MATHUR ALLOY STEELS PVT LTD Vs. UNION OF INDIA
LAWS(BOM)-1962-11-11
HIGH COURT OF BOMBAY
Decided on November 06,1962

MATHUR ALLOY STEELS PVT.LTD. Appellant
VERSUS
UNION OF INDIA Respondents


Referred Judgements :-

THE REGIONAL PROVIDENT FUND COMMISSIONER U.P. V. M/S.ALLAHABAD CANNING CO. [REFERRED TO]
COSMOS INDIA RUBBER WORKS P LTD VS. R P F COMMISSIONER [REFERRED TO]





JUDGEMENT

- (1.)The order dated December 8, 1986 passed by the Regional Fund Commissioner, the second respondent herein, levying damages under Section 14-B of the Employee's Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) (hereinafter referred to as "the Act") is impugned in the present petition. The order impugned shows that the damages ranging from 5% to 100% of the provident fund dues has been levied against the petitioner. The petitioners have challenged the imposition on the grounds inter alia that there has been an inordinate delay in issuing the show cause notice for levying damages has been waived and that the levy of damages over and above 25% is unjustified. In so far as the latter objection is concerned, the Government of India has by an amendment introduced a new para being para 32-A to the Employees' Provident Funds Schemes whereunder rates of damages, for different periods of default, has been laid down. The present case is, therefore, liable to be remanded back to the second respondent for reassessing damages in the light of the amended provisions of paragraph 32-A of the Scheme.
(2.)Ms. Desai, the learned Counsel appearing on behalf of the petitioners, has however contended that the period of default in the instant case is for the period May, 1974 to May 1982. The show cause notice is issued on December 22, 1984. According to Ms. Desai the show cause notice is issued after an inordinate delay. Because of lapse of time the petitioners were entitled to believe that the defaults on the part of the petitioner are condoned and the damages are waived. Ms. Desai further pointed out that prior to June, 1981 the business of the first petitioner was controlled by the fourth respondent. In June 1981 the business was transferred to the third respondent and it is only in December 1985 that the third respondent transferred the business to the second petitioner. Hence, according to Ms. Desai, the petitioners would be penalised for the acts of third and fourth respondents for which the second petitioner can hardly be held to be responsible. It would amount to visiting the second petitioner with a penalty for the defaults committed not by him by the third and fourth respondents.
(3.)Another thing which also militates against imposition of penalty is that no action had been taken against the petitioner for a long period of nine years when it committed the first default. No doubt, the Act does not provide a period of limitation but it is presumed that an action of a penal nature is contemplated in Section 14-B of the Act, must be taken as quickly as possible and within a reasonable time, otherwise the. subject is entitled to presume that default has been waived as the State Government has a power to waive the default and not to initiate proceedings, for the levy of damages."


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