The State Government is required to give an opportunity of hearing to the employer before imposing damages under Section 14-B of the Employees Provident Funds Act, 1952, as the levy of damages is punitive in nature and involves serious civil consequences.

K. N. SINGH, J. :- This petition is directed against the proceedings taken by the Regional Provident Funds Commissioner for levy of damages and other charges as well as recovery of the same under Section 14-B of the Employees Provident Funds Act, 1952.

2. The petitioner company committed default in making its contribution towards provident fund dues of its employees during the period April 1962 to Sept. 1967. The petitioner company had deposited the provident fund dues but the deposit was made after the expiry of the prescribed date. On 18th Sept. 1968 the Accounts Officer acting on behalf of the Regional Provident Funds Commissioner U.P. Kanpur, issued a notice to the petitioner in respect of levy of damages under S.14-B of the Employees Provident Funds Act, 1952. The notice stated that as the petitioner had deposited the provident fund dues after the expiry of the prescribed date it was liable to pay a sum of Rs. 14,856.85 paise as damages under S.14-B of the Act and Rs. 361-94 as administrative charges. The petitioner was directed to show cause within ten days of the receipt of the notice as to why the State Government should not be requested to impose damages up to 25 per cent on the belated payments made by the petitioner. The notice was accompanied by a statement giving details of the damages proposed to be imposed. Under some misconception of law the petitioner made a representation to the Central Government on 12-10-1968 against the proposed imposition of damages. The Central Government by its letter dated 30th Nov. 1968 directed the petitioner to approach the State Government. The petitioner thereupon made a representation to the State Government setting out the details of the circumstances under which it could not remit the provident fund dues in time, but prior to that the State Government by its order dated 12th Feb. 1969, sanctioned the levy of damages and administrative charges as proposed by the Regional Provident Funds Commissioner. The petitioners representation was rejected by the State Government on 17th Dec. 1974. Intimation of the same was not given to the petitioner, instead the State Government informed the Regional Provident Funds Commissioner about the rejection of the petitioners representation. The Regional Provident Funds Commissioner by his letter dated 18-1-1971 informed the petitioner that his representation had been rejected by the State Government. The petitioner was directed to deposit the damages as imposed against it within fifteen days. The petitioner failed to deposit the damages. Thereupon the Regional Provident Funds Commissioner issued a certificate to the Collector, Aligarh, on 14th June, 1971, for the recovery of the amount of damages as arrears of land revenue from the petitioner. The petitioner thereupon filed this petition challenging the validity of the levy and assessment of damages and the recovery proceedings.

3. Sri G.P. Bhargava, learned counsel for the petitioner, challenged the validity of the levy and assessment of the damages and its recovery on the following grounds :

(1) Since the damages were levied after six years and not immediately after the defaults were committed, the State Government and the Regional Provident Funds Commissioner were not entitled to recover the same from the petitioner.

(2) The petitioner was not given any opportunity by the State Govt., the competent authority to assess and levy the damages before the proposal of the Regional Provident Funds Commissioner was approved by it.

(3) The Regional Provident Funds Commissioner had no authority under S.14-B of the Act to levy or assess the damages as the State Government could not validly delegate its functions to him.

(4) The State Governments order approving the assessment and the levy of damages was made mechanically without application of mind.

(5) The order of the State Government is vitiated as it does not contain any reasons.

4. S.14-B of the Act confers power on the appropriate Government to lev