Madhya Pradesh High Court
M/S Bharat Sanchar Nigam Ltd. vs Assistant Provident Fund Commissioner ... on 3 January, 2018
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HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE
(M/s Bharat Sanchar Nigam Ltd. vs. Assistant Provident Fund Commissioner)
Indore, dated : 03.01.2018
Shri G. S. Patwardhan, learned counsel for the appellant.
Heard on the question of admission.
Learned counsel for the appellant has submitted that the amount
had become due on the respective dates since since 20.02.2005. Since
there was a delay in payment of the aforesaid amount, therefore, the
notice the notice was issued under Section 7Q and after granting
opportunity of hearing, the respondent has passed the order dated
21.11.2016 calculating the said amount. The due procedure as prescribed under Section 7Q of the Employers Provident Fund & Miscellaneous Provisions Act, 1952 (in short "the Act of 1952") has been followed.
The law on the subject is well settled. The Apex Court in the case of Arcot Textile Mills Limited vs. Regional Provident Fund Commissioner & others reported in 2013 (16) SCC 1 has held that there can even be a composite order under Section 7A and 7Q of the Act of 1952, therefore, the contention of the learned counsel for the appellant that after passing of the order under Section 7A of the Act of 1952, the amount was promptly deposited hence, his entitlement for payment of interest cannot be accepted.
Relevant part of the order dated 04.09.2017 passed by the learned Writ Court reads as under :-
Under Section 7Q of the Act interest is payable by the employer on the amount due under the Act from the date on which the amount becomes due till the date of its actual payment. The order dated 22.7.2011 reveals that the amount had become due on the respective dates since 2002/2005. The report of the Enforcement Officer was not disputed by the representative of the petitioner as is reflected from the following part of the order dated 2 HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE (M/s Bharat Sanchar Nigam Ltd. vs. Assistant Provident Fund Commissioner)
22.7.2011:-
" The area Enforcement Officer has filed his report on very specific point of payment of food allowances only for the period i.e. Jan. 05 to May
10. He has worked out the dues as under:-
Period A/c-I A/c-II A/c-X A/c- A/c- Total Jan.05 XXI XXII to May 10 Ee Er 77457 23688 7100 53768 3228 66 165307 (Rs. One Lac Sixty Five Thousand Three Hundred Seven only) Shri Darshan Makhija, Jr. A. O. authorized representative does not dispute finding of Enforcement Officer and has nothing more to say."
Accordingly on the basis of the aforesaid undisputed position the amount was calculated by the respondent.
Since there was a delay in payment of the aforesaid amount which has fallen due on the respective dates since 2002 to 2005, therefore, the notice was issued to the petitioner for levy of interest under Section 7Q and after giving an opportunity of hearing the respondent-authority has passed the order dated 21.11.2016 calculating the said amount. The due procedure has been followed while calculating the amount under Section 7Q.
The Supreme Court in the matter of Arcot Textile Mills Limited Vs. Regional Provident Fund Commissioner and others reported in 2013(16) SCC 1 has held that there can even be a composite order under Section 7A and 7Q of the Act, therefore, the contention of counsel for the petitioner that after passing of the order under Section 7A the amount was promptly deposited hence interest is not payable, cannot be accepted. The Supreme Court in the matter of Arcot Textile Mills Limited (supra) has held that:-
"
21. At this stage, it is necessary to clarify the position of law which do arise in certain situations.3
HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE (M/s Bharat Sanchar Nigam Ltd. vs. Assistant Provident Fund Commissioner) The competent authority under the Act while determining the moneys due from the employee shall be required to conduct an inquiry and pass an order. An order under Section 7-A is an order that determines the liability of the employer under the provisions of the Act and while determining the liability the competent authority offers an opportunity of hearing to the concerned establishment. At that stage, the delay in payment of the dues and component of interest are determined. It is a composite order. To elaborate, it is an order passed under Section 7-A and 7-Q together. Such an order shall be amenable to appeal under Section 7-I. The same is true of any composite order a facet of which is amenable to appeal and Section 7-I of the Act. But, if for some reason when the authority chooses to pass an independent order under Section 7-Q the same is not appealable." It has further been held that the interest under Section 7Q of the Act is basically a compensation for payment of interest to the affected employee and the provision has been made to secure just and humane conditions of work. In the matter of Arcot Textile Mills Limited (supra) it has further been held as under:-
"27. Presently we shall address to the nature of the lis that can arise under this provision. There cannot be any dispute that the Act in question is a beneficial social legislation to ensure health and other benefits of the employees and the employer under the Act is under statutory obligation to make the deposit that is due from him. In the event of default committed by the employer Section 14-B steps in and calls upon the employer to pay the damages. (See: Regional Provident Fund Commissioner v. S.D. College, 1997(1) SCC 241. Section 7Q which provides for interest for belated payment is basically a compensation for payment of interest to the affected employees. This provision has been made to secure just and humane conditions of work as has been opined in 4 HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE (M/s Bharat Sanchar Nigam Ltd. vs. Assistant Provident Fund Commissioner) Regional Provident Fund Commissioner v. Hooghly Mills Company Limited, (2012) 2 SCC
489. The language employed in Section 7Q provides for levy of interest on delayed payment and the rates have been stipulated. When a composite order is passed or order imposing interest becomes a part of the order or levy in any of the provisions of the Act the authority grants a reasonable opportunity of hearing to the employer/ affected party." In the matter of Arcot Textile Mills Limited (supra), it has also been held that there is no cavil for the fact that it is a social welfare legislation and to meet the constitutional requirement to protect the interest of the employees, the provision for levy of interest has been made.
Having regard to the aforesaid and the fact that there was delay in payment of amount, I am of the opinion that there is no merit in the present writ petition and the petitioner has been rightly held liable to pay the interest amount under Section 7Q of the Act, hence the impugned order does not require any interference.
No case to interfere with the impugned order, as prayed is made out. The writ appeal has no merit and is accordingly, dismissed.
(P. K. Jaiswal) (Virender Singh)
Judge Judge
Digitally signed by Geeta Pramod
Date: 2018.01.09 14:17:49 +05'30'