The legislative intent of S. 14b of the Employees' Provident Funds Act, 1952, requires an estimation of damages in each case based on all relevant facts and circumstances, and does not permit a rigid and inflexible formula for computing damages.

SOMNATH AYYAR, J.

( 1 ) THE petitioner in Writ Petition No. 121 of 1966 is a certain Fernandes who is the managing partner of a cashewnut factory in Mangalore. The petitioner in Writ Petition No. 122 of 1966 is a certain Mizar Govinda Annappa Pai who is the proprietor of another reasons cashewnut factory in that place. For the reason that they committed default in the payment of their committed default in the payment of their contribution to the employees' provident fund payable under the employees' Provident Funds Act, 1952, and the administrative charges payable under the scheme made under the provisions of the Act, the Regional Provident Fund Commissioner called upon them to pay damages determined under S. 14b of that Act. The amount demanded of Fernandes was Rs. 12,760 which consisted of amount described as penal interest and penal damages. Similarly, the amount demanded of Mizar Govinda Annappa Pai was Rs. 19,318.

( 2 ) WE are asked in these writ petitions to quash those demands on the ground that there was no proper determination of the damages which could be demanded under S. 14b of the Employees' provident Funds Act, 1952, which would be referred to in the course of this judgment as the Act.

( 3 ) THAT section reads :

"where an employer makes default in the payment of any contribution to the fund or in the transfer of accumulations required to be transferred by him under Sub-section (2) of S. 15 [or sub-section (5) of S. 17] or in the payment of any charges payable under any other provisions of this Act or of any scheme or under any of the conditions specified under S. 17, the appropriate government may recover from the employer such damages not exceeding twenty-five per cent of the amount of arrears, as it may think fit to impose. "

( 4 ) THE Government of the new State of Mysore in the exercise of the power created by S. 19 delegated the power to recover damages under the provisions of this section to the Regional provident Fund Commissioner, Bangalore, by a notification made on 2 September, 1963. By that notification the Regional provident Fund Commissioner was directed to recover from the defaulters, damages specified in a table annexed to the notification. That table incorporated a formula for the computation of damages which could be recovered on the basis of the number of defaults and the period during which there was non-payment. That table is : period OF DEFAULT serial No. One month Over 1 Over 2 Over 3 Over 4 Over 5 default or less month months months months months up to 2 up to 4 up to 4 up to 5 months months months months first 2 per 5 per 10 per 15 per 20 per 25 per default. cent of cent of cent of cent of cent of cent of arrears. arrears. arrears. arrears. arrears. arrears. Second 5 per 10 per 15 per 20 per 25 per cent of cent of cent of cent of cent of arrears. arrears. arrears. arrears. arrears. Third 10 per 15 per 20 per 25 per cent of cent of cent of cent of arrears. arrears. arrears. arrears. Fourth 15 per 20 per 25 per cent of cent of cent of arrears. arrears. arrears. Fifth 20 per 25 per cent of cent of arrears. arrears. Sixth 25 per cent of arrears.

( 5 ) THE office of the Regional provident Fund Commissioner, therefore, made the arithmetic directed by that table and arrived at the sums which the petitioner were called upon to pay.

( 6 ) SRI Jagannatha Shetti contends that it was the duty of the State Government under S. 14b of the Act to determine the sum of money which could be recovered as damages under its provisions in each case which came up before it and that it could not make a formula of universal application such as the one which the table to the notification incorporates. He maintained that since the only power that was delegated to the Regional Provident Funds Commissioner was the power to make a calculation in accordance with the system evolved by the State Government, there was no proper determination either by the State Government or by the Regional Provident fund Commissioner o

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