1. A private company takes exception in these two petitions to the imposition of damages upon it under S. 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (Act).

2. Petitioner, a private limited company, was in the business of manufacturing and weaving nylon yarn and fabrics. Its factory was at Thane and administrative office at Princess Street, Bombay. The two were treated as separate establishments for the purpose of coverage under the Act — the separate existence being in the form of allotment of two different code numbers. Petitioner delayed remittance of contributions to the fund for the factory as also the office. The delay was for periods falling between 1970 to 1978, On 15 May, 1978, petitioner replied to the second respondent's (Regional Provident Fund Commissioner) notice, dated 5 May, 1978, calling upon it to show cause why action should not be taken against it for the delay. The reply sought condonation of the delay on the ground that it was due to the sudden leaving of employment by their chief accountant who used to attend to these matters. His replacement was attending to the completion of the pending work. Recitals appearing in the notice annexure would be checked up with the company's records and an explanation submitted within a month. There the matter rested until 20 March, 1984 when the Regional Provident Fund Commissioner gave a notice calling upon petitioner to show cause why damages under S. 14-B vis-a-vis one account should not be imposed for the delay in remittances for the period August 1974 to August 1978. Petitioner replied to the said notice pleading that its factory had been closed as from 30 November, 1976 and the office from August 1978. At the date of giving the reply the company had no staff and the Board of Directors were not conversant with the working of the administrative side. The greater part of the record was also not traceable. The delay was minimal and attributable to administrative difficulties in the contributions being intimated to the Regional Provident Fund Commissioner. This delay, if it could be so termed, was unintentional and had not occasioned any loss to the members. A plea was made that the Regional Provident Fund Commissioner refrain from imposing any damages whatsoever. The Regional Provident Fuud Commissioner considered the reply and passed an order on 3 May, 1981 directing the petitioner to pay damages of Rs. 14,909.50 failing which action would be taken to recover the amount as an arrears of land revenue. The 1984 petition challenges the above order. In regard to the other account a personal hearing was given to a representative of the petitioner on 30 September, 1987. The Regional Provident Fund Commissioner on 14 December, 1987 by a detaild order assessed the damages at Rs. 90,593.30. Petitioner on 29 February, 1988 addressed a communication to the said officer complaining that it had come to know of the above order through a notice of demand pasted at its old office. A copy of the order was sought and after obtaining the same, petitioner moved the 1988 petition. Orders admitting the two petitions have resulted in petitioner depositing 25 per cent of the sums demanded and furnishing a bank guarantee vis-a-vis the balance in the order of 1987.

3. A number of grounds have been advanced in the petitions to impugn the orders. At the hearing learned counsel for the petitioner pressed only four, viz.:

(1) Delay in the intimation, of proceedings by the Regional Provident Fund Commissioner depriving his client of access to the records and personnel which could have explained the lapses.

(2) Implied condonation of the delay indicated by Regional Provident Fund Commissioner's inaction for near about 6 years and more after receipt of petitioner's reply, dated 15 May, 1978.

(3) The impugned orders not showing the authority's awareness of damages assessable under S. 14-B having two different aspects, i.e, compensatory and punitive; and

(4) The orders showing arbitrariness by imposition of unexplained different rates for different periods.

The Regional Provident Fund Commissioner refutes the charges summarised above. The plea of delay is not maintainable as there is no period prescribed within which action is to be initiated. The alleged inference of condonation was not permissible. The orders differentiated between the compensatory and punitive aspects of damages awarded under S. 14-B. The difference in rates for fixing damages payable was based on relevant considerations like period of delay, loss occasioned to members and frequency of default, etc., etc.

4. Sri Bhatkal in support of the first contention submits that delay in calling upon petitioner to explain the lapses amounted to an impropriety. Had the Regional Provident Fund Commissioner not been so remiss the petitioner could have had access to material to explain the same. It was unfair to call upon petitioner to explain lapses relating to the period 1970 to 1978 in the year 1984. Equally inexcusable was the giving of a personal hearing as late as in 1987 in regard to the second account. The Regional Provident Fund Commissioner's counsel replies that there is no period of limitation prescribed for calling upon defaulters to explain their lapses. Precedents have been cited to support the answer. That there is no limitation prescribed by the Act is of course there. But administrative delay can have a prejudicial effect on the citizen and in appropriate cases can lead to intervention by a writ Court. This is all the more so when the citizen is accused of failing to meet his obligations under a regulatory measure within a prescribed deadline. In relation to remittances under the Act compliance involves a lot of paper work. There are first deductions to be made from wages and/or salaries payable to members. The deductions require a matching contribution by the employer. Papers ever increasing in size and length have to be filled up. A cheque representing the total payable under a code number has to be drawn up. A challan has to accompany this cheque and only after all this is done that the Regional Provident Fund Commissioner is intimated of the credit. One may argue that all this is routine and requires no special talent or effort. It can also be argued that the law's prescriptions have to be observed whatever the difficulties. This refutation has no application in all circumstances were timely action initiated the party proceeded against has a fair opportunity to meet the charge. It may show that there is no default or that the default is on account of an administrative snarl. Next it may give an explanation to avert what after all is the exercise of a discretionary power. This may help the party in getting away with a smaller if not the entire penalty impossible. And what is more important the lapse being close to the seeking of the explanation, the affected party will have access to material to support its stand. Material in the shape of records and personnel is lost by passage of time. No one, certainly not a commercial concern, can afford to preserve its accounts and office copies of letters sent for years and years. Personnel in the managerial and ministerial cadres charges whether on account of death or market mobility. Therefore, absence of a prescribed period within which S. 14-B becomes operational, does not mean that the authorities can initiate action at any time. They must move within a reasonable interval of the commission of the lapse. Ascertainment of compliance with this requirement would depend upon the circumstances of each case. That requires a scrutiny of the circumstances vis-a-vis petitioner.

5. Petitioner is a private company. Being incorporated under the Companies Act, it is no stranger to paper work. Its factory and office both were covered under the Act. The defaults range from 1970 to 1978. The show-cause notices qua S. 14-B preceding the impugned orders were given in 1984. But there was an earlier notice on 5 May, 1978, It may not have threatened action under S. 14-B. But it did call upon petitioner to explain the delayed remittances. Petitioner was given to understand that some penal action would follow the failure to give an acceptable explanation. Petitioner's reply, dated 15 May, 1978, to the said notice negatives the plea of prejudice now put forth in the petitions. It speaks of delay having been caused on account of the abrupt leaving of his job by the concern's chief accountant. The reply goes on to mention that the replacement is engaged in completion of the pending work. A month's time was expected to be taken to verify the position and come forth with an explanation. The reply does not say that the records were untraceable. Several years passed without the receipt of the promised explanation. It was in this background that the 1984 notices were given. The opportunity of a personal hearing vis-a-vis one account given to the petitioner was not, availed of by it. It appeared at the hearing and was heard in regard to the second account. Petitioner's plea of delay having caused prejudice to its interests cannot be accepted seeing that—

(i) notice to explain was first given to it in 1978—not distant from the date of delayed remittances; and

(ii) its failure to give the promised explanation for about six years when it had the available records with it.

Petitioner is in error in assuming that the Regional Provident Fund Commissioner sought its explanation for the first time in 1984. This assumption ignores the 1978 notice. That the said notice was in terms not one intimating action under S. 14-B is of no consequence. The 1978 notice put petitioner on guard vis-a-vis defaults and the liability it had incurred for penal action under the Act. This was enough to ensure fairness. Petitioner cannot take advantage of its remissness in not giving the explanation promised in its reply of 15 May, 1978 and fasten upon the situation in the later years as a stick to beat the Regional Provident Fund Commissioner with. No procedural impropriety can, therefore, be said to vitiate the orders.

6. The second ground of attack is based upon the 1984 notice being unwarranted in the background of an implied condonation consequent to the explanation tendered on 15 May, 1978. The reply, dated 15 May, 1978, promised an explanation within a month. By itself it could not be construed as an explanation for all the delayed remittances. The abrupt departure of the chief accountant was given as an explanation for the delay in the remittance for the month of March or April 1978. Assuming the best in petitioner's favour, viz., that the sudden leaving of the chief accountant was offered as an explanation for all the delayed remittances, petitioner had to bear this out with reference to its papers.

It had promised to do so within a month. That the promise was not kept implies that the records offered no scope for soliciting condonation. Patience cannot be interpreted as condonation.

7. Sri Bhatkal submits that assessment of damages under S. 14-B has to be with reference to the twin factors of compensating loss of interest to members and penalising of the defaulting employer. The impugned orders do not show such an awareness. This contention is not tenable vis-a-vis the order assailed in the 1984 petition. There the compensatory and punitive proportions are placed at 10 per cent to 90 per cent respectively. The second orders reads as if the entire sum represents the punitive factor. The decision of a Single Judge of this Court in Josts Engineering, Ltd. v. Union of India [1983 II — L.L.N 57], does require an awareness of the twin aspects. But a failure would not vitiate the order. The very learned Judge who delivered the above verdict deviated therefrom in Victro Pharma case [1986 -I L.L.N 971]. Making of a division between the compensatory and penal aspects in the awarded damages is not, therefore, a must. The omission may not by itself invalidate the order. It certainly would not always permit the invoking of the writ jurisdiction to void the same.

8. Last is the argument that Regional Provident Fund Commissioner's orders do not explain the difference in rates for assessing damages vis-a-vis the defaults. The Regional Provident Fund Commissioner's counsel says the variation is based upon a table drawn up for departmental guidance. The said table has received the imprimatur of the Division Bench of this Court in Special Civil Appeal No. 1862 of 1978 decided on 3/4 August, 1981. The decision says so and is an answer to the contention.

9. In the result none of the contentions canvassed to challenge the orders can be accepted. Rules stand discharged with interim protections to stand vacated after six weeks. Costs in the two petitions, as incurred.