KHODIYA SYSTEMS LTD Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THESE petitions have been taken up together for disposal as common question of law is involved. In these petitions, petitioners have sought to declare S. 7 Q of the Employees provident Fund and Miscellaneous Provisions Act, 1952 as unconstitutional and violative of Art. 14, 19 (1) (g) and 20 (1) of the Constitution and to strike down the provisions of S. 7 Q of the act in the matter of levying rate of interest for the delay in payment of contribution being violative of principles of natural justice, discriminate arbitray and unreasonable and to quash the order passed by the 1st respondent under S. 7 Q of the Act and for issuance of a writ of mandamus directing the respondent to consider the hardship and to cancel the interest imposed as per s. 7 Q of the Act and for such other orders.

(2.) FACTS will be referred to in respect of WP 34582/2002. Petitioner is a company incorporated under the provisions of the companies Act having commenced its activities in the field of software development in August 1999. Petitioner is said to have voluntarily approached for the coverage of the establishment as per the provisions of the Act and is said to have made arrangements to pay contribution on 18. 3. 2000. According to the petitioner, it being a new establishment, has taken sufficient time to settle down in its business and the petitioner was able to remit the contribution only on 4. 8. 2001 and 24. 4. 2001 in respect of the contribution payable for the period from 20 March 2000 to 20th March 2001 due to shortage of funds. However, thereafter petitioner is said to have paid the contribution regularly. Meanwhile, the respondent authority is said to have initiated proceedings under S. 14 B of the Employees Provident Fund and miscellaneous Provisions Act ('act' for short) having issued a show cause notice on 3. 5. 2002 proposing to levy damages for the delay in payment of contribution for the period from 1999-2000 to 2000 to 2002 to which, the petitioner furnished an explanation vide letter dated 3. 6. 2002 and also requested the respondent not to levy any damages, but the impugned order at annexure-B dated 17. 6. 2002 came to be passed having imposed damages of rs. 9,16,503 and levied interest in sum of Rs. 3,11,811/- at the rate of 12% p. a. for the delayed remittance of contribution as per annexure-D. Hence, this petition.

(3.) HEARD the counsel for the petitioners and the Learned counsel Sri Ashok Haranahalli representing the Provident Fund commissioner.