Court clarifies EPF Act's adjudication not barred by SICA; Upholds statutory appeal requirement.

The court held that adjudication proceedings under section 7A of the EPF Act are not barred by section 22 of SICA, which only restricts enforcement actions, not adjudication. The liability to contribute under the EPF Act remains. The court found the writ petition not maintainable without exhausting the statutory appeal remedy under section 7-I of the EPF Act. The petitioner was directed to pursue the appeal, and the writ petition was dismissed. The respondent was prohibited from taking coercive recovery actions while the matter is pending before the BIFR.

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Issues Involved:
1. Whether the respondent could pass an order of adjudication under section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act when a case has been registered under the Sick Industrial Companies (Special Provisions) Act, 1985.
2. Whether the writ petition is maintainable without exhausting the remedy of statutory appeal.

Issue-wise Detailed Analysis:

1. Adjudication under Section 7A during BIFR Proceedings:
The petitioner contended that the adjudication proceedings under section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act (EPF Act) are barred by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) once a reference is registered with the BIFR. The petitioner argued that section 22 prohibits any action, including adjudication, when proceedings are pending before the BIFR.

The respondent countered that section 22 of SICA does not bar the passing of an adjudication order under section 7A of the EPF Act. It was argued that section 22 only restricts coercive actions such as execution, distress, or the like, and not the adjudication itself.

The court held that section 22 of SICA does not prohibit the passing of an adjudication order under section 7A of the EPF Act. It only restricts enforcement or recovery actions through distress or coercive means. The court referenced several Supreme Court judgments, including Maharashtra Tubes Ltd. v. State Industrial & Investment Corpn. of Maharashtra Ltd., Deputy CTO v. Corromandal Pharmaceuticals, and Gram Panchayat v. Shree Vallabh Glass Works Ltd., which clarified that section 22 suspends only coercive recovery actions and not the adjudication of dues.

The court concluded that the adjudication proceedings under section 7A are not barred by section 22 of SICA, and the liability to contribute under the EPF Act is not suspended. Therefore, the first contention raised by the petitioner fails.

2. Maintainability of Writ Petition without Exhausting Statutory Appeal:
The court examined whether the writ petition is maintainable without the petitioner exhausting the statutory remedy of appeal under section 7-I of the EPF Act. It was noted that an order of adjudication passed under section 7A is appealable under section 7-I, providing an efficacious remedy.

The court observed that the petitioner was given sufficient opportunity during the adjudication process, and the quantum of contributions payable was determined based on materials collected and admitted by the petitioner. It was not contended that the adjudication was conducted behind the petitioner's back or without due opportunity.

The court held that when an efficacious remedy of appeal is available, it would not normally interfere with the adjudication proceedings through a writ petition. Therefore, the writ petition is liable to be rejected, and the petitioner is directed to pursue the appeal under section 7-I of the EPF Act.

Conclusion:
The court dismissed the writ petition, directing the petitioner to seek remedy through the statutory appeal process. It was also noted that the respondent would not take any distress or coercive proceedings to recover the adjudicated amount while the matter is pending before the BIFR, except by following the procedure prescribed under section 22 of SICA. The parties were directed to bear their respective costs, and the connected W.M.P. was also dismissed.

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