JOSTS ENGINEERING LIMITED BOMBAY Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition impugns the order of the Regional Provident Fund Commissioner, Maharashtra (the second respondent) levying damages against the petitioner under the provisions of S. 14B of the Employees Provident Funds & Miscellaneous Provision Act, 1952.

(2.) It is an admitted position that the petitioners were guilty of delays in making payments of contributions to the provident fund, the family pension fund and for administrative charges under Act. On 22nd January, 1975 an Inspector from the office of the second respondent visited the petitioner and recorded the delays. On 12th February, 1975 the petitioners wrote to the second respondent claiming that they had been in financial and administrative difficulties and that was why the contributions had been delayed. On 4th February, 1978 the second respondent served the petitioners with a show cause notice dated 28th January, 1978. The show cause notice stated that the second respondent proposed to levy damages against the petitioners as specified in the statement accompanying it. The statement gave, columnwise, a break-up of the periods for which damages were due, the amounts which were due, the dates on which they had become due, and were paid, the period and number of defaults, the percentage on which the damages were calculated and the amounts of damages. In the aggregate, the second respondent proposed to recover damages in the sum of Rs. 2,60,682.35. On 16th February, 1978 the petitioner showed cause stating that monetary and administrative difficulties had caused the delays, they requested that the delays should be condoned and damages should be waived. On 7th June, 1978 the petitioner were heard. On 8th August, 1978 the impugned order was passed. The order recorded that the petitioner had failed to pay in time the aforesaid contributions for the months of March 1974 to November 1976. A show-cause notice had been served and a personal hearing had been given. The petitioner had raised contentions about monetary and administrative difficulties. The second respondent had applied his mind to all the relevant facts and had gone into the reasons stated by the petitioners in reply to the show-cause notice and at the hearing. He found that administrative difficulties could not override the petitioners' statutory obligations and damages could not be waived merely because the petitioners had incurred losses. The loss of interest caused to the provident fund and the need that employers deposit statutory dues in time in future were of more importance. The order said :

(3.) This petition was filed on 30th March, 1979. It challenges the order on various grounds, of which two have been pressed before me. It was contended by Mr. Damania, learned Counsel for the petitioners, that the order was not a speaking order and did not indicate what potion of the damages levied was allocable to the head of actual loss and what was allocable to the head of punitive damages. In Mr. Damania's submission, it was incumbent upon the second respondent to have applied his mind to this aspect and to state such allocation in the order. Mr. Damania placed great emphasis upon the judgment of the Supreme Court in Organo Chemical Industries and another v. Union of India and others [1979-II L.L.J. 416]. I shall have an occasion to refer to this judgment in some detail.