Decided on March 27,2006



Arijit Pasayat, J. - (1.)Challenge in this appeal is to the judgment rendered by a Division Bench of the Punjab and Haryana High Court holding that the appellant was required to pay damages in terms of Section 14(B) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (in short the Act) amounting to Rs.14,50, 172/-.
(2.)Brief reference to the factual aspects would suffice:- The appellant, an educational institution was affiliated to the Education Department to the Haryana Government. A scheme of contributory provident fund was in operation which was under the control and guidance of the Haryana Government and same was being applied to the appellant-institution. Under the said scheme of contributory provident fund it was mandated that an account shall be opened in the name of each subscriber in a Co-operative Bank approved by the Registrar, Co-operative Societies, Haryana. Appellant transferred its affiliation to Central Board of Secondary Education (in short CBSE) in April, 1984 after obtaining no objection certificate from the State Government. As per C.B.S.E. bye-laws, appellant was required to follow the State Government Rules regarding salary and service conditions of its staff members. Accordingly, the scheme of contributory provident fund which was earlier being followed by the appellant, continued to be operative. On being asked by the Regional Provident Fund Authorities the scheme under the Act was adopted by the appellant w.e.f. 1-7-1993; but the same was made operative retrospectively w.e.f. August, 1982 by the authority. Thereafter in respect of each employee the provident fund contributions were deposited with the Regional Provident Fund Commissioner. The accumulated balance in the contributory provident fund accounts of the various employees was transferred by the Department of Education, Haryana to the Employees Provident Fund Scheme under the Act in May and June, 1995 and an amount of Rs. 17,33,914.60 was transferred by the Haryana Government. On 5-2-1996, proceedings under Section 7(A) of the Act were initiated. Taking into account the amount payable on assessment and giving credit to the aforesaid amount, it was held that there was extra deposit of Rs. 44,031.85. Therefore, the proceedings were dropped and no recovery was effected. On 14-2-1997 notice under Section 14(B) of the Act was issued covering the period August, 1982 to June, 1993. Reply was furnished by the appellant taking the stand that since the deposit had been made with the Government Authorities in terms of the applicable scheme, there was no scope of levy of any damage. However, the Commissioner imposed damages of Rs. 14,50, 172/- which was about 100% of the alleged amount of default. For the purpose of levy reference was made to the table contained in Section 32A. An appeal was filed before the Statutory Tribunal, i.e. Employees Provident Fund Appellate Tribunal, New Delhi (in short the Appellate Tribunal). In appeal it was held that there was no default in view of the circumstances noted above. A writ petition was filed challenging the order before the High Court taking the stand that there was no power to waive/reduce the damages except in terms of the circumstances indicated in Section 14(B) (proviso). The High Court placed reliance on a decision of this Court in Regional Provident Fund Commissioner vs. S.D. College, Hoshiarpur and others (1997) 1 SCC 241) and held that the penalty as levied by the Commissioner were to be maintained.
(3.)In support of the appeal learned counsel for the appellant submitted that there was absolutely no remiss on the part of the appellant which had scrupulously followed the scheme of the State Government. There was a transfer of the amount which would show that by no stretch of imagination it can be conceived that there was any default, muchless intentional. It was pointed that S. D. Colleges case (supra) has no application to the facts of the present case. In that case the college in question continued to deposit the amount with the university in spite of the directions of this Court, and there the quantum of damages was reduced to 25%.

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.