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2006 Supreme(SC) 275
2006(3) Supreme 214
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
Arijit Pasayat and Tarun Chatterjee, JJ.
Halwasia Vidya Vihar (Sr. Sec. School) Haryana—Appellant
versus
The Regional Provident Fund Commissioner—Respondent
Civil Appeal No. 3848 of 2000
Decided on 27-3-2006
Counsel for the Parties :
For the Appellant : Pranab Kumar Mullick, Afzal Ahmmed, Rajesh Gogna, Advocates.
For the Respondent : T.S. Doabia, Sr. Advocate, Mahnish Sharma, Shail Kumar Dwivedi, Advocates.
IMPORTANT POINT
Reduction or waiver of penalty under Section 14(B) of Employees Provident Fund and Misc. Provisions Act can be done in the indicated circumstances.
Headnote:Employees Provident Funds and Miscellaneous Provisions Act, 1952—Section 14(B)—Damages—Reduction or waiver could be done in indicated circumstances—Appellant, affiliated to the Education Department of State Govt. was contributing to provident fund in the account of subscriber in terms of scheme of contributory provident fund under control and guidance of State Govt.—Appellant transferred its affiliation to Central Board of Secondary Education in April 1984—Scheme of contributory provident fund being followed by appellant was continued—Scheme under the Act was adopted by appellant on 1.7.1993, operative retrospectively w.e.f. August 1982—Accumulated balance in contributory provident fund was transferred by Dept. of Education to Employees Provident Fund Scheme—In a proceedings u/s 7(A) of the Act, there was extra deposit of Rs. 44,031—Found and proceedings were dropped—Commissioner imposed damages of Rs. 14,50,172—Which was 100% of alleged amount of default covering period August 1982 to June 1993—High Court upheld the penalty—Appeal—No allegation that there was delay in making deposit with Govt. under scheme which was being followed by appellant—In view of special features involved penalty deserved to be reduced to 25%.
Held : Therefore, reduction or waiver can be done in the indicated circumstances. In S.D. College’s case (supra) this Court took note of the fact that by order dated 29th January, 1988 the respondent-college authorities were directed to deposit the contribution with the appellant-Commissioner thereby there could be compliance of statutory obligation to deposit the amount in the manner as directed, from February 1988 onwards. But the college authorities continued to deposit the amount with the University. It is to be noted that the factual background in that case was somewhat different. In the instant case there was no allegation that there was any delay in making the deposit with the Government under the scheme which was being followed by the appellant. Even otherwise in S.D. College’s case (supra) also this Court did not maintain the levy of damages at 100% and reduced it to 25%. Taking into account the special features involved, we direct that the damage imposed shall be restricted to 25% of the amount levied by the respondent-Commissioner.(Para 6)
JUDGMENT
Arijit Pasayat, J.—Challenge in this appeal is to the judgment rendered by a Division Bench of the Punjab and Haryana High Court holding that the appellant was required to pay damages in terms of Section 14(B) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (in short the ‘Act’) amounting to Rs. 14,50,172/-.
2. Brief reference to the factual aspects would suffice:—
The appellant, an educational institution was affiliated to the Education Department to the Haryana Government. A scheme of contributory provident fund was in operation which was under the control and guidance of the Haryana Government and same was being applied to the appellant-institution. Under the said scheme of contributory provident fund it was mandated that an account shall be opened in the name of each subscriber in a Cooperative Bank approved by the Registrar, Co-operative Societies, Haryana. Appellant transferred its affiliation to Central Board of Secondary Education (in short ‘CBSE’) in April, 1984 after obtaining no objection certificate from the State Government. As per C.B.S.E. bye-laws, appellant was required to follow the State Government Rules regarding salary and service conditions of its staff members. Accordingly, the scheme of contributory provident fund which was earlier being followed by the appellant, continued to be operative. On being asked by the Regional Provident Fund Authorities the scheme under the Act was adopted by the appellant w.e.f. 1.7.1993; but the same was made operative retrospectively w.e.f. August 1982 by the authority. Thereafter in respect of each employee the provident fund contributions were deposited with the Regional Provident Fund Commissioner. The accumulated balance in the contributory provident fund accounts of the various employees was transferred by the Department of Education, Haryana to the Employees Provident Fund Scheme under the Act in May and June, 1995 and an amount of Rs. 17,33,914.60 was transferred by the Haryana Government. On 5.2.1996, proceedings under Section 7(A) of the Act were initiated. Taking into account the amount payable on assessment and giving credit to the aforesaid amount, it was held that there was extra deposit of Rs. 44,031.85. Therefore, the proceedings were dropped and no recovery was effected. On 14.2.1997 notice under Section 14(B) of the Act was issued covering the period August, 1982 to June 1993. Reply was furnished by the appellant taking the stand that since the deposit had been made with the Government Authorities in terms of the applicable scheme, there was no scope of levy of any damage. However, the Commissioner imposed damages of Rs. 14,50,172/- which was about 100% of the alleged amount of default. For the purpose of levy reference was made to the table contained in Section 32A. An appeal was filed before the Statutory Tribunal, i.e. Employees Provident Fund Appellate Tribunal, New Delhi (in short the ‘Appellate Tribunal’). In appeal it was held that there was no default in view of the circumstances noted above. A writ petition was filed challenging the order before the High Court taking the stand that there was no power to waive/reduce the damages except in terms of the circumstances indicated in Section 14(B) (proviso). The High Court placed reliance on a decision of this Court in Regional Provident Fund Commissioner v. S.D. College, Hoshiarpur and Ors. (1997(1) SCC 241) and held that the penalty as levied by the Commissioner were to be maintained.
3. In support of the appeal learned counsel for the appellant submitted that there was absolutely no remiss on the part of the appellant which had scrupulously followed the scheme of the State Government. There was a transfer of the amount which would show that by no stretch of imagination it can be conceived that there was any default, muchless intentional. It was pointed that S.D. College’s case (supra) has no application to the facts of the present case. In that case the college in question c
