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IN THE HIGH COURT OF ORISSA
R.K. Patra, Pradipta Ray, JJ.
BHUBANESWAR CITY DISTRIBUTION DIVISION - APPELLANT
Versus
UNION OF INDIA (UOI) AND ANOTHER - RESPONDENT
O.J.C. No. 10396 of 1997
Decided On : 19-09-1997
EMPLOYEES' PROVIDENT FUNDS & MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 14B - DAMAGES FOR DELAYED PAYMENT - LEVY OF DAMAGES - REASONABLE OPPORTUNITY OF HEARING - LIMITATION FOR INITIATION OF PROCEEDINGS - RATE OF DAMAGES - EXCLUSION OF ESTABLISHMENT FROM THE PURVIEW OF THE ACT - REFUND OF EXCESS AMOUNT DEPOSITED - INTEREST ON REFUND.
Fact of the Case:
The petitioner, Bhubaneswar City Distribution Division, challenged the order passed by the Regional Provident Fund Commissioner, Orissa, Bhubaneswar, levying damages on it for the delayed payment of statutory dues under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 (the Act). The petitioner contended that it was not given a reasonable opportunity of hearing, the proceedings were not initiated within a reasonable period, the levy of damages was arbitrary, and the damages could not be levied from April 1, 1990, as the petitioner was excluded from the purview of the Act from that date.
Finding of the Court:
The court held that the petitioner was given a reasonable opportunity of hearing, there was no unreasonable delay in initiating the proceedings, the levy of damages was arbitrary and should be recalculated at the rate of 17% per annum, and the damages could not be levied from April 1, 1990, as the petitioner was excluded from the purview of the Act from that date.
Issues: 1. Whether the petitioner was given a reasonable opportunity of hearing before the levy of damages? 2. Whether the proceedings for levy of damages were initiated within a reasonable period? 3. Whether the levy of damages was arbitrary? 4. Whether the damages could be levied from April 1, 1990, when the petitioner was excluded from the purview of the Act?
Ratio Decidendi: 1. The court held that the petitioner was given a reasonable opportunity of hearing as it had submitted a show cause reply in response to the notice issued for the delayed payment of dues. 2. The court held that there was no unreasonable delay in initiating the proceedings as the affidavit filed by the Commissioner showed that the proceedings were initiated soon after the default was detected. 3. The court held that the levy of damages was arbitrary as the Commissioner had not given any specific reason for the levy of damages and had not followed the prescribed rate of damages. 4. The court held that the damages could not be levied from April 1, 1990, as the petitioner was excluded from the purview of the Act from that date by a Government decision.
Final Decision: The court allowed the writ petition, quashed the impugned order, and directed the Commissioner to recalculate the damages for the period from March 1986 to March 31, 1990, at the rate of 17% per annum. The court also directed the Commissioner to refund the excess amount deposited by the petitioner, along with interest, if any, as per the provisions of the Employees' Provident Funds Scheme, 1952.
JUDGMENT :
R.K. Patra, J. - The Bhubaneswar City Distribution Division represented through its Executive Engineer, Electrical Grid Corporation of Orissa Limited, Bhubaneswar is the petitioner. It has tiled this application under Articles 226 and 227 of the Constitution of India challenging the order at Annexure -5 passed by the Regional Provident Fund Commissioner, Orissa, Bhubaneswar u/s 14B of the Employees' Provident Funds & Miscellaneous Provisions Act. 1952 (in short, 'the Act') levying damages on it amounting to Rs. 10,80,125/- for the delayed payment of the statuary dues for the periods 1986-87, 1987-88, 1988-89, 1989-90 and 1990-91.
2. Shri Nayak, learned counsel for the petitioner raises the following contentions in support of the application:-
(i) The petitioner was not given reasonable opportunity of being heard in respect of the 1 delayed payment of dues for the period 1986-87 in as much as in the show cause notice at Annexure-2 there was no such allegation but in the impugned order damage has been imposed for the said period.
(ii) The entire proceeding leading to the passing of the impugned order is vitiated as it was not initiated within a reasonable period.
(iii) Delayed payment of the statutory dues ipso-facto does not invite levy of damages u/s 14B of the Act and the Commissioner in the impugned order has not: given any specific reason for levy of the damages.
(iv) The damages have been levied arbitrarily without following any principle.
(v) In any event, with effect from April 1, 1990 no damages can be levied on the petitioner in view of the Government decision communicated in letter No. 1107 dated; January 28, 1997 at Annexure-1 excluding the Orissa State Electricity Board from the purview of the Act.
Shri Samal, learned counsel appearing for the opposite parties contends as follows: -
(i) Although in the show cause notice at Annexure-2, there was no mention of delayed payment of dues for the period 1986-87, the petitioner was issued with the show cause notice for the said period in P.O. Case No. 197 of 1994 to which the petitioner submitted its show cause reply which indicates that the petitioner was given reasonable opportunity of hearing in respect of the delayed payment of dues for the period 1986-87 and by the impugned order, the Commissioner has disposed of both the cases i.e. P.D.Case Nos. 197 of 1994 for the period 1986-87 and 132 of 1994-95 relating to other periods.
(ii) The Act has not provided any period of limitation for initiation of the proceeding u/s 14B of the Act and the affidavit dated August 29, 1997 filed in the case on behalf of the Commissioner would show that the proceeding was initiated soon after the default was detected.
(iii) The petitioner having defaulted in making payments is statutorily liable to pay damages.
(iv) The damages have been levied as per the prescribed rate.
(v) The State Government's decision excluding the petitioner from the purview of the Act is not final as the opposite parties may challenge the same in appropriate forum.
3. We have carefully considered the rival contentions of the counsel for the parties.
Contention No. (i):-So far as the grievance of the petitioner that in the show cause notice at Annexure-2, there was no allegation of nonpayment/delayed payment of the dues for the period 1986-87 is concerned, we may state that the petitioner was admittedly given notice to show cause for the said period in P.D.Case No. 197 of 1994. The petitioner had also submitted his reply in the said case. By the impugned order, the Commissioner had disposed of two cases, i.e. P.O. Case Nos. 197 of 1994 and 132 of 1994-95. In view of this factual position, the contention of Shri Nayak on this score has no merit.
Contention No. (ii):- It is true that under the Act, there is no provision prescribing any period of limitation for initiation of proceeding for levy of damages u/s 14B of the Act. The law seems to be fairly settled that even though the statute does not provide for any limitation
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