EMPLOYEES PROVIDENT FUND Vs. SPORTKING INDIA LTD

JUDGEMENT

(1.) THE two writ petitions relate to the legitimacy of levy under Provident Fund Commissioner for damages for delayed remittances under Section I4 -B of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The Tribunal in an appeal filed under Section 7(1) of the Act held that the management had been labouring under a belief that they were entitled to Infancy Protection period from the date when the establishment came into being and when the demand was made on 22.05.1998, the respective management did not contest any further but made the remittance even within 15 days namely on 5th June, 1998. The Tribunal therefore held that there had been really no delay and waived the requirement of damages.

(2.) THE writ petitions have been filed by the Provident Fund Commissioner assailing the respective orders of the Tribunal granting to the respective establishments the exemption from payment of damages. In both the writ petitions, the directions of the Tribunal are to set aside the damages for the delayed remittances for the period from December 1993 to September 1994 and directions for consideration of the damages for the period from June 1997 to July 1997. These two orders are challenged on the ground that a power of grant of a complete waiver of damages is not available to the Tribunal exercising his powers under the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.

(3.) THE learned Counsel appearing for the petitioner points out that even apart from the liability to pay interest which is covered by the provisions of the Section 7(q) of the Act against which liability, there is no provision for an appeal under Section 7(1), a determination of damages which is assessed under Section 14 -B could be assailed in an appeal under the provisions of Section 7(1). The liability for payment of damages and the extent of damages are respectively governed under the provisions of Section 14 -B of the Act and clause 32 -A of the Employees' Provident Fund Scheme (hereinafter called 'the scheme'). The contention of the learned Counsel Shri Kamal Sehgal is that in terms of the language under Section 14 -B, the power of the authority to impose a penalty for delayed remittance shall be in the nature of damages as provided under the scheme and the only limitations to such power are two -fold: (i) the employee shall be given a reasonable opportunity of being heard; and (ii) when the establishment comes within the purview of a rehabilitation scheme under SICA, the Central Board may reduce or waive the damages. This power to waive damages is available only to the Central Board and that too on a contingency of the establishment being declared as a sick company to which the provisions of SICA were applicable. The discretion to waive the liability of damages could again extend only to the limit of damages that could be imposed, the outer limit having been prescribed under clause 32 -A of the scheme.