The Regional Provident Fund ... vs M/S Jamiyyatul Falah on 20 November, 2009

[Cites 1, Cited by 4]

Karnataka High Court

The Regional Provident Fund ... vs M/S Jamiyyatul Falah on 20 November, 2009

Bench: Ram Mohan Reddy

 

I

m TEE mes comm' or KARKATAKA,  u

DATED mm mm mm DAY or xmzanmgfxj %  

mm HOITBLE am. JHSTICE  ' 

wax': PETITION rm.  OF%2,6'e9"'%1I§;gi§'j' %
BETWEEN     

THE REGIONAL PROVIDER?'  *
FUIF-ID COMMISSEONER  .  '
SUB-REGIONAL'QFF'ICE I _

P B NO. 572,',§e;1G§TiLA;=:I}s   
smva ROAD, ream.N'<;a_1.Q»RTEVL;~--2,"gm.   PETITIONER

(BY 3121; i=i;e1§?§;;:ié{s?£::;*JA"-$ HOLL'A;,xi3v)
AND: V V' " V 4' .' '

1 M; s;ﬁ;m;';r<r+;;%:~:;;.%
, BEHINIJ KANKANADY MOSQUE
.. -a_KAm<:AmA13--Y, ,_MANGALORE

 Rf*3P.BY ITS PRESIDENT

* 1.  ?d:;«}iAZi3ULLAH ISMAIL.

 A%'%T"1..,%~E§;«ii7°TL0¥§3;'E'"s* PROVIEENT FUND

 APPELLATE TRIBUHAL
 ¥ii§753{'DELHl
REES?' ITS REGiS"i'RAR.  RESPGNDSIWIE

 "v'I'HIS PETITEGN FELEB UNBER AEPICLE 226 65 2%'?

§  €Z)_P'""3""f~§E COi5I$'i"'I'i'UTiO¥sI 01:' ENBIA PRAYING T0 CALL FOR

  Tii-{E RECORDS GK THE FILE 0:9 'THE R2 Am SE'? ASIDE
 -~'I'-HE O-FIBER ';)A'I'ED 3011* MARCH, 2<)o9(Am:ExURE~B);
 AND ETC.

Lrk



THIS PETITION, COMING ON FOR 

THIS DAY THE COURT MADE THE FOLLOWIIs!.f3 ~  V " 

The petitioner~EmpIoyec§oAApV   " , V

Organisation constit*:.1ted :  unde-If.  the

Provident Funds and Mis§$i:iia31oouS' w  Act,
1952 (for short. 'AQ'.f5:L~~._   dated
30.03.2009 in A.T.A.   Employees

Provident   _gg)p¢11;:ie   New Delhi,
Annex"uréé-"B'}v',  préfefxed  ﬂépetition.
ii}. The'  an establishment faliing

witl1Ajn_ tho oi"'.f;he said term under the 'Act',

 Ifeqtiigfeci  deposit the Provident Fund

  Section 6 of the Act read with

Pmrggaphi of Empioyeos' Provident Fund Scheme,

 is: short 'EFF Sohomo 1952'; Pension Filnci

VA  i'V'r;oI?t§*ibuté.ons under Section 6A of the Act read with

   ...oP.=f1;*agI*aph 3 of the EFF Scheme, 1952; Administrative

V' charges under Paragmph 38 of EFF Scheme 1952;

bi



3

Inspection charges under Section I'? (3) of 

with Paragaphs 27 and 27A of the   _ 

Employees Deposit linked '1

and administrative chargesj.1_nder&'Seetjon 67%: ..(§f2t1'l(";*§ Act  ,

and inspection charges undei"e»tr§eetion V21'? offdle Act.

3. The Petitienei*;eHegi1§;g:iv ve:'1iheV.ResponcIent -
Estabﬁshmentéfailﬁd  'V      
1) The 
ii)  Charges
iii) ﬁle 

iv) The LiV1:k'ec.1"'-~'Ix1suraI1ce Fund COI}1ZI'ibI1f;iO1'1S

 V.  V)   EDLI Aé£d;.r_:.i::1is1:1'ative inspection charges

 asRfequ'éreé:V'}:ﬁ}'}aw for the months 3/ 1998 to 2/2001,

2  _ issﬁed  dated }{).(}'7.20I'32 to show cause as to Why

" " "T : £iam__ageS' Emder section 1413 of the Act should net W

 feeevered from the Respondent after extending an

VT " opﬁortmlity of mrsenai hearing. UK 4

4. In response to the notice, the _ having submitted a reply dated . ~ .. extended an opportunity of "i ' .33' 27.08.2002 and o3.o9.2oo:2,eee_when¢e 1: w.~g5;s_1 eQ.nc_eded: :e» that there was delay in _V0f"ec:T:1_t:1v€ih1V1:¥:ions on dates ixldicated in the "delay was sought to be explained by "tilat it was a charitable _ contributions in the f0If;_:B._ c)i7 giieexaed a scheol in a remote admitted to gant--in-waid by the Staiee was not extended; were the forV't}2e:VVde1,*~:;£y in payment of the contribution. .AI1f1« iI:~-was asserted that the respondent was not liable to pay czentributions under the aetf" fact, had raised loans to pay the V' ..e01iH_'ib£}J:iens. In the aforesaid premise, the respendent ' not to levy damages.

5. The Regional Provident Fund Cammissioner, Mangalore of the Petitioner ~-- Organisation, by order (it. UK 5 24.09.2002 Armexure ~ "A" observed that obligation is cast on the Respondent,_.»'lto. K contribution and as the legislation, the successful we1fsre'oi"€lhe L' Scheme being dependant by employers declined 'Vi"es%§ondent's explanation for the ii levied damages of ~-- Respondent to deposit 'Penal ﬁamages', a ._ which action would be initiated with interest at 12% per as provided for by Section 7Q of the Act: and in. V. in Sections 813 to 8G of the Act. it 6,. Respondent, aggieved by the order, ll."»-'~___l'-».p1efe1':i'ed* an apmal before the Employees Provident Appellate Tribunal, New Delhi, in A.T.A No.663 2003, whence the Tribunal having observed the law it laid down by the Apex Court in ms. rxmnusrm M 6 STEEL LIHITED vs TI-{E STATE or onxssei with the decision 01' the Apex K czemmcm. zmmsmms 01%' mm 8: o'rI-12352,, held '--- fimt Organisation had failed to the to whether there was part of the empleyer mAVnen-pggygﬁeﬁz'V:Vth;(§§;éjf1i§:9i'butiens under the Act, mt;)re_ the respondent ' straits and A' 56.63.2009, resmcted the cIa.:1£1ageS,_:1;)V axanum. on the arrears of conizfihutiefi. Renee, Writ Petition. ' eementien of the Learned Cotmsei for the that the appeal memorandum befere the Tribunal was apposed by ﬁling Statement ef e~Ifee.b}écuons, must stand repeiied in the lighi: of the Speciﬁc statement recorded in the order impug:r1ed that ' " 'AIRl9'7'1}SC253 M 3a;K:9?9s{::se3 no counter was ﬁled, coupled with the fae1;_ "xlip material is forthcoming in this petition to ee§;abiieﬁ said assertion.

8. The second centeniieag of "the msel ' that Section MB invests fight to impose damages by Qjf Earagaph 32A of the EFF Seheme,:A"'19;5:2 the scale of irnpositionf. " Regional P.F. Comm_issiey§ie:;,' the Scheme, imposed the _ -9, In'uto '- aﬁpreeiate this contention, it is

-11se'f1iI 'to éonsidefihe law in relation to imposition of s. Hindustan Steel Limited vs State of

1), a three judge bench of the Apex Court, "':xzI1ile..cei:1$idering the plea as to whether persons in~ of aﬁ'aiI's of a Company failing to regeter it as a deaier in honest and genuine belief that it was not 3 UK 8 dealer under the Orissa Sales Tax Aci, 14 imposition of penalty was justiﬁeazl, 3 "

"An order imposing fer li-aﬂure"

to carry out a statulﬁeiy o¥':iiigV:2'1é:'£<)Iil,:VisA«:.__'i';'sE:-.e result: of a quasi-eﬁmiﬁe} ehd penalty will not iuiuvﬂposedyyiirlless the party obliged'eitheiv;1ete{l.ll'ltleEjl:)verately in deﬁance ' ef law "are conduct eontu;11§e1ci:e'i§1'r;j, Her acted in eonseienljeits ehligaﬁon. Penalty wmeexlegjialséffee "merely because it is lewfm .. penalty sheuld be fa: perform a statutory 1» 'ehligelf1oi;'is' almvatter of discretion of the aagzlhexfity 'exercised judicially and on a A V' " ». [eevﬁeideifaﬁon of all the relevant Even if a minimum penalty is,.__"preseribed, the authority competent to the penalty will be justified in 'grefusirlg to impose penalty, when there is a

-- Hltechnieal or Venial breach of the provisions of the Act; or where the breach flows from a bone tide belief that the offender is not liable M 9 to act in the mamler prescribed V. etatute'.

10. In EMPLOYE%' j'§'I'ATA_E:~;_ CORPORATION vs mar LTD judge bench of the Supren:1ee. :VVC'nurl:h, V' the nature seopeﬂef ti1e Eﬁ1ployees' State Insurance Act, fegiéiaﬁon 31~C ef the Employees'g$?,ate:=._Insefaﬁee"*:{{'reI§eraI) Regulations, I950 interpreting the provisipns, e 3 thus: ._ 11;',--is"e. 9ié'eH--1a1ow11 principie of law " {gt subordinate legislation must conform te; '---.pI'ovisio11s of the Iegislative Act. 'V of the Act; providee for an 'A provision. I1: does not envisage ' Qﬁeefxdatexy levy of damagee. It does not aiso ' eehtempiate computation of quantum of ' "damages in the maxmer prescribed under the Regulations.

3 2008 (3) see 35 M I0 1?. The statutory liabiiity of employer is not in dispute. An en': p51oys:{3"s:"' being required to be comp1.,z1seri}§zs" iilsijgfsél, u the empioyer is bound t0I»A_ma.kc:fjVhis the contribution. An smp1o§~sé"i.s ' is make his contx*ibui;i01j§"~1_z:1dei' S the same does not --l.eyy_.:§ of damages in _ e%itI:;sti0:1s."'~swouId be imperative.

__ uses the-, of damages The législatius me }'11risdictioJ:3. of the autfioljity is. not exceeding the a111<;i11.r1V§of Regtllation 31---C cf Regulations, ti1e1'efort:, in our opinion, " "bs'_j..<:onst;x'usd keeping in View the used in the isgislative Act and not dcéhofs the same."

er' "Only because a provision has been made for levy of penalty, the same by itself would not lead to the conclusion that bk ii Pﬁnalty must be levied in ail situaﬁons. -. an intention 911 the part of the ' net decipherable from Se«;:t«i;:>;14 8543 "tlie Act. When a discreﬁonary jzniisdicfjon"*-ha;1§f-.,___ AA been conferred on a>j.statutery*V.aut11di.itjf' '£0 ievy penal damages by {;f--.at; provision, the same coi1$irv..;ed.'§as imperative. Evé;1..':%"otla$:-:ns;fi§§é;»« endeavour should 13¢ madf; penal provisiozﬁg "as di§i:*etia:ii'x :;1xf*sr,_'__Hffuhiess the statigte " .. .. Vmandatorv in V' x .

.. '(Emphasis suppiied) 1'+'1i1*£1';{_e'I*,_za§1':' 25, observed thus:

Thé"'§tatuie itself does not say that ' " has to be levied only in the maxmer it is also not a case where the mjtiicﬁﬁity is left with no discretion. The 1:;:gi*siatioI1 doaa not proviée that adjudication A VT ffor the purmse of levy of penalty proceeding H wotﬂd be a mere: formaiity er imposition sf penalty as also computation of the quantum thereof bacame 3 foregcne conclusion. Orciirzariiy, aver: such a prezvision weuid net bk 12 be held to providing for imposition of penalty, if the proceedmg:'isVai }" A adjudicatory one 01* com_pli.a3_:1r;e _-'iéséitiiirlie principies of natural jt1S:=§iCe:.,,i:$fiv ut2¢€;$'Ss:é;13?:~-LL,__. A' thereunder. "

Paragraph 26, states thus:

"Existence to contravencé a 3C1'EV}L1ISt also be he1d .t<§ a for ievy of ~the--"q:é;a1;tum thereof."

Sectiqfh"

V -- recover damages:-------

Whérc--: an :<:_r3z1A1.?)_i'<>3z--§r makes default in the .. fg§a}'mCI}}f " Contribution to the Fund ipcmsien) Fund or the Insurance Fund) itransfer of accumuiations required _ to by him under st.1b~section (23, . Section 15 (Gr subsection (5) of A. , 4' S e"c'éon 17} or in the payment of any charges V fpayabie under any other provisim: of this Act or of (any Schztme or insurance Scheme) or under any of the (renditions speciﬁed under Section 17, (the Cenuai Provident Fumi bi 13 Commissioner or such other oﬁicer a$f13ia}'._ » be authorized by the Central Govemmexig» "

notiiication in the Oﬁicial; 'tigigé behalf) may recover (f1'oni.__tI1r: b3,:,,,,. way 01" penalty such da1fx4:1age's-},_ 'not excéaadixig the amount of a1:'eaI'$,'a§";:aay S the Scheme.) % [A V' (Provided that ievynxg and recovering such shall be ﬁve}; of being ____ the Central 1 pr -'waive the damages I<§§ir:d'* undcfr in relation to an _estalV:$IishIn;:r:tAA'-:3%1ii{§h is a sick industrial _ A' respect of which a scheme ;'f'*E>;ii"L;I'f$I4:I4§'9:1)ilit:,1t:ioI1 has been sanctienw by the:

'V x Industrial and ﬁnancial __'4' IQe(:s;ﬁ:::¥"};§:£':;11ctio3r1 established under Section 4 _ afthe Sick Industrial Companies (Special " n 4.Pr£§§:isions) Act 1985 (1 of 1935), subject to V' v Eéuch terms and condmens as may be speciﬁed in the Schexm-::.)) 321% of the Empicyees' Pmviderzt Fund Schame, 3.952 reads thus:

b*\ 14 "32--A. Recevery af damages for defauﬁ payment 01' any contribution.--- )1) empieyer makes default in than payn;é1"it'* contribution to the Fund, oij K ;_n .' accumulations required t.<)_ be traijsferred.".%,byv"riim":

under sub--section (2) "S§:cti§$n._ . E5 section (5) of Section Ant " 0§?_iz1:§ the payment of any chafgas any other provisions efthe any of the 17 of the Act, the; ,§'.4'1.iit;d.VVCon1Ix1issic>ner or such by the Central

--.n9f;ﬁ«3a§1on in the Oﬁicial Gazéétté -in may recover from the emplo3;e:7_V%by of»'petna1ty, damages at the rates ~hei0i§V?': _ """ A .

Pééimqrdqauzs Rate afdamages (Percentage of arrears per annum)

a) Abass nvo 1ZI1()IITZhS Savant:-':61':

"b3 frwé m£snt11s and above 'bat 'ism than four mnntkas 'I'wenty--tWo " months and above ' ...hL1t less than six Inenths 'I'wenty--seven V' d) Six months and above 'I'hi1'ty--seven. M I5 (2) The damages shail be calculated _.1;o_ 'V ~ nearest rupee, 50 paise or more to be "

as the nearest; higher rupee; ﬁ~aceo;1sA% repee iess than 50 paise to hi 4' '

11. A perusal of of statute, what emanates is preirides for recovery of damages % the Words 'may recover'. T§1e:' is empowered te 1V;1:1eJ'empioyer faiis to make _ due in respect of to the condition that the amount tiiezfeof 's$ro11}xi"i1,r§t exceed the amount of arrears as Scheme, 1952. The provise "tl*ie1*et;o'.ji:e§3r§orates the principles of naturai justice.

" . i ebligation on the part ef the respondent «- emp1eyer;_ deposit the contributions of both employer A 'sfemployee is not in (iispute. What is in dispute is as te; whether the amount «of damages speciﬁed in M i6 Paragaph 32-A of the EFF Scheme, 1952 in character or not'?

23. Applying the aroresazgd Section 148 does not ehj.%i~sa.ge lexry of'- damages. It does got c9ﬁ{£imp1ate..CGn;1pu?£5tﬁon of quantum of under para 32A of 'tag Though the statutory Jicf be in dispute, but lcV:vy.. '%§ 31..v':§<:ircumstances is not th:Le words 'may recover' in Section of to the very words in Se¢t§i«o1';__iAV' "of. ____ ﬂue Employees' State Insurance 1948, in the matter of recovery of daﬁiégés 91" penaity, in my opimon, the 161131 of daﬁa,g§;s;_ {ﬁnder Section :48 of the Act is by way of A ' ' The I.eg'sia1;11re having liiilitﬁd the juzisdiction the aiséthority to levy penalty not excézﬁding the ameunt referred to in Paragaph 32A of the EFF bi 1?' seheme, 1952, must be censtrued, keeping language deployed in the legislative act the same.

14. Even if Paragaph 1952 prescribes genera} to V' which the imposition' ea'-:._(«)11lc:_I& "rtaade, it cannot be contended 4' mitigating circumstances by the edjudicamiﬁ ﬂeeidmg the matter and is uppermost or the lowemiest %.ab1eVVé1:3':_jﬂ_1te' in case, the Appeliate 'I'ri.buna1, anxious consideration over the plea 1e;d§a.:'1eedu7_"ef 'ﬂee respondent regarding the delay in {Sf eentribuﬁons, as satisfactery explanatien V' V' wfert L139: having paid the contributions within the time ' the rejection of the explanation Witheut either '4 Hegapiieation ef mind or recording reasons as to why the M 18 gounds for deiayed payment were not interfered with the order Annexure--"A" of _ Provident Fund Commissioner. :

fact that the respondent was a ci1e{i*itable,'vé:rg'a1iis§é;t$e:1V"'VL' imparting education to 'in locality, dependant upon cior3.§1:ions'_'AV.1'§%*<§}?'VA % coeeieoﬁons to carry on its activity, the Appellate Tribunal as in the matter of impositiori. under Section 1413 read Scheme, 1952. The Appeilef;eoVV_1*ese*icted the damages to 15%; per. on the iartrears of contribution, to meet ._ justice, in my opinion, in the facts and A the case, cannot be found fault with.

' 4 " 1 4." ' ---- accordiiiély, rejected.

The peiition is Without merit and is KS

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