D.B.Dutta, J. - (1.) An order dated 31.7.96 passed by the Regional Provident Fund Commissioner levying damages against the petitioner company under section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the Act) for the failure of the petitioner company to deposit on time (i) Provident Fund Contributions under section 6 of the Act read with para 38 of the Employees' Provident Fund Scheme 1952, (ii) Family Pension Fund Contributions under section 6A of the Act read with para 9(1) of the Employees' Family Pension Scheme 1971, (iii) Employees' Deposit Linked Insurance Scheme Contributions under section 6C of the Act, (iv) Administrative Charges under para 38 of the Employees' Provident Fund Scheme, 1952 and (v) Administrative Charges on Deposit Linked Insurance Scheme under section 6C of the Act for the months of September 1978 to October 1988 excepting the months of March 1987 to April 1988, forms the subject matter of challenge in the instant writ application.
(2.) The petitioner's case, in substance, may be stated as follows. The Petitioner company was running its business at a loss during the period from 1971 to 1983 and the amount payable by the petitioner towards provident Fund due fell into areass with effect from September 1982 to the tune of Rs.2,08,000/- and odd. The respondent by issuing a requisition dated 20.7.84 informed the petitioner that he had advised the Collector and the Certificate Officer, Darjeeling, to initiate certificate proceeding for recovery of the said arrears. The respondent also initiated criminal proceedings being G.R. case Nos. 210 to 213 of 1984 under section 14,14A and 14(1)A of the Act as also proceedings for levy of damages for late payment of Provident Fund dues against the petitioner. The petitioner then moved the High Court under Article 226 of the Constitution and in the year 1995 obtained an order from the High Court for payment of the aforesaid arrears by monthly instalments and also for stay of all the aforesaid proceedings. Out of the said arrears the petitioner had made payment to the extent of Rs. 1,61,000/- and odd together with current Provident Fund dues upto April 1986 leaving an outstanding balance of Rs. 46,786/-. A further sum of Rs. 8.03.069/- fell into arrears towards the Provident Fund dues for the period from July 1986 to April 1988. The arrears thus totalled Rs. 8,49,855. The Board of Directors of the petitioner company was re-constituted in April, 1988 and since May, 1988, Provident Fund dues are being paid by the petitioner regularly. The respondent by issuing another requisition dated 23.12.88 threatened to take steps against the petitioner for realisation of the total amount of arrears to the tune of Rs. 8,49,855/- due for the period from July 1986 to April 1988 whereupon the petitioner again moved the High Court by filing another writ application in the year 1989. The said application was disposed of by the High Court by its order dated 30.1.89 by granting 30 equal monthly instalments in payment of the said arrears and also for payment of interest @ 11 % for the period of default, with a direction upon the respondent not to initiate or proceed with any criminal or certificate proceeding against the petitioner in case the petitioner goes on paying the monthly instalments subject to the condition that the stay of the said proceedings would stand vacated and the respondent would be at liberty to take steps in case of default in payment of any two instalments and/or current dues. The respondent thereafter by its third requisition dated 2.3.93 called upon the petitioner to produce challans so as to show that the payment of interest as directed by the High Court by order dated 30.1.89 was made in full. The petitioner then moved the High Court for the third time on filing a writ application in May, 1993. The High Court passed an interim order on 14.5.93 in the said writ application directing the respondent to maintain status quo with regard to demand made by him. The said interim order was extended from time to time by orders dated 4.6.93, 9.6.93, 30.6.93 and 20.7.93 and finally the writ petition was disposed of by the court by its order dated 8.10.93 which is as follows : "The subject matter of dispute in the writ petition relates to the payment of interest on the arrears paid earlier. It is the petitioner's case that a sum of Rs. 3213.15 p. is due as such interest to the respondents. The petitioner is directed to deposit the said amount with the RPFC without prejudice to his rights and contentions. The RPFC is directed to hear the petitioner on the question of interest and the payment made by him will be subject to the final decision that may be taken by the RPFC upon proper scrutiny and adjudication. Since no affidavit in opposition has been used the allegations contained in the writ petition will not be deemed to have been admitted. The writ petition is thus disposed of. There will be no order as to costs." The petitioner thereafter received a notice dated 16.4.96 of initiation of a proceeding under section 14B of the Act for levying damages for default in the payment of dues payable under the provisions of the Act and the schemes framed thereunder for the period from September 1978 to October 1988 and in response to that notice submitted its written objection on 23.7.96.
(3.) Upon hearing the petitioner, the respondent Commissioner passed the impugned order levying the damages amounting to Rs. 14,69,528/- for the periods from September 1978 to February 1987 and May 1988 to October 1988, in exercise of his powers conferred by section 14B of the Act read with Government of India, Ministry of labour, Notification No. SC 548(B) dated 16.10.73. In levying the damages the respondent No.2 observed that the petitioner was a chronic defaulter and that the default extended upto thousand days on many occasions. He relied on the Supreme Court decision in the case of Organo Chemical Industries reported in AIR 1978 SC 1603 wherein it was held that the damages leviable under section 14B are both compensatory and penal. The respondent Commissioner also relied on another Supreme Court decision reported in 1995 (I) LLJ 574 setting aside the decision of the Bombay High Court in the case of K.T.Rolling Mills reported in 1993 LAB I.C. 1466 which laid down the proposition that the proceeding under section 14B is to be initiated within a reasonable time. The petitioner took the plea before the Commissioner that the delay in payment of the dues related to the period during which the present management of the company was not in possession of the property and the Commissioner negatived the plea holding that this ground could not absolve the petitioner of its liability to pay the penalty. The respondent Commissioner also assigned the reasons for the delay that was occasioned in initiating the proceeding under section 14B. The delay according to the impugned order, was not intentional and was caused by the petitioner by reason of its having moved the High Court on different occasions necessitating production of files and papers before the court. Moreover, according to the impugned order, although the account was being maintained by the office of the petitioner as Siliguri and as per provisions of the Scheme, deposits were supposed to be made at the place where the factory was situated, the fact that the deposits were made in Calcutta at their sweet will resulted in extreme problem in compiling the figures and this constituted one of the major reasons for the delay initiating the said proceeding.;