Interest under Section 7Q of the Act is independent of damages under Section 14B, and claims regarding interest must be pursued in the pending appeal.

ORDER :

Mummineni Sudheer Kumar, J.

This writ petition has been filed aggrieved by an order passed by the respondent bearing No.TN/SRO-TRY/PDC/C-11/81025/7Q PROC/2014 dated 16.09.2015 under Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “the Act 1952”).

2.1. The brief facts that are relevant for the disposal of this writ petition are as under:

2.2. The petitioner establishment was allotted EPF Code No.TN/81025 through proceedings dated 23.06.2010 with retrospective coverage from 01.09.1999 and thereafter, the petitioner remitted the entire provident fund contribution amount belatedly. Accordingly, the respondent passed orders dated 11.03.2015 under Section 14B of the Act 1952 as well as under Section 7Q of the Act levying damages and interest on the petitioner. Aggreived by the order dated 11.03.2015 levying damages, the petitioner filed an appeal before the Appellate Tribunal and the same is pending for consideration.

2.3. Insofar as the order passed under Section 7Q of the Act 1952 claiming interest on the belated payment of the provident fund contributions for an amount of Rs.21,35,049/- is concerned, the petitioner disputed the said claim and approached this Court by filing W.P.(MD) No.9374 of 2015 and the said writ petition was disposed of by this Court by an order dated 15.06.2015. The said interest amount of Rs.21,35,049/- was claimed for the period commencing from 09/1999 to 07/2013. Out of the said period, there is no dispute about liability to pay interest with effect from 26.09.2008 to 07/2013. The dispute was only in respect of the period from 01.09.1999 to 25.09.2008.

2.4. In the light of the above, in terms of the order passed by this Court in the earlier writ petition, the petitioner paid the undisputed amount of Rs.8,00,000/- towards interest for the period subsequent to 25.09.2008. Thus, the dispute in the present writ petition is only in respect of an amount of Rs.13,35,528 being the interest amount claimed for the period from 01.09.1999 to 25.09.2008.

2.5. The contest for the said interest by the petitioner is on the ground that prior to 25.09.2008, the interest amount being claimed now under Section 7Q of the Act 1952 was included in the damages payable under Section 14B and it is only after 25.09.2008, the interest portion is separated from the damages and fixed at 12% per annum on the delayed remittance of provident fund dues. Thus, it is contended that till 25.09.2008 from 01.09.1999, the damages were already claimed in an order passed under Section 14B of the Act 1952 by order dated 11.03.2015 and therefore, claiming interest for the said period again at 12% is amounting to collecting interest on the very same amount for the second time.

3. In support of the said contention, the learned counsel for the petitioner placed reliance on a decision of a learned Division Bench of the High Court of Delhi in the case of Systems and Stamping and another vs. Employees' Provident Fund Appellate Tribunal and others reported in 2008 (5) L.L.N.266. In the said decision, the learned Division Bench held as under:

“The stand of the respondent, however, is that even after July 1, 1997 the defaulter is liable to pay "Total" mentioned in Col. 3 as well as interest at the rate of 12 per cent per annum under S. 7Q of the Act or 29 per cent 34 per cent 39. per cent and 49 per cent for the respective periods of default. This stand of the respondents cannot be accepted as it is contrary to their own circular, dated May 29, 1990. As per the respondent, defaulter will be made to pay interest under S. 7Q at the rate of 12 per cent even when he has paid damages as per the rate mentioned in Col. 3 which includes interest under S. 7Q. Thus he will pay interest under S.7Q twice. It is clear from the circular that once interest is chargeable under S.7Q of the Act, the defaulter should be asked to pay damages as per the percentage specified in Col. 1, that is, between 5 to 25 per a