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2017 Supreme(Ori) 1254
IN THE HIGH COURT OF ORISSA
D.DASH, J.
(A). W.P. (C) NO. 16598 OF 2011
(Date of Judgment : 02.01.2017)
From the order dated 29.04.2011 passed by the learned Regional Provident Fund Commissioner-II/OIC, Rourkela questioning the legality and validity of a proceeding under Section 14-B of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter for short ‘as the EPF Act’).
Orissa Manganese and Minerals
Pvt. Ltd. and another … Petitioners.
Versus
Regional Provident Fund
Commissioner-II/OIC, Rourkela… Opp.Party
AND
(B) W.P.(C) No. 16600 of 2011
From the order dated 29.04.2011 passed by the learned Regional Provident Fund Commissioner-II/OIC, Rourkela questioning the legality and validity of a proceeding under Section 14-B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter for short 'as the EFP Act').
Orissa Manganese and
Minerals Pvt. Ltd. and another … Petitioners.
Versus
Regional Provident Fund
Commissioner-II/OIC, Rourkela … Opp.Party
For Petitioners:M/s. A.K. Parija, S.P. Sarangi, P.P. Mohanty, P.K. Dash, B.P. Das, D.K. Das and A.Pattnaik, advocates.
Opp. Party :M/s. P.K. Parhi, G.Mohanty, D.Rath and B.K. Parhi, advocates.
For Petitioners:M/s. A.K. Parija, S.P. Sarangi, P.P. Mohanty, P.K. Dash, D.K. Das and A.Pattnaik, advocates.
For Opp. Party :M/s. P.K. Parhi, G.Mohanty, advocates.
Headnote:1. EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - Sec. 14 -B - Authority derives his power to levy and recover damages under the Section, whenever an employer makes default in the payment of any contribution under any provision of the E.P.F.Act or as per the Scheme - Damages leviable under the Section are both punitive and compensatory - Recovery of damage is as per the wordings of the Section is as if penalty - In the present case held, while holding Petitioner-Company’s liability to pay the damage on the account of default and the action of the authority by initiation of the proceeding for recovery of the damage as legal, the order impugned is liable to be quashed to the extent of manner of computation, assessment of the damage - Authority is to recover the damage strictly following the provisions contained in Sec.14-B of the E.P.F. Act read with Para-32-A of the E.P.F.Scheme at such rate, as it stands on the date of initiation of the proceeding as also the final order continuing to hold the field till completion of the said proceeding. (Paras - 11 to 17).
2. CONSTITUTION OF INDIA, 1950 - Art. 226 - Existence of alternative remedy is not a bar for filing a writ application under Art. 226 of the Constitution, yet the constitutional Courts are slow in exercising the jurisdiction under the article where adequate and efficacious remedy is available. (Para - 6).
3. EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - Sec. 14 -B - Proceeding for recovery of damages - Limitation - Statute does not provide any period of limitation for initiating such proceeding so as to recover the damage and for non-payment of cotributions under the E.P.F. Act. (Para - 8)
4. LIMITATION ACT, 1963 - EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - Sec. 14 -B - Provisions of the Limitation Act are not applicable to the Labour Courts which principles get squarely attracted for recovery of the damage by the authority concerned u/s. 14-B of the E.P.F.Act. (Para - 8).
5. LEGISLATIVE JURISPRUDENCE - Court should adopt a beneficient rule of construction; if a Section is capable of two constructions, that construction should be preferred which fulfils the policy of the Act and is more beneficial to the persons in whose interest the Act has been passed. (Para - 15)
JUDGMENT
(A) The writ application has been filed questioning the legality and validity of the order dated 29.04.2011 passed by the Regional Provident Commissioner, Rourkela in the matter of a proceeding under Section 14-B of the Employee 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 August, 1999 to February, 2005 by way of penalty followed by issuance of notice dated 20.07.2010 to the Petitioner-Company.
(B) The writ application has been filed questioning the legality and validity of the order dated 29.04.2011 passed by the Regional 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 March, 1989 to October, 2007 by way of penalty followed by issuance of notice dated 20.07.2010 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 11 years, and
(B) having been initiated after lapse of almost 21 years.
The Regional 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), 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 period concerning the prevalence of same rate of penal damages; all being prior to the year 1991. Therefore, the said writ applications have been heard together for their disposal by this common order.
4. (a) Mr. Ashok Parija, learned Senior Counsel appearing on behalf of the Petitioner-Company first of all going to refute technical objection raised by the Opp.Party in the counter affidavit as regards the maintainability of the writ application in view of the availability of alternative and efficacious remedy as provided under Section 7-I of the EPF Act and having approached this Court without exhausting those, contends that the instant cases purely concern
