JUDGMENT :

Heard Sri Metta Chandra Sekhara Rao, learned counsel for the petitioner and Sri P.Rama Bhoopal Reddy, learned Standing Counsel for the respondent Nos. 1 and 2.

2. This writ petition under Article 226 of the Constitution of India has been filed by the ‘Eastern Power Distribution Company of Andhra Pradesh Limited, represented by the Divisional Electrical Engineer (Operation)’ in short APEPDC Limited, for the following reliefs :

“This Hon’ble Court may be pleased to issue an appropriate Writ order or direction more particularly one in the nature of WRIT OF CERTIORARI and call for the records relating to and connected with orders of the Hon’ble Employees Provident Fund Appellate Tribunal dated 08.03.2011 passed in ATA No.303(1) of 2009 and proceedings A.P /VP/PD Cell/ VSP/ CC51/ AP/ 45010/2009/3084 dated 13.02.2009 of the 1st Respondent and quash or set aside the same as illegal arbitrary without jurisdiction and competence and pass appropriate orders”.

3. The petitioner A.P.E.P.D.C.L was formed in February, 1999 and came under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (in short, “the EPF Act”) working in the company in the year 2003, with effect from February, 1999. As the company did not deposit its contribution from February, 1999 to January, 2007 in time and there was considerable delay, the proceedings under Sections 7Q and 14-B of the EPF Act were initiated. After holding enquiry and affording the opportunity of hearing to the petitioner, the 1st respondent-Assistant P.F. Commissioner passed the order dated 13.02.2009.

4. The 1st respondent by the impugned order dated 13.02.2009 imposed damages by way of penalty for the total amount of Rs. 14,366/- + Rs. 79/- for the period for the months of 9/2006, 10/2006 and 01/2007 under Section 14B of the EPF Act.

5. The 1st respondent also determined that the petitioner shall have to pay interest @ 12% for the due period totaling to an amount of Rs.2,26,784/- under Section 7Q of the EPF Act.

6. The petitioner’s appeal was dismissed by the 2nd respondent finding no infirmity in the order of the 1st respondent.

7. The applicability of the EPF Act to the petitioner establishment was not disputed before the appellate Tribunal nor that the establishment was covered with retrospective effect and the dues were deposited. The same has also not been questioned in the present writ petition.

8. Sri Metta Chandra Sekhar Rao, learned counsel for the petitioner raises the following arguments to challenge the impugned orders:

(i) That the higher rate of interest i.e @ 37% has been applied whereas Section 7Q of EPF Act provides for a simple interest @ 12%;

ii) The Employer and Employee both are liable for payment of interest and penalty but the entire liability has been fastened on the petitioner Employer only.

9. Sri P.Rama Bhoopal Reddy, learned standing counsel submits that the damages/penalty has been imposed as per Section 14B and the interest has been calculated as per Section 7Q of the EPF Act @ 12% and not @ 37%. He further submits that only the Employer is liable for penalty and interest. Consequently the impugned orders are perfectly legal and valid.

10. I have considered the submissions advanced by the learned counsels for the parties and perused the material on record.

11. The first submission of the learned counsel for the petitioner is that the authority has calculated interest @ 37%, where as Section 7Q of the EPF, Act provides for a simple interest @ 12% per annum.

12. The first point for consideration is as to what rate of interest has been applied and if it is contrary to Section 7Q of the EPF Act.

13. Section 7Q of the EPF Act provides as under:-

“7Q. Interest payable by the employer.— The employer shall be liable to pay simple interest at the rate of twelve per cent. per annum or at such higher rate as may be specified in the Scheme on any