Kerala High Court
The Kuttanad Rubber Company Limited vs Employees Provident Fund Appellate on 15 June, 2017
Author: A.Muhamed Mustaque
Bench: A.Muhamed Mustaque
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
THURSDAY, THE 15TH DAY OF JUNE 2017/25TH JYAISHTA, 1939
WP(C).No. 15725 of 2010 (M)
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PETITIONER :
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THE KUTTANAD RUBBER COMPANY LIMITED,
KELACHANDRA NAGAR, CHINGAVANAM,
KOTTAYAM - 686 531, REPRESENTED BY ITS
EXECUTIVE DIRECTOR JOSEPH THOMAS.
BY ADVS.SRI.E.K.NANDAKUMAR
SRI.P.BENNY THOMAS
SRI.P.GOPINATH
SRI.K.JOHN MATHAI
RESPONDENTS :
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1. EMPLOYEES PROVIDENT FUND APPELLATE
TRIBUNAL, SCOPE MINAR, CORE II, 4TH FLOOR,
LAXMI NAGAR DISTRICT CENTRE, LAXMI NAGAR,
NEW DELHI - 110 092.
2. THE REGIONAL PROVIDENT FUND
COMMISSIONER, EMPLOYEES PROVIDENT FUND,
ORGANISATION, SUB REGIONAL OFFICE,
CHALAKUZHY, BUILDINGS, C.M.S.COLLEGE ROAD,
KOTTAYAM - 686 001.
3. THE RECOVERY OFFICER,
OFFICE OF THE RECOVERY OFFICER,
EMPLOYEES PROVIDENT FUND ORGANISATION,
SUB REGIONAL OFFICE, CHALAKUZHY BUILDINGS,
C.M.S.COLLEGE ROAD, KOTTAYAM - 686 001.
4. THE BRANCH MANAGER,
INDIAN OVERSEAS BANK,
KANJIRAPPALLY BRANCH, KANJIRAPPALLY.
WP(C).No. 15725 of 2010 (M)
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5. THE BRANCH MANAGER,
VIJAYA BANK, YMCA BUILDING, KOTTAYAM.
6. THE BRANCH MANAGER,
THE FEDERAL BANK LIMITED,
CHINGAVANAM BRANCH, CHINGAVANAM, KOTTAYAM.
R2 & R3 BY SRI.JOY THATTIL ITOOP, SC,
R5 BY SRI.K.ANAND,SC,
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 15-06-2017, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
bp
WP(C).No. 15725 of 2010 (M)
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APPENDIX
PETITIONER'S EXHIBITS :
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P1: COPY OF THE NOTICE DT 14/3/2002 ISSUED BY THE
R2 TO THE PETITIONER.
P2: COPY OF THE REPLY DT 26/3/2002 SUBMITTED BY THE
PETITIONER TO THE R2.
P3: COPY OF THE ORDER DT 29/4/2002 PASSED BY THE
R2.
P4: COPY OF THE APPEAL PETITION ATA NO. 644(7)/2002
(WITHOUT ITS ANNEXURES) FILED BY THE PETITIONER
BEFORE THE R1.
P5: COPY OF THE ORDER OF THE R1 TRIBUNAL DT
27/1/2010 IN ATA NO. 644(7)/2002.
P6: COPY OF THE NOTICE DT 29/4/2010 ISSUED BY THE
R3 TO THE PETITIONER.
P6: COPY OF THE LETTER DT 31/5/2010 ADDRESSED BY
THE PETITIONER TO THE R2 ( IA NO. 7654/2010)
RESPONDENT'S EXHIBITS : NIL.
//TRUE COPY//
P.A. TO JUDGE
bp
A.MUHAMED MUSTAQUE, J.
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W.P.(C).No.15725/2010
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Dated this the 15th day of June, 2017
J U D G M E N T
The petitioner is a public limited company engaged in plantation. The establishment is covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short, the "Act"). This writ petition is filed challenging the orders passed by the authorities under the Section 14B of the Act levying damages for the delayed payment of the contribution for the period from 3/1995 to 2/2001. By a detailed order produced as Exhibit-P3, the Regional Provident Fund Commissioner, Kottayam, ordered to levy a sum of Rs. 7,73,589/- as damages. The petitioner was heard before passing such an order. The petitioner claimed that the establishment is running at a loss and therefore, they could not remit the dues on time. However, the Regional Provident Fund Commissioner overruled their explanation by finding that the price of natural rubber was at its peak during 1995 to 1998, which period also the petitioner defaulted payment. The petitioner challenged Exhibit-P3 order before the appellate authority. The appellate authority concurred the finding of the primary authority. The WPC 15725/2010 -:2:- petitioner's case is that the appellate authority did not advert to the financial constraints of the petitioner. No doubt financial constraints sometimes may be a mitigating factor to reduce damages but on that ground the employer cannot claim absolute exoneration from payment of damages.
2. In the facts and circumstances, I am of the view that the proposed levy of damages need not be interfered in as much as the petitioner is liable to pay damages. However, levy of maximum is the discretion of the authority. There may be certain genuine reasons for the petitioner for not making contribution within time.
3. In fact, the above aspect has been considered by the Division Bench of this court in Regional Provident Fund Commissioner v. Harrisons Malayalam Ltd. [2013 (3) KLT 790] and at para.23, it was held as follows:
"23. Going by the specific words employed in paragraph 32A again, the officer has to exercise his discretion while looking at the mitigating circumstances, which includes financial difficulties projected by an employer and the quantum to be imposed has to be decided. The only fetter is on the upper limit of rates provided in S.14B and the table under paragraph 32A..."
WPC 15725/2010 -:3:-
True that it is the pure discretion of the authority to exercise maximum damages. If the petitioner is able to elaborate certain mitigating circumstances to lessen damages, certainly, the authority must consider reduction of damages. In the light of the fact that there was no occasion to consider the reason for levying maximum damages, this court is of the view that the petitioner should be given an opportunity before the primary authority to reduce the maximum limit. Accordingly, the impugned order is set aside to the limited extend as above. However, it should be on condition that the petitioner should remit 50% of the demand now ordered in Exhibit- P3. If any amount already deposited shall be given due credit. This shall be paid within four months. However, the authority after notice to the petitioner shall reconsider the matter for reduction in the light of the discussions as above and after adverting to the judgment in Harrisons Malayalam Ltd.'s case (supra).
The writ petition is disposed of as above.
Sd/-
A.MUHAMED MUSTAQUE, JUDGE ms