(1.) In Writ Petition No. 588/2012, petitioners have called in question an order of the Employees' Provident Fund Appellate Tribunal (in short Tribunal') dated 04.07.2011 produced at Annexure-D wherein the Tribunal has set aside the order of the original authority with a direction to the Provident Fund Organisation to levy the damages at the flat rate of 22%. It is against the said order of the Tribunal, the petitioner -Provident Fund Commissioner is before this court. In connected writ petitions also, similar orders are called in question. The issue raised in these writ petitions is:
(2.) The facts, which are not in dispute are that,
(3.) Sri. Harikrishna S Holla, learned Counsel appearing for the petitioners submitted that, under the provisions of the Act, the Central Government has notified a Scheme formulated for establishment of Provident Funds for employees or any class of employees by specifying the establishment or class of establishments to which the said Scheme shall apply. The Provident Fund contribution will vest with the administration constituted by the Central Government under Section 5-A of the Act. Each employer covered under the Scheme shall contribute towards the Provident Fund at the rate specified under Section 6 of the Act. However, the method of determination of the Provident Fund is contemplated under Section 7-A of the Act. If the contribution towards the Provident Fund is not made in time, the employer shall be liable to pay simple interest at the rate of 12% per annum or at such higher rate as specified in the Scheme on any amount due from him under the Act from the date on which amount had become due till the date of actual payment. However, the interest so levied shall not exceed the lending rate of interest charged by any scheduled bank. He further submitted that, in case of delayed contribution, the employer is liable to pay the penalty under Section 14 of the Act. Section 14 sub-section (1B) of the Act confers power on the organisation to levy the damage against the employer, and the employer who contravenes, or makes default in complying with the provisions of Section 6C or Section 17 sub-section (3A), shall be punishable with imprisonment for a term, which may extend to one year but shall not be less than six months and shall also be liable to fine which may extend to five thousand rupees. At the same time, the organisation is conferred with the power to recover the damage where an employer makes a default in making the contribution towards the Provident fund, the Pension fund or the Insurance fund or in the transfer of accumulations required to be transferred by him under sub-section (2) of Section 15 or sub-section (5) of Section 17 or in the payment of any charges payable under any of the conditions specified under Section 17, the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf may recover from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme.