JUDGMENT

RAY, C. J.:—This appeal by special leave turns on the question whether the Coal Mines Provident Fund Commissioner is to hear an employer before making an order requiring the employer to pay damages under S. 10-F of the Coal Mines Provident Fund and Bonus Schemes Act, 1948 (hereinafter referred to as the Act).

2. The employer being the respondent to this appeal was directed by a letter dated 3/4 January, 1969 to pay provident fund contributions amounting to Rs. 5,821.21 for the months of July to September, 1968 and damage at the rate of 25 percent on the above dues amounting to Rs. 1,455.30. The employer was required to pay damages under the provisions of Section 10-F of the Act.

3. The employer filed an objection explaining the circumstances under which there was delay in the payment of provident fund contribution. The employer prayed that damages might not be imposed at the rate of 25 per cent for the delay in payment. The employer paid the provident fund contributions. The employer was informed that damages charged on the delayed payments of provident fund contribution could not be waived.

4. The employer thereafter filed an application in the High Court for an 677 order that the demand notice be quashed. The High Court acceded to the application of the employer. The High Court gave two reasons. First, that the computation of amount of damages should arise upon consideration of facts and circumstances and a mechanical computation of damages is not contemplated. Second, the authorities should have given opportunity to the employer to represent the case.

5. The High Court did not accept the contention of the employer that Section 10-F of the Act suffered from the vice of excessive delegation.

6. The provisions contained in Section 10-F of the Act are as follows:-

"Where an employer makes default in the payment of any contribution or bonus or any charges payable by him under any scheme framed under this Act, or where any person who is required to transfer provident fund accumulations in accordance with the provisions of Section 3-F makes default in the transfer of such accumulations, the Central Government may recover from such employer or person, as the case may be, such damages, not exceeding twenty-five per cent of the amount of arrears, as it may think fit to impose."

7. The Central Government under sub-section (1) of Section 10-C of the Act is authorised to delegate any power exercisable by it under the Act, or any Scheme framed thereunder, to the Coal Mines Provident Fund Commissioner or any other officer.

8. The Central Government in excercise of the power conferred under Section 10-C (1) of the Act by notification dated 1 October, 1966 directed that powers exercisable by it under Sections 10-A and 10-F of the Act and specified in column (1) of the Table attached to the notification shall, subject to the conditions specified in the corresponding entry in column (2) of the Table attached, be exercised by the Coal Mines Provident Fund Commissioner appointed under Sec. 3-C (1) of the Act. There is a Schedule attached to the notification where sliding scale of damages has been fixed by the Central Government under Section 10-F of the Act. The Schedule attached to the notification is as follows:-

"Sliding rate of recovery of damages under Section 10-F of the Coal Mines Provident Fund and Bonus Schemes Act, 1948.

S.No. of default during the year Period of default

one month or less Over one month up to two months Over two months up to three months Over three months up to four months Over four months up to five months Over five months

1 2 3 4 5 6

1 st default 2% of arrears 5% of arrears 10% of arrears 15% of arrears 20% of arrears 25 % of arrears

2nd default 5%" 10%" 15%" 20%" 25%" 25%"

3rd default 10%" 15%" 20%" 25%" 25%" 25%"

4th default 15%" 20%" 25%" 25%" 25%" 25%"

5th default 20%" 25%" 25%" 25%" 25%" 25%"

6th or subsequent 25%" 25%" 25%" 25%" 25%" 25%"

defaults

9. Under Section 7-B of the Act the Coal Mines Provident Fund Co