SUPREME TYRES PVT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) IN this writ petition, the petitioner is questioning the validity of the proceeding and order dated October 22, 2003 under Section 14-B of the Employees' Provident Fund and miscellaneous Provisions Act, 1952 ("the Act" for short) issued by the Assistant Provident fund Commissioner, Sub-Regional Office, shillong (the respondent No. 3) and of the order dated June 15, 2004 passed by the Regional provident Fund Commissioner, North Eastern region, Guwahati, affirming the said proceeding and order of the respondent No. 3.

(2.) THE facts giving rise to this writ petition may be briefly noticed at the very outset. The petitioner is a private limited company, having its registered office at Shillong, and is engaged in the business of retreading motor tyres and is a franchisee of MRF Pretreads with its factory at umbrang, Sumer, East Khasi Hills. According to the petitioner, by the letter dated August 2, 1998 (Annexure-1) issued by the respondent no. 3, the firm was brought within the purview of the Act with effect from April 1, 1998 and called upon it to pay the dues under the Act from april 1, 1998 onwards. However, by the letter dated March 24, 1999 (Annexure-2), the respondent No. 3 informed the petitioner that on further inspection of the factory, the coverage for payment of Fund was being shifted to March 1, 1991 instead of April 1, 1998 and accordingly required it to pay all the dues commencing from March 1, 1991 to march 31,1998 within 15 days of the receipt of the letter. It would appear that subsequently, on the prayer of the petitioner, the case was finally decided as evident from the order dated december 15, 2000 whereby the dues were assessed at Rs. 3,36,841/-, which, according to the petitioner, were in the nature of damages and penalty. The petitioner apparently cleared these dues by three instalments, which also included interest payable under Section 7-Q of the Act and assessed at Rs. 36,091 / -. However, to the misfortune of the petitioner, the matter apparently did not end there as will appear hereafter.

(3.) WHEN the petitioner thought that his ordeal was over, the respondent No. 3 slapped a fresh liability by the impugned proceeding and order requiring it to pay damages by way of penalty under Section 14-B of the Act amounting to Rs. 2,82,392/-due to its "persistent and continuous default" in remitting the dues payable from March 1, 1991 to March 31, 1998. The petitioner preferred an appeal from this proceeding and order before the respondent No. 2 with a prayer to keep the recovery proceeding in abeyance and recall the earlier orders for realization of the said penalty. When this appeal was dismissed by the respondent No. 2, the petitioner is filing this writ petition. It is the case of the petitioner that in the year 1973, a firm under the name and style of Shillong City Bus Syndicate had challenged the applicability of the Act before this Court in civil Rule No. 82/1973 contending that the notice memo issued by the Regional Provident fund Commissioner, NER, alleging non-payment of the Fund was without authority of law and jurisdiction of the ground that the act was not applicable to the Autonomous district of Khasi Hills; that a Full Bench of this court upheld the contention of the firm, but the same was overturned by the Apex Court in the decision rendered on March 27, 1996 Regional provident Fund Commissioner v. Shillong City bus Syndicate AIR 1996 SC 1546 : (1996) 8 scc 741 : 1996-II-LLJ-753 that it was only after this decision that the petitioner became liable to pay the dues under the Act and that the decision of the respondent authorities to impose penalty, on the facts and circumstances of the case, is arbitrary, illegal unfair and unjust. The case of the respondents, on the other hand, as evident from the affidavit-in-opposition filed by them, is simple, that is, non-payment of statutory dues within the stipulated time attracts the penal provisions under Section 14-B of the act and due to the failure of the petitioner to make timely deposit of their liabilities, no investment could be made in a profitable fund thereby depriving the Trust Fund to earn interest for payment to the employees of the petitioner, it is the further contention of the respondent that the pendency of the writ petition from 1973 to 1996 questioning the applicability of the Act to this part of the country did not have the effect of wiping out the liability of the petitioner-firm to pay its contribution; the liability to pay was merely postponed and became operative once the Apex court upheld the applicability of the Act. Being devoid of merit, it is so contended, the writ petition is liable to be dismissed.