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2006 Supreme(Cal) 226
High Court Of Calcutta
Jyotirmay Bhattacharya
HOOGHLY MILLS COMPANY LIMITED - Appellant
Versus
REGIONAL PROVIDENT FUND COMMISSIONER - Respondent
W. P. 11090 (W) Of 2004
Decided On : 04/13/2006
PARTHA SENGUPTA, S.SENGUPTA, SAMBUDDHA CHAKRABORTY, SOUMYA MAJUMDAR, SUDESHNA BAGCHI MAITY
The provisions of Sections 6, 7a, 8, and 14b of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 are only partially applicable to exempted establishments. The extent of applicability is limited to the contribution towards the Pension Fund and Insurance Fund and other charges recoverable under Section 8(b) of the Act.
Headnote:
EMPLOYEES' PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 14B - APPLICABILITY - EXEMPTED ESTABLISHMENT - DAMAGES FOR DELAYED PAYMENT OF CONTRIBUTION - EXTENT OF APPLICABILITY OF SECTION 14B IN CASE OF DELAY IN PAYMENT OF CONTRIBUTION BY AN ESTABLISHMENT ENJOYING EXEMPTION UNDER SECTION 17 (1) (A) OF THE ACT.
Fact of the Case:
The petitioners, an exempted establishment under Section 17(1)(a) of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (the Act), challenged the imposition of damages under Section 14b of the Act for delayed payment of provident fund dues.
Finding of the Court:
The Court held that Section 14b of the Act, which provides for the recovery of damages for delayed payment of contribution, is only partially applicable to exempted establishments. The Court interpreted the expression "so far as may be" in Section 17(1a) of the Act to mean that the provisions of Sections 6, 7a, 8, and 14b of the Act are applicable to exempted establishments only to the extent of their contribution towards the Pension Fund and Insurance Fund and other charges recoverable under Section 8(b) of the Act.
Issues: 1. Whether Section 14b of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 is applicable to exempted establishments for delayed payment of provident fund dues? 2. If so, to what extent is Section 14b applicable to exempted establishments?
Ratio Decidendi: 1. The Court interpreted the expression "so far as may be" in Section 17(1a) of the Act to mean that the provisions of Sections 6, 7a, 8, and 14b of the Act are applicable to exempted establishments only to the extent of their contribution towards the Pension Fund and Insurance Fund and other charges recoverable under Section 8(b) of the Act. 2. The Court held that the provident fund authority does not retain control over the management of the Trust Fund of an exempted establishment and, therefore, cannot recover damages under Section 14b for delayed payment of that part of the contribution to the Trust Fund.
Final Decision: The Court allowed the writ petition and set aside the impugned order imposing damages on the petitioners under Section 14b of the Act for delayed payment of provident fund dues. The Court directed the provident fund authority to ascertain damages under Section 14b afresh for delayed payment of contribution to the Pension Fund as well as the Insurance Fund.
( 2 ) ADMITTEDLY by a Notification dated 23rd December, 1967, the Central government in exercise of the powers under Section 17 (1) (a) of the Employees provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the said Act) granted exemption to the said Company subject to the conditions specified in Schedule-II annexed to the said Notification. By virtue of the said exemption, the provisions of the Employees' Provident Fund Scheme, 1952 framed under Section 5 of the said Act does not apply to the petitioners' company which framed a scheme creating a trust, and a Board of Trustees for management of the Trust Fund. It is also an admitted position that the petitioners company is still enjoying the said exemption.
( 3 ) ADMITTEDLY, the petitioners'-company could not pay its provident fund dues for various periods during October 1999 to October 2000 and from november 2000 to July 2002 within due date.
( 4 ) ACCORDINGLY, damages under Section 14b of the said Act was levied upon the petitioners on such delayed payment of provident fund dues in accordance with the provisions of Para 32a of the Employees' Provident fund Scheme, 1952, Para 5 (1) of the Employees' Pension Scheme, 1995 and Para 8a of the Employees' Deposit Linked Insurance Scheme, 1976.
( 5 ) THE order of imposition of such damages which was passed by the regional Provident Fund Commissioner-II on 9th June, 2004 is under challenge in this writ petition.
( 6 ) MR. Partha Sengupta, learned Advocate, appearing for the petitioners, challenged the propriety of the said order on various grounds.
( 7 ) MR. Sengupta complained that sufficient opportunity of hearing was not given to the petitioners in connection with the said proceeding. Mr. Sengupta further complained that the basis of the calculation and/or the details thereof, has not been supplied to the petitioners and as a result thereof the petitioners are unable to verify the correctness of such determination.
( 8 ) MR. Chakraborty, learned Advocate, appearing for the Provident Fund authorities, refuted the said submissions of Mr. Sengupta by submitting that in spite of giving sufficient opportunity, the petitioners did not appear in connection with the said proceeding on 11 th May, 2004 and on 28th May, 2004. As a result, the concerned authority had to determine the quantum damages payable by the petitioners ex parte. The allegation to the effect that details of such calculation were not given to the petitioners, was also denied by the Provident Fund authorities. Mr. Chakraborty pointed out from the impugned order itself that the details of the calculation were given to the petitioners along with the impugned order.
( 9 ) MR. Chakraborty further submitted that even the representation which was submitted by the petitioners on 28th May, 2004 claiming waiver of damages, was considered by the Regional Provident Fund Commissioner at the time of passing the impugned order. As such, the petitioners cannot have any grievance against the said determination.
( 10 ) IN view of the aforesaid submission of Mr. Chakraborty which is also supported by the materials-on-record, this Court does not find any substance in the aforesaid submissions of Mr. Sengupta.
( 11 ) APART from the aforesaid grounds of challenge, Mr. Sengupta raised a very interesting and serious question with regard to the extent of applicability of section 14b of the said Act in case of delay in payment of contribution by an establishment enjoying exemption under Section 17 (
