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IN THE HIGH COURT OF BOMBAY
Dr. B.P. Saraf, J.,
K.T. Rolling Mills Pvt. Ltd. .... Petitioner.
Versus
R.M. Gandhi and others....Respondents.
Writ Petition No. 3271 of 1987, decided on 19/20-11-1992
Advocates appeared :
J.P. Cama, for petitioners.
H.V. Mehta with R.C. Master, for respondents.
The fact that the legislation in question is a social welfare legislation cannot be stretched too far to give a licence to the authorities thereunder to sit over matters for years and years and to spring in action and initiate proceedings as and when they take. The law in this regard is well sett1cd by the various decisions of the Supreme Court. The principles that emerge from these decisions arc clear and can be summed up thus. Where no period of limitation is prescribed by the law for the exercise of any power, it must be exercised within a reasonable time. Any unreasonable delay in exercise of the power may effect its validity. What is reasonable time, however, will depend upon the facts of each case.
In the instant case, there is long delay ranging between 8 to 17 years in initiating action under Section 14-B of the Act for alleged delay in depositing contributions No explanation is available for such unreasonable delay. Under the circumstances, the delay cannot be hold to be reasonable. Such unreasonable delay will definitely vitiate the action taken by the respondents. In fact, the initiation of proceedings after such inordinate delay amounts to abuse of the powers. The initiation of the proceedings and the impugned order passed in pursuance thereof, therefore, are liable to be quashed.
2. Admitted position in this case is that the proceedings were initiated for the first time by issue of notice to show cause on 19-4-1985. The challenge to the order is on the ground, inter alia, that the initiation of proceedings in the year 1985 for the alleged delay in payment of the contribution for the period from July 1968 to October 1977 is most unreasonable. A notice issued after long 17 years from the first alleged default and 8 years from the last alleged default is no show cause notice in the eye of law. The contention of the petitioner is that the entire proceedings should be quashed on this ground itself. There are other grounds too.
3. One of the other grounds is about the applicability of the provisions of section 14-B to the alleged defaults committed between July 1968 and September 1973. The other challenge is on the ground that even if the proceedings are found to be valid and the Act is found to be valid and the Act is found to be applicable, the calculation of damages is not in accordance with law. There is no dispute as to the maximum amount of damages that could be levied under section 14-B till 30th October,1973 which was an amount not exceeding 25% of the arrears.It was raised to 100% thereafter. Certain circulars were also issued from time to time by way of guidelines in the matter of levy of damages under section 14-B. Disputes were also there in regard to the applicability of these circulars. These circulars and guidelines came to be challenged before this Court from time to time. The question that arose was whether the circulars which were operative on the date of the adjudication would be applicable or the circulars effective on date of commission of the default would apply to the adjudication no matter when the adjudication took place.
4. The last controversy has been decided, of late, by a Division Bench of this Court on an appeal from a judgment of the Single Judge in Appeal No. 45 of 1992 in Writ Petition No. 150 of 1986 and a batch of connected cases. It has been held that though the law as applicable on the date of the default will apply, the circulars and guidelines issued for determining the quantum of damages subject to the maximum prescribed in the Act would be those which are effective on the date when the adjudication is made. This issue, so far as it relates to the present case, was also decided by the Division Bench in that appeal and batch of cases referred to the Division Bench. The Division Bench, however, did not go into any other issues raised by the parties/by the petitioners in those cases and left it open for them to raise the same before the Single Judge when the case is taken up for disposal. That is how this matter has come before this Court today.
5. The controversy regarding the applicability of the circulars or the guidelines having been decided by the Division Bench of this Court, the calculation of the damages will automatically be governed by that judgment. The only two issues that remain to be decided in this case are applicability of section 14-B to levy of damages for delay made in payment of contribution for the months from July 1968 to September, 1973 and the issue regarding the validity of the initiation of the proceedings which have been initiated after long lapse of time ranging from 8 years to 17 years.
6. I shall deal with the second issue first because in case that is decided in favour of the petitioners, it may not be necessary to go into the first issue.
7. The Counsel for
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