(1.) THE petitioners are a partnership firm carrying on business inter alia of calendering of cotton clothes. The first respondent is the Union of India and the second respondent is Regional Provident Fund Commissioner for Maharashra and Goa States. By this petition the petitioner seek to impugn the order dated 15th March, 1985 passed by the Regional Provident Fund Commissioner under section 14-B of the Employees Provident Funds and Mis- cellaneous Provisions Act, 1952 (19 of 1952) (hereinafter referred to as "the Act") claiming damages in the sum of Rs. 1,18,057. 60 P. for delayed payment of provident fund contributions. The impugned order is annexed at Exhibit `a to the petition. The aforesaid order was preceded by show cause notice dated 31st March, 1984 which called upon the petitioner to show cause in regard to the default committed in respect of payment of employees, provident fund contributions, the Family Pension Fund and the Deposit Linked Insurance Fund contributions. The period of default was August, 1978 to March, 1982. A copy of the show cause notice is annexed at Exhibit - A to the petition. The representatives of the petitioners appeared before the Regional Provident Fund Commissioner but did not file any reply, though it secured 10 adjournments for the purpose. Hence the impugned order levying damages was passed ex parts. Taking exception to the said order, the petitioners have preferred the present petition.
(2.) THE impugned order shows that the petitioners have committed, default in making contributions towards the aforesaid fund for the period from August 1978 to March 1982. The default consisted of delayed payments which ranged from 8 days to 2 months and 24 days. The Regional Provident Fund Commissioner has levied damages ranging from 2% to 100% of the amount in arrears. The said order is impugned on several grounds and I will presently deal with each of the grounds.
(3.) SHRI Cama, the learned Counsel appearing in support of the petition has contended that the rate of imposition of penalty is excessive and the same cannot be sustained in view of the circular dated 3rd November, 1982, Exhibit D, to the petition and the clarifications thereto dated 13th May, 1983, Exhibit-E to the petition. According to Shri Cama, the maximum rate of penalty that can be imposed under the aforesaid circulars would be to the extent of 25% of the amount in arrears. The impugned order in so far as it levies damages at a rate higher than 25% is liable to be struck down.