M/s. C.P.LData Services (INDIA) Private Ltd V. The Union of India

WP/32635/2023

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The case involves M/s. C.P.I. Data Services (INDIA) Private Ltd., represented by its director A. Balaji, who filed a writ petition against the Union of India, Ministry of Labour and Employment, the Employees Provident Fund Organization (EPFO), and Bank of Baroda. The petitioner challenged a prohibitory order issued by the EPFO, which attached the petitioner's bank account for non-payment of provident fund contributions due to financial difficulties exacerbated by the COVID-19 pandemic. The petitioner argued that the attachment was illegal, arbitrary, and violated principles of natural justice, seeking to have the order set aside and to be allowed to pay the dues in installments. The court did not delve into the merits of the case but directed the EPFO to consider the petitioner's request for installment payments.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 724750 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 05-12-2023
• Assessment Year: misc
• Laws Referred To: Employees Provident Fund and Miscellaneous Provisions Act, 1952, Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: RAJYALAXMI; G VENKATESHWARLU
• Assessee Lawyers: M R S SRINIVAS
• Keywords: Bank Account Attachment; Covid-19 impact; Natural Justice; Prohibitory order; Writ of Mandamus; Financial Instability
• Section: 89; 226; 88; 14(b); 8F

Judgement Text

"132521 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FIFTH DAY OF DECEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 32635 OF 2023 Between: M/s. C.P.l. Data Services (lNDlA) Private Ltd. Rep. by its Director, A.Balaji. S/o. Late A.B.K.Murthy, Aged about 63 yrs, Occ. Director, R/o Flat.No C-11, Vijay Pratap Apartment, Vidyanagar, Hyderabad- ...PETITIONER/wRIT PETITIONER AND 1. The Union of lndia, Ministry of Labour and Employment, Rep by its secretary. Shram Shakti Bhawan, New Delhi- '1 l0 001. 2. The Employees Provident Fund Organization, Rep by.its..Com.missioner, Regional Office at Employees provident fund organization Madhapur, Hyderabad Bavisyanidhi l3havan, 3-4-763/barkathpura chaman, Hyderabad- 500027. 3. The Regional Office, EPFO, Rep by its Assistant P.F. Commissioner and Recovery Officer, Hyderabad-ll. 4. The Recovery Officer, Employees Provident Fund Office, Madhapur, Hyderabad. 5. Bank of Baroda, rep by its Branch Manager, P.8.8.812159615, Road.No 10, Banjara Hills, Hyderabad. ...RESPONDENTS Petition under Article 226 ot lhe Constitution of [ndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction more particularly one in the nature of WRIT OF MANDAMUS to declare the action of the respondents no. 2 to 5 in issuing the prohibitory order vide. No.TS/RO- ll/HYD/Recove ryt516O3t 1290lPDRC N0 79 1202317 1 4, datedl T-'1 0-2023 by the 3rd respondent under Sec.BF, BB to 89 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and rules of the 2nd schedule of lncome Tax Act for an amount Rs.14,29,3471-. There by attaching the petitioner's bank account No.266104000 01721 , Bank of Baroda Banjarahills Branch along with recovery charges to the tune of Rs.'14,29, B97l-( Rs.14,29,3471- + 5151 = to Rs. 14,29,897/-) and thereby the 5th respondent creating a charge to the tune of the Rs.14,29,897! as illegal, arbitrary, unjust and violative of principles of natural justice and to set aside the same. lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the prohibitory order No.TS/RO- ll/HYD/Recove ry t51603t81290/PDRC.NO.79 1202317 1 4, dated 17 -10-2023 for attachment of the account No. 26610400001721, Bank of Baroda Banjarahills Branch to the tune of Rs.14,29,897/-(including recovery charges) pending disposal of the above writ petition. lA NO: 2 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the respondent.No.3 to allow the petitioner to pay the balance dues of Rs.1 1 ,44, 100/- in 8 consecutive installments by accepting the acknowledged D.D.No.385257, dated O2-11-2023 and adjust the said amount in the attachment order raised to the tune of Rs.14,29,897/- pending disposal of the above Writ Petition. Counsel for the Petitioner: SRI M.R.S.SRINIVAS Counsel forthe Respondent No.1: SMT RAJYALAXMI, REP. FOR SRI GADI PRAVEEN KUMAR, Dy. SOLICITOR GEN. OF INDIA Counsel for the Respondent No.2 to 4: SRI G.VENKATESHWARLU, SC FOR EPFO Counsel for the Respondent No.5: - The Court made the following: ORDER ,- HON'BLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION 0.32635 ot 2023 ORDER: Heard learned counsel appearing on behalf of petitioner and Smt. Rajyalaxmi, learned Counsel representing Dy. Solicitor General of India, appearing on behalf of respondent No.1 and Mr.G,Venkateshwarlu, learned Standing Counsel for EPFO, appearing on behalf of respondent Nos.2 to 4. 2, The Petitioner approached the Court seeking prayer as under: \"to issue a writ, order or direction more particularly one in the nature of WRIT OF MANDAMUS to declare the action of the respondents no. 2 to 5 in issuing the prohibitory order vide. No. TS/RO. IIlHYD/Recovery/5t603/ 81290 /PDRC.NO.7g/2023/714, dated 17.L0.2O23 by the 3'd respondent under Sec. 8F, 88 to Bg of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and rules of the 2nd Schedule of Income Tax Act for an amount Rs.L4,29,347l-. There by attaching the petitioner's bank account No.26610400001721, Bank of Baroda Banjarahills Branch along with recovery charges to the tune of Rs.14,29,897/-( Rs.14,29,347/-+515/- =Rs. 74,79,897/-) and thereby the 5th respondent creating a charge to the tune of the Rs.14,29,897/- as illegal, 2 arbitrary, unjust and violative of principles of natural justice and to set aside the same and pass such other order or orders as this Hon'ble Court deems fit and proper in the circumstances of the case and in the interest of justice.\" 3 The soecific case of the oetitioner. i brief, is as follows: a) The petitioner Company is doing the business with the corporate identity number U722O0AP2OL3PTCO85879 under the name and style of M/s. C.P.L Data Services (INDIA) Private Limited, registered on 20.O2.2O23. The Petitioner company is doing the business of data correction, Modification of the data sent from their head office in the State of Detroit USA, virtually it is a B.P.O. Company. b) It is further the case of the petitioner that due to the Covid-19 Pandemic the turnover of the business drastically slipped to the lowest level. The company has seen the financial instability during the said period and some of the clients in USA have sold their companies and overnight the projects were withdrawn by the new buyers of that companies hence, the petitioner company struggled to meet the regular overheads of the company as a result the PF contributions t- 3 through bearing account No.TS/HYD/81290/C5l6O3/ P.D/2223, I.D.No.APHYDOO81290O0O were paid belatedly and the recovery oFFicer i.e., respondent No'2 has imposed interest and damages to a tune of Rs'17,14,561/- under Section 14(B) of the EPF Act and Miscellaneous provisions Act, L952. c) It is further the case of the petitioner that immediately after receipt of the notice of the claim of Rs'17,14,561/- towards damages and interest, the petitioner approached the 2nd respondent and deposited an amount of Rs'2,85,764/- on 08.09.2023 and requested the 2nd respondent to consider the balance payment to a tune of Rs' 14,29,347l- in twelve installments. That the 2nd respondent instead of considering the application of the petitioner seeking installments, sent a Prohibitory Order vide TS/RO-II/HYD /Recovery/51603 /81290/PDRC. No.79, dated 17.10.2023 by attaching the petitioner's bank account No.26610400OO1721, Bank of Baroda, Banjara Hills Branch adding Rs'515/- the recovery charges and making the attachment to a tune of Rs.14,29,897/- and created charge and did not even allow the salary amounts of the employees' The petitioner came to 4 know about the attachment order only through respondent No.5 and the petitioner approached respondent Nos.3 and 4 in respect of bank attachments and the petitioner again deposited another amount of Rs.2,85,764l- through the D.D.No.385257, dated 02.1L.2023 along with a request letter for the consideration for the respondent Nos.3 and 4 for the balance amount of Rs.11,44,100/- to be paid in at least (g) installments. The petitioner has not yet received the receipt for the same. d) That having seen the drastic changes in the software business at global level during and after the covid period and also the recession which is pertinent in the present context of the business, it is very difficult to the petitioner to pay in lump sum, the whole amount of Rs.11,44,100/- at one time. Hence, the petitioner approached this Court by way of filing the present writ petition. PERUSED THE RECORD 4. It is the specific case of the petitioner that petitioner vide representation dated 09.11.2023 addressed to the 4th respondent herein requested to provide the receipt for the 5 amount paid by the petitioner on 02.11.2023 and also requested to allow the petitioner to pay the balance due amount in installment basis. The said representation, dated 09.11.2023 ot the petitioner, addressed to the 4th respondent/Recovery Officer, EPFO Regional Office, Hyderabad reads as under: \"As per the notices (referred above) we have received the order to pay a total amount of Rs.17,14,561/- as interest and damages for late payments. Out of this arnorit we have paid Rs.2,85,764/- on 8th September, 2013, through DD No.385178 and we requested you to provide installment facility for balance amount of Rs.14,28,797/- . But as on 17th October, 2023 you have attached mY bank account No.26610400OOl72t for the amount of Rs.14,29,347l-(including Rs.550/-) towards recovery charges). After that, as on 2no November, 2023 we have deposited Rs.z,85,764/- through DD No.385257 for this the receipt was not yet received. So here re ue o ro th recet fort hea moun atdo 2 D November, 2O23 and olease allowusto nc e nt installment basis.\" 5. Learned counsel appearing on behalf of the petitioner contends that though the representation submitted by the petitioner dated 09.11.2023 had been received and acknowledged by the 4th respondent, but as on date no steps a ':.,. rl 6 have been initiated by the 4th respondent considering the request of the petitioner for payment of balance amount of Rs.11,44,100/- in (6) monthly insta[ments. 6. Learned counsel for respondent Nos.2 to 4 brings on record the proceedings No.TS/HYD/B 1 290/C_5 160 3 / p.D / 2022_ 23/L273, dated 20.12.2022 and also proceedtngs No.TS/HYD/81290/C-51603/p.D/2022_23/tlt4, ctated 20.12.2022, issued by the office of the Assistant p.F. Commissioner, Regional Office-Il, Madhapur, Hyderabad and contends that the petitioner has not challenged the determination order as on date and therefore, the relief as sought for by the petitioner in the present writ petition cannot -be granted to the petitioner. 7. ' Without going into the merits of the case, the writ petition is disposed of directing the 4th respondent herein to consider the representation of the petitioner, dated O9.11.2O23 which has been acknowledged by the 4th respondent and pass appropriate orders, in accordance to !aw, within a period of three (O3) weeks from the date of receipt of the copy of this order. Till 7 such exercise as indicated above is initiated and concluded, and the decision on the representation of the petitioner dated 09.11.2023 is communicated to the petitioner, the respondents shall not initiate any coercive steps against the petitioner herein. However, there shall be no order as to costs. As a sequel Miscellaneous petitions, if any, pending shall stand closed. SD/.K. SREERAMA MU HY To, ASSISTANT REGIq RAR //TRUE COPY// SECTION FICER '1 . The Secretary, Ministry of Labour and Employment, Shram Shakti Bhawan, New Delhi, Union of lndia - 1 '10 001 . 2. The Commissioner, Employees Provident Fund Organizalion, Regional Office at Employees provident furid organization lvladhapur, H-yderabad Bavisyanidhi Bhavdn, 3-4-763lbarkathpura chaman, Hyderabad-500027. 3. The Regional Office, EPFO, Rep by its Assistant P.F. Commissioner and Recovery Officer, Hyderabad-l l. 4. The Recovery Officer, Employees Provident Fund Office, Madhapur' Hyderabad- 5. The Branch [ 4anager, Bank of Baroda, P .8.8.812159615, Road.No.10, Baniara Hills, Hyderabad. 6. One CC to SRI fU.R.S.SRINIVAS, Advocate [OPUC] 7. One CC to SRI G.VENKATESHWARLU, SC FOR EPFO [OPUC] 8. One CC to SRI GADI PRAVEEN KUIMAR, Dy SOLICITOR GEN. OF INDIA' High Court for the State of Telangana at Hyderabad [OPUC] 9. Two CD Copies BSR BS t \"r{ HIGH COURT DATED: 0511212023 ORDER WP.No.32635 of 2023 DISPOSING OF THE WRIT PETITION, WITHOUT COSTS 1 e STAIG: J O 2 o DEt 2[?3 rrk-!' a {= * * Y "