- (1.) THE subject matter of challenge in this writ petition is an order dated 4th december. 2008, passed by the Regional Provident Fund Commissioner assessing damages payable under Section 14b of the Employees Provident fund and Miscellaneous Provisions Act, 1952, hereinafter referred to as the said Act.
(2.) MR. Sengupta, learned Counsel, appearing in support of the writ petition, has advanced the following submissions : (a) Power to recover damages conferred by the said Act under Section 14b is in addition to the power to recover interest provided under section 7q of the said Act. He submitted that the interest for the delay made by the writ petitioner in payment of the statutory dues has been separately assessed and paid. By the order, under challenge, damages have been assessed at a sum of Rs. 27,79,020/ -. He has drawn my attention to the extent of delay made by the writ petitioner in paying the statutory dues. The pattern of delay appears to be in most of the cases less than ten days. There have been delay exceeding ten days but majority of the payments were delayed by less than ten days. He submitted that in such a case, the concerned authority had a discretion in the matter of levying damages/penalty under Section 14b of the said Act. In support of his submission, he relied on a judgment of the Apex court in the case of M/s. Hindustan Steel Limited v. State of Orissa reported in AIR 1970 SC 253. He drew my attention to Paragraph 7 of the said judgment where Their Lordships did, in fact, hint at such a proposition with regard to liability arising out of the provisions of Orissa Sales Tax Act. Paragraph 7 of the said reported judgment reads as follows : "under the Act penalty may be imposed for failure to register as a dealer: Section 9 (1) read with Section 25 (1) (a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. And order imposing penalty for failure to carry out a statutory obligation is a result of a quasi criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of misconduct, contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is technical or venial breach of the provisions of the Act or where the breach flows a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out. "
(3.) HE drew my attention to Section 7q of the said Act which provides that "the employer shall be liable to pay simple interest. . . . . . . . . . . . . " He wanted me to compare this provision with Section 14b of the said Act which confers power to recover damages by providing that the authority "may recover from the employer by way of penalty such damages. . . . " He submitted that the provisions contained in Section 14b of the said Act appear to be directory rather than mandatory. He added that the concerned authorities can, in an appropriate case, recover damages but not as a matter of rule in all cases.;