The case came before the high court through a Bharat Coking writ petition challenging the validity of the notice (dated December 7, 1998) which directed the State Bank manager at Dhanbad to attach the company's account. The commissioner issued the notice under Section 8F of the Employees' Provident Fund & Miscellaneous Provisions Act, 1952.

Justice SJ Mukhopadhaya, while interpreting Section 8 of the act, held that the bank account of a company could not be attached under the provident fund act merely because the company owed money to another company which was a provident fund defaulter.

BCCL owes money to Heavy Engineering Corporation (HEC) and it has no relationship with HEC other than that of business.

OnNovember 10, 1998, RPFC intimated BCCL that HEC Ltd had defaulted paying the provident fund dues of their employees and that BCCL owed Rs 17.30 crore to HEC.

A request was made to BCCL by RPFC, Ranchi, to disburse the amount in favour of RPFC by a demand draft. BCCL in a letter dated December 22, 1998 intimated RPFC that it was liable to pay Rs 5.56 crore only to HEC Ltd and that the rest of the amount involved a dispute which was to be resolved between the parties only.

On December 7, 1998 RPFC issued a letter to SBI directing the bank not to allow BCCL to operate its account and to disburse Rs 17.34 crore from the BCCL account to RPFC.

While setting aside the December 7 letter of RPFC the high court observed that as BCCL had accepted the liability of paying Rs 5.06 crore to HEC and as HEC at a meeting held on December 29, 1998 decided to accept recovery of the said amount, BCCL should remit the amount to RPFC.

The court also directed BCCL that if after calculations it finds itself liable to pay HECany further amount, it should remit the amount to RPFC for adjustment of dues of HEC Ltd towards provident fund.