- (1.) The petition is being decided on the request of the learned counsel for the parties at the admission stage without issuing notice to the fifth respondent and without calling for counter affidavit. ING Vyasya Bank Limited which subsequently amalgamated with Kotak Mahindra Bank Ltd1, Bank sanctioned and disbursed credit facility to the fifth respondent, M/S Y.A. Fidelity Engineering Pvt. Ltd, Borrower Company.. The borrower company defaulted, consequently the debt were classified non-performing asset (N.P.A) on 4 February 2006 as per guidelines of the Reserve Bank of India. The Bank proceeded in terms of section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, SARFAESI Act. and recovered a sum of Rs. 50 lacs by selling the mortgaged immovable property, hyoptheticated stock, plant and machinery on 30 March 2009 and 22 May 2009 respectively.
(2.) The third respondent, Recovery Officer, Employees Provident Fund Organization, Kanpur attached the unit of the borrower company for realizing the dues towards employees provident fund under the Employees' Provident Funds and Miscellaneous Provisions Act 1952, EPF Act.. Upon failure to deposit the provident fund by the Bank, the Recovery Officer by the impugned order dated 15 July 2015 attached two third salary of the second petitioner, Zonal Recovery Manager, Kotak Mahindra Bank Ltd. The petitioners are assailing the order in writ jurisdiction. Sri Manish Trivedi, learned counsel appearing for the petitioners would submit that the action on the part of the Provident Fund Commissioner in attaching the salary is wholly illegal and arbitrary, the bank is having first charge on the security of the borrower company, therefore, the Bank has recovered all the outstanding dues by sale of the security in 2009, which cannot be claimed under Section 11 of the EPF Act by the respondents. The respondents could recover the employees' dues by sale of other assets of the borrower company. Sri Amit Negi, learned counsel appearing for the respondents would submit that the dues payable by an employer under section 11 of E.P.F Act, would have priority over other debts and is not subject to the provisions of section 13 of the SARFAESI Act. The rival submissions fall for consideration.
(3.) The question which arises for consideration is as to whether the priority given to the dues payable by an employer under section 11 of E.P.F Act is subject to section 13 of SARFAESI Act. The EPF Act was amended by Act 40 of 1973, Act 19 of 1976 and Act 33 of 1988. By Act 40 of 1973, Section 11 was renumbered as Section 11(1) and a new sub-section was added as Section 11(2) and it was declared that any amount due from an employer in respect of the employees' contribution shall be deemed to be first charge on the assets of the establishment and shall be paid in priority to all other debts. The scope of Section 11(2) was enlarged by Act 33 of 1988 by including the employer's contribution.;