NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

M.A. NO. 2364 OF 2018 IN CIVIL APPEAL  NO. 2591 OF 2006

THE KELVIN JUTE CO. LTD. WORKERS PROVIDENT FUND  AND  ANR.                                 … APPELLANT(S)

VERSUS

KRISHNA KUMAR AGARWALA AND OTHERS  … RESPONDENT(S)

WITH

M.A. NO. 2363 OF 2018 IN CIVIL APPEAL  NO. 2593 OF 2006

O R D E R

1.       The following are the prayers in M.A. No. 2363 of

2018 (previously I.A. No. 6 of 2016) in C.A. No. 2593 of 2006

and M.A. No. 2364 of 2018 (previously I.A. Nos. 9 and 10 of

2016) in Civil Appeal No. 2591 of 2006.         Prayer in I.A. No. 6 of 2016 in C.A. No.2593/2006

“a) pass appropriate directions in terms as prayed 1

for in Para 10 hereinabove; and  

b) pass  such  other  or  further  order(s)  as  this Hon’ble Court may deem fit and proper in the facts  and  circumstances  of  the  present  case and in the interest of justice;”

Para 10 of said I.A. reads as follows :-

“10. The  applicant  most  humbly  submit that  order  dated  21.1.2016  passed  in  C.A. No. 2593 of 2006 be modified to the extent of directing disbursal, if any only from such amount  which  are  in  excess  of  funds,  not identified or related to the members of the applicant or such order/s as deemed fit and proper  in  facts  and  circumstances  of  the case may be passed.”

Prayer in I.A.  9 of  2016  in C.A. No.2591/2006

“a)  order  dated  21.01.2016  be  modified  and directions  be  passed  in  terms  of  para  9 hereinabove; and

b)  pass such other or  further order(s)  as this Hon’ble  Court  may  deem fit  and  proper  in  the facts and circumstances of the present case and in the interest of justice.”

Para 9 of said I.A. reads as follows :-

“9.  The  instant  application,  under  the circumstances,  is  being  preferred  before this  Court,  seeking  appropriate  directions and/or  modification  of  order  dated 21.01.2016, passed by this Court. A copy of the said order dated 21.01.2016 passed by this  Court in C.A. No. 2591/2006 is annexed hereto and marked as Annexure A-3. Trust not having any amount in its accounts for

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making payments, necessary directions be given to  the  new company for  making  of such payment, on terms, as deemed fit and proper  in  facts  and  circumstances  of  the case."

Prayer in I.A. No.  10 of 2016 in C.A. No.2591/2006

“a) necessary direction be issued modifying the order dated 21.01.2016 passed by this Hon’ble Court in Civil Appeal No.2591 of 2006 with Civil Appeal No. 2593 of 2006, by directing payment of only the principal amount of Rs.1.95 crores, to be paid in installments, in such a manner as this Hon’ble court may deem fit and proper,  in full and final settlement of claim of Respondent; and

b)  pass  such  further  order(s)  as  this  Hon’ble Court may deem fit and proper in the facts and circumstances  of  the  present  case  and  in  the interest of justice.”

2.      The judgment dated 21.01.2016, which is sought to

be modified, reads as follows: “1. After  having  extensively  heard  Mr.

Dushyant  Dave and Mr.  Jayant  Bhushan,  learned senior  counsel  appearing  for  the  appellants  and Mr. Sudhir Chandra, Mr. Bhaskar P. Gupta and Mr. Krishnan  Venugopal,  learned  senior  counsel appearing for the respondents, we see no ground to interfere with the well reasoned order passed by the  learned  Single  Judge  of  the  Calcutta  High Court,  as  affirmed by  the  Division  Bench  of  the High  Court,  since  the  High  Court  has  mainly proceeded on undisputed facts.

2. Mr.  Krishnan  Venugopal,  learned  senior counsel,  has  submitted  that  the  Kelvin  Jute Company  Ltd.  has  since  merged  into  Trend

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Vyapaar Ltd. in 2001 under a scheme framed by BIFR. We see from the Judgment that the direction for payment of the provident fund dues is to the Trust as well as to the Company.

3. In the unlikely event of the Trust not able to  meet  the  payment  as  directed  by  the  High Court,  it  would  be  open  to  the  new  company referred  to  above  to  approach  this  Court  for appropriate directions.

4. Since  the  matter  has  been  pending before this Court since 2006 and as there was an order of stay of the Judgment of the High Court, we grant further period of three months for payment of the amount as directed by the High Court.

5. In view of the above,  the Civil  Appeals are dismissed with no order as to costs.”

3.      The appeal leading to the judgment above arose

from  the  judgment  of  the  Calcutta  High  Court  dated

16.02.2006 in APO-258/2002 and APO-238/2002. The Division

Bench affirmed the judgment dated 15.03.2002 in Writ Petition

No. 4312 of 1993. Paragraphs 26.1 and 26.2 of the judgment

dated 15.03.2002 of the Single Bench containing the operative

portion, reads as follows: “26.1 In  the  circumstances,  the  Kelvin Trust  shall  transfer  the  amount  of Rs.2,00,98,363.02  as  stood  on  June  30,  1986 together  with  the  interest  accrued  on  the  said amount  at  the  statutory  rate  till  the  date  of transfer to the Waverly Trust. In case the Trust is short of fund, the Kelvin,  which has utilized the funds of the Trust, shall  pay the same to Kelvin Trust,  which  will  in  turn  transfer  the  same  to

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Waverly  Trust.  All  these  actions  have  to  be undertaken and completed  within  three  months from date. In default,  the RPFC shall  cancel the exemption and shall take custody and possession of all the funds and securities at the hands and assets and bank accounts of Kelvin Trust. In case there  is  any  shortage,  assets,  funds,  securities, capitals and bank accounts of Kelvin shall remain attached until the fund is available in Kelvin Trust. It will be open to RPFC to take appropriate steps and pass appropriate order enforcing transfer of the said fund and recovery of the amount from Kelvin Trust and Kelvin respectively,  in terms of section 17B or otherwise including recovery and also to take steps for the penal consequences, as the case may be. Let a writ mandamus do issue accordingly to each of the respective respondents severally and jointly.

26.2 Until the amount is so transferred, the Kelvin Trust  and  the  Kelvin  is  restrained  from dealing with  or  disposing  of  its  funds,  assets  and securities and from withdrawing any money from their  respective  Bank  Account  except  in  usual course of business and in discharge of payment of its  statutory liabilities  and wages payable to its workers  without  leaving  a  balance  of  a  sum of Rs.3 crores.

In  the  result,  the  writ  petition  succeeds  and  is allowed to the above extent.”   

4.      While the Interlocutory Applications were pending

before this Court, in view of the dispute on the amounts due,

this Court on 10.05.2016, issued a direction to the Provident

Fund  Commissioner  to  determine  the  outstanding  amounts.

The order reads as follows:  “Pending disposal of these applications, we

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direct the Provident Fund Commissioner, acting through its jurisdictional delegate, to determine the  outstanding  amounts  due  from  the respondents  and submit  a  report  to  this  Court within three months.

In  the  meanwhile,  we  direct  the  7th respondent -  Trend Vyapar Ltd. (applicant in I.A. No.10)  to deposit  an amount of Rs.1.95 crores before the Provident Fund Commissioner within a period  of  three  months  from  today,  without prejudice  to  all  contentions  available  in  the pending cases…”

 5.      The  Assistant  Provident  Fund  Commissioner,

accordingly, passed an order dated 26.08.2016 under Section

7A  of  the  Employees’  Provident  Funds  and  Miscellaneous

Provisions  Act,  1952.  The  Provident  Fund  Commissioner

determined  the  amount  due  as  Rs.1,94,98,363.00.  The

determination was made on the basis of the available records.

6.      In the meanwhile,  M/s Trend Vyapaar Ltd. deposited

an  amount  of  Rs.1.95  crores  with  the  Provident  Fund

Commissioner in terms of the order dated 10.5.2016.

7.      At one stage, after hearing both sides for quite some

time, this Court felt that it would be in the interest of all to put

an end to the litigations, invoking its jurisdiction under Article

142 of  the Constitution of  India and close the litigations by

treating  the  remittance  of  Rs.1.95  crores  as  full  and  final

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settlement of all the dues from M/s Trend Vyapaar Ltd. Order

dated 26.10.2016 reads as follows: “Having  regard  to  the  prolonged  litigation  and after hearing learned senior counsel appearing for both sides, we are of the view that it is high time to give a quietus to the disputes.

As  per  our  direction,  M/s.  Trend  Vyapar Limited  has  deposited  an  amount  of  Rs.1.95 Crores with the Provident Fund Commissioner.

We  are  also  informed that  ever  since  M/s. Trend  Vyapar  Limited  took  over  the  Company, they are in regular payment of the Provident Fund to its workers. Be that as it may, in view of the background of the cases which have been dealt with in detail by the High Court while disposing of the  appeals,  we  have  taken  the  view  that  no interference was called for  since the facts were not disputed.

In  the  above circumstances,  we are  prima facie of the view that this is an eminently fit case where  this  Court  should  invoke  its  discretion under Article 142 of the Constitution of India and give a quietus to all other disputes by treating the remittance  of  Rs.  1.95  Crores  as  full  and  final settlement  of  all  the  dues  without  any  further liability on the part of M/s. Trend Vyapar Limited either by way of interest or by way of damages. …”   

8.      The non-applicants have submitted that they are not

willing for such a settlement and insisted on disposal of the

applications on merits.   9.       Mr. Krishnan Venugopal, learned Senior Counsel has

led  the  arguments  on  behalf  of  M/s  Trend  Vyapaar  Ltd.. 7

According  to  the  learned  Senior  counsel,  the  applicant  had

made a provision, at the time of takeover only for a sum of

Rs.1.95 crores, as a contingent liability. It is also submitted that

the  non-applicants  had  not  raised  any  objection  before  the

BIFR.  Learned  Senior  Counsel  has  also  made  a  forceful

submission on an alleged fraud played by the non-applicants

before the High Court. To quote from the written submission: “15.… The writ petition admits that Kelvin Broadloom  was  covered  by  Kelvin’s  S.17 EPF Act exemption. Instead of taking a fresh exemption,  Hooghly  renamed  the  Kelvin Broadloom  division  that  it  bought  from Bajoria Group in 1986 its “Waverly Jute Mill Company” unit  only  to  take advantage of the  22.6.1961  exemption  to  an  entirely different company of that name. From S.2A of the EPF Act  read with the definition of “exempted establishment”  in  S.2(fff),  it  is clear  that  a  company  cannot  utilize  an exemption granted to some other company.

16. In  Weaverly’s,  the  fraud  is  even more  brazen.  While  the  Civil  Appeal  was pending before this Hon’ble Court, in 2011, Hooghly sold its Waverly Jute Mill Company Unit to a company “Weaverly Jute Mills Pvt. Ltd.”  newly  incorporated  in  2011  only  to take over the unit by adding letter “e” after “a” in “Waverly”. This was obviously done only to continue to take advantage of the exemption dated 22.6.1961 in favour of the original  Waverly  Jute  Mills  Company Limited, Titagarh, 24 Parganas…”

It  is  also  submitted   that  in  the  case  of  a  non-exempted

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establishment, only a beneficiary employer can stake a claim

and in the instant case, no beneficiary has ever made a claim.

10. The  arguments  in  the  written  submission  have  been

completed by submitting that: “35.  In  view  of  the  capping  of  Trend Vyapaar’s liability at Rs.1.95 crores under the  BIFR  Scheme  in  terms  of  S.18(8)  of SICA  and  the  amount  of  Rs.1.95  crores having been deposited with  the RPFC as per  this  Hon’ble  Court’s  order  dated 10.05.2016,  it  is  respectfully  prayed that no further  liability  to  pay interest  should be fastened on Trend Vyapaar Ltd.  Trend Vyapaar Ltd should also be relieved of any liability  under  paragraph  28  of  the Appendix to the EPF Scheme to make good any  deficit  in  Kelvin  Trust’s  accounts  if Kelvin Trust is directed to pay interest to Waverly Trust.

36.   In any case, in view of RPFC’s finding that Waverly Trust is not an exempted trust after the transfer of Kelvin Broadloom unit first  to  Hooghly  and  then  to  Weaverly, under the provisions of paragraph 27AA of the EPF Scheme read with paragraph 29 of the Appendix thereto, Waverly Trust is not entitled to claim any money by way of EPF dues  from  Trend  Vyapaar  Ltd  or  Kelvin Trust. …”

11.  Shri Sudhir Chandra, learned Senior Counsel, who led the

arguments  on  behalf  of  the  writ  petitioner  before  the  High

Court  (non-applicant  herein),  has  submitted  that  the  issues

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before the High Court having become final, the same cannot

be reopened otherwise than in accordance with law. To quote

from the written submission : “17…  It  is  submitted  with  great  respect that the question that Trend Vyapaar Ltd. was in regular payment of Provident Fund dues to its workers was of no consequence at all in the case because the amount of Rs.1.95 Crores with statutory interest from 30.06.1986  till  payment  was  payable  by the Kelvin Trust to the Waverly Trust. It did not  matter  whether  Trend  Vyapaar  Ltd. was paying its workers or not. The finding of  Hon’ble  Single  Judge  is  that  the management  of  Kelvin  Jute  Co.  Ltd.  had utilized the funds for its own purposes (in obvious  collusion  with  the  trustees  of Kelvin  Trust).  It  is  submitted  that  this amounts  to  defalcation  and/or embezzlement by the management of the Kelvin Jute Co. Ltd. of the PF accumulations liable  to  be  transferred  from  the  Kelvin Trust to the Waverley Trust.  As such,  the question  of  this  Hon’ble  Court  issuing directions  under  Article  142  of  the Constitution of India could not arise.

18. Appln. Nos. 6, 9 and 10 are nothing but abuse  of  the  process  of  Court  at  the behest  of  the  erstwhile  management  of Kelvin/Trend Vyapaar Ltd., i.e., the Nathani Group.

19.  The  PF  accumulations  alongwith statutory  interest  due  thereon  is  the amount  due  under  the  decree  of  the Hon’ble  High  Court,  affirmed  by  this Hon’ble  Court,  as  payable  by  the  Kelvin Trust to the Weaverly Trust, failing which, by the Kelvin Jute Co.  Ltd./Trend Vyapaar

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Ltd. to the Waverly Trust.

20.  None  of  the  said  IA  Nos.  6,  9  and 10/2016  are  review  applications,  nor  is there any ground of review.

21. The issue in respect of transfer of the said  admitted  amount  of  Rs.1.95  crores with  statutory  interest  thereon  from 30.06.1986 is between the Kelvin Trust and the Waverly Trust, failing which, the Kelvin Jute Co. Ltd. has to transfer the amount to the  Waverly  Trust.  The  workers  do  not come in the picture.”

 12. The Regional Provident Fund Commissioner has taken a

stand  before  this  Court  that  Section  7A,  Section  14B  and

Section  7Q are  not  applicable  in  the  present  case,  being  a

private Trust. But the fact remains that the non applicants did

not produce any records before the Commissioner for enabling

him to determine the dues, as directed by this Court. 13. We have also heard the learned Senior Counsel and other

Counsel appearing for other applicants, intervenors and non-

applicants. 14. Having regard to the judgment dated 15.03.2002 passed

by the learned Single Judge of the High Court in Writ Petition

No.  4312 of  1993,  which has been affirmed by the Division

Bench  of  the  Calcutta  High  Court  and  by  this  Court  in  the

judgment dated 21.01.2016, we are afraid any application for 11

recall/modification  which  has  the  effect  of  reviewing  the

original judgment in the Writ Petition cannot be entertained by

this Court. The main contention of the applicants seem to be

that writ petitioners had played fraud on Court and that the

basis of the judgment of the High Court has been obtained by

misleading that Court. If that be the position, nothing prevents

the applicants from approaching the High Court and seeking a

review of the judgment. We make it clear that in the event of

such a  review being filed on the ground of fraud, the High

Court will be free to examine the same and the judgment of

this Court dated 21.01.2016 shall not stand in any way of the

High  Court  looking  into  that  aspect  of  the  matter.  Without

prejudice to such liberty and making it further clear that such

applications may not be dismissed on the ground of delay in

case they are filed within thirty days from today, M.A. No. 2363

of 2018 (previously I.A. No. 6 of 2016) in C.A. No. 2593 of 2006

and M.A. No. 2364 of 2018 (previously I.A. Nos. 9 and 10 of

2016) in Civil Appeal No. 2591 of 2006 are dismissed. 15. We make it  clear that we are not otherwise expressing

any  opinion  on  the  merits  of  the  applications  or  their

objections. It will be open to both sides to take all  available

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contentions before the High Court. 16. The  amount  of  Rs.1.95  Crores  deposited  with  the

Provident  Fund  Commissioner  pursuant  to  order  dated

10.05.2016 along with accrued interest shall be transferred to

the non-applicant  Trust  without  prejudice to  the  contentions

available to the parities. However, we make it clear that the

transfer as above shall be subject to any orders which may be

passed by the High Court in the review petitions.

.……………........................J.        [KURIAN JOSEPH]  

……………….......................J.                                     [R. F.  NARIMAN]  

NEW DELHI; OCTOBER 25, 2018.

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