The main legal point established in the judgment is that the provisions of the EPF & MP Act, 1952, regarding the recovery of damages and penal interest for delayed contributions are clear and must be applied unless the petitioner can demonstrate grounds for reduction or waiver of such damages.

1. The petitioner is a Textile Mill. They have come forward to challenge an order passed by the Provident Fund Appellate Tribunal in ATA No.748(13)2003 dated 31.03.2010.

2. When the writ petition came up for admission on 22.09.2010, notice was directed to be served on the learned Standing Counsel for respondents 2 and 3. Accordingly, Mr.K.Ramu, learned Standing Counsel for the Provident Fund appears for respondents 2 and 3. He also filed a counter affidavit dated 28.04.2011 on behalf of the second respondent which was adopted by the third respondent. He also produced a copy of the order passed under Section 7A, levying damages under Section 14-B as well as penal interest under Section 7-Q of the EPF & MP Act, 1952. The Annexure to the said order contains the date of payment, delay caused in respect of the payment and the consequential levy of damages.

3. The petitioner challenging the said order filed an appeal under Section 7-I of the Act before the EPF Tribunal, the first respondent herein. The Tribunal took up the case as ATA No.748(13)2003. After hearing the parties, the appeal was dismissed by an order dated 31.03.2010. It is as against the said order, the present writ petition came to be filed.

4. ending the writ petition, this Court granted an interim stay of recovery of damages on condition that the petitioner deposits Rs.15 lakhs within two weeks. Subsequently, an application was taken in M.P.No.3 of 2010, seeking to extend the time granted for depositing the amount of Rs.15,00,000/- and the same was granted by this Court on 22.12.2010. It is now stated by the learned counsel for the petitioner that the said amount has been deposited.

5. The contention raised by the petitioner in challenging the order of the Tribunal as reflected in the affidavit filed in support of the writ petition was that there was non-application of mind and the levy of damages for the delay in payment of contribution was made after ten years. It was further contended that the delay caused was not wilful and in the absence of any finding that the delay was wilful, no damages can be levied.

6. In the counter affidavit filed by the contesting respondents, it was stated that the dues for the period from 1992-93 to 2001–02 were paid belatedly, which itself is a ground for levying damages as provided under Section 14-B of the Act as well as penal interest under Section 7Q of the Act. When the petitioner was issued with summons with reference to the show cause notice to appear on 10.06.2003, no one on the side of the petitioner Mill appeared and hence, the enquiry was adjourned to 24.06.2003. On 24.06.2003, the authorised representative of the petitioner Mill appeared for the enquiry and pleaded time to verify the records. Hence, the matter was further adjourned to 15.07.2003. On 15.07.2003, there was no representation for the petitioner Mill. Therefore, the earlier provisional order came to be confirmed by the second respondent.

7. The Tribunal before which the appeal was filed recorded the argument of the petitioner that the company has become sick under the provisions of the Sick Industrial Companies (Special Provisions) Act and it was referred to BIFR was not a valid ground. After referring to the judgment of the Kolkata High Court in Vikram Poddar v. RPFC reported in2001 Vol II 578had held that a mere reference to BIFR is not a sufficient ground.

8. The learned counsel for the petitioner referred to the judgment of the Supreme Court in M/s.Hindustan Steel Ltd., v. The State of Orissa reported inAIR 1970 SC 253for contending that levy of penalty emphasis a statutory obligation as a result of quasi-criminal proceeding and penalty should not be ordinarily levied unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. In that case, the Supreme Court was dealing with the provisions of the Sales Tax Act and after referring to Sec