Case Note & Summary
The petitioner, M/s Unity Security Force & Training Institute, a proprietary concern registered under the Mumbai Shops & Establishment Act, 1948, filed a writ petition challenging the attachment of its current account No. 31725043372 with the State Bank of India, Mahal Nagpur (respondent No. 2). The attachment was made by the Assistant Provident Fund Commissioner (respondent No. 1) for recovery of Rs. 49,63,692/- as damages determined under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The factual background reveals that a show cause notice for proposed damages was issued to the petitioner on 31.01.2015, and after adjudication on 20.04.2015, the damages amount was determined. The petitioner's appeal before the Employees Provident Fund Appellate Tribunal, New Delhi was dismissed on 15.12.2015, and the petitioner then filed Writ Petition No. 2027/2016 before the Bombay High Court, which was pending adjudication. On 30.06.2017, the High Court passed an interim order in that writ petition directing that until further orders, there shall not be any further coercive recovery from the petitioner on the basis of the impugned order. Despite this interim protection, the respondent proceeded to attach the petitioner's current account. The petitioner then filed the present writ petition (Writ Petition No. 1303/2016) challenging the attachment. The court considered the submissions of the petitioner's counsel, who relied on the decision in Navnit Motors Pvt. Ltd. v. Union of India & anr. The court found that the attachment was made in clear violation of the interim order dated 30.06.2017 passed in Writ Petition No. 2027/2016, which restrained further coercive recovery. The court held that the attachment was illegal and quashed it, directing respondent No. 2 to defreeze the account and restore the funds. The court also made the rule absolute and disposed of the petition.
Headnote
A) Employees' Provident Fund - Damages under Section 14B - Attachment of Bank Account - Validity - The petitioner challenged the order determining damages under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. During pendency of the writ petition, the Court passed an interim order directing that there shall not be any further coercive recovery from the petitioner. Despite this, the respondent attached the petitioner's current account. The Court held that the attachment was in violation of the interim order and quashed it. (Paras 3-7) B) Civil Procedure - Interim Orders - Violation - Consequences - When a court grants an interim order restraining coercive recovery, any attachment made thereafter is illegal and must be set aside. The Court directed the respondent to defreeze the account and restore the funds. (Paras 5-7)
Issue of Consideration
Whether the attachment of the petitioner's current account by the respondent for recovery of damages under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is valid when a writ petition challenging the damages order is pending and an interim order restraining coercive recovery is in operation.
Final Decision
The court quashed the attachment of the petitioner's current account No. 31725043372 with respondent No. 2 and directed respondent No. 2 to defreeze the account and restore the funds. Rule made absolute. Petition disposed of.
Law Points
- Attachment during pendency of writ petition and in violation of interim stay order is illegal
- Recovery of damages under Section 14B of EPF Act cannot be made by attaching bank account when interim order prohibits coercive recovery
- Principle that courts must protect parties from coercive action during pendency of proceedings
