Gujarat High Court
Mansa Nagrik Sahakari Bank Ltd. vs Regional Provident Fund Commissioner ... on 21 February, 2005
Equivalent citations: (2005)2GLR1592, (2005)IIILLJ669GUJ
Author: M.S. Shah
Bench: M.S. Shah, D.H. Waghela
JUDGMENT M.S. Shah, J.
1. This appeal is directed against the judgment dated 30.1.2003 of the learned Single Judge dismissing the appellant-bank's petition seeking a declaration that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Act") are not applicable to the appellant-bank, which is a co-operative society registered under the Gujarat Co-operative Societies Act, 1961.
2. The facts leading to filing of this appeal are as under :-
2.1 The Regional Provident Fund Commissioner, Gujarat State, the respondent herein, issued notice dated 15.2.2000 (Annexure "B") calling upon the appellant-bank to comply with the provisions of the Act with effect from 1.4.1997 on the ground that the appellant-bank is an establishment engaged in one of the industries specified in Schedule I to the Act. The establishments classified as banks other than Nationalized Banks are covered by the provisions of the Act by the Government of India notification issued under Section 1(3)(b) of the Act. As the appellant-bank is employing more than 20 persons, the notice required the appellant-bank to comply with the provisions of the Employees' Provident Funds Scheme, 1952 ("the Scheme" for short) framed under the Act. The respondent also afforded an opportunity of hearing to the appellant-bank as per the notice dated 6.10.2000 (Annexure "C") under Section 7A of the Act. Ultimately, by order dated 27.12.2000 (Annexure "D"), the Assistant Provident Fund Commissioner (Compliance), acting on behalf of the Regional Provident Fund Commissioner, determined the appellant-bank's liability for the period from April 1997 to August 2000 being Rs. 69,43,262/- as the amounts of provident fund inclusive of the accumulations upto 31.3.1997 quantified at Rs. 39,45,367/and also for the period from April 1997 to June 2000 for which the coverage notice was given. As the appellant had already deposited the total amount of provident fund aggregating to Rs. 67,88,021/- for the period from 1.4.1997 to 30.6.2000 on 21.7.2000 during pendency of the proceedings, the Assistant Provident Fund Commissioner determined by the same order dated 27.12.2000 the amount of interest payable by the appellant-bank under Section 7Q of the Act at Rs. 4,42,066/-. The said order dated 27.12.2000 of the Assistant Provident Fund Commissioner further mentioned that if the employer failed to deposit the amount mentioned above within 15 days of the receipt of the order, recovery thereof as arrears under the Act would be without prejudice to the appellant's liability for belated remittance as provided in Section 14B of the Act.
2.2 After the aforesaid order dated 27.12.2000 was passed under Section 7A of the Act, the appellant-bank preferred a review application under Section 7B of the Act, contending that since the appellant-bank had employed less than 50 employees and the appellant-bank was running its business without the aid of power, the appellant-bank was covered by the exemption under Section 16(1)(a) of the Act. The Assistant Provident Fund Commissioner rejected the said review application on the ground that it was not filed in the proper format.
2.3 After the said reply, the appellant-bank filed the present petition being Special Civil Application No. 7436 of 2001 under Article 226 of the Constitution contending that the respondent authority had committed a grave jurisdictional error in not holding that the appellant was exempted from the provisions of the Act by virtue of Section 16(1)(a), because the appellant-bank is a co-operative society registered under the provisions of the Gujarat Co-operative Societies Act, 1961; the appellant employs less than 50 employees and the appellant is working without the aid of power.
2.4 The learned Single Judge rejected the petition on the ground that the appellant works with the aid of power not only for the purpose of lighting and cooling the bank premises for the benefit of its employees and customers, but also uses power for its computers and other gadgets for providing effective services to its customers. The learned Single Judge also dealt with the decisions cited by the learned counsel for the appellant-bank, particularly the decisions of the Patna High Court and Allahabad High Court in support of his contention that the words "and working without the aid of power" are to be considered as applicable only to the manufacturing units. The learned Single Judge held that since the bank was utilizing power i.e. electricity for its working, the decisions cited on behalf of the bank were not applicable to the facts of the case at hand. The learned Single Judge ultimately dismissed the petition.
It is the aforesaid judgment which is under challenge in the Letters Patent appeal.
3. After dismissal of the appellant-bank's petition by the judgment under appeal, the respondent initiated proceedings under Section 14B of the Act. The bank contended that during pendency of the Letters Patent Appeal, proceedings under Section 14B may not be continued. However, the respondent passed an order dated 1.10.2004 for recovering, by way of penalty, damages to the tune of Rs. 14,69,103/- being damages for belated payments of the provident fund amounts and interest. The bank has filed Special Civil Application No. 15274 of 2004 for challenging the said order dated 1.10.2004. In the said petition, the learned Single Judge passed order dated 26.11.2004 recording the learned counsel's statement that the present Letters Patent Appeal will be moved for hearing and on that basis by way of ad-interim relief the respondents were directed to maintain status quo. Ultimately, at the joint request of the parties, the said Special Civil Application has also been placed for hearing before us.
4. The learned counsel for the appellant has submitted as under :-
4.1 Reference is made to the order dated 3.11.1999 of the Presiding Officer, Employees' Provident Fund Appellate Tribunal, New Delhi in Case No. ATA/5(13)99 in the case of Unnati Co-op. Bank Ltd. in support of the contention that the Tribunal under the Act has already taken the view in favour of the Co-operative banks.
4.2 Strong reliance is also placed on the decisions of the Allahabad, Madras and Bombay High Courts in support of the contention that where business is carried on without the aid of power, the establishment is entitled to claim exemption from the provisions of the Act.
4.3 The appellant was bona fide contending all along that the appellant was entitled to exemption available under Section 16(1)(a) of the Act because admittedly the appellant is a co-operative society registered under the Gujarat Co-operative Societies Act and has been employing less than 50 employees. The only controversy was whether the appellant-bank has been working without the aid of power and the appellant was justified in taking up the plea in view of the aforesaid order dated 3.11.1999 of the Employees' Provident Fund Appellate Tribunal under the Act. When the appellant-bank had deposited the entire amount of provident fund under Section 7A and interest levied under Section 7Q of the Act, the respondent is not justified in levying penalty on the appellant-bank under Section 14B of the Act. Levy of penalty is in the nature of quasi-criminal proceedings and that the penalty is not to be levied unless a party has acted mala fide.
5. On the other hand, Mr PJ Mehta, learned standing counsel for the respondent authority has supported the judgment of the learned Single Judge and has further submitted that since the appellant-bank had made belated payments, that was a sufficient ground for the authority to pass the order dated 1.10.2004 levying damages under Section 14B of the Act read with para 32A of the Scheme.
6. Before dealing with the rival submissions, it is necessary to refer to the relevant provisions of the Act and the Scheme.
1. Short title, extent and application.
(1) & (2) ... ... ... ... ...
(3) Subject to the provisions contained in Section 16, it applies -
(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed, and
(b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify, in this behalf.
Provided that ... ... ... ...
Section 5 empowers the Central Government to frame a Scheme to be called the Employees' Provident Fund Scheme for the establishment of provident funds under this Act for employees or for any class of employees and specify the establishments or class of establishments to which the said Scheme shall apply. A Scheme framed under sub-section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme.
Section 7 empowers the Central Government to add to, amend or vary either prospectively or retrospectively, the Scheme by notification in the official gazette.
In exercise of the aforesaid statutory powers, the Central Government had issued GSR No. 70 dated 20.1.1966 for applying the Scheme w.e.f. 31.1.1966 to "1(3)(b)(iii): banks doing business in one State or Union Territory and having no department or branches outside that State or Union Territory"
Thereafter by notification dated 25.2.2000, the Government of India in the Ministry of Labour has substituted the aforesaid clause as under :-
"banks other than the nationalised banks established under any Central or State Act"
16. Act not to apply to certain establishments.- (1) This Act shall not apply -
(a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State relating to co-operative societies employing less than fifty persons and working without the aid of power; or
(b) & (c) ... ... ... ...
7A. Determination of moneys due from employers.- (1) The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner may, by order,-
(a) in a case where a dispute arise regarding the applicability of this Act to an establishment, decide such dispute; and
(b) determine the amount due from any employer under any provision of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.
7Q. The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or any such higher rate as may be specified in the Scheme on any amount due from him under this Act from the date on which the amount has become so due till the date of its actual payment :
Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any scheduled bank.
(While Section 7A was added by Act 28 of 1963 w.e.f. 30.11.1963, Sections 7B to 7Q were added by Act 33 of 1988 w.e.f. 1.7.1997) 14B. Power to recover damages.- Where an employer makes default in the payment of any contribution to the Fund, ... ... or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 or in the payment of any charges payable under any other provisions of this Act ... ... , the Central Provident Fund Commissioner or such other officer as may be authorized by the Central Government, by notification in the Official Gazette, in this behalf, may recover from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme.
Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard.
Provided further that ... ... ...
Para 32-A of the Employees' Provident Fund Scheme, 1952 reads as under :-
32-A. Recovery of damages for default in payment of any contribution :- (1) When an employer makes default in the payment of any contribution to the Fund, or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 of the Act or in the payment of any charges payable under any other provision of the Act or Scheme or under any of the conditions specified under section 17 of the Act, the Central Provident Fund Commissioner or such officer as may be authorized by the Central Government, by notification in the Official Gazette, in this behalf, may recover from the employer by way of penalty, damages at the rates given below :-
---------------------------------------------------
Period of default Rate of damages
(Percentage of arrears
per annum)
---------------------------------------------------
(a) Less than two months. Seventeen
(b) Two months and above Twenty-two
but less than four
months.
(c) Four months and above Twenty-seven
but less than six
months.
(d) Six months and above. Thirty-seven
---------------------------------------------------
(2) The damages shall be calculated to the nearest rupee, 50 paise or more to be counted as the nearest higher rupee and fraction of a rupee less than 50 paise to be ignored.
Para 32-B of the Scheme empowers the Central Board to reduce or waive the damages levied under Section 14B of the Act in case of sick industries.
7. It is not the case of the appellant-bank that the appellant is not an establishment as contemplated by Section 1(3)(b) for which the Central Government has issued notification for application of the Act to such establishments. As per the notification dated 25.2.2000, the Act is made applicable to all the banking Companies other than the nationalized banks.Commercial establishments for which notification is issued under Section 1(3)(b) employing 20 or more persons would be governed by the provisions of the Act. The term "establishment" is not defined in the Act, but the expression "factory" is defined by Section 2(g) to mean any premises in which the manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power.
In order to appreciate the contentions of the appellant-bank based on the language of Section 16(1)(a), it is necessary to note that the word "establishment" has been used in Section 1(3) of the Act (and in other Sections of the Act) as a genus of which the factory is a species. A plain reading of clauses (a) and (b) of Section 1(3) makes it clear that the two clauses divide establishments in two parts, one being factories engaged in a scheduled industry and the other being establishments whether factory or non-factory in respect of which notifications have been issued by the Central Government [vide Ojas Corporation v. RPF Commissioner, 1970 Lab IC 81 (Guj)].
8. We may now turn to the interpretation of Section 16(1)(a). To properly appreciate the said sub-clause, it is also necessary to refer to clauses (b) and (c) of the said sub-section which exempt establishments set up by Central/State Government or under Acts of Parliament or State Legislature, provided the employees of such Government/statutory establishment are entitled to the benefit of contributory provident fund or old age pension in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits. While Section 17 confers power on the appropriate Government to grant exemption to an establishment with or without conditions if the Rules for such contributions to the Provident Fund and the benefits in the nature of Provident Fund, Pension or Gratuity are not less favourable to employees of such establishments than the rates of provident fund/benefits provided under the Act, the only other establishment which is entitled to exemption as a matter of right under the provisions of the Act is an establishment which is a co-operative society employing less than 50 persons and working without the aid of power as provided in clause (a) of Section 16(1).
9. In the backdrop of the aforesaid statutory scheme of Sections 1 and 16 and reading the definition of "factory" in Section 2(g) of the Act, it is clear that the Legislature intended that the words "and working without the aid of power" are required to be read in the context of the definition of "factory" in Section 2(g) of the Act, which bears repetition :-
"2. Definitions.- In this Act, unless the context otherwise requires,-
(g) "factory" means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power."
Clause (a) of Section 16(1), therefore, contemplates a co-operative society with less than 50 employees and carrying on the manufacturing process without the aid of power.Since large scale manufacturing operations would ordinarily not be possible without the aid of power, an establishment run by a co-operative society with less than 50 employees and without the aid of power would, therefore, be an establishment working on a small scale like a co-operative society running a handloom industry manufacturing without the aid of power. Clause (a) was not intended to grant exemption to a commercial establishment run by a co-operative society with large scale business like banking business or other businesses with turn over of crores of rupees merely because it uses power only for the purpose of lighting or cooling.
10. Even assuming that clause (a) of Section 16(1) was intended to cover both factories as well as commercial and other establishments, the finding given by the learned Single Judge that the appellant bank uses electricity also for running its computers and other gadgets for providing effective banking services to its customers does not call for any interference.
11. As regards the decisions of the Allahabad and Madras High Courts in Kalpana Kala Kendra, Kanpur v. ESI Corporation, 1985 Lab I.C. 763 (Allahabad), V. Md. Haneef v. ESI Corporation, 1969 Lab I.C. 549 and New Taj Mahal Cafe Ltd. v. Inspector of Factories, Mangalore, AIR 1956 Madras 600, those cases were concerned with establishments engaged in manufacturing process, but without the aid of power.
11.1 In the case of Kalpana Kala Kendra (Supra), the Allahabad High Court was concerned with an establishment which was making handmade greeting cards with manual labour without using power. The Court held that there was no evidence to show that the electric power was used for manufacturing cards. The Court held that where the use of electric power is an integral part of the operation, it can be said that the manufacturing process is being carried on with the aid of power and the Court further held that use of electricity merely for the purposes of light or fans only can not be treated to be an aid in the manufacturing process. The Court was, however, concerned in that case with the definition of the term "factory" under the Employees' State Insurance Act and not with a case under the provisions of the Employees' Provident Fund Act. Apart from the said distinction, on facts it appears that the Court was basically concerned with the question whether the greetings cards were made with or without use of power and the Court came to the conclusion that the greeting cards were made with manual labour and not with the aid of power.
11.2 Similarly, in the case of V. Md. Haneef (Supra), the Madras High Court was concerned with the definition of "factory" under Section 2(12) of the Employees' State Insurance Act. The establishment in the case was a tannery which was not using electricity for tannery work, but power was used for operating a pump set for pumping water which would be used after tanning hides and skins. The Court held that pumping of water had little to do with the actual tanning process and that the pumping process cannot be said to be so integrated with the manufacturing process within the tannery premises as to make it part of the manufacturing process and pumping of water by power is not incidental to the tannery process which goes on within the premises. Thus, in the above case, the Madras High Court was concerned with the question whether manufacturing process of tanning as such was with or without the aid of power.
11.3 In New Taj Mahal Cafe Ltd. (Supra) also the Madras High Court was concerned with a similar question under the Factories Act. The restaurant was using refrigerator. The question was whether the restaurant was carrying on any manufacturing process with the aid of power. The Court held that the restaurant was engaged in the business of making snacks without the aid of power and that having a refrigerator for storage of food was not a part of the manufacturing process and, therefore, the use of electricity for running the refrigerator did not amount to the establishment carrying on manufacturing process with the aid of power. The Court held that if, however, the refrigerator is used for treating and adopting any article with a view to its sale, then the test of manufacturing process with the aid of power would be satisfied, but not otherwise. This case is, therefore, clearly distinguishable.
12. As regards the decision of the Bombay High Court in Backbay Premises Co-operative Society Ltd. v. Union of India, 1999 (1) LLJ 155/589, it is true that the Bombay High Court in that case was concerned with a co-operative society and the controversy did arise under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the interpretation of which is involved in the present appeal also. However, it is important to note that the aggrieved party was a housing co-operative society and the Regional Provident Fund Commissioner was seeking to apply the provisions of the Act to the premises owned by the society on the ground that the society provides services to its members on payment. The society was recovering maintenance charges for upkeep of the building from its members to manage and administer the property like repairs and maintenance of the building. The authorities invoked items 16(2) and 34 (in the Appendix I to the Act which defines "non factory industries") which read as under :-
16.(2) Societies, clubs or associations which provide board or lodging or both or facility for amusement or any other service to any of their members or to any of their guests on payment.
34. All societies, clubs, and associations which render service to their members, without charging any fee over and above the subscription fee or membership fee.
The Bombay High Court held that a housing society providing repairs and maintenance services to its members is not rendering "any other service" contemplated in item 16(2) or "service" in item 34.
The decision in Backbay Premises Co-operative Society Ltd. (Supra) is clearly distinguishable as it was a housing co-operative society not providing any commercial services, much less a commercial establishment.
13. The decision of the Employees' Provident Fund Appellate Tribunal, New Delhi in the case of Unnati Co-op. Bank Ltd. was based on the aforesaid decision of the Bomaby High Court in Backbay Premises Co-operative Society Ltd. which was rendered in the context of a housing society and not for a co-operative bank. Therefore, the decision of the Tribunal did not apply the correct test. The decision of the Allahabad High Court in M/s Kalpana Kala Kendra relied upon by the Tribunal is also not applicable to co-operative banks as already explained hereinabove. Hence, the decision of the Appellate Tribunal in the case of Unnati cannot be treated as laying down the correct law.
14. In view of the above discussion, we have no hesitation in coming to the conclusion that the appellant-bank is not entitled to be exempted from the provisions of the Act on the strength of the provisions of Section 16(1)(a) of the Act.
15. As regards challenge to the order dated 1.10.2004 (Annexure "F" to the petition), on behalf of the petitioner-bank additional affidavit has been filed today giving particulars of the amounts transferred by the petitioner-bank when for the first time the PF Code Number was given to the bank on 15.2.2000. The first annexure to the said affidavit gives particulars of the amounts of provident fund accumulations as on 31.3.1997, which the petitioner-bank voluntarily transferred to the respondent-authorities after receiving the coverage notice dated 15.2.2000. The total amounts of provident fund accumulations as on 31.3.1997 inclusive of the members' contributions and interest thereon and the employer's contributions and interest thereon were Rs. 39,45,381/-. In fact there is no dispute about the aforesaid amounts because even according to the respondents, coverage notice was given for the period from 1.4.1997 to 30.6.2000.The petitioner-bank deposited total amounts of Rs. 67,88,021/= with the respondent-authorities on 21.7.2000 before the Assistant Provident Fund Commissioner passed the order dated 27.12.2000 under Section 7A of the Act :
--------------------------------------
Period Amounts u/s.7A
--------------------------------------
upto 31.3.1997 Rs.39,45,367/-
1.4.1997 to 29.2.2000 Rs.24,61,724/-
1.3.2000 to 30.6.2000 Rs. 3,80,930/-
--------------------------------------
Rs.67,88,021/-
--------------------------------------
In the impugned order dated 27.12.2000, over and above the aforesaid amounts assessed under Section 7A, the Assistant Commissioner also quantified the amount of interest payable under Section 7Q for the period from July 1997 to August 2000 at Rs. 4,42,066/- and called upon the petitioner-bank to deposit the said amount within 15 days from the date of receipt of the order.
The petitioner thereafter made an application under Section 7B of the Act on 5.7.2001 in which the petitioner-bank also raised dispute about coverage under the Act and claimed exemption under Section 16(1)(a) of the Act. As already indicated earlier, that part of the controversy is already adjudicated against the appellant-bank.
16. At the hearing of the petition, we called upon the learned standing counsel for the respondents to indicate the basis on which the impugned order dated 1.10.2004 was passed under Section 14B. The learned standing counsel produced the instructions issued by the Central Provident Fund Commissioner through circulars dated 24.10.1975 and 15.6.2004 laying down the guidelines for levy of penal damages under Section 14B. Part III of the Circular dated 24.10.1975, reads as under:-
(a) to (e) .... .... ... ...
(f) Damages should not be levied at the present rates from the establishments which have been discovered and covered retrospectively i.e. in the case of discovered establishments in respect of which coverage notices are issued on or after 1.11.1973. In these cases, damages may be levied at the rate of 10% per annum for amounts due upto the date of issue of the coverage notice and paid within the stipulated period in coverage letter. Damages on the current contributions (on or after 1.11.1973) may be levied in accordance with the new rates. In the cases of discovered establishments in respect of which the coverage notices were issued prior to 1.11.73, damages at the then existing rates should be levied.
(g) to (i) ... ... ... ...
The Circular dated 15.6.2004, reads as under:-
"Very often establishments are covered retrospectively leaving a gap between the effective date of coverage and the actual date of communication of the coverage notice. When establishments are covered retrospectively the EPFO is required to credit interest to the members account from the date of coverage irrespective of the fact that the establishment has started compliance only after receiving the coverage intimation from the PF office. This interest burden on the EPFO on account of such belated remittance is normally taken care of by the employers by virtue of Section 14B of the Act.
Many establishments have represented against the levy of damages for the 'pre-discovery period' (the gap between the actual date of coverage and the date of intimation of the coverage notice) that they were prevented from making remittance in the absence of any code number allotted to them. Various High Courts also have taken strong exception to this particularly after introduction of Section 7Q of the Act. Moreover, different regions adopt different standards in levying damages in such cases.
The matter was discussed in detail by the CBT in its 165th meeting held on 3.12.2003. It has been decided that no damages shall be levied for the pre-discovery period where the code number was allotted belatedly by the EPFO and the establishment was prevented from remitting the contributions in the absence of a code number allotted to it by the EPFO. In order to have uniformity of approach by different field offices and with a view to alleviate the difficulties experienced by the establishments, the following guidelines are issued in the matter of levy of damages in respect of establishments covered belatedly :-
---------------------------------------------------------
1. Levy of damages : No damages shall be levied on workers' share if the workers' share for for pre-discovery the pre-discovery period period has been waived.
2. Establishment : No damages shall be levied which paid PF however to compensate the dues within the interest loss to the EPFO, time prescribed only simple interest @12% in the coverage p.a. shall be levied.
notice
3. Establishments : No damages shall be levied which paid PF till the date of payment dues beyond the fixed in the coverage date fixed in notice. Only simple the coverage interest @12% upto the date notice mentioned in the coverage letter and damages at appropriate rates for the period of delay beyond the date fixed in the coverage letter be levied.
4. Establishments : Only difference of which were having interest amount between their own private 12% simple interest p.a. PF system before and the actual interest coverage and who earned by the private PF deposited the PF shall be levied if the in banks or latter is less than finance 12% p.a.. Beyond the date establishments fixed in the coverage notice, damages shall be levied at the appropriate rates.
--------------------------------------------------------
However, the past cases already decided may not be reopened.To avoid confusion and inconvenience in the matter of remittance of PF dues where the establishments are covered belatedly, the coverage notices shall henceforth contain instructions that 'payments of PF contributions and allied dues shall be made within 15 days from the date of receipt of the coverage notice'."
17. In view of the aforesaid instructions and in view of the fact that the petitioner-bank was having its own private PF system, it is clear that the petitioner-bank's case would fall under category 4.Hence, the respondent-authorities could not have levied damages by way of penalty under Section 14B of the Act for the period prior to the date of payment fixed in the coverage notice. In the instant case, the penalty to be levied would be only for the period after the date of payment fixed in the coverage notice. The coverage notice did not specify any date for payment of dues. The order dated 27.12.2000 under Section 7A did not quantify the amounts under Section 7A which were already paid by 21.7.2000. The order dated 27.12.2000 quantified the amount of interest payable under Section 7Q of the Act which amount the Bank paid after almost three years. The respondent-authorities would, therefore, be required to re-calculate the amount of penalty for the said delay on the aforesaid basis after giving an opportunity of hearing to the petitioner.
18. To avoid any future litigation, we asked the respondents whether it would be possible to quantify the amount of penal damages right away, the learned counsel for the respondents stated under instructions from Ms GA Shah, Assistant Provident Fund Commissioner, Ahmedabad that in view of the aforesaid formula, the amount of damages by way of penalty under Section 14B in the petitioner-bank's case would be about Rs. 4,26,417/-. We accordingly direct the petitioner-bank to pay the said amount to the respondent by 30th April 2005.
The petition is accordingly disposed of in terms of the aforesaid direction.
19. In view of the above discussion, while Letters Patent Appeal No. 1372 of 2003 is dismissed, Special Civil Application No. 15274 of 2004 is party allowed by directing the respondent to modify the order dated 1.10.2004 under Section 14B of the Act on the aforesaid basis and the petitioner-bank shall pay such amount by 30th April 2005.
Rule is made absolute in SCA No. 15274 of 2004 to the aforesaid extent with no order as to costs.
20. Since the appeal is dismissed, the Civil Application does not survive and is accordingly disposed of.