POPULAR SAW MILLS Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) In this writ application under Article; 226 of the Constitution the petitioner has challenged the order dated 11.5.88 passed by the Regional Provident Fund Commissioner-respondent No. by Annexure-XIII and also notices of demand dated 12.5.88 and 27.4.89 (Annexure-XIV & XV) of the writ petition and prays for issuance of appropriate writ or direction.

(2.) The facts of the case for the purpose of this Civil Rule may briefly be stated as follows : Shri Hemraj Agarwala is the proprietor of a saw mill known as "Popular Saw Mills." This proprietorial concern was converted into a partnership firm with other partners, namely, Onkarmal Agarwala and Smti. Sushila Devi Agarwala, Partnership business continued upto 31.3.88. But, thereafter it became a proprietorial concern of which Shri Hemraj Agarwala was the sole proprietor on and from 1st April, 1988. During the period of partnership particularly during the period from 1979-80 some of the employees wanted to have the benefits of the Provident Fund and Miscellaneous Provisions Act of 1932 (for short, the Act) and its schemes. Accordingly, there was a discussion between the employer and the employees about the scope of such benefits and the employees had expressed their willingness to contribute from their salaries. The number of employees working therein was less than 20 and the name of the industry was also not included in Schedule-I of the Act. The provisions of the said Act was not applicable under the proviso to Section 1, Sub-sections (1), (2) and (3). However, as the majority of the employees were willing to contribute their shares from their salaries, the employer also agreed to pay the share of the contribution from the employer. An application along with the consent form was filled in and signed by the willing employees before the Regional Provident Fund Commissioner -respondent No. 1 with a request for issuing a notification under Section 1 (4) of the Act to enable the willing employees to get the benefit of the scheme of the Act. The 1st respondent by Annexure- III dated 21.1.81 informed the said saw mill that the Act was made applicable to the establishment of the saw mill with effect from the 1st of January, 1980 subject to the conditions that the voluntary coverage as prayed for would be considered on satisfactory compliance of the establishment with the statutory provisions of the aforesaid Act and the scheme framed therein and accordingly, directed to deposit all the dues and submit all the returns from January, 1980 onwards failing which the prayer for coverage under Section '1 (4) would not be acceded to. The letter was received by the petitioner's said mill in the last week of January, 1981 and as per the direction given therein the petitioner was to realise the share of the contribution from the employees and to prepare a return and deposit the amount along with the share of the employee.

(3.) Monthly, emolument of the employees of each employees varies and, therefore, sufficient time was necessary for preparation of the return. Besides, the letter dated 21.1.81 was sent with a direction to deposit the money for the month of January. Order itself will indicate that from the date of passing of the said order there was a backlog of 13 months. The petitioner came to know about the acceptance of their prayer only in the last week of January, 1981 and the petitioner was required to prepare the returns of all the 13 months. Thereafter, returns for the months of January and February, 1980 were submitted on 20th of April, 1991 after depositing the required amount by challans in the State Bank of India. Similarly, for the months of March and April were submitted on 20.4.81. Those of May, June and July, 1980 were submitted on 29.4.81. Being backlog of 13 months at the very beginning the petitioner tried its level best to clear up the backlog and by 2nd of February, 1983 almost cleared all the backlogs clearing upto the month of July, 1982. During the period of 1983-84 and 1985 the functioning of the mill was very irregular. Because of frequent bandhs called by the AASU in connection with the Assam movement, mill could not function properly and as a result mere had been delay by one or two months in the submission of returns and depositing the required amounts. However, the petitioner continued to deposit the amounts months after months even though there had been some delay. Dues for the month of August, 1985 which was normally to be paid in September was, howver, deposited in time. Show cause notice dated 30.4.86 was issued as to why the damages should not be imposed and to appear before the 1st respondent on 27.5.86 But the said notice was received after the date fixed. Ultimately the 1st respondent by his letter dated 11.5.88 levied a damage to the tune of Rs. 17,403.93 with a direction that the amount should be paid within 15 days from the date of receipt of the order. Thereafter, the 1st respondent issued yet another notice dated 12.5.88 directing the petitioner to deposit the amount of damages within 20 days from the date of receipt of the said order. The Provident Fund Commissioner while passing the aforesaid order dated 11.5.88 did not consider all the aspects pointed out by the representative of the petitioner and failed to consider the submissions made on behalf of the petitioner. Petitioner further states that from the very beginning the number of employees were below 20 and in some cases the number went down to 5 and the existing employees are not interested to contribute to their provident, fund. The petitioner, therefore, informed the Regional Provident Fund Commissioner and prayed for cancelling the order for payment of damages. Petitioner further states that the impugned order was illegal without jurisdiction inasmuch as there could not be a default or delay in payment of the contribution to the Provident Fund before the date of granting permission by order dated 21.1.81 and the 1st respondent in fact imposed damages calculating from the date more than a year before the date of permission which was in violation of the law. By Annexure-XIII the Regional Provident Fund Commissioner of N.E. Region levied an amount of Rs. 17,403.93 as a total amount of damages for the period from January, 1982 to August, 1985. The Regional Provident Fund Commissioner-respondent No. 1 did not mention how the amount of Rs. 17,403.93 was assessed as damage. While passing the impugned order the 1st respondent did not consider the reason for delay.