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Regional Provident Fund Commissioner, U.P v. M/S. Allahabad Canning Company, Bamrauli
Judgment Summary — Regional Provident Fund Commissioner, U.P. v. M/s. Allahabad Canning Company
Factual and Procedural Background
The respondent, M/s. Allahabad Canning Company, Bamrauli, Allahabad, was covered by the Employees' Provident Fund and Family Pensions Act, 1952 (the Act) and the applicable scheme. The company made delayed remittances of contributions for periods from June 1964 to March 1970.
On 20 August 1973 the Regional Provident Fund Commissioner (Accounts Officer) issued a notice stating that Rs. 7,830.65 was recoverable as damages for delayed payments and a further amount (described as Rs. 382.20 in the notice and later Rs. 302.20 in the order) as administrative charges, with annexures showing dates of deposits and calculations. The respondent replied (letter dated 28 September 1973) asserting that the contributions and administrative charges had been paid and credited to the Fund, that delays were due to unavoidable circumstances and financial difficulties and were not deliberate, and argued that no damages could be levied as payments had been accepted and credited.
After further correspondence (including letters dated 18 February 1974, 12 April 1974 and 14 December 1974) and a final communication on 17 January 1975, the Regional Provident Fund Commissioner directed recovery of the specified sums under section 14-B of the Act and threatened recovery under section 8 as arrears of land revenue if not paid within 30 days.
The respondent filed a writ petition in this Court challenging the 17 January 1975 notice. The learned single Judge allowed the writ petition and quashed the 17 January 1975 notice. The Regional Provident Fund Commissioner filed the present special appeal against that judgment.
Legal Issues Presented
- Whether action under section 14-B of the Employees' Provident Fund and Family Pensions Act, 1952, could be taken in January 1975 to levy damages for delayed deposits that fell due between June 1964 and March 1970 (i.e., whether any limitation or bar prevented such action).
- Whether the 17 January 1975 notice rejecting the respondent's representation was a valid speaking order (i.e., whether the order gave adequate reasons) and therefore whether the proceedings under section 14-B were vitiated for lack of reasons.
Arguments of the Parties
Appellant's Arguments (Regional Provident Fund Commissioner)
- The Act, specifically section 14-B, contains no provision of limitation; in the absence of any statutory limitation the court should not import one. (Reliance was placed on the Supreme Court decision in Bombay Gas Co. Ltd. v. Gopal Bhiva.)
- The Regional Provident Fund Commissioner's order of 17 January 1975 gave sufficient reasons — the respondent's representation was vague, did not dispute the quantum, and did not disclose particulars of the alleged unavoidable circumstances or financial difficulties; therefore the notice was not vitiated for want of reasons.
Respondent's Arguments (M/s. Allahabad Canning Company)
- The company contended that it had paid the requisite contributions and administrative charges and that the amounts were accepted and credited to the Fund, therefore there was no default entitling imposition of damages.
- Delays in payment were said to be due to unavoidable circumstances and financial difficulties and were not due to deliberate or wilful neglect by the employer.
- The company contended that the State Government (Governor of Uttar Pradesh) was the appropriate authority under section 14-B and sought relief from the State; it also argued that damages levied after a long delay and at a belated stage could not be recovered as a matter of natural and social justice.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Amin Chand & Sons v. State of Punjab | Used by the learned single Judge to support the proposition that action in January 1975 for defaults during 1964–1970 was illegal (i.e., effectively treated as a limitation or bar). | The Division Bench disagreed with the learned single Judge's reliance on this authority and did not follow its approach; the Court rejected the notion that section 14-B contains any limitation or that a court may read in such a limitation. |
| Bombay Gas Co. Ltd. v. Gopal Bhiva (Supreme Court) | Principle that where the legislature has made no provision for limitation, courts should not introduce a limitation on grounds of fairness or justice; the Labour Court must give effect to the plain words of the statute without importing limitation. | The Court relied on this authority to hold that section 14-B contains no limitation and the Provident Fund Commissioner was not barred from exercising powers under section 14-B merely because the claim was made belatedly. |
| Chief Mining Engineer East India Coal Co. Ltd. v. Rameshwar | Followed the principle stated in the Bombay Gas decision (i.e., courts should not read in limitation where statute is silent). | The Court noted that this decision followed the Bombay Gas reasoning and treated it as supportive precedent for refusing to import a limitation into the statutory scheme. |
| Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli | Also followed the principle in Bombay Gas regarding the inability of courts to impose limitation where statute is silent. | The Court observed that this authority further supports the position that, in the absence of statutory limitation, statutory remedies may be exercised despite belatedness of claims. |
Court's Reasoning and Analysis
The Division Bench addressed the two grounds on which the learned single Judge quashed the 17 January 1975 notice and found both to be unsustainable.
On limitation (first ground): The Court examined the language of section 14-B and concluded that it does not provide any period of limitation during which action must be taken against an employer for delayed deposits. The Court held that, in the absence of any statutory bar, courts cannot itself introduce a limitation on the exercise of statutory powers. The Court relied on the Supreme Court decision in Bombay Gas Co. Ltd. v. Gopal Bhiva which expressly held that where the legislature has made no provision for limitation, it is not open to courts to import one; the Court treated subsequent authorities which followed that decision as reinforcing the principle. Applying that legal principle, the Division Bench disagreed with the learned single Judge's reliance on Amin Chand & Sons and held that the Provident Fund Commissioner was not precluded from exercising powers under section 14-B in January 1975 for defaults occurring in 1964–1970.
On the adequacy of reasons (second ground): The learned single Judge had held that the 17 January 1975 notice was not a speaking order and therefore invalid. The Division Bench examined the record and observed that the respondent did not dispute the correctness of the amounts claimed in the original show-cause notice of 20 August 1973; annexures setting out calculations and dates of deposit (though not placed before the Division Bench) had accompanied the show-cause notice. The respondent's reply to the show-cause notice merely asserted financial stringency and unavoidable circumstances without furnishing particulars or disputing the quantum. Given the vagueness of the respondent's objections and the absence of any challenge to the calculations, the Court held that the Regional Provident Fund Commissioner's finding — that the plea advanced by the respondent was untenable — constituted sufficient reasoning. The Court explained that the extent and detail of reasons in a speaking order depend on the nature of the objections raised; where the reply is vague and does not contest the claimed quantum, a concise finding that the plea is unacceptable can suffice as a reasoned decision.
Weighing these considerations, the Court concluded that the learned single Judge erred in both respects: (a) by reading a limitation into section 14-B and relying on Amin Chand & Sons, and (b) by concluding that the Regional Provident Fund Commissioner's order lacked adequate reasons.
Holding and Implications
Holding: The appeal is allowed; the judgment and order of the learned single Judge quashing the notice dated 17 January 1975 are set aside, and the writ petition is dismissed. Costs are awarded to the appellant and any interim order is vacated.
Implications: The direct effect of the decision is that the Regional Provident Fund Commissioner was entitled to exercise the powers under section 14-B to levy damages and administrative charges for the delayed remittances described, even though the contested recovery was initiated several years after the dates when the contributions were due. The Court held that no limitation could be read into section 14-B where none exists in the statute. The opinion does not purport to lay down any new or broader precedent beyond applying established authority (notably the Supreme Court's approach in Bombay Gas Co. Ltd. v. Gopal Bhiva) to reject the introduction of a judicially-created limitation and to affirm that a decision-maker's concise reasoning may be adequate where pleadings or representations are vague and do not contest the quantum claimed.
Note: This summary is strictly confined to the matters discussed in the provided opinion and does not add or infer facts or legal propositions beyond the text of the judgment.
Yashoda Nandan, J.:— This special appeal by the Regional Provident Fund Commissioner, U.P, Kanpur, is directed against the judgment and order of a learned single Judge allowing a writ petition at the instance of M/s. Allahabad Canning Company. Bamrauli, Allahabad, which was directed against an order under section 14-B of the Employees' Provident Fund and Family Pensions Act, 1952 (hereinafter referred to as the Act), directing the recovery from the respondent certain amount of damages and administrative charges.
2. The Respondent-Company is covered by the provisions of the Act and the Employees' Provident. Pensions Scheme is applicable to it. Admittedly it made defaults in making deposits it was required to make under the Act and the Scheme framed thereunder for periods commencing June, 1964 and ending March, 1970.
3. As a consequence by a notice dated 20th August, 1973, under the signature of the Accounts Officer of the Regional Provident Fund Commissioner, Uttar Pradesh, the respondent was intimated that since it had delayed remittance of certain dues under the Act for periods during the years, 1964 to 1970, an amount of Rs. 7830.65 p. was recoverable from it as damages for the delayed payments and a further amount of Rs. 382.20 p. on account of administrative charges. The annexures to the notice disclosed in detail the dates of deposits made by the respondent. The notice required the respondent to show cause as to why the amounts disclosed in the notice be not recovered from it and gave it an opportunity of raising any objection to the demand within a period of 15 days from the receipt of the notice. This notice was replied to by the respondent by means of a letter dated 28th September, 1973, addressed to the Governor of Uttar Pradesh, Lucknow. It was stated in the reply by the respondent that it had already paid the contributions due to the Provident Funds Scheme and the administrative charges accrued on the same uptodate. It was, however, contended that due to some unavoidable circumstances and owing to some financial difficulties the payments were delayed. It was further stated that the delays had not been caused due to deliberate and wilful neglect of the employers. The contention was raised that since the employees had already paid the requisite contributions along with administrative charges for the period commencing June 1964 and ending March 1970 and the amounts had also been accepted and credited to the Funds Account there remained no default and as such legally no damages could be levied or recovered from the employers. It was further stated that damages aforesaid having been levied at a very late and belated stage by the authority concerned, according to principles of natural and social justice such damages could not be recovered. It appears that on behalf of the Provident Fund Commissioner, Uttar Pradesh, some reply dated 11th September, 1973, was again sent to the respondent which is not to be found on the record. However, on the 28th September, 1973, another letter was addressed by the Manager of the respondent concern in response to the notice dated 20th August, 1973, to the effect that it had already made a representation to the Governor of Uttar Pradesh, who was the appropriate authority praying for redress of its grievances. It was prayed that further proceedings be stayed till the Governor had given his decision. By a letter dated 18th February, 1974, the Regional Provident Fund Commissioner, Uttar Pradesh, apparently in response to the letter dated 28th September, 1973, of the Manager of the respondent informed it that the Act had been amended and the State Government was no longer the competent authority under section 14-B of the Act. By means of this letter the respondent was once again given an opportunity to represent its case in writing or in person for consideration by the Regional Provident Fund Commissioner within 30 days of receipt failing which it was stated further necessary action would follow. The respondent, however, persisted in treating the State of Uttar Pradesh as the appropriate authority under section 14-B of the Act and again on 12th April, 1974, addressed a representation to the State of Uttar Pradesh through the Secretary, Labour Department, U.P Contentions similar to those raised earlier in the letter dated 28th September, 1973 were raised. Failing to get relief from the State Government the respondent ultimately on 14th December, 1974, addressed a letter to the Regional Provident Fund Commissioner, U.P, praying that the damages proposed to be levied against the respondent be waived. It was prayed that the respondent may be given an opportunity of being heard and explaining the correct facts and legal position. The facts and legal position set out in this communication were again identical with those contained in the representation dated 28th September, 1973. Again, the excuse was taken that the required deposits had not been made on account of ‘some unavoidable circumstances’ and owing to ‘some financial difficulties’ and that delay had not been caused due to deliberate and wilful neglect of the employers. Ultimately, on the 17th January, 1975, the Regional Provident Fund Commissioner, Uttar Pradesh, communicated to the respondent that the representation made by it had been duly considered but it was regretted that the pleas advanced for delays in the remittances under the Act and the Scheme framed thereunder could not be accepted. The notice went on to state that in exercise of powers conferred on the Regional Provident Fund Commissioner, Uttar Pradesh, under section 14-B of the Act, it is directed that a sum of Rs. 7830.65 P. in Employees' Provident Fund Account No. 1 and Rs. 302.20 only in Employees' Provident Fund Account No. II, be levied as damages on the respondent for the belated remittance of the dues under the Act and the Scheme framed thereunder for the periods commencing from June, 1964 and ending March, 1970. The respondent was directed to remit the said amounts to the respective Employees Provident Fund Account maintained at the State Bank of India within 30 days from the date of the letter, failing which action was threatened to be taken under section 8 of the Act to recover the amounts in the same manner as arrears of land revenue without further notice.
4. Aggrieved by the action of the Regional Provident Fund Commissioner, U.P, the respondent no. 1 filed a writ petition in this Court. The learned single Judge of this Court, who heard the wait petition allowed it and quashed the notice dated 17th January, 1975.
5. The learned Judge quashed the proceedings against the petitioner and the notice dated 17th January, 1975, on two grounds only. It was firstly held by the learned Judge that since the dues the payment of which were alleged to have been delayed were for the period commencing from June, 1964 and ending March 1970, action against the petitioner under section 14-B of the Act as late as in January 1975 was illegal. For the view taken by him the learned single Judge relied upon decision of the Punjab High Court in Amin Chand & Sons v. State of Punjab (1). It was further held that action under section 14-B was in the nature of a quasi-judicial proceeding and since the notice impugned was not a speaking order it was liable to be quashed.
6. Aggrieved by the decision of the learned single Judge, the Regional Provident Fund Commissioner, U.P, Kanpur, has appealed.
7. We have heard learned counsels for the appellant as well as learned counsel for the respondent, and in our view the reasons given by the learned single Judge for quashing the notice dated 17th January, 1975, are unsustainable and this special appeal has consequently to be allowed.
8. As far as the first point decided by the learned single Judge is concerned, we find ourselves in disagreement with the views expressed in Amin Chand and Sons v. State of Punjab, (supra). section 14-B of the Act does not provide any limitation during which action against an erring employer can be taken for delayed deposits under the Act. In the absence of any bar of limitation, in our opinion there is no principle of law which debarred the Provident Fund Commissioner from exercising the statutory powers available to him under section 14-B of the Act. In this connection, reliance has been placed by the learned counsel for the appellant on the decision of the Supreme Court in the Bombay Gas Co. Ltd. v. Gopal Bhiva, (2) wherein it was observed that:—
“It seems to us that where the legislature has made no provision for limitation, it would not be open to the courts to introduce any such limitation on the 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. Mr. Kohal no doubt emphasised the fact that such belated claims made on a large scale may cause considerable inconvenience to the employer, that is a consideration which the Legislature may take into account, and if the Legislature feels that fair play and justice require that some limitation should be prescribed, it may proceed to do so. In the absence of any provision, however, the Labour Court cannot import any such consideration in dealing with the applications made under section 33-C (2).”
9. In this case the Supreme Court was called upon to decide as to whether an order in proceedings under section 33-C (2) of the Industrial Disputes Act could be made when the application had been presented eight years after the amount fell due. The view taken by the Supreme Court in the above mentioned decision was further followed by it in Chief Mining Engineer East India Coal Co. Ltd. v. Rameshwar (3), and the Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli (4).
10. The second reason which prevailed with the learned Judge was, as already stated, that the notice dated 17th January, 1975, did not give reasons for rejecting the representation made by the respondent in response to the show cause notice issued to him. We are not impressed with the submissions made by the learned counsel for the respondent in support of the view taken by the learned single Judge. In its reply the respondent did not challenge the correctness of the amounts demanded by means of the show-cause notice dated 20th August, 1973, addressed to the Prabhandak of the respondent. It appears that the notice was accompanied by some annexures which contained details and the manner in which the amounts claimed as recoverable were worked out and also showed the dates when the delayed deposits had, in fact, been made by the respondent. The annexures have not been filed along with copy of the notice and are not available for our perusal. However, in view of the fact that the respondent did not raise any dispute with regard to the quantum of the amount considered recoverable it must be assumed that he was satisfied that the amounts were not unreasonably claimed. The only reply given by the respondent to the show-cause notice issued to it was that on account of financial stringency and some other unavoidable reasons it had been compelled to make the payments after delay. The details of the so-called unavoidable circumstances and the nature of the financial difficulties were not disclosed at all in the representation given by the respondent to the show-cause notice. Under the circumstances, the finding given by the Regional Provident Fund Commissioner that the plea advanced by the respondent was untenable was, to our mind, a sufficient compliance with the requirements of a reasoned order. To the vague nature of objections raised by the respondent, we find it difficult to understand as to what other reasons could conceivably have been given. The reasons expected to be recorded in a speaking order must necessarily depend on the nature of contentions raised in reply to the show-cause notice.
11. For the reasons given, we allow this appeal, set aside the order and the judgment of the learned single Judge and dismiss the writ petition with costs to the appellant. The interim order, if any is hereby vacated.
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