Complaint filed on: 19.09.2016

                                                                                                                             Complaint Disposed on:26.07.2017

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT CHICKMAGALUR.

COMPLAINT NO.99/2016

DATED THIS THE 26^th DAY OF JULY 2017

:PRESENT:

HON’BLE SRI RAVISHANKAR, B.A.L, LL.B., - PRESIDENT

HON’BLE SMT B.U.GEETHA, M. COM., LL.B., -MEMBER

HON’BLE SMT H. MANJULA, B.A.L., LL.B., - MEMBER

COMPLAINANT:

The Principal,

A.L.N. Rao Memorial

Ayurvedic Medical College,

Koppa-577126.

(By Sri/Smt. S.S.Venkatesh, Advocate)

V/s

OPPONENT:

1. The Branch Manager,

    State Bank of Mysore,

    Koppa branch,

    Koppa-577126,

    Chikmagalur Dist.

2. The Regional Provident Fund

    Commissioner, E.P.F.O Office,

    Yashoram Chambers, Chikmagalur.

(Op1 By Sri.D.Druvanarayana, advocate)

(Op2 By Sri.Halekote A.Thejaswi, advocate)

By Hon’ble President Sri. Ravishankar,

:O R D E R:

The complainant filed this complaint U/s 12 of the Consumer Protection Act 1986 against Op1 & 2 alleging deficiency in service in imposing penalty of Rs.10,082/- and interest of Rs.14,701/- in total Rs.24,783/-. Hence, prays for direction against Op 1 to pay the said penalty and interest amount along with compensation of Rs.10,000/- for deficiency in service.

2.     The brief facts of the complaint is that:

        The complainant in order to remit the provident fund accumulation of its employees had credited the said provident fund accumulation to Op 1 bank within 15^th of every month and 5 days grace period. Accordingly, the complainant was regularly remitting the provident fund accumulation to Op 2 through Op 1 without fail. Inspite of regular remittance within the time as prescribed under provident fund rules, the Op 2 had issued a notice to impose penalty and interest for delayed payment. It is only due to negligence on the part of Op 1 since 2002 to 2012 the remittance was not made to the Op 2 organization. For which Op 2 had imposed penalty of Rs.10,082/- and interest of Rs.14,701/- to the complainant for delayed payment of 45 monthly payment for 13 years. The complainant in this regard had repeatedly requested the Op 1 to explain the reason for delayed payment, inspite of remittance of the provident fund accumulation well within the time to the bank. But Op 1 had not responded properly and gave untenable answer. Hence, Op 1 rendered a deficiency in service in not remitting the provident fund accumulation to Op 2 organization, even inspite of regular payment made within the stipulated time. Op 2 is a formal party, who imposed penalty and interest on this complainant, even inspite of payment of provident fund well within the time to Op 1 bank. Hence, complainant filed this complaint and prays for direction against Op 1 to pay the said penalty and interest amount along with compensation of Rs.10,000/- for deficiency in service as prayed above.

3. After service of notice Op1 & 2 appeared through their counsel and filed version.

4. Op 1 in his version has contended that, it is true that complainant is remitting the provident fund accumulation of its employees to EPF office, Chikmagalur through this Op within 20^th of every month including grace period. But it is false to state that this Op had not remitted the said amount to the Op 2 by this Op bank well within the time since 2002 to 2012 i.e., 45 monthly payments for 13 years. This Op also do not know that the Op 2 imposed penalty of Rs.10,082/- and interest of Rs.14,701/- in total Rs.24,783/- to complainant for delayed payment. At no point of time the complainant made a request to this Op bank to give reason for delayed payment of provident fund accumulation.

        This Op has not committed any deficiency in service or negligence or breach of trust towards complainant. This Op is a nationalized bank having Core Banking System which is totally computerized which does not give space of any kind of error, but in this instant case though the complainant had remitted the provident fund accumulation through this Op, the same was promptly complied and duly communicated to the Main Branch, Chikmagalur. But since there was a technical error in informing sharing between branch office and main office of this Op bank, there may be some delay in remitting the provident fund accumulation to the accounts of the employees with Op 2 organization. The said delayed remittance is not with any malafide intention and it was only due to technical error in the Core Banking System. Hence, this Op is not liable to pay any amount claimed in the complaint.

        Op 1 further contended that the complainant is a long standing customer of Op bank and the service of the Op is being given vigilantly considering image and reputation of the complainant in the society. Hence, there is no deficiency in service in rendering the service to the complainant. Therefore, prays for dismissal of the complaint.

5. Op 2 also filed version and contended that the complainant establishment has made employees provident fund remittance belatedly for the period from 04/1999 to 03/2014. Hence, the complainant is liable to pay penal damages and interest with respect of the said belated remittance under the provisions of EPF and M.P Act. In order to afford an opportunity of being heard before leavy of penal damages and interest, this Op had issued summons U/s 14(B) and 7(Q) of the Act vide a letter No.KN/CKR/SRO/PD/19707/2015/1021, dated:09.06.2015 and directed the complainant to appear in person or through authorized representative on 07.07.2015. This Op also sent a statement of delayed remittance which attracts penal damages U/s 14(B) and 7(Q) of the EPF and MP Act, 1952 showing the details of wage month, due date and remittance date of EPF contribution to the EPF accounts. The enquiries conducted by this Op was concluded after affording reasonable opportunity followed by principles of national justice. Apparently, the complainant has remitted the dues by cash to State Bank of Mysore instead of State Bank of India which is the banker of the employees PF organization. Though the subsidiary banks of SBI have been authorized to collect PF dues, but the remittance should be made within the time stipulated under the Act and the scheme. As per the provisions of the schemes the complainant is responsible for belated remittance made after 15^th of following month in respect of wage month concerned through D.D/Local cheque as the case may be and as per the office records the monthly P.F dues were remitted belatedly by the complainant for the default period. Hence, the request of the employer is not tenable.

        Op 2 further contended that there is no any deficiency in service on the part of this Op in imposing the penalty and interest on the belated remittance, they have imposed the interest and penalty as per the rules laid on under EPF and M.P Act. Hence, prays for dismissal of the complaint.

6. Complainant filed affidavit and marked documents as Ex.P.1 to P.21. Op 1 filed affidavit and no documents marked. Op 2 not filed any affidavit in support of his case.

7.     Heard the arguments.

8.     In the proceedings, the following points do arise for our consideration and decision:

1. Whether there is a Deficiency in service on the part of Op1?
2. Whether there is a Deficiency in service on the part of Op 2?
3. Whether complainant entitled for any relief & what Order?

9.     Our findings on the above points are as follows:-

1. Point No.1: Affirmative.
2. Point No.2:Negative
3. Point No.3: As per Order below. 

: R E A S O N S :

POINT NOs. 1 & 2:

10. The case of the complainant is that, he is an employer, who regularly paying the provident fund accumulation of its employees to Op 2 through Op 1 within 15^th of every month along with 5 days grace period. The complainant is regular in paying the said provident fund accumulation of its employees to Op 1 bank well within the time, but Op 1 bank had not remitted the said amounts to Op 2 well within the time. There is a delay in remitting the PF amount to Op 2 organization, even inspite of payment made by complainant. For which Op 2 imposed penalty of Rs.10,082/- U/s 14(B) and interest of Rs.14,701/- U/s 7(Q) of EPF and M.P Act, 1952 for belated payment since 04/1999 to 03/2014. Hence, complainant alleges a deficiency in service on the part of Op 1 bank in not remitting the provident fund accumulation which was deposited within the time and prays for payment of the said penalty and interest, which was paid to the Op 2 organization along with compensation for deficiency in service.

11.  On contrary Op 1 has taken a contention that, the complainant had remitted the EPF accumulation to this bank well within the time, in turn this branch office has send the amount to the main branch office, but there is a delay in remitting the said provident fund accumulation to Op 2 organization due to technical error and admits that there is a delay in remitting the provident fund accumulation to the account of the employees of complainant. The Op 1 also admits the delayed remittance only for the reason of Core Banking and sworn that the delay is not with any malafide intention and submits no deficiency in service on the part of Op 1.

12. Op 2 in his version has contended that, as per the rules they have imposed the penalty of Rs.10,082/- U/s 14(B) and interest of Rs.14,701/- U/s 7(Q) of the EPF and MP Act to the complainant. After enquiry there is a delay in payment of the provident fund accumulation to this Op since 04/1999 to 03/2014. Hence, submits no deficiency in service.

13. Complainant has produced statement of account which clearly goes to show that the complainant had remitted the provident fund accumulation of its employees to Op 1 bank well within the time marked as Ex.P.5. The complainant also produced a statement which established that he had remitted the provident fund accumulation to Op 1 bank which is marked as Ex.P.2 & 6, it reads as follows.

Details of Provident Fund Remittance

 It is admitted by the Op 1 bank that the complainant had remitted the provident fund to them within the time, but they have made delayed payment to the Op 2 which resulted in imposition of the penalty of Rs.10,082/- and interest of Rs.14,701/- to the complainant. We are of the opinion that due to negligence on the part of Op 1 bank in remitting the provident fund accumulation well within the time, the complainant suffered penalty U/s 14(B) and interest U/s 7(Q) of the EPF and M.P Act. Op 2 organization have not considered the request made by complainant as because the complainant had remitted the amount to their banker well within the time, but the Op 2 after enquiry have made an order U/s 14(B) and 7(Q) against the complainant, who is the employer to pay the penalty and interest. But the Op 1 bank had not explained the genuine reason for delay in payment of the said remittance made by complainant. Op 1 bank has simply sworn affidavit that due to technical error they are not able to remit the provident fund accumulation of complainant since 2002 to 2014. Hence, it is clear case of deficiency in service on the part of Op 1 bank in not remitting the provident fund accumulation of the complainant well within the time to Op 2 organization. Hence, Op 1 is liable for payment of the said interest and penalty amount to the complainant. Op 1 being a banker is also liable to pay a compensation of Rs.10,000/- for deficiency in service along with litigation expenses of Rs.5,000/- to the complainant. Here the Op 2 is only an organization, who receives the provident fund contribution from employer towards their employees through bank. In this case Op No.2 has imposed penalty and interest on the belated payments by employer. We found there is no deficiency in service in imposing the said penalty and interest on the belated payment. Hence, the complaint against Op No.2 is liable to be dismissed. As such for the above said reasons, we answer the above point no.1 and 3 in the Affirmative, Point No.2 in the Negative and proceed to pass the following:-  

: O R D E R :

1. The complaint filed by the complainant is allowed.
2. Op 1 is directed to pay the penalty and interest amount of Rs.24,783/- along with compensation of Rs.10,000/- (Ten Thousand Rupees only) for deficiency in service and litigation expenses Rs.5,000/- (Five  thousand Rupees only)  to the complainant within one month from the date of receipt of this order, failing which the payable amount shall carry interest @ 9% P.A. till realization.
3. The Complaint against Op 2 is hereby dismissed.
4. Send free copies of this order to both the parties.

(Dictated to the Stenographer transcribed typed by her, transcript corrected by me and then pronounced in Open Court on this the 26^th day of July 2017).

  (B.U.GEETHA)         (H.MANJULA)      (RAVISHANKAR)

      Member                   Member                          Presidet

ANNEXURES

Documents produced on behalf of the Complainant/S:

Ex.P.1              - Authorization letter.

Ex.P.2              - Statement U/s 7(Q) &14(B).

Ex.P.3             - Mail correspondence dtd:25.1.16.

Ex.P.4              - Gazette Notification dtd:14.1.16.

Ex.P.5              - Copy of the challens and statement of accounts.

Ex.P.6              - Certified copies of seven letters to Op 2.

Ex.P.7              - Order of the Asst. Provident Fund Commissioner dtd:5.11.15.

Ex.P.8              - Another Order U/s 7(Q) of P.F & M.P Act dtd:5.11.15.

Ex.P.9              - Another two letters dtd:24.11.15 & 7.11.15.

Ex.P.10            - Letter issued by Op 2 dtd:3.11.15.

Ex.P.11            - Letter dtd:3.12.15 by complainant.

Ex.P.12            - Letter dtd:3.11.15 from Op 2 to complainant.

Ex.P.13            - Letter dtd:3.10.15 by complainant to Op 2.

Ex.P.14            - Copy of the application under RTI Act to Op 2.

Ex.P.15            - Summons issued by Op 2 dtd:21.9.15.

Ex.P.16            - Another two letters dtd:24.5.15. & 10.8.15.

Ex.P.17            - Another notice of adjournment/summons.

Ex.P.18            - Letter dtd:13.3.17 issued by Op 2.

Ex.P.19            - Copy of the letter dtd:20.3.2017.

Ex.P.20            - Letter dtd:21.3.2017.

Ex.P.21            - 2 receipts issued by Op.

Documents produced on behalf of the OP/S:

NIL

Dated:26.07.2017                         President

                                    District Consumer Forum,

                                                  Chikmagalur.            

RMA