- 1 - NC: 2025:KHC:221 WP No. 34453 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 34453 OF 2024 (L-PF) BETWEEN: 1. CHIEF OFFICER, K R PETE TOWN MUNCIPAL COUNCIL, K R PETE @ TALUK, MANDYA DISTRICT - 571426. …PETITIONER (BY SRI G M ANANDA, ADVOCATE) AND: 1. REGIONAL PROVIDENT FUND COMMISSIONER-II, DISTRICT OFFICE, NO.1705/C, 1ST FLOOR, CHRISTIAN COLONY, MANDYA - 571401. 2. AREA ENFORCMENT OFFICER, MANDYA DIVISION, DISTRICT OFFICE, NO.1705/C, I FLOOR, CHIRISTIAN COLONY, MANDYA - 571401. 3. ASSISTANT PROVIDENT FUND COMMISISONER, BHAVISHHYA NIDHI BHAVAN, 2ND STAGE, GAYATHRIRPURAM, MYSORE - 570019. …RESPONDENTS (BY SRI M PRADEEP, ADVOCATE (VK NOT FILED)) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDER DTD. 29.08.2024 PASSED BY THE R-1 IN NO. KN/MYS/DO/MYA/ENF/826/1945430/7A/2024- 25/JULY/541 (DIARY NO. 947/2023 AT ANNX-A. AND FURTHER DIRECT THE RESPONDENTS TO RETURN FORFEITED AMOUNT OF RS.19,83,327/- 9RS. NINETEEN LAKHS EIGHTY-THREE THOUSAND THREE HUNDRED AND TWENTY SEVEN ONLY) BY TAKING BANK GUARANTEE. Digitally signed by PRAMILA G V Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:221 WP No. 34453 of 2024 THIS PETITION COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE ORAL ORDER Heard the learned counsel appearing for the petitioner and Sri M. Pradeep, the learned counsel appearing for the respondents. 2. This petition is filed challenging the order dated 29.08.2024 passed by the first respondent. A direction is also sought to refund forfeited amount of Rs.19,83,327/-. 3. Learned counsel for the petitioner would submit that the petitioner is a Municipal Council and it is not in arrears of any provident fund amount due to its employees from the date of allotment of provident fund account. In terms of the order at Annexure-A, an amount of Rs.59,66,968/- is ordered to be recovered from the petitioner towards the provident fund dues. Pursuant to this order, there was no compliance by the petitioner, as such, the petitioner’s account has been attached and - 3 - NC: 2025:KHC:221 WP No. 34453 of 2024 Rs.19,83,327/- has been transferred to the account of respondent No.1. The said order is called in question before the Appellate Authority by filing an appeal. The petitioner also filed an application to stay the operation of the order under appeal. However, the said application is not yet considered. In the meantime, Rs.20,00,000/- is also transferred from the account of the petitioner, to the account of the respondent. 4. Learned counsel for the petitioner would submit that the petitioner being the Town Municipal Council has to carry out several welfare activities and the amount credited to the account of the petitioner for developmental activities will have to be utilized within the stipulated period, else, the scheme would lapse and the petitioner will have to refund the entire amount, to the Government. He would also submit that the construction/development activities are under way and the petitioner is also facing difficulty in paying the salary of the employees as the account is freezed. Thus, he would urge that the - 4 - NC: 2025:KHC:221 WP No. 34453 of 2024 appropriate order for refund of the amount be passed, in the interest of justice, modifying the order of attachment. 5. Learned counsel for the respondents would submit that despite the sufficient time as prescribed under the Statute is provided to the petitioner to pay the arrears of provident fund, the petitioner has not chosen to pay the amount, as such, the action is initiated in accordance with law and absolutely there is no justification to grant the prayer sought in the petition. 6. This Court has considered the contentions raised at the Bar and perused the records. 7. It is not in dispute that the petitioner is a Town Municipal Council/Local Body. It is also not in dispute that the Town Municipal Council will have an obligation to carryout developmental activities and it has to pay salary to its employees. It is forthcoming from the records that the entire amount which is claimed by the respondent No.1 is recovered, during the pendency of appeal. - 5 - NC: 2025:KHC:221 WP No. 34453 of 2024 8. The petitioner has raised the contention that the petitioner is not liable to pay the amount prior to creation of provident fund account i.e. which was created in 2018. It is also the contention of the petitioner that there cannot be any liability to pay the provident fund amount prior to 2018 and the demand made from 2014 to 2018 is impermissible. All those contentions are to be considered in the appeal which is pending. 9. Considering the facts of the case, this Court is of the view that an equitable order is to be passed to safeguard the interest of both the petitioner as well as the respondents. Hence, the following:- ORDER i) The recovery of Rs.59,66,968/- shall be subject to the result of the pending appeal before the Appellate Authority. ii) The respondent No.1 shall transfer the amount of Rs.20,00,000/- to the petitioner’s account - 6 - NC: 2025:KHC:221 WP No. 34453 of 2024 subject to the petitioner furnishing the bank guarantee for the likesum. iii) On petitioner furnishing the bank guarantee the petitioner's bank account shall be de-freezed and petitioner shall be permitted to operate the bank account. iv) The Appellate Authority shall hear the appeal as expeditiously as possible, preferably within six months from the date of receipt of the copy of this order. iv) It is made clear that this Court has not expressed anything on the merits of the matter. The writ petition is disposed of accordingly. Sd/- (ANANT RAMANATH HEGDE) JUDGE CHS List No.: 1 Sl No.: 31