Karnataka High Court
Whaddon Estate "B" vs The Assistant Provident Fund on 26 February, 2014
Equivalent citations: 2014 (4) AKR 272
Author: Ram Mohan Reddy
Bench: Ram Mohan Reddy
1
W.P.7569/11
IN THE HIGH COURT OF KARNATAKA, BANGALORE
DATED THIS THE 26TH DAY OF FEBRUARY, 2014
BEFORE
THE HON'BLE MR.JUSTICE RAM MOHAN REDDY
WRIT PETITION NO. 7569 OF 2011 (L-PF)
BETWEEN :
WHADDON ESTATE 'B'
POLYBETTA, SIDDAPUR 571233
KODAGU, BY ITS PROPRIETRIX
SMT. UMADEVI NAMBIAR
W/O. K P P NAMBIAR
AGE 60 YEARS.
... PETITIONER
(BY SRI. T I ABDULLA, ADVOCATE)
AND :
1 THE ASSISTANT PROVIDENT FUND
COMMISSIONER
EMPLOYEES' PROVIDENT FUND
ORGANIZATION, SUB-REGIONAL OFFICE
No.109-128, BHAVISHYA NIDHI BHAVAN
II STAGE, GAYATHRIPURAM, MYSORE - 570 019.
2 EMPLOYEES PROVIDENT FUND
APPELLATE TRIBUNAL, NEW DELHI
REP.BY ITS SECRETARY.
3 THE RECOVERY OFFICER
EMPLOYEES' PROVIDENT FUND
ORGANISATION, SUB-REGIONAL OFFICE
No.109-128, BHAVISHYA NIDHI BHAVAN
II STAGE, GAYATHRIPURAM
MYSORE - 570 019. ... RESPONDENTS
2
W.P.7569/11
(BY SMT. SUMANGALA A SWAMY, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF CONSTITUTION OF INDIA PRAYING TO CALL FOR
RECORDS FROM THE RESPONDENTS & QUASH THE (I) ORDER
DT. 4.7.2005 VIDE ANN-A ISSUED BY THE R1 & (II) ORDER DTD.
1.10.2010 PASSED BY THE EMPLOYEES PROVIDENT FUND
APPELLATE TRIBUNAL, NEW DELHI, THE R2 IN APPEAL No. ATA
714(6) 05 DT. 1.10.10 VIDE ANN-F NOTICE DT. 31.1.2011, VIDE
ANN-G PASSED BY THE R3; ETC.
THIS WRIT PETITION COMING ON FOR HEARING THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
Petitioner aggrieved by the order dated 4-7-2005, Annexure-A, of the Asst. Provident Funds Commissioner determining damages of Rs.12,24,368/- under Sec.14-B and Rs.1,19,157/- as interest under Sec.7Q of the Act, filed appeal registered as ATA 714(6)2005 before the EPF Appellate Tribunal, New Delhi, which when dismissed by order dated 1st October, 2010, Annexure- F, has presented this petition.
2. Learned counsel for the petitioner submits that this petition is restricted to one of challenge over determination of damages under Sec.14-B of the 3 W.P.7569/11 Employees' Provident Funds and Miscellaneous Provisions Act, 1952 while Rs.1,19,157/- determined as interest under Sec.7Q has been made good vide Annexure-D.
3. A learned Single Judge by order dated 21st August, 2012 in REGIONAL PROVIDENT FUND COMMISSIONER VS. K.T.SWITCHGEAR LIMITED AND OTHERS (W.P.588/12 and connected writ petitions) observed that, ' just because that different rates are prescribed in para 32-A of the scheme, it is not mandatory to levy the damage at such rate. For the delayed period, Section 7Q itself makes the employer liable to pay interest not less than 12% per annum or at such higher rate of interest. As such, the employees' interest is protected by way of contribution and even case of delayed contribution, by way of interest. As far as damage is concerned, it is by way of penalty and it is in these circumstances, the legislation has conferred a 4 W.P.7569/11 discretion on the Commissioner by using the word 'may recover' both under Sec.14-B of the Act and also para 32-A of the Scheme and on interpretation of these provisions, even the Apex Court has observed that, the discretion vests with the Commissioner to consider the mitigating circumstances and pass speaking order supported by reason, it makes absolutely clear that the commissioner is conferred with discretionary power to levy the damages.'
4. Having examined the orders of the first respondent Asst. Provident Fund Commissioner and that of the appellate tribunal, what is patent is that discretion is not exercised in the matter of considering the explanation offered by the petitioner for the delay in the remittance of the contributions during the period from 1998-2003 when the petitioner was under the control of the Receiver appointed by the court. In addition, what is also patent is the fact that the first 5 W.P.7569/11 respondent and the appellate tribunal did not notice that paragraph 32-A of the scheme limits the imposition of penalty to a maximum of 25% of the contribution remitted after a delay. Therefore, the imposition of damages to an extent of 100% of contribution for delayed remittance is unsustainable.
5. In the result, this petition is allowed, the orders of the first respondent and that of the appellate tribunal are quashed and the proceeding remitted for consideration afresh and to pass an order after extending an opportunity of hearing to the petitioner, and in the light of the observations made in the decisions referred to supra.
Sd/-
JUDGE ssy/-