MADURAI: Banks have no authority to freeze the account of an individual who has defaulted in making provident fund (PF) contributions, without giving an opportunity of hearing to him/her, the Madras high court Madurai bench has observed.
The court was hearing a case in connection with PF defaults. It also set aside ans osrdsesrs of the assistant provident fund commissioner (APFC) passed in February, directing the District Central Co-operative Bank Ltd in Thanjavur to pay Rs 5.19 lakh by demand draft from the account of Salaimangalam Primary Agricultural Co-operative Credit Society tos be credited to the account of the regional provident fund commissioner for defaulting in remitting several dues. The APFC also directed the bank not to allow the society to operate its account. Aggrieved by the order, the society had filed the case.
When the matter was heard by Justice S Vaidyanathan, the society said it suffered a loss of Rs 1.5 crore in 2013-14. Due to that reason, the employees could not pay their PF contributions. And it said it did not receive any order from the PFO.
However, the opposite side said the petition was not maintainable since the petitioner could avail the alternative remedy before the authority/tribunal as per the EPF Act.
After hearing, the judge said though the PF side's contention was true, a glance at the impugned order makes it clear that the undated copy of the order had not been forwarded to the petitioner, as the name of the petitioner did not find place in the said order. Thus, the petitioner could not be expected to pursue the appeal remedy.
Besides, without giving an opportunity of hearing to the petitioner, there is no authority for the bank to freeze the account. For the mistake of officer and the bank the petitioner could not be made to run from pillar to post by unnecessarily invoking the alternative remedy of appeal, the judge said.
The judge also said since there is a dispute with regard to the liability, the petitioner should be given an opportunity. Hence, the officer's order is set aside, the judge said.
The court was hearing a case in connection with PF defaults. It also set aside ans osrdsesrs of the assistant provident fund commissioner (APFC) passed in February, directing the District Central Co-operative Bank Ltd in Thanjavur to pay Rs 5.19 lakh by demand draft from the account of Salaimangalam Primary Agricultural Co-operative Credit Society tos be credited to the account of the regional provident fund commissioner for defaulting in remitting several dues. The APFC also directed the bank not to allow the society to operate its account. Aggrieved by the order, the society had filed the case.
When the matter was heard by Justice S Vaidyanathan, the society said it suffered a loss of Rs 1.5 crore in 2013-14. Due to that reason, the employees could not pay their PF contributions. And it said it did not receive any order from the PFO.
However, the opposite side said the petition was not maintainable since the petitioner could avail the alternative remedy before the authority/tribunal as per the EPF Act.
After hearing, the judge said though the PF side's contention was true, a glance at the impugned order makes it clear that the undated copy of the order had not been forwarded to the petitioner, as the name of the petitioner did not find place in the said order. Thus, the petitioner could not be expected to pursue the appeal remedy.
Besides, without giving an opportunity of hearing to the petitioner, there is no authority for the bank to freeze the account. For the mistake of officer and the bank the petitioner could not be made to run from pillar to post by unnecessarily invoking the alternative remedy of appeal, the judge said.
The judge also said since there is a dispute with regard to the liability, the petitioner should be given an opportunity. Hence, the officer's order is set aside, the judge said.
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