21.05.2012 and pass appropriate orders on merits, within a period of four weeks from the date of receipt of a copy of this order. No costsCosts Subject to any written law, costs are at the discretion of the Court, and the Court has the power to determine all issues relating to the costs of or incidental to all proceedings, including by whom and to what extent the costs are to be paid, at any stage of the proceedings or after the conclusion of the proceedings. Generally “Costs” includes charges, disbursements, expenses, fees, and remuneration. Costs in any matter are payable from the date of the order of the Court unless the parties otherwise agree. The costs of a third-party funding contract are not recoverable as part of the costs of, or costs..”

4. While so, the impugned order dated 13.09.2012 was passed by the second respondent refusing to pay the provident fund amount payable to him on the ground that the petitioner misappropriated huge amount and caused loss to the Society.

5. The petitioner has filed this writ petition to quash the aforesaid order dated 13.09.2012 and for a consequential direction to pay the provident fund amount.

6. The learned counsel for the petitioner placed heavy reliance on Section 72 of the Act. According to the learned counsel, even after dismissal, the provident fund amount cannot be withheld. The learned counsel also referred to paragraphs 3 and 4 of the order dated 06.07.2012 extracted above.

7. On the other hand, the learned counsel for the second respondent has submitted that the writ petition itself is not maintainable since the petitioner can avail remedy of revision under Section 141 of the Act against the impugned order passed by the second respondent before the first respondent. Further, it is submitted that at the most, the petitioner can claim contribution made by him towards provident fund and he cannot claim the contribution made by the employer, since he misappropriated huge amount. The learned counsel also submitted that the petitioner also failed to invest the provident fund in the financing bank as per Section 72(2)(d) of the Act and therefore, he was negligent, besides committing misappropriation. Hence, he is not entitled to the employer’s contribution. The learned counsel also submitted that on facts, the petitioner took loan from the provident fund account and he has to repay the loan amount Rs. 63,700/- and after adjusting the said amount, in the normal course, the Society is liable to pay Rs. 2,32,944/-. But now the petitioner could not claim the employer contribution and he could claim only the employee’s contribution.

8. I have considered the submissions made by the learned counsel on either side.

9. It is relevant to extract Section 72 of the Act:-

“72. Contributory Provident fund:-

(1) A registered society shall establish a contributory provident fund for the benefit of its employees to which shall be credited all contributions made by the employees and the society in accordance with the rules and by-laws or the Employees Provident Funds Act, 1952 whichever is more beneficial.

(2) A contributory provident fund established by a registered society under sub-section (1)–

(a) shall not be used in the business of the society;

(b) shall not form part of the assets of the society;

(c) shall not be liable to attachment or be subject to any other process of any court or other authority;

(d) shall be invested in the financing bank.”

10. In the aforesaid facts and circumstances of the case, two issues arise for consideration in this writ petition. The first issue is whether the writ petition is maintainable in view of the remedy available under Section 141 of the Act and the second issue is whether the petitioner can be deprived of the provident fund.

11. It is true that the petitioner has a remedy by way of revision against the impugned order passed by the second respondent before the first respondent. If it is not the payment of terminal benefits viz., Provident Fund, this Court, would have no hesitation in directing the petitioner to approach the revisional authority, namely, the first respondent under Section 141 of the Act. But the prayer is for payment of provident fund. Section 72 of the Act, that was extracted above, makes it clear that the provident fund shall not be liable to attachment or be subject to any other process of any court or other authority. That protection is given for payment of provident fund, after the person leaves the service of the employer. In this case, I am not going into the merits or allegations relating to dismissal. Even if an employee is dismissed, in view of Section 72 of the Act, Provident Fund cannot be withheld.

12. In view of a larger Bench judgmentJudgment The statement given by the Judge on the grounds of a decree or order - CPC 2(9). It contains a concise statement of the case, points for determination, the decision thereon, and the reasons for such decision - Order 20 Rule 4(2).  Section 354 of CrPC requires that every judgment shall contain points for determination, the decision thereon and the reasons for the decision. Indian Supreme Court Decisions > Law declared by Supreme Court to be binding on all courts (Art 141 Indian Constitution) Civil and judicial authorities to act in aid of the Supreme Court (Art 144) Supreme Court Network On Judiciary – Portal > Denning: “Judges do not speak, as do actors, to please. They do not speak, as do advocates, to persuade. They do not speak, as do historians, to recount the past. They speak to give Judgment. And in their judgments, you will find passages, which are worthy to rank with the greatest literature….” Law Points on Judgment Writing > The judge must write to provide an easy-to-understand analysis of the issues of law and fact which arise for decision. Judgments are primarily meant for those whose cases are decided by judges (State Bank of India and Another Vs Ajay Kumar Sood SC 2022) of this Court in K. Marappan Vs. The Deputy Registrar of Co-operative Societies and The Special Officer, Vattur Co-operative Agricultural Bank, , the writ petition is maintainable against cooperative society, if the order impugned is contrary to the statutory provision. Further more, in this case, the payment, which the petitioner claims is provident fund, I am of the view that it amounts to deprival of livelihood under Article 21 of the constitution.

13. Furthermore, when the facts are also not in dispute, no useful purpose would be served in driving the petitioner to the revisional authority after two years of filing of the writ petition for claiming provident fund. Even in the earlier occasion, this Court passed an order dated 06.07.2012 in W.P. No. 16827 of 2012, wherein, it has been clearly held in paragraphs 3 and 4 that the petitioner is entitled to provident fund. But the second respondent can withhold the amount of loan, for which the petitioner has no objection.

14. Taking into account the aforesaid facts, I am of the view that the writ petition is maintainable in view of the aforesaid decision and particularly taking into account Section 72 of the Act, the petitioner is entitled to provident fund. The records produced by the second respondent as well as the submission made by the learned counsel makes it clear that after deducting the loan amount, provident fund amount payable to the petitioner is Rs. 2,32,944/-.

15. The writ petition is allowed and a direction is issued to the second respondent to pay the amount payable to the petitioner in respect of the Provident Fund, within a period of three months from the date of receipt of a copy of this order. It is stated by the learned counsel for the respondents that surcharge proceedings is pending against the petitioner. The pendency of the surcharge proceeding cannot be a reason to withhold the provident fund. Even if surcharge proceeding is issued and it reaches finality, the provident fund cannot be withheld against surcharge proceeding. However, society can very well proceed against the petitioner for collection of amount payable under the surcharge proceeding. No costs.