Hon’ble Dilip Gupta, J.—The Regional Provident Fund Commissioner, Meerut has filed this petition for quashing the order dated 2nd February, 2011 passed by the Employees Provident Fund Appellate Tribunal, New Delhi (hereinafter referred to as the ‘’Appellate Tribunal’) by which the matter has been sent back to the Employees Provident Fund Authority with a direction to assess the dues at the rate of 22% (inclusive of interest).

2. It is seen that an order under Section 14-B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the ‘’Act’) was passed by the Regional Provident Fund Commissioner on 27th February, 2006 for levy of damages for delayed payment and for payment of interest under Section 7-Q of the Act against the Uttar Pradesh State Road Transport Corporation, Garh Mukteshwar Depot, Ghaziabad. The relevant portion of the order is as follows :

“In exercise of the power conferred on me by Section 14B of the Act read with Government notification No. SO/548(E) dated 17.10.1973 I, M.S. Kalia, Regional Provident Fund Commissioner, Meerut think fit and accordingly order. The levy of the damages for delayed payment as under:

The order mentions that a notice dated 26th September, 2007 was issued to the employer to show-cause as to why the damages may not be recovered and the employer was also advised to appear before the Regional Provident Fund Commissioner, Meerut on 13th October, 2005 but even though the matter was adjourned to 22nd November, 2005, neither any reply was filed nor the employer appeared.

3. An appeal was filed by M/s. U.P. State Road Transport Corporation under Section 7-I of the Act to the Appellate Tribunal against the aforesaid order and the Appellate Tribunal remanded the matter to the Authority with a direction to assess the dues at the rate of 22% (inclusive of interest) and the relevant observations are as follows :

“9. It is contended that after bifurcation the manager of the Corporation of Uttarakhand State is liable to pay and not the present appellant. The object of the Provident Fund Act is the benefit of the employees so the liability to pay continues even after the change of management. Whether it is the manager of Uttarakhand or Uttar Pradesh who is liable to pay is immaterial. Dispute between the states is not sufficient to make the employee suffer. In the case of M/s Vision Engineering Company v. RPFC, 1995 (2) LLJ 1224, the Hon’ble High Court of Madras held that, “in no case however the interest of the employee can be ignored and that would be for the obvious reason which may for any reclacitrancy of the competent authority or the employees the employee should not be made to suffer.”

10. The document filed show that the appellant deposited the money whenever the same was available and the default does not appear to be intentional. In the case of M/s Shanti Garments v. Regional PF Commissioner, 2003 (1) CLR 228, the Hon’ble High Court of Madras held that, “where default is found but no apparent fault the quantum of damage should be compensatory rather than penal in nature.”

11. Thus, in view of the discussion held above, the default does not appear to be intentional and imposing the damage at a higher rate does not appear to be proper one. Hence ordered, the matter is remanded back to the EPF Authority with direction to assess the dues @ 22% (inclusive of interest). ....”

4. Sri Prashant Mathur, learned counsel appearing for the petitioner has submitted that the Tribunal has, while upholding the order passed under Sections 14-B and 7-Q of the Act, illegally altered the rate of damages and interest from the prescribed rate to 22% inclusive of interest. In this connection he has pointed out that as the default was committed for the period August, 1998 to July, 2002 the statutory rates for levy of the damages w.e.f. 9th January, 1991 would be in accordance with the paragraph 32-A of the Employees Provident Funds Scheme, 1952 (hereinafter referre