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RAJASTHAN HIGH COURT
S.K.Mal Lodha, J.
Udaipur Sahkari Upbhogats Thok - Appellant
Versus
The Union of India (Uoi) And Ors. - Respondent
Civil Writ Petition No. 1318 of 1979.
Decided On : 17-01-1980
EMPLOYEES PROVIDENT FUND - DAMAGES - LEVY - SECTION 14B - EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952 - REGIONAL PROVIDENT FUND COMMISSIONER - JURISDICTION - LIMITATION - WAIVER - SPEAKING ORDER - REASONABLE OPPORTUNITY OF BEING HEARD - QUANTUM OF DAMAGES - GRACE PERIOD - REDUCTION OF RATE OF DAMAGES - EMPLOYEES PROVIDENT FUND SCHEME, 1952 - PARAGRAPH 38(1).
Fact of the Case:
The petitioner, a registered Cooperative Society under the Rajasthan Cooperative Societies Act, 1965, challenged the order passed by the Regional Provident Fund Commissioner under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the Act), levying damages for belated payments of provident fund contributions, family pension fund contributions, and administrative charges.
Finding of the Court:
1. The Commissioner had the jurisdiction to levy damages for defaults committed prior to November 1, 1973, as the amendment to Section 14B of the Act by Act No. 40 of 1971 did not have retrospective effect and merely changed the authority from the State Government to the Commissioner. 2. There is no principle of law that debars the Regional Provident Fund Commissioner from exercising his statutory power under Section 14B of the Act, and delay in initiating proceedings under Section 14B does not result in waiver or condonation of damages. 3. The impugned order was a speaking order as it contained reasons for rejecting the petitioner's request for condonation of delay and for determining the quantum of damages. 4. The petitioner was given a reasonable opportunity of being heard as required under Section 14B of the Act, as the notice (Ex. 1) provided details of the defaults and the petitioner had the opportunity to submit a reply and make submissions before the Commissioner. 5. The Commissioner applied his mind to the relevant factors in determining the quantum of damages, including the petitioner's explanation for the belated payments and the period of delay, and the damages were levied in accordance with the circular issued by the Central Board of Trustees.
Issues: 1. Whether the Regional Provident Fund Commissioner had the jurisdiction to levy damages for defaults committed prior to November 1, 1973. 2. Whether there is a limitation period for initiating proceedings under Section 14B of the Act, and whether delay in initiating such proceedings results in waiver or condonation of damages. 3. Whether the impugned order was a speaking order that contained reasons for the Commissioner's decision. 4. Whether the petitioner was given a reasonable opportunity of being heard as required under Section 14B of the Act. 5. Whether the Commissioner applied his mind to the relevant factors in determining the quantum of damages.
Ratio Decidendi: 1. The amendment to Section 14B of the Act by Act No. 40 of 1971 did not have retrospective effect and merely changed the authority from the State Government to the Commissioner. Therefore, the Commissioner had the jurisdiction to levy damages for defaults committed prior to November 1, 1973. 2. There is no principle of law that debars the Regional Provident Fund Commissioner from exercising his statutory power under Section 14B of the Act, and delay in initiating proceedings under Section 14B does not result in waiver or condonation of damages. 3. The impugned order was a speaking order as it contained reasons for rejecting the petitioner's request for condonation of delay and for determining the quantum of damages. 4. The petitioner was given a reasonable opportunity of being heard as required under Section 14B of the Act, as the notice (Ex. 1) provided details of the defaults and the petitioner had the opportunity to submit a reply and make submissions before the Commissioner. 5. The Commissioner applied his mind to the relevant factors in determining the quantum of damages, including the petitioner's explanation for the belated payments and the period of delay, and the damages were levied in accordance with the circular issued by the Central Board of Trustees.
Final Decision: The writ petition was dismissed without any order as to costs.
Whereas information has been laid before me and on consideration there of. I have reason to believe that in respect of your establishment namely, M/s Udaipur Sahkari Upbhokta Thok Bhandar Ltd. which was covered with effect from March, 1969 under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 you have failed to remit:
(i) The Employees' and Employer's share of contribution from July, 71 to Dec. 75 to the fund within 15 days of the close of each of the aforesaid months which you were liable to pay under para 30 and 21(1) of the Employees Provident Fund Scheme, 1952.
(ii) The Employees share of family Pension Fund Contribution for the month from May 74 to Dec. 75 and Employer's share of Family Pensions Fund Contribution for the month from May 74 to Dec 75 to the fund within 15 days of the close of each of aforesaid months which you were liable to pay under para 9(1), 10(1)(2)(3) of the Employee's Family Pension Fund Scheme, 1971.
(iii) Administrative charges to the fund for the months from July 71 to Dec. 75 within 15 days of the close of each of the month which you were liable to pay under para 38(1) of the said scheme.
It was stated that the Commissioner (respondent No. 3) proposed to levy damages on all belated payments of Contribution and administrative charges as envisaged under Section 14B of the Act. The petitioner submitted a reply (Ex. 1A) dated December 5, 1978 to the notice. In the reply, (Ex. 14) dated December 5, 1978 to the notice in the reply, it was stated that it was covered under the Act from March 1969. The relevant portion of reply (Ex. 14) is as under:
"In some of the past cares as specified in the statements enclosed with the letter under reference, the payment has been deposited late merely through an oversight and not for any other reasons.
It has never been the intention of the Bhandar to avoid any work of payment. It would also be clear from the returns submitted for the last four years that the Bhandar is keen in depositing the P F. Contributions timely. Only in some past cases the timely payment could not be deposited through an oversight.
After hearing the Accountant and the Accounts officer of the petitioner's Organisation, the Commissioner in exercise of the powers conferred upon him by Section 14B of the Act, ordered for the recovery of the following amount from it.
(a) Rs. 7,200/- On Provident Fund Contribution.
(b) Rs. 500/- on Family Pension Fund Contribution, and
(c) Rs. 165/- on Administrative Charges. Total Rs. 7865/-
The petitioner has filed this writ petition questioning the legality of (the order (Ex. 2) dated August 29, 1979 passed by the Commissioner under Section 14B of the Act.
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