The main legal point established is the discretionary power of authorities to quantify damages under Section 14B, considering financial crisis and factual circumstances, and the limited scope of judicial review in assessing the quantum of damages.

JUDGMENT :

Prayer: Petition filed Under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, calling for the records of the 1st respondent in ATA No. 364 (13)/2005 and quash the order dated 07.07.2009.

1. The order dated 07.07.2009 passed in A.T.A No.364(13) 2005 is under challenge in this writ petition.

2. The writ petitioner is the Assistant Provident Fund Commissioner. The second respondent is an establishment covered under the Employees' Provident Fund & Miscellaneous Provident Act, 1952 (hereinafter referred to as 'the Act'). Admittedly, there is delay in payment of employees provident Fund contributions. To be precise, the establishment paid EPF contribution for the period of January, 1999 to February, 2002 belatedly. The Management contended that due to continuous loss, the second respondent herein could not pay the PF Contribution in time. The petitioner herein had issued show cause notices on 03.10.2001 & 25.12.2004 under Section 14B of the Act. On 03.03.2005, the representative of the second respondent establishment appeared before the petitioner and explained the difficulties faced by the establishment and stated that the delay was not deliberate. On 17.03.2005, the petitioner herein has passed an order under Section 14B of the Act levying a sum of Rs.3,14,834/- towards damages. The second respondent preferred an appeal before the Employees Provident Fund Appellate Tribunal under Section 7(1) of the Act. The Appellate Tribunal disposed of the Appeal holding that RPF Commissioner, failed to follow the law laid down by the Apex Court in the case of M/s. Hindustan Steel Limited Vs. State of Orissa [reported in AIR (1970) SC 253]. The Appellate Tribunal without setting aside the order of RPF Commissioner or remitting the matter back for fresh enquiry, proceeded further and restricted the damages payable by the establishment to 5% per annum of the arrears of the contribution, keeping in view of the reasons and circumstances in which the delay in remittance of PF dues occurred. Thus, the petitioner is constrained to move the present writ petition.

3. The learned counsel appearing for the second respondent states that the second respondent company is in financial crisis and it is not in a position to pay the damages, when Section 14B contemplates waiver of damages or quantify the damages. Considering various facts and circumstances of the Company, the petitioner ought to have waived the damages as far as the second respondent company is concerned and the Tribunal also failed to consider the financial condition of the second respondent Company and confirmed the damages issued by the Competent Authorities.

4. The learned counsel for the respondent, the Regional Provident Fund Commissioner disputed the contentions by stating that the second respondent company was a defaulter in payment of contribution as per the provisions of the Act under Section 14B of the Act. The Authorities are empowered to quantify the damages, considering various factual aspects and accordingly the damages were quantified as Rs.3,14,834/- towards damages under Section 14B of the Act in respect of the second respondent Company. Thus, the second respondent is liable to pay the damages to the petitioner Department.

5. The learned counsel for the petitioner cited a judgment of the Madras High Court in the case of M/s. Lakshmi Machine Works Limited, Coimbatore vs. Union of India, rep.by its Central Provident Fund Commissioner, HUDCO, New Delhi and others, dated 08.09.2011 wherein the High Court made an observation as follows:

“21. In the present case, the contentions raised by the petitioner cannot be countenanced for more than one reason. The contention that the petitioner was not aware of the liability as it did not reflect in the books of a