The imposition of penalty under Section 14-B is not imperative and should be based on the facts of each case. The authority should indicate reasons for rejecting justifications for delay.

Vipin Sanghi, J. Oral:

1. The present batch of writ petitions have been preferred by the U.P. State Road Transport Corporation (UPSRTC) to assail the orders passed by the Regional Provident Fund Commissioner (RPFC)/ Assistant Provident Fund Commissioner (APFC) under Section 14-B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (the Act) and the appellate order passed by the Employees Provident Fund Appellate Tribunal, New Delhi (the Appellate Tribunal), the details whereof are set out herein below: “TABLE”

2. Since common issues have been raised by the petitioner in these petitions, they are being dealt with by this common judgment. In respect of some of the proceedings and orders, certain additional issues are raised, such as in W.P.(C.) No. 6676/2010, which shall be noted hereinafter and dealt with.

3. The case of the petitioner is that it is a statutory authority, functioning directly under the control of the State Government of Uttar Pradesh. It is a corporation constituted w.e.f. 01.06.1972 under Section 3 of the Road Transport Corporation Act, 1950. It has succeeded to the assets & liabilities of the erstwhile U.P. Roadways. The mandate of the petitioner is to provide efficient, adequate, economical and properly coordinated transport services to the public in the State of U.P.

4. The petitioner submits that ever since its incorporation, and prior to that the U.P. Government Roadways have been depositing the provident fund dues of its employees with the provident fund authorities from time to time. The respondent sought to issue notices to the petitioner to initiate proceedings under Section 14-B and 7Q of the Act. The periods for which the petitioner was alleged to be in default, and the dates on which these notices have been issued have been detailed hereinabove. The amount of damages and interest sought to be levied have also been indicated hereinabove.

5. The submission of learned counsel for the petitioner is that the petitioner Corporation was running into deep losses ever since its incorporation. Consequently, there was some unintended delay in deposit of the Provident Fund dues. However, the dues were deposited, though belatedly, from time to time. Learned counsel submits that by the year 2000, the losses of the petitioner had inflated substantially and were in the range of Rs.600-700 Crores. Learned counsel submits that till the year 2002, the respondent authorities did not issue any notice to the petitioner even under Section 7-A of the Act, let alone notices under Section 14-B and 7Q to levy damages and claim interest. No inspection was carried out, or inspection report prepared to point out any default on the part of the petitioner.

6. Learned counsel submits that the orders passed under Section 14-B of the Act in all these cases are more or less identical. She submits that they were mechanically passed without providing any reasoning or dealing with the submissions of the petitioner. She submits that while in some cases the rates at which the damages have been levied has been disclosed, in other cases the said rates have not even been disclosed. For instance, in the orders passed under Section 14-B dated 28.08.2009 (impugned in W.P.(C.) No.6676/2010), and dated 26.02.2003 (impugned in W.P.(C.) No.877/2011) the APFC has merely stated the amounts claimed on several accounts without disclosing the basis for the computation made. Learned counsel submits that even in respect of the cases where the rates of damages have been disclosed, a perusal of the same would show that the said rates are even beyond the rates notified in para 32-A of the Employees Provident Fund Scheme, 1952 (the Scheme). Section 14B and Para 32-A are relevant and read as follows: “14B. Power to recover damages.- W here an employer makes default in the payment of any contribution to the Fund 2[ , the Family Pension Fund or the Insurance Fund] or in the transfer of accumulations required to be transferred by him un