(1) These two writ petitions raise a common question and hence they are disposed of by a common judgment. In w. P. No. 1838/1977 the petitioner challenges the proceedings no. Ap/1874/pd/eng/6494, dated 7th june, 1977, of the regional provident fund commissioner, hyderabad, calling upon the petitioner to pay damages of rs. 28,179 - 35p. Under section 14 - b of the employees provident funds and miscellaneous provisions act, 1952 (hereinafter called the act) for the delayed payment of : (i) the provident fund contributions, (ii) the family pension contributions and (iii) the administrative charges for the period march 1971 to february, 1976.
(2) In the writ petition no. 1200 of 1978, the petitioner therein challenged a similar order of the regional provident fund commissioner, hyderabad calling upon the petitioner therein to pay damages of rs. 42,521 - 45p. For delayed payment of the aforesaid amount for the period april, 1970 to september, 1977.
(3) The petitioner in w. P. No. 1838 of 1977 is the divisional engineer, electrical, m. R. T. Division, andhra pradesh state electricity board, hyderabad, and the petitioner w. P. No. 1200 of 1978 is the executive engineer, g. T. S. Division, andhra pradesh state electricity board, hyderabad. It is not disputed that both the petitioners are establishments, covered by the employees' provident funds and miscellaneous provisions act, 1952. As per the provisions of the act, the provident fund contributions and administrative charges. Should be remitted within 15 days from the beginning of the following month with a further grace period of five days.
(4) The provident fund commissioner, issued notices to the petitioners calling upon them to show cause why action should not be taken under section 14 - b of the act, for delayed payment of the aforesaid amounts. Lists of the alleged defaults for the aforesaid periods were appended to the show cause notices. The petitioner in writ petition no. 1838 of 1977 submitted his explanation stating that the delay occurred due to the following reasons: - (i) due to revision of pay scales; (ii) due to telangan a strike from april 1971 to june 1971 (iii) due to transfer of upper division clerk from the division without a substitute in his place; and (iv) due to additional work of compulsory deposit scheme.
(5) The respondent considered the reasons given by the petitioner and condoned the delay caused by the telangana strike period from april, 1971 to june, 1971, and for the rest of the delay, he reduced the damages to 10 per cent flat and accordingly directed the petitioner to pay a sum of rs. 28,179 - 35 p. Towards damages.
(6) The petitioner in w. P. No. 1200 of 1978 sent a reply stating that the delay occurred due to the following reasons: - (i) it was not an intentional delay; (ii) the delay occurred in realisation of cheques; (iii) due to employees strike; and (iv) due to certain unavoidable circumstances.
(7) The respondent considered the aforesaid explanation and condoned the delay which had occurred during october 1971 to may 1972, april 1973, december 1975, august 1976 and october 1976, as the relative cheques were deposited into the bank in time. He also waived the damages for december 1972 and december 1973 due to the strike of non - gazetted government officers and also self - immolation of one s. A. S. Kameswara rao. For the remaining period, he reduced the damages to a flat rate of 7| per cent and accordingly directed the petitioner to pay a sum of rs. 42,521 - 45 p. As damages.
(8) The petitioners challenge the impugned orders of the respondent, the regional provident fund commissioner, hyderabad, on the following grounds :
(i) even if any default was committed damages should have been levied immediately after the default had occurred and not after a lapse of six or seven years and that the action of the commissioner in seeking to recover damages after such a long lapse of time, is unjust and devoid of jurisdiction. (2) the long lapse of time in seeking to recover the damages, amounts to a waiver or an estoppel and precludes the commissioner from levying damages under section 14 - b of the act. (3) the delay in payment of the contribution amounts occurred due to the bonafide mistake and no damages could be levied under section 14 - b of the act in the absence of any contumacious conduct on the part of the employer and that the commissioner had exercised the discretion vested in him under section 14 - b arbitrarily and unjustly, and (4) the damages levied, are arbitrary and excessive.
(9) In order to appreciate these contentions, it is necessary to refer to the relevant provisions of the employees' provident funds and miscellaneous provisions act, 1952. The act has been enacted by parliament to provide for the institution of provident funds for employees in factories and other establishments. It applies 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 to any other establishment employing twenty or more persons or class of such establishments which the central government may specify in that behalf by notification in the offical gazette.
(10) Under section 5 of the act, the employees' provident fund scheme is to be framed by the central government for the establishment of provident funds under the act for the employees.
(11) Section 6 requires that the scheme should provide for payment of contribution by the employer to the fund and also that the contribution payable by the employee shall be equal to the contribution payable by the employer in respect of him.
(12) Under section 8, the amount payable by the employer can be recovered in the same manner as an arrear of land revenue.
(13) Section 14, prescribes penalties for contravention of the provisions of the act.
(14) Section 14 - b empowers the central provident fund commissioner or such other officer as may be authorised by the central government to recover from the employer damages for default in payment of any contribution to the fund or the other amounts mentioned therein.
(15) In exercise of the power under section 5 of the act, the central government framed a scheme known as the employees' provident fund scheme, 1952. The scheme applies to all factories and other establishments to which the act applies. The scheme provides for various matters relating to constitution of board of trustees, appointment and powers of commissioner and other staff, membership of the provident fund, payment of contribution, administration of the fund and other matters which it is not necessary to refer to in detail.
(16) The first contention urged by the learned counsel for the petitioners is that the regional provident fund commissioner had no jurisdiction to levy damages after a long lapse of six or seven years after the default was committed.
(17) Section 14 - b of the act, reads as follows: -
"14 - b : power to recover damages: - where an employer makes default in the payment of any contribution to the fund (the family fund or the insurance 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 or of any scheme or insurance scheme or under any of the conditions specified under section 17, the central provident fund commissioner or such other officer as may be authorised by the central government, by notification in the official gazette in this behalf may recover from the employer such damages, not exceeding the amount of arrear, as it may think fit to impose : provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard"
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(18) This section does not require that action to levy damages should be taken immediately or soon after the employer makes a default in payment of the contribution amount, nor does it prescribe any period of limitation for recovering damages. No provision of the act or the scheme has been brought to my notice which fixes any such period of limitation for the recovery of damages. The statute having been enacted by parliament for the benefit of workers, a beneficial construction must be placed on it. The liability to pay damages arises as soon as a default is committed by an employer in payment of the contribution to the fund. Whether the facts and circumstances warrant the levy of damages, is a matter for consideration of the competent authority empowered in that behalf to recover damages. The mere fact that no action was initiated immediately after the occurrence of default in payment of the contribution, would not take away the jurisdiction of the competent authority to enforce the provisions of section 14 - b, and recover damages from the employer. There being no period of limitation prescribed by the statute within which damages can be recovered under section 14 - b of the act, i do not think, the exercise of the power bythe commissioner to recover damages after a lapse of six or seven years after the defaults had occurred is not without jurisdiction. When the legislature itself has not thought fit to fix any period of limitation in respect of recovery of damages under section 14 - b, i do not think the court will be justified in imposing any such limitation on the powers of the commissioner to recover damages even after the lapse of considerable time after the default had occurred.
(19) In bombay gas co. V. Gopal bhiva while dealing with a claim by employees under section 33 - c (2) of the industrial disputes act, 1947, their lordships observed that no period of limitation could be prescribed for recovery of the said damages in the absence of any such provision in the statute.
(20) It was contended before their lordships that the claim of the employees should not have been allowed after a lpse of nearly eight years after the award was pronounced. In repelling the said contention, their lordships observed as follows: -
"where the legislature has made no provision for limitation, it would not be open to the courts to introduce any such limitation on grounds of fairness or justice. The words of section 33 - c (2) are plain and unambiguous and it would be the duty of the labour court to give effect to the said provision without any considerations of limitation. No doubt, such belated claims made on a large - scale may cause considerable inconvenience to the employer, but thtat is a consideration which the legislature may take in to account, and if the legislature feels that fairplay and justice require that some limitation should be prescribed, it may proceed to do so. In the absence of provision, however, the labour court cannot import any such consideration in deling with the applications made under section 33 - c (2)."
(21) The aforesaid observations apply with equal force to claims for recovery of damages on account of default of payment of contributions to the provident fund by the employees, which are intended mainly to benefit the employees.
(22) The first contention that the commissioner has no jurisdiction to recover damages after a long delay, cannot be upheld.
(23) The second contention urged by the learned counsel for the petitioners is that 1. (1964) 3 s. C. R. 709: a. I. R. 1964 s. C. 752. On account of long lapse of time in seeking to recover damages, the respondent must be deemed to have waived and is also estopped from recovering the damages.
(24) I do not think this contention can be accepted. Under paragraph 30 of the scheme, the employer shall, in the first instance pay the contribution payable by himself and also on behalf of member.
(25) Under paragraph 32 of the scheme, the amount of the member's contribution paid by the employer, can be recovered by the employer by means of deduction from the wages of the member or otherwise.
(26) Under paragraph 50, the aggregate amout received as the employer's and the employees' contributions to the fund, shall be credited to an account to be called the "provident fund account. "
(27) Under paragraph 52, the amount belonging to the fund shall be deposited in the reserve bank or the state bank of india or in such other scheduled bank as may be approved by the central government from time to time or shall be invested in the securities referred to in clause (a) to (d) of section 20 of the indian trusts act.
(28) Under paragraph 53, the said fund shall not be expended for any purpose other than the payment of the sums standing to the credit of individual members of the fund or to their nominees or heirs or legal representatives.
(29) Under paragraph 59, an account shall be opened in the office of the fund in the name of each member in which it shall be credited : (a) his contributions, (b) contributions made by the employer in respect of him : and (c) interest as provided in paragraph 60.
(30) Paragraph 60 of the scheme provides that the commissioner shall credit to the account of each member interest at such rate as may be determined by the central government in consultation with central board.
(31) From the aforesaid provisions of the scheme it is clear that an obligation is cast on the employer to pay contributions to the fund and the amount in the fund has to be deposited in a bank, and the employee who is a member of the fund is entitled to be paid the contribution amount standing to his credit in the said fund together with interest therein. The provisions of the statute and the scheme do not depend upon any decision being taken by any authorities with regard to payment of the contribution amount to the fund or payment of the amount together with interest thereon standing to his credit in the account of the fund to the employee. The mere fact that no action was initiated by the commissioner for recovery of damages, would not deprive the employee of the amounts of contribution and the interest thereon to which he is entitled. Under the act and the provisions of the scheme, the commissioner has to pay the employee the contribution amout together with interest therein at the rate fixed by the central government irrespective of the fact whether the contribution is remitted by the employer within the time or not. The provision for damages under section 14 - b is intended to cover the loss of interest suffered by the organisation by not being able to invest the amount in time on account of delay in remittances of contritution amounts by the employer. This obligation to pay damages is imposed on the employer by the provisions of section 14 - b of the act, and is intended to protect the interests of the employees who are members of the fund and therefore mere absence of demand or any delay on the part of the commissioner in seeking to recover damages under section 14 - b would amount to waiver and would not estop him from enforcing the provisions of section 14 - b for recovery of damages.
(32) The learned counsel for the petitioners relied upon the decision of the punjab high court in m/s amin chand v. State of punjab. In that case, the employer did not make payments within the scheduled time and the delay in payment never exceeded five days and in most cases it was of one or two days only and the delayed payments in some cases related to successive months. The government did not levy damages in respect "of those occasional defaults when they occurred but levied damages after a lapse of six years. The learned judge shamsher bahadur, j. Held that:
"technically the damages should have been levied immediately after the default and it was legitimate for the employer to have thought that the government had decided not to exercise its discretion to levy damages. To choose a date to levy damages after six years was arbitrary and bad resulted in operation of law very harshly and the court is entited to interfere in its writ jurisdiction"
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(33) In that case, the delays in remittances, were for short periods of five days and the learned judge was inclined to take the view that the delay was not such as to warrant levy of damages.
(34) In the present case, the delays in remitances of contribution amounts are inordinate and therefore the levy of damages is clearly warranted by the facts and circumstances of the case. Hence the aforesaid decision does not apply to the facts of the present case.
(35) The learned counsel for the respondent brought to my notice an unreported decision of the delhi high court, in m/s. Lajrat potteries (p.) ltd. And another v. Regional provident fund commissioner, delhi and another. In that case the learned judges prakash narain and prithvi raj, jj. Were not inclined to agree with the view taken in m/s. Amin chand v. State of punjab and their lordships also observed that the said decision of the punjab high court was overruled by an unreported decision of the punjab and haryana high court in the state of punjab and others v. Amin chand and sons. For the foregoing reason also the decision of the punjab high court in m/s. Amin chand v. State of punjab cannot be relied upon as supporting the case of the petitioners. Hence the second contention of the petitioners, that the commissioner cannot recover damages after a lapse of six or seven years from the date of default is devoid of any merit.
(36) The third contention urged by the learned counsel for the petitioners is that only contumacious conduct on the part of the employer in remitting the contribution amount, attracts the provisions of section 14 - b of the act and that no damages can be recovered where the delay has occurred due to bona fide reasons and circumstances beyond the control of the employer.
(37) Whether the delay occurred due t o bona fide reasons and whether the delay is such as to warrant the levy of damages, are questions which have to be determined with reference to the facts of each case and no hard and fast rule can be laid down. In the present case, the commissioner had given notices to the petitioners calling upon them to show cause why damages should not be recovered and the petitioners submitted their explanation and they were duly considered by the respondent, who condoned delays which had occurred during certain periods. The respondent came to the conclusion that there was inordinate delay with regard to remittances of the contribution amounts almost every month and this was more or less admitted by the petitioners and therefore the circumstances warranted the levy of damages under section 14 - b of the act. Thus, the respondent, has, on relevent material came to the conclusion that certain periods of delays, in remitting the contribution amounts by the petitioners, were not bona fide or reasonable and the said conclusion of the respondent is not shown to be vitiated by any illegalities or by taking into consideration any extraneous matter and there are therefore no grounds for interfering with the impugned orders of the respondent.
(38) The last ground urged by the learned counsel for the petitioners is that the quantum of damages imposed in each case, is arbitrary and excessive.
(39) In both the cases, the respondent, on a consideration of the explanations of the petitioners, condoned the delays for certain period and considerably reduced the quantum of damages in the first case to rs. 28,179 - 35 p. And in the second case to rs. 42,521 - 45 p. Under section 14 - b of the act, the damages may be recovered at a rate not exceeding 25% of the amount as the concerned authority may think fit to impose. The words "twenty five per cent. " have since been omitted by the amendment act xl of 1973. In the present case, it is not the contention of the petitioners that the rate of damages imposed, exceeds the statutory limit prescribed by section 14 - b. The only contention is that the amounts levied are excessive or arbitrary. But the regional provident fund commissioner after taking into consideration all the relevant factors and circumstances, considerably reduced the amounts of damages, and it cannot be said that they are either arbitrary or excessive; nor is the contention of the petitioners that the damages imposed are wholly disproportionate to the loss suffered by the organisation. For the foregoing reasons, i do not think, this court can interfere with the quantum of damages imposed by the respondent.
(40) In the result, both the writ petitions fail and are dismissed with costs in each. Advocate's fee rs. 100 in each. Writ petitions dismissed.