The main legal point established in the judgment is that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act cannot be made applicable merely by consent, and the jurisdiction of the authorities to initiate proceedings for the recovery of damages is not attracted without a notification in the Official Gazette applying the provisions of the Act.

JUDGMENT :

D.Y. Chandrachud, J.—Rule, returnable forthwith. Counsel appearing on behalf of the Respondent waives service. By consent, taken up for hearing and final disposal.

2. The Petitioner is an indenting agent and was incorporated on November 16, 1994. As an indenting agent the Petitioner is required to liaise with customers in India and place orders on their behalf with its principals. On September 4, 1995, the Petitioner addressed a letter to the Regional Provident Fund Commissioner, applying for coverage of its establishment u/s 1(4) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 on a voluntary basis "with effect from December 1, 1995 the last date of the month in which the notification is published in the Gazette of India." The Petitioner undertook as an employer to pay its share of the Provident Fund contribution at the rate of 10% as provided u/s 6 of the Act read with paragraph 29 of the scheme framed thereunder. The Petitioner stated that a majority of the employees had also agreed to such coverage and the employees were willing to pay their contribution at the rate of 10%. A copy of the written consent of the employees was also enclosed.

3. No action appears to have been taken by the Department at that stage upon the request for voluntary coverage. On January 31, 1996, the office of the Regional Provident Fund Commissioner addressed a communication to the Petitioner stating that the establishment of the Petitioner was being brought within the purview of the Act and the scheme with effect from November 30, 1995. The Petitioner it must be noted had sought coverage on a voluntary basis under the provisions of Section 1(4). The letter of the Regional Provident Fund Commissioner dated January 31, 1996 provided that the establishment was being covered u/s 1(3)(b) as a trading and commercial establishment to which the provisions of the Act have been made applicable by the Government of India in a notification issued u/s 1(3)(b). The Petitioner was accordingly directed to implement the provisions of the Scheme with effect from December 1, 1995.

4. On May 2, 1997, the Petitioner requested the authorities to clarify the applicability of the Act, especially the date from which coverage could be extended. The Petitioner addressed a further letter dated October 21, 1997. In the meantime, it is common ground that the Petitioner started complying with the provisions of the Act with effect from September 1, 1997 and deposited the monthly contribution in accordance with the provisions of the Act in the State Bank of India, Dahisar (West), Branch. On May 11, 1998 the Petitioner informed the Respondent that it had commenced depositing its monthly contribution with effect from September 1997 and that the applicability of the Act may be given effect to from September 1, 1997.

5. The Respondent thereupon issued a summons to the Petitioner for a proceeding u/s 7A of the Act claiming that the Petitioner had not deposited its dues for the period commencing from November 30, 1995 and ending on November 30, 1998. This culminated in an order u/s 7A forwarded to the Petitioner under cover of a letter dated April 15, 1999. Under the order, the Petitioner was directed to deposit an amount of Rs. 1,22,032/- for the period between November 1995 and November 1998. The Petitioner complied with the aforesaid order by its letter dated June 4, 1999 and remitted the payment which was required to be made in pursuance thereof.

6. On November 13, 2003 the Respondent initiated proceedings u/s 14B of the Act read with Section 7Q for the levy of damages and interest on account of the payments which had been belatedly made. A total amount of Rs. 2,07,732/- was claimed to be due and payable. In response thereto the Petitioner submitted its reply dated December 17, 2003 contending that the coverage under the Act was sought by the Petitioner on a voluntary basis u/s 1(4). The Petitioner contended that at no stage had it engaged more than 20