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2016 Supreme(Ori) 791
IN THE HIGH COURT OF ORISSA, CUTTACK
D. DASH, J.
Orissa Manganese and Minerals Pvt. Ltd. and another - Petitioners
Versus
Assistant Provident Fund Commissioner - Opp. Party
W.P.(C) No.22273, 22274, 22275 of 2010
Decided On : 03-11-2016
For the Petitioners:M/s. A.K.Parija, S.P.Sarangi, P.P.Mohanty, P.K.Dash, B.Ch. Mohanty and A. Pattnaik, advocates.
For the Opposite Parties :M/s. P.K.Parhi, G.Mohanty, D.Rath and B.K.Parhi, advocates.
The computation of damages under section 14-B of the EPF Act should be based on the rates prevailing at the time of initiation of the proceeding, not the rates at the time of default.
Headnote:
EPF Act - Recovery of Damages - Section 14-B - [EPF Act] - [Section 14-B]
Fact of the Case:
The writ application challenges the legality and validity of the order passed by the Assistant Provident Commissioner for recovery of damages for default in payment of contributions under the EPF Act. The petitioner-company argued that the liability for default in payment of contributions remains with the previous management and challenged the initiation of proceedings as being barred by limitation.
Finding of the Court:
The court found that the initiation of the proceedings was not barred by limitation and upheld the imposition of penalty. However, the court held that the computation of damages should be based on the rates prevailing at the time of initiation of the proceeding, not the rates at the time of default.
Issues: The issues involved the legality and validity of the order for recovery of damages, the liability for default in payment of contributions, and the applicability of limitation periods.
Ratio Decidendi: The court held that there is no limitation prescribed for levy of damages under section 14-B of the EPF Act. The computation of damages should be based on the rates prevailing at the time of initiation of the proceeding, not the rates at the time of default.
Final Decision: The writ applications were allowed in part, and the court directed the computation of damages to be based on the rates prevailing at the time of initiation of the proceeding.
JUDGMENT :
(A) The writ application has been filed questioning the legality and validity of the order dated 27.10.2010 passed by the Assistant Provident Commissioner, Rourkela in the matte of a proceeding under section 14-B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter for short as the ‘EPF Act’).
The order in question arises out of the proceeding initiated for recovery of damages for default in payment of the contributions under the EPF Act in time for the period ranging from March, 1978 to July, 1981 by way of penalty followed by issuance of notice dated 23.06.2010 to the Petitioner-Company.
(B) The writ application has been filed questioning the legality and validity of the order dated 27.10.2010 passed by the Assistant Provident Commissioner, Rourkela in the matter of a proceeding under section 14-B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter for short as the ‘EPF Act’).
The order in question arises out of the proceeding initiated for recovery of damages for default in payment of the contributions under the EPF Act in time for the period ranging from November, 1999 to April, 2002 by way of penalty followed by issuance of notice dated 23.06.2010 to the Petitioner-Company.
(C) The writ application has been filed questioning the legality and validity of the order dated 27.10.2010 passed by the Assistant Provident Commissioner, Rourkela in the matte of a proceeding under section 14-B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter for short as the ‘EPF Act’).
The order in question arises out of the proceeding initiated for recovery of damages for default in payment of the contributions under the ESI Act in time for the period ranging from December, 1999 to May, 2002 by way of penalty followed by issuance of notice dated 28.06.2010 to the Petitioner-Company.
2. The Petitioner-Company on receipt of the show cause notice as aforementioned submitted the written explanation contending therein that the mine in question was transferred to it in the year 2007 and after the said transaction the Petitioner-Company paid all the arrear provident fund dues. Therefore, the petitioner-company submitted that in view of such diligent conduct making timely payment, no case is made out for imposition of penalty in adherence to the provision of section 14-B of the EPF Act. According to it that liability in so far as the damage by way of penalty is concerned for default in payment of the contributions/dues under the EPF Act in time remains with the previous management and not with the Petitioner-Company which has immediately acted upon in clearing contributions/dues under the EPF Act with utmost promptitude. In essence, it is said that the default being at the behest of earlier Management, the recovery of the damage by way of penalty is not with the present Management. The initiation of the proceedings was further challenged being barred by limitation:-
(A) being initiated after lapse of 30 years,
(B) having been initiated after lapse of almost 10 years; and
(C) for initiation after lapse of almost 9 years.
The Assistant Provident Fund Commissioner repelled the above contentions raised by the Petitioner-Company with the following findings:-
(1) the Petitioner-Company has to make the good the default of the past management and as such the liability on that account remains on its shoulder; and
(2) no limitation is prescribed for levy of damages in consonance with the provision of section 14-B of the EPF Act.
Finally penalty has been imposed computing the damage @ 37% which was the rate prevailing during the period of default and not the rate as was prevailing at the time of issuance of show cause notice and thereafter.
3. All the above writ applications (A,B & C), thus involve common points and questions of law having the only difference in factual setting relating to the period for which the penal damage has been imposed which also refers to the pe
