Chattisgarh High Court
M/S Kumar Undertaking vs Canara Bank on 31 July, 2025
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2025:CGHC:37494
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
WPC No. 3974 of 2025
M/s Kumar Undertaking Through Its Proprietor Pradeep Kumar
Dhurve Having Its Registered Office At H.No.- 606, Near Pawan
Kirana Stores, Sangram Chowk, Sikola Bhata, Ward - 14, Durg,
Chhattisgarh 492001
... Petitioner(s)
versus
1 - Canara Bank A Body Corporate Constituted By And Under The
Banking Companies (Acquisition And Transfer Of Undertakings Act,
1970), With Its Branch Office At Plot No. 745/1, Main Road Rasmada
Post, Rasamada, District- Durg Chhattisgarh 491001
2 - Employees Provident Fund Organisation Through Its Assistant
Provident Fund Commissioner And Recovery Officer, With Its
Regional Office At Bhavishya Nidhi Bhawan, Indira Gandhi
Commercial Complex, D-Block, Pandri, Raipur- Chhattisgarh -
492004
---- Respondents
For Petitioner : Mr. Ankit Pandey, Advocate
For Respondent No.1 : Mr. Soumitra Kesharwani, Advocate appears
on behalf of Mr. Akash Gupta, Advocate
For Respondent No.2 : Mr. Sunil Pillai, Advocate
Hon’ble Shri Justice Arvind Kumar Verma
Order on Board
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31/07/2025
1. During the course of argument, learned counsel for Respondent No.2
has placed some documents which have been taken on record and copy
of the same supplied to learned counsel for the petitioner and with the
consdent of counsel for the parties, matter is heard finally.
2. The petitioner has been filed this writ petition on the following
relief(s) :
“10.1 10.1.Issue a writ of mandamus, certiorari or any
other appropriate writ, order or direction, quashing
and setting aside the impugned letter dated
24/07/2025 issued by Respondent No. 1, whereby the
Petitioner’s bank account bearing maintained with its
Durg Branch has been illegally and arbitrarily
frozen/held pursuant impugned notice dated
23/07/2025 issued under Section 8F of the Employees’
Provident Funds and Miscellaneous Provisions Act,
1952 by Respondent No.2 Assistant Provident Fund
Commissioner and Recovery Officer, EPFO Raipur;
10.2. Declare that the purported recovery action
initiated by Respondent No.2 EPFO in respect of
alleged dues of M/s Padmini Dhurve, Sangram
Chowk, Sikola Bhata, Durg, Chhattisgarh – 491001,
cannot in law be enforced against the Petitioner or its
bank account, as the Petitioner is an independent and
unconnected proprietorship firm, namely M/s Kumar
Undertaking, having no nexus with the said
establishment;
10.3. Issue a writ of mandamus or any other
appropriate writ, order or direction directing
Respondent No.1 to forthwith lift the freeze/hold
imposed on the Petitioner’s Bank Account No.
3/8404321000014 and restore full operational access to
the Petitioner in respect of the said account;
10.4. Declare the impugned action of Respondents
No.1 and 2 as ultra vires and violative of the
fundamental rights guaranteed to the Petitioner under
Articles 14, 19(1)(g), and 300A of the Constitution of
India;
10.5. Direct the Respondents to compensate the
Petitioner for any penal or statutory consequences
suffered or to be suffered by the Petitioner under the
GST regime or any other law, arising solely due to the
illegal restraint placed upon its bank account;
10.6. Pass such other or further orders as this Hon’ble
Court may deem fit and proper in the interest of
justice, equity, and good conscience, including the
award of costs in favour of the Petitioner.”
3. Learned counsel for the petitioner contended that the present writ
petition is being preferred by the Petitioner against the coercive and
patently illegal action of Respondent No.1 Bank in placing an unlawful
hold/restriction on the operation of the Petitioner’s Bank Account No.
404321000014 on 24/07/2025, purportedly in compliance with a notice
issued by Respondent No.2, i.e., the Assistant Provident Fund
Commissioner and Recovery Officer, Employees’ Provident Fund
Organization (EPFO), Raipur, under Section 8F of the Employees’
Provident Funds and Miscellaneous Provisions Act, 1952, dated
23/07/2025, whereby Respondent No.2 has sought recovery of an
amount of ₹16,89,679/- from the Petitioner’s account, despite the said
demand actually being raised against an entirely different and unrelated
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establishment, namely M/s Padmini Dhurve. The impugned notice
dated 23/07/2025 issued under Section 8F by Respondent No.2, and
the subsequent action of Respondent No.1 Bank dated 24/07/2025 in
placing a hold on the Petitioner’s bank account, constitute the direct
cause of grievance in the present writ petition. Both actions are
challenged herein on the grounds of being wholly without jurisdiction,
factually misconceived, legally unsustainable, and undertaken in gross
violation of principles of natural justice, as well as the Petitioner’s
fundamental rights under Articles 14, 19(1)(g), and 300A of the
Constitution of India. The Petitioner submits that there exists no order
or adjudication against it under the provisions of the EPF Act, nor has
the Petitioner ever been put to notice of any default, demand, or
recovery under the said Act. The impugned action has been initiated
without issuing any notice, without affording any opportunity of
hearing, and without any determination of liability, solely on the basis
of an erroneous and unverified assumption that the Petitioner is liable
for the dues of a third-party entity, with whom it has no legal or
financial connection. The Petitioner is aggrieved by the impugned
notice dated 23/07/2025 (Annexure P-4) issued by Respondent No.2,
and the consequential action of placing a hold on Petitioner’s Bank
Account on 24/07/2025, which together constitute the
order(s)/action(s) under challenge in the present petition.
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4. Reliance has been placed by the petitioner in the order passed by the
High Court of Gujarat at Ahmedabad in the case of Geetaben J. Patel
Vs. Assistant Sales Tax Commissioner & Ors. Para -3 of the said
order held as under :-
“3. Having heard learned counsel for for the parties and
having perused documents on record, we do not see any
authority in law permitting respondent No. 1 to attach
the property of the petitioner for the dues of her
husband. Nothing has been brought on record to suggest
that the property in question was purchased from the
sources other than that off the petitioner herself. It is not
the case of the Department that the same translation of
December 31, 1994 was “benami” transaction and that
the husband of the petitioner had funded for purchase of
the property. In any case, as noted, the sale took place
on December 31, 1994 and the husband of the petitioner
started his current business in the year 1998. The sales
tax dues pertain to the assessment year 1999-2000.
Nothing has been stated in the affidavit in reply to
justify the action of the Department in attaching the
property of the petitioner for the dues of her husband.
By merely stating that only qua share of the husband,
the said property was attached, would not further the
case of the Department. This is in fact curious
statement. It does not clarify whether the share referred
to is that of the sales tax dues or of the interest in the
property. If later is the case, there is nothing on the
record to suggest that the husband had any right, title or
interest in such property.”
5. Further, reliance has been placed in the order passed by the Madhya
Pradesh High Court in the case of Ferro Concrete Construction (I)
Pvt. Ltd. Vs. Regional Provident Fund Commissioner, Indore &
Others. Para 11 to 14 are held as under :-
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“11. In substance, the ratio of the Supreme Court
decision rendered in the case of Biharilal supra, is that
it is mandatory on the part of the Recovery Officer
before passing any order under these two sections to
hold an inquiry after giving due opportunity to the
person concern, allow him to state on oath whether he
has to pay any amount to the defaulter and if so under
what head, against which transaction or whether he
holds any money on account of defaulter and if so how
much, whether any money is due or not and if so, its
extent? It is only after the person concern files and
makes a statement on oath on any of the facts referred
supra, then depending upon the statement so made, the
Recovery Officer will proceed to pass an order. In other
words, holding of an inquiry into the requirement of
section 8F(3)(vi) is mandatory and any deviation from
the compliance will result in vitiating the order.
12. The aforesaid principle equally applies to cases
falling in section 8F(3) of the Act and hence, Recovery
Officer while exercising the powers under section
8F(3), has to follow the aforesaid principle enunciated
by the Supreme Court in the case of Biharilal.
13. Coming to the facts of the case, I find that Recovery
Officer (respondent No. 2) while initiating and
eventually passing the order dated 11-4-2001
(Annexure P9) did not even care to read section 8F(3)
(vi) what to say recorded a finding as contemplated
therein. Indeed, while proceeding to pass an impugned
order, he committed an error of law in proceeding ex
parte against the petitioner. The recovery officer neither
properly apprised the petitioner of the facts on which he
was proposing to proceed against the petitioner, nor he
allowed the petitioner to comply the requirement of
section 8F(3) (vi) ibid. In substance, the whole
proceedings are in total disregard to the provisions of
section 8F(3) ibid and hence, liable to be quashed.
14. When there is no compliance of the mandatory
procedure contained in the Act, when there is no factual
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adequate opportunity to the person concern to defend
the proceedings in terms of requirement of Act, then
such proceedings are not liable to be sustained and
deserves to be quashed. They are accordingly quashed.”
6. Learned counsel for respondent No.2 contended that as per EPFO
document No.CG/18663/PF/RAI/DAM/Cir-III/2023 dated 12.11.2021
and under Section 14B of the EPF Act, combined summon under
Section 14B & 7Q of the Act was issued to the Employer of the
establishment directing him to appear virtually before the Regional
Provident Fund Commissioner – II and to show cause as to why penal
damage & interest as envisaged in the Act be not recovered from the
establishment vide summon dated 12.02.2021. None appeared on
03.03.2021, hence hearing was adjourned to 08.04.2021, 15.07.2021,
03.08.2021, 02.09.2021, 21.09.2021, 13.10.2021 and lastly on
02.11.2021. On 02.11.2021, Shri Pradeep Kumar Dhurve, Proprietor of
the establishment appeared for the establishment and stated that the
calculation sheet regarding rely of interest and penalty was received by
him, which was sent by the department through post and Email.
7. I have heard learned counsel for the parties and perused the record with
utmost circumspection.
8. Considering the facts and circumstances of the case and submission
made by learned counsel for the parties, it is crystal clear that after
giving notice and after giving due opportunity of hearing to the
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petitioner, respondent authority has passed the order against the
petitioner. It is also pertinent to mention here that as per document,
Pradeep Kumar Dhurve is a Proprietor and there is a three specimen
signatures of the petitioner with respect to Padmini Dhurve or
claims/returns related matter in EPFO and in Page No.14 there is a
digital signature of the petitioner in specimen signature card and in
Page No.15 petitioner put signature on the document of Padmini
Dhurve as employer, but the petitioner is filed the petition and trying to
demonstrate here that there is no relationship between the petitioner
and Padminit Dhurve. Therefore, it is also crystal clear that the
petitioner has not come with clean hand. Therefore, the relief which
has been sought by the petitioner cannot be granted in exercise of writ
jurisdiction, in view of the considered opinion of this Court, no case is
made out for any interference.
9. Accordingly, the petition being devoid of any merit is liable to be and
is hereby dismissed.
10. No order(s) as to cost(s).
Sd/-
(Arvind Kumar Verma)
Judge
Vasant