THANDAVA CO OPERATIVE SUGARS LIMITED Vs. REGIONAL PROVIDENT FUND COMMISSIONER ANDHRA PRADESH HYDERABAD

JUDGEMENT

(1.) The petitioner herein i.e., the Thandava Cooperative Sugars Ltd., Payakaraopeta, Tuni R.S. questions in this Writ Petition the order of the Regional Provident Fund Commissioner, Andhra Pradesh (the respondent herein) in his proceedings No.AP/1773/PD/EG/87/3914 dated 31-7-1987 levying a total sum of Rs.72,439-25 Ps. as damages for bela ted remittances under Para 30 read with Para 38 of the Employees' Provident Funds Scheme, 1952 and with Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act') on the ground that the said damages were fixed in an arbitrary manner without any rationale or reasonableness.

(2.) In the affidavit in support of the Writ Petition, on behalf of the petitioner it is stated that during the period when default was committed in making the various remittances as required by the Act and the Employees' Provident Funds Scheme, 1952 (hereinafter referred to as 'the Scheme') i.e., March, 1979 to December, 1979, January 1980 to August 1980 and January 1981 to May 1981 the petitioner "had to struggle very hard for arranging finances at various stages" and "the factory had to pass through a very critical financial position for meeting its normal commitments in its functioning with the then existing capacity unit besides meeting from time to time the project cost for the new higher capacity unit taken up for erection" and therefore was not even in a position to pay the salaries of its employees and was forced to pay some advances only to the extent its meagre resources permitted, as an alternative to avoid lay-off. On this basis, it is firstly contended on behalf of the petitioner that there was no default committed because the question of payment of contribution would arise only when salaries were paid to the employees and deductions were made towards their provident fund contribution from the salaries actually paid to them. The second contention advanced is that even assuming that contributions were to be remitted whether salaries were paid to the employees or not, the respondent ought to have taken into consideration the difficult financial position of the petitioner and ought not to have imposed any damages on the petitioner in view of the peculiar circumstances disabling the petitioner from even paying the salaries to its employees. The third contention advanced on behalf of the petitioner is that fixation of damages was done arbitrarily without any rational basis and therefore are liable to be set aside.

(3.) In support of his first contention, the learned counsel for the petitioner relied on Para 38 of the Scheme. Sub-para (1) of the said Para 38 provides that