The authority under the Act has discretion to mitigate damages depending upon the circumstances of the case but never a discretion to condone the delay; damages in rare cases can be nil percentage but failure to pay will always attract Section 14-B.

JUDGMENT :

V.P. Tipnis, J.—The Vegetables Vitamins Foods Co. Ltd., has challenged the legality and correctness of the order dated 5/2/1992 passed by the Regional provident Fund Commissioner, Maharashtra and Goa, levying damages for the delayed payments of the Provident Fund contributions; Family Pension Fund Contributions; Administrative charges etc. u/s 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

2. By notice dated 22/10/1991 issued by the regional provident Fund Commissioner, the Petitioner-company was told that it has defaulted to pay the Employees' Provident Fund Contributions/Family Pension Fund Contributions/Insurance Fund Contributions and Administrative charges/inspection charges in the respective funds on or before the due dates for the months of March 1984 to January 1985, as indicated in the statement enclosed along with the aforesaid letter. The petitioner-company was called upon to show case why damages at such rates deemed fit, should not be imposed. The statement accompanying the notice shows that the contributions for the month of May 1984 were made on 18/2/1985. The statement shows that the contributions from the month of May 1984 to January 1985 were made on 18/2/1985. Thus, there has been delay from three days to seven months and seventeen days.

3. The petitioner-company replied by its letter dated 11/11/1991. It brought to the notice of the authority that they have three units in Bombay, two at Sion and one at Sewree. Workmen of all the three units had joined the Maharashtra General Kamgar Union led by Dr. Datta Samant during April 1984. It was alleged that the workers started intimidation, go slow, insubordination etc. and the management attempted to pursue the workmen to desist from such illegal activities. During the first week of June 1984 the workmen resorted to a sit down strike inside the factory and the work in the establishment came to standstill. They also damaged the plant and machineries. Since the situation went beyond the control of the Management, the management decided to suspend the work and accordingly the work was suspended in all departments on and from 7th June, 1984. Subsequently a lock out was declared from 24/6/1984. However the same was lifted on 18/10/1984. Despite this the workmen did not resume duty and continued to an illegal strike which continued upto 12/1/1986. It is specifically asserted in the reply that in the meanwhile a few loyal workmen reported for work during the month of January 1985 and the Management prepared the wages sheets and the payment made to all workmen including the workmen who were on strike. The management further asserted that the information regarding the lock out has been intimated to the office of the Regional Provident Fund Commissioner by letter dated 15/6/1984. They have also paid the administrative charges at rate of Rs. 5/- per month for six months on 9/11/1984. The management also forwarded a certificate from the Commissioner of Labour to the effect that there was a strike and lock out prevailing in the establishment from 7/6/1984 to 12/1/1986.

4. The Regional Provident Fund commissioner, after having referred to all the facts, observed that the labour difficulties, illegal strike, lock-out, union activities etc. cannot be considered as a valid reason for committing defaults of the statutory payments. These are the business hazards which employer is required to face at one time or the other. According to the Regional Provident Fund Commissioner, if the establishment could disburse the salaries and make deductions from the employees wages on account of Provident Fund and Family Pension Fund, he saw no reason why these should not be deposited within the stipulated date. Having regard to all the circumstances, ultimately by the impugned order, he levied penalty and damages for the period from May 1984 to January 1985 at 25 percent per annum. The total amount comes to Rs. 3205.80.

5. Shri Kochar, learned Counsel appear