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Rs 12-crore EPF dues: EPF office initiates process to auction Osmanabad sugar factory

DCC Bank says factory owes it Rs 227 cr, gets stay on auction

The regional office of Employees Provident Fund (EPF) in Solapur has initiated the auction process for the Terna sugar factory in Osmanabad for failing to pay Rs 12 crore in EPF of around 1,200 employees. However, the District Central Cooperative (DCC) Bank, Osmanabad, has got a stay against the EPF office’s move, saying the sugar factory owes it Rs 227 crore in dues.

Officials from the EPF office in Solapur said that the sugar factory was seized in 2015 after it failed to pay the EPF from 2008 to 2011. As per the norms, an inquiry was conducted to fix the EPF dues, including the fine and interest. The EPF dues are approximately Rs 12 crore of around 1,200 employees, said an official. The official further said that the e-auction process was initiated by the office and the Metal Scrap Trading Corporation was given the task for the auction. “If any company or factory is closed or is in liquidation, then the EPF dues of the employees should be given first by selling its property, as per the EP Act,” said an official from the regional EPF commissioner in Solapur.

However, the DCC Bank, Osmanabad, had moved the Bombay High Court against the EPF office’s move of auctioning the factory, seeking a stay on it. “After the factory failed to pay the loan taken from us, we had seized the factory in 2012. Now, our total dues from the sugar factory is around Rs 227 crore. So, we moved the High Court and got a stay on the EPF office’s auction earlier this week,” said Vijay Ghonse Patil, managing director of the DCC Bank, Osmanabad.

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Patil further said the EPF office can’t auction it when the managing director of the DCC Bank has been appointed as the official liquidator for it. “We have communicated to them. If there are any EPF dues, then they should write to us and will consider them at the time of auction,” he added. Officials from the DCC Bank, Osmanabad, said the auction has been pending as the sugar factory management has challenged the DCC Bank’s seizure action in the Debt Recovery Tribunal, which ruled in favour of the sugar factory. “The tribunal’s order has been challenged by the DCC Bank in the Debt Recovery Appellate Tribunal and the case is still pending,” said an official from the bank.

However, officials from the EPF office said that it has now deferred the auction process and would move the High Court against the stay. “We will move the High Court to ensure that the EPF dues are given on priority at the time of auction and will request the court to direct the DCC Bank to give an undertaking for it,” said an official.

First uploaded on: 28-01-2018 at 07:59 IST
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