DANDELI FERRO PRIVATE LTD. Vs. THE CENTRAL BOARD OF TRUSTEES, EMPLOYEES PROVIDENT FUND ORGANISATION AND ORS.

JUDGEMENT

(1.) The petitioner is before this Court assailing the communication/order date 26.8.2008 (Annexure-E) and the demand notice dated 08.09.2008 (Annexure-G) to the petition. The undisputed fact is that the petitioner is a Sick Industrial Company and was before the Board of industrial and Financial Reconstruction ('BIFR' for short) under Section 15 of the Sick Industrial Companies (Special Provision) Act, 1985 'CSICA' for short). During the period when the establishment was going through the financial difficulties, the amount payable towards provident fund was defaulted. In that view, the respondents in exercise of the powers under Section 14(B) of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (the 1952, Act' for short) had levied the damages. The petitioner had assailed the action of the respondents in a petition filed in W.P. (C) No. 540/2006 before the High Court of Delhi at New Delhi. The High Court of Delhi by its order dated 16.01.2006 on noticing the provisions contained in Section 14(B) of the Act, 1952 had allowed the petitioner herein to make an appropriate representation to the respondents seeking reduction or waiver of the damages that had been levied. Considering that the second proviso to Section 14(B) had vested such power with the Central Board, the petitioner had thereafter made a representation seeking waiver of the damages which had been levied to the tune of Rs. 32,34,981. The said waiver had been sought in view of the fact that the BIFR had sanctioned the scheme and if the damages are levied, the scheme would not materialize.

(2.) The Central Board of trustees on considering the representation made by the petitioner has reduced the damages to the extent of 50% and as such has made the demand for the balance of the amount to the extent of Rs. 16,40,664. It is the said order and demand which are impugned at Annexures-E and G to the petition.

(3.) The respondents have filed their objection statement. The sequence as noticed above is not disputed. The contention of the respondents however is that the power to be exercised by the Central Board of Trustees is in terms of the Clause 32B of the Employees' Provident Fund Scheme, 1952 (the Scheme, 1952' for short). In that view, it is contended that such waiver to the extent of 100% could be granted only if there is recommendation from the BIFR as provided in sub-clause (b) to clause 32B and in all other cases as contemplated under sub-Clause (c) to Clause 32B, the Central Board of Trustees has discretion only to reduce the damages up to 50% which has been done. It is therefore contended that the waiver in its entirety is not within the powers of the Central Board of Trustees. It is therefore their contention that in the instant facts, the maximum of 50% has been granted.