(Hrishikesh Roy and Pankaj Mithal, JJ.)
National Stock Exchange of India Ltd. __________________ Appellant;
v.
Assistant Provident Fund Commissioner and Another __ Respondent(s).
Civil Appeal No. 6353 of 2012, decided on August 23, 2023
The Order of the court was delivered by
Order
1. Heard Mr. J.P. Cama, the learned Senior Counsel appearing for the appellant. Also heard Mr. Abhishek Vikas, the learned counsel for the respondents.
2. The challenge here is to the final judgment and order dated 27.11.2008 of the Division Bench of the High Court of Judicature at Madras in the Writ Appeal No. 609 of 2006 whereby the High Court dismissed the writ appeal with the observation that the writ petition itself is not maintainable under Article 226 of the Constitution since as against the order impugned in the writ petition, there is an appellate remedy provided under Section 7-I of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as, ‘PF Act’).
3. The Writ Petition No. 24857/2001 was filed by the present appellant challenging the records of the Assistant Provident Fund Commissioner, Regional Office, Chennai in the order dated 28.08.2001 passed in E2/TN/39526/E.O/Circle 1/2001 along with order bearing proceedings No. E 1/TN/36764/ENF/Regl/2001, dated 05.01.2001 issued under Section 8(F) and also to restrain the PF Authority from dealing with their security deposit lying with the appellant given at the instance of the 2nd respondent, who was a trading member under the stock exchange. On 05.01.2001 the authority passed an order attaching the deposited money of the 2nd respondent lying in the hands of the appellant. The appellant gave a statement on oath under Section 8(F)3(vi) denying any liability but the authority proceeded to hold that the Bye-laws, Rules and Regulations of the appellant – National Stock Exchange, will have to give way to Section 8(F) and Section 11 (2) of the PF Act. Under Section 8(F), the 1st respondent is empowered to recover the arrears of contribution payable by the employer from any person other than the defaulter. In other words, if the authorities are of the view that if some person is holding the money of the defaulter, after following the due process prescribed under the Section, the authority can proceed to directly recover the money from the concerned person and also equally restrain the third party from paying the said money to the defaulter. The amount lying in the hands of the appellant is the amount deposited by the 2nd respondent who admittedly is a defaulter in payment of PF contribution. However, the contention of the appellant was that as per their Bye-laws, this amount has to be paid as per their priorities and only balance, if any, if left, might be capable of being attached under Section 8(F) of the PF Act.
4. The learned Single Judge, while considering the writ petition, adverting to the provisions of Section 11(2) of the PF Act observed that if any amount is due from an employer, the amount so due shall be deemed to the first charge and shall be paid in priority to all the other debts as Section 11(2) gives overriding effect of priority notwithstanding anything contained in any other law in force. Accordingly, after analyzing the provisions of Section 8(F)(3) and Section 11(2) of the Act, the learned Judge opined that the Bye-laws of the appellant-National Stock Exchange will have to make way for the 1st respondent for enforcing their statutory rights. It was also noted that the PF Act is a welfare legislation, enacted for the benefit of the employees engaged in the factories and establishments. With such observations, the proceedings drawn up by the authorities against the appellant were found to be in order.
5. The judgment (dated 27.03.2006) of the learned Single Judge was challenged before the Division Bench in the Writ Appeal No. 609 of 2006. However, as earlier noted, the learned Division Bench without addressing the contentions raised in the writ appeal, opined that since an appellate remedy is provided under Section 7-I of the PF Act, the appellant should be relegated to the statutory remedy. It was further observed that the writ petition should not have been entertained by the learned Single Judge.
6. Before us, the learned senior counsel for the appellant, Mr. J.P. Cama would advert to Section 7-I of the PF Act which provides for appeals to the Tribunal to point out that while an aggrieved party can file an appeal for his grievances mentioned in the said Section, the grievances raised by the appellant in the writ petition emanating from action under Section 8(F) and Section 11(2) are outside the purview of the appellate provisions and, therefore, the Division Bench erred in saying that the appellant has an alternate remedy for their grievances raised in the writ petition, under the appellate provisions of Section 7-I of the PF Act.
7. The appellant would also contend that since the Writ Petition No. 24857/2001 was pending adjudication before the learned Single Judge for about five years and thereafter a decision on merit was rendered by the Writ Court on 27.03.2006, the Appellate Court after keeping the Writ Appeal No. 609/2006 pending for another four years, should have considered the merit of the challenge in the writ appeal and should not have dismissed the writ appeal with the observation that appellant has alternate statutory remedy under Section 7-I of the PF Act. It was specifically argued before the Division Bench that the remedy under Section 7-I is not available for the grievances raised in the writ petition but this legal contention was not appropriately appreciated by the Court.
8. The learned counsel for the respondent, Mr. Abhishek Vikas on the other hand submits that the dues under the PF Act will have priority over all other debts like mortgage, pledge, etc. The counsel relies on the ratio in Maharashtra State Cooperative Bank Limited v. Assistant Provident Fund Commissioner1 in support of his contention.
9. The respondents’ counsel would therefore argue that even if the matter is to be relegated to the Division Bench, they are bound to hold against the appellant in view of the declaration of law in Maharashtra State Cooperative Bank Limited (supra).
10. The writ petition filed by the appellant remained pending before the two benches in the High Court for several years and therefore we feel that the Division Bench should have considered the writ appeal on merit instead of saying that the appellant has an alternate remedy under Section 7-I of the Act. The writ petition itself was pending before the learned Single Judge for about five years and was then adjudicated on merit holding against the appellant. When the writ appeal thereafter was filed by the aggrieved writ petitioner and the same was pending for long with an interim order operating, the Division Bench should have considered the merit of the appellant challenge in the writ appeal.
11. Our above expression finds support from L.K. Verma v. HMT Limited2, where this Court held as follows:—
“21. In any event, once a writ petition has been entertained and determined on merit of the matter, the appellate court, except in rare cases, would not interfere therewith only on the ground of existence of alternative remedy. (See Kanak v. U.P. Avas Evam Vikas Parishad [(2003) 7 SCC 693]) We, therefore, do not see any justification to hold that the High Court wrongly entertained the writ petition filed by the respondent.”
12. This Court in Radha Krishnan Industries v. State of Himachal Pradesh (2021) 6 SCC 771 summarized the following principles on the maintainability of a writ petition before the High Court:
“27. The principles of law which emerge are that:
27.1. The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well.
27.2. The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person.
27.3. Exceptions to the rule of alternate remedy arise where : (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged.
27.4. An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law.
27.5. When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with.
28. These principles have been consistently upheld by this Court in Chand Ratan v. Durga Prasad [Chand Ratan v. Durga Prasad, (2003) 5 SCC 399], Babubhai Muljibhai Patel v. Nandlal Khodidas Barot [Babubhai Muljibhai Patel v. Nandlal Khodidas Barot, (1974) 2 SCC 706] and Rajasthan SEB v. Union of India [Rajasthan SEB v. Union of India, (2008) 5 SCC 632] among other decisions.”
13. Applying the above principles, we find that an effective alternate remedy was not available to the aggrieved party in the present case. Moreover, the existence of an alternate remedy does not completely exclude writ jurisdiction. The High Court should have considered whether, for proceedings drawn up under Section 8(F) and Section 11(2) of the PF Act, the remedy of appeal under Section 7-I was available to the aggrieved party. This is because although several other sections are mentioned in Section 7-I, there is no reference to Section 8(F) and Section 11(2). Therefore, the appellate forum provided in Section 7-I of the PF Act would not be capable of addressing the grievances that relate to Section 8(F) and Section 11(2) of the PF Act. Thus, the only remedy that was available was to invoke writ jurisdiction under Article 226 of the Constitution of India.
14. The Division Bench should have adjudicated the writ appeal on merit when the case was pending for such a long time and the Writ Court had adjudicated on the merit of the matter. It is also doubtful whether Section 7-I can be an alternate remedy for the grievances raised by the appellant before the High Court. As the Division Bench had omitted to render their decision on the merit of the appellant’s contention on the erroneous understanding of an appellate remedy being available under Section 7-I, we consider it appropriate to remit the matter to High Court for consideration of the writ appeal by the Division Bench. The Division Bench should now adjudicate the writ appeal No. 609 of 2006 on merit and give their decision. As the appellant is litigating since long, we request that once the writ appeal is assigned to the Division Bench, the Court should make an endeavour for expeditious disposal of the writ appeal. It is ordered accordingly. With this the impugned judgment is set aside and the appeal stands allowed to the extent indicated.
15. Before parting, we may also record that since the appellant has the benefit of an interim order passed by this Court on 06.07.2009, the same will continue to operate until the disposal of the writ appeal by the Division Bench of the High Court.
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1 (2009) 10 SCC 123
2 (2006) 2 SCC 269
