REGIONAL PROVIDENT FUND COMMISSIONER Vs. SUNDERGARH MINING LABOUR CONTRACT COOPERATIVE SOCIETY LTD.

JUDGEMENT

(1.) The petitioner, which is an authority under the provisions of Employees' Provident Funds and Miscellaneous Provisions Act, 1952, has filed this application challenging the order dated 27.01.2000 in Annexure-3 passed by Employees' Provident Fund Appellate Tribunal in Appeal Case No. ATA-10 (15) 99 setting aside the order dated 04.08.1999 passed under Section 14-A imposing penal damages and remitting the matter back to the petitioner for reassessment of the damages in the light of the observation made therein.

(2.) The factual matrix of the case is that opposite party no.1-Sundergarh Mining Labour Contract Cooperative Society Ltd. is an establishment covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short "EPF and MP Act, 1952") and carries on business of mining limestone at Purunapani. As per Para-38 of the Employees' Provident Funds Scheme, 1952 (for short "EPF Scheme, 1952"), provident fund contributions are to be paid within 15 days of the claim of every month by deducting the employees' contribution realized from the wages paid along with employer share. If the employer makes any default in payment of contribution, he is liable to pay penal damages under Section 14B of the EPF and MP Act, 1952. Para-32A of the EPF Scheme, 1952, which was introduced in 1991, envisages the rate of penal damages to be imposed for different period of delay. The rate has been so fixed in Para-32A in order to curb the imposition of 100% damages in all cases irrespective of the period of delay and this provision also left no discretion with the Regional Provident Fund Commissioner to go below the rates, which are fixed for imposition of penalty on an employer, who recovers from employees' share but does not deposit the same within time specified.

(3.) Mr. S.K. Pattnaik, learned Senior Counsel appearing along with Mr. N.C. Mohanty, learned counsel for the petitioner vehemently contended that the rate of penal damages to be imposed in exercise of power under Section 14B of the EPF and MP Act, 1952 as per Para-32A of the EPF Scheme, 1952 and, as such, neither the Regional Provident Fund Commissioner nor the appellate tribunal has any discretion to vary the said rates fixed by the Central Government. When the appellate tribunal held that the employer is liable to pay the damages for delayed payment of the contribution, the direction to confine the rate of penal damages to 5% in addition to the interest accrued on the amount of default, without realizing the period of delay in depositing the contribution, is contrary to the provisions contained in Para-32A of the EPF Scheme, 1952. As such, the plea, that there was delay in payment of bills by the purchasers of limestone from opposite party no.1, should not have been accepted in absence of any proof. Thus, the conclusion arrived at by the tribunal cannot sustain in the eye of law and, as such, the order impugned passed by the appellate tribunal is liable to be quashed. In order to substantiate his contention, he has relied upon the judgments of the apex Court in Regional Provident Fund Commissioner v. S.D. College, Hoshiarpur, AIR 1997 SC 3645; M/s Hindustan Times Ltd. v. Union of India and others, AIR 1998 SC 688; and Chairman, SEBI v. Shriram Mutual Fund, AIR 2006 SC 2287.