Karnataka High Court
M/S Kolar District Co-Op Milk Producers ... vs The Assistant Provident Fund ... on 5 February, 2014
Author: Ram Mohan Reddy
Bench: Ram Mohan Reddy
1
W.P.15350/13
IN THE HIGH COURT OF KARNATAKA, BANGALORE
DATED THIS THE 5TH DAY OF FEBRUARY, 2014
BEFORE
THE HON'BLE MR.JUSTICE RAM MOHAN REDDY
WRIT PETITION NO. 15350 OF 2013 (L-PF)
BETWEEN :
M/S. KOLAR DISTRICT CO-OP MILK PRODUCERS
SOCIETY LTD.,
KOLAR DAIRY, N H - 4, HUTHUR POST
KOLAR - 563102
REP.BY ITS MANAGING DIRECTOR.
... PETITIONER
(BY SRI. M R C RAVI, ADVOCATE)
AND :
THE ASSISTANT PROVIDENT FUND COMMISSIONER
EMPLOYEE'S PROVIDENT FUND ORGANISATION
SUB-ACCOUNTS OFFICER - WHITEFIELD
36, LAKSHMI COMPLEX, N H - 4, K R PURAM
BANGALORE - 560 036.
... RESPONDENT
(BY SRI. HARIKRISHNA S HOLLA, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF CONSTITUTION OF INDIA PRAYING TO CALL FOR THE
RECORDS AND QUASH THE ORDER AT ANN-M DATED
18.7.2012 PASSED BY THE EPF APPELLATE TRIBUNAL IN
APPEAL ATA No. 493(6) 2011 AND QUASH THE ORDER DATED
25.5.2011 AT ANN-K PASSED BY THE RESPONDENT; ETC.
THIS WRIT PETITION COMING ON FOR PRL.HEARING IN
'B' GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
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W.P.15350/13
ORDER
Petitioner having failed to pay the contributions under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 in respect of temporary employees for the period from 1992-2000, did remit the contribution though by 13-05-2010 leading to proceedings under Sec.14-B of the Act to recover damages. The Additional. Provident Fund Commissioner, Bangalore by order dated 25-5-2011 having noticed that the contributions wee not paid for the period from 1992-2000, levied damages of 100%. That order when carried in an appeal to the Employees Provident Fund Appellant Tribunal, in ATA No.493 (6)/2011 was dismissed by order dated 18-7-2012. Hence this petition.
2. A perusal of the order dated 25-5-2011 Annexure- K of the Additional Provident Fund Commissioner levying 100% damages since the delay is above 3 years 3 W.P.15350/13 invoking Sec.14-B of the Act did not take into consideration the discretion vested in him to consider mitigating circumstances and the provisions of paragraph 32-A of the Employees' Provident Funds Scheme 1952.
3. In similar circumstances a learned Single Judge by order dated 21-8-2012 in REGIONAL PROVIDENT FUND COMMISSIONER VS. K.T.SWITCHGEAR LIMITED AND OTHERS (W.P.588/12 and connected writ petitions) observed:
"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 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, 4 W.P.15350/13 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. In the light of the aforesaid observation, this petition deserves to be allowed and it is, accordingly, allowed. The order dated 25-5-2011, Annexure-K of the Additional Provident Fund Commissioner and the order dated 18-7-2012, Annexur-M, of the Provident Fund Appellate Tribunal are quashed and the proceeding remitted to the Additional. Provident Fund Commissioner for consideration afresh and to pass orders strictly in accordance with law and in the light of the observations made in the order.
Sd/-
JUDGE ssy/-