IMPORTANT POINT
Regional Provident Fund Commissioner is given discretion only to reduce a percentage of damages to be imposed u/s 14B of the Provident Fund Act and he has no power to waive penalty altogether.

ORDER

Delay condoned.

Leave granted.

We have heard learned counsel on both sides.

2. These appeals by special leave arise from the judgment of the Division Bench of the Punjab & Haryana High Court made on December 6, 1995 in CWP Nos. 637 and 692 of 1995.

3. The admitted position is that the appellant had applied the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short, the Act ) to the respondent Institution by notification dated March 6, 1982. Calling the notification in question, the respondents had filed writ petition in this Court. This court by judgment dated January 29, 1988 had held that the Act would apply to the educational institutions and, therefore, they are required to comply with the notification issued under the Act. This Court had directed thus:

"Shri S.K. Bagga, learned counsel appears for the petitioners. We do not find any substance in the contention of the petitioners in these cases that the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the Act ) has no application to the educational institutions, who are petitioners in these cases. We, therefore, dismiss all these cases.

We direct that the petitioners shall comply with the Act and the schemes framed thereunder regularly with effect from 1.2.1988. Whatever arrears they have to pay under the Act and the schemes in respect of the period between 1.3.1982 and 1.2.1988 shall be paid by each of the petitioners within such time as may be granted by the Regional Provident Fund Commissioner. If the petitioners pay all the arrears payable from 1st March, 1982 upto 1st February 1988 in accordance with the directions of the Regional Provident Fund Commissioner he shall not levy any damages for the delay in payment of the arrears. Having regard to the special facts of these cases the subscribers (the employees) shall not be entitled to any interest on the arrears. The writ petitions are disposed of accordingly. No costs.

4. In spite of the directions issued by this Court, instead of complying with the orders of this Court, the respondents continued to deposit the amounts with the University. The respondents, thus, have not complied with the law. Consequently, the appellant exercising the power under Section 14-B of the Act levied damages @ 25% of the amount payable by the respondents. The respondents filed writ petitions against the appellant in the High Court. The High Court in the impugned order has held that the appellant is not liable to levy damages on the respondents. Thus, these appeals by special leave.

Section 14-B of the Act reads as under:

"14-B. Power to recover damages.- Where an employer makes default in the payment of any contribution to the Fund (the Family Fund or the Insurance Fund) or in the transfer of accumulations required to be transferred by him under sub-section (2) of Section 17) or in the payment of any charges payable under any other provision of this Act or of any scheme or insurance scheme or under any of the conditions specified under Section 17, the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette in this behalf may recover from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the scheme;

Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard:

Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under Section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985, subject to such terms and conditions as may be specified in the scheme."

5. Shri Randhir Jain, learned counsel for the res