MALIMATH, J. ( 1 ) THE petitioner Star Construction and Transport Co. , a registered firm of partners having its business in Bangalore, has challenged in this writ petition the order made by the Government of Mysore under S. 14b of the employees' Provident Funds Act, 1952 (hereinafter referred to as the Act), whereby the petitioner has been directed to pay damages of Rs. 12,324-50 on the ground that the petitioner has committed delay in making contribution towards the Provident Fund and administrative charges. The said order of the Government dt. 16-8-1969 bearing N. FCL 455 LPF 68 is produced in the case as Annexure II. ( 2 ) ON 21-12-1968 the Government of Mysore issued a notice to the petitioner under S. 14b of the Act requiring the petitioner to show cause why a sum of Rs. 18,938-15 should not be recovered as damages on the ground that the petitioner has not paid contribution to the Fund within the prescribed time as well as the administrative charges for the period from january 1966 to February 1968. The details about the defaults committed and the proposed damages are contained in a statement enclosed to the said notice. The petitioner gave a reply on 4-1-1969. In the said reply, he raised several contentions against the proposed action and inter alia contended that a personal hearing should be given before taking any action in the matter. ( 3 ) THEREAFTER the petitioner received a second notice issued by the state Government of Mysore on 2-5-1969. This notice is also under S. 14b of the Act. The petitioner has been required by the said notice to show cause why damages of Rs. 12,324-50 should not be recovered from the petitioner on the ground that it has not paid contribution to the Fund and the administrative charges within the prescribed time for the period from january 1966 to January 1968. Though it is not stated in so many words that the earlier notice given by the State Government on 21-12-1968 has been abandoned, it appears to us that that is the clear effect of the second notice given by the State Government on 2-5-1969. inasmuch as the same pertains to the same period as was covered by the earlier notice of 21-12-68. ( 4 ) THE petitoner gave his reply to the said notice on 10-5-1969. inasmuch as the same pertains to the same period as was covered by the earlier notice of 21-12-68. ( 4 ) THE petitoner gave his reply to the said notice on 10-5-1969. The petitioner reiterated all the contentions raised in the earlier reply given on 4-1-1969 to the first notice issued by the State Government. It has asserted that the firm is a new establishment, the same having been started in january 1964 and that therefore the same is exempt from the operation of the Act for a period of three years in view of S. 16 (l) (b) of the Act. It is further contended that the petitioner has not committed any default in making contribution to the Provident Fund and the administrative charges. The delay, according to the State Government, varies from 6 days to 14 days. According to the interpretation put forward by the petitioner all the payments were made well within the prescribed time and that therefore no action could be taken against the firm under S. 14b of the Act. It is next contended that the contributions were being made by the petitioner through the State Bank and that the time occupied for the transmission of the amounts by the State Bank should not be regarded as a period of delay to which the petitioner is responsible. The further contention of the petitioner is that the firm bona fide believed that the amount could be contributed within 15 days of the end of the month during which the pay is given to the employees and that therefore the default, if any, is a bona fide one and not warranting any serious action being taken under S. 14b. The petitioner reiterated the request for a personal hearing before any final action is taken under Section 14b. ( 5 ) THE petitioner was not given any personal hearing in the case. The state Government made the imugned order on 16-8-1969. ( 6 ) SRI Sundaraswamy, the learned Counsel for the petitioner, urged that the impugned order under S. 14b is not a speaking order and that none of the contentions raised by the petitioner in response to the notice issued by the State Government under S. 14b has been considered by the government. ( 6 ) SRI Sundaraswamy, the learned Counsel for the petitioner, urged that the impugned order under S. 14b is not a speaking order and that none of the contentions raised by the petitioner in response to the notice issued by the State Government under S. 14b has been considered by the government. He submitted that the power exercisable under S. 14b is of quasi-judicial character and that evil consequences will ensue to a person against whom an adverse order is passed under S. 14b. He also urged that the petitioner should have been given a personal hearing before taking a final decision under Section 14b of the Act. ( 7 ) IN support of his first contention Sri Sundaraswamy relied upon a decision of this Court in L. R. Saldhana v. State of Mysore, (1972) 2 Mys. L. J. 15. The relevant portion of the judgment on which reliance was placed reads as follows every officer who exercises the power of the State has to act in accordance with law; when any action is taken which adversely affects the rights of citizens, it is settled law that no prejudicial action can be taken without affording a reasonable opportunity of being heard. In other words, the rules of natural justice require that every person whose rights are adversely affected should be heard by the authority before making the order. Further, the order has to state the reasons of the order and the provisions of the law under which action is taken. The order which gives no reasons is void in law. An order made in utter disregard of the rules of natural justice is also void. Relying on the said observations made by this Court, it is urged that when the State Government exercises power under S. 14b, the principles of natural justice should be followed and a reasonable opportunity should be given to the person against whom an adverse order is sought to be made under S. 14b for defending himself. It is also urged that the order under s. 14b should be a speaking order containing the reasons in support of the findings recorded by the Government and for negativing the contentions urged by the person against whom the order is made. It is also urged that the order under s. 14b should be a speaking order containing the reasons in support of the findings recorded by the Government and for negativing the contentions urged by the person against whom the order is made. ( 8 ) S. 14b empowers the appropriate Government to recover damages from an employer who makes default in the payment of any contribution to the Fund or the transfer of accumulations required to be transferred by him under sub-sec. (2) of S. 15 or sub-sec. (5) of S. 17 or in the payment of any charges payable under any other provisions of the Act or of any scheme or under any of the conditions specified under S. 17. The maximum amount of damages that may be levied under S. 14b is twenty-five per cent of the amount of arrears. It is clear from the provisions of S. 14b that the power which the Government exercises under the said provision is of a punitive character. That power has to be exercised against an employer who has committed default contemplated under the said section. It is obvious that an amount not exceeding twenty-five per cent of the arrears can be directed to be paid by the employer for the default committed by him. It therefore follows that a person against whom an adverse order is passed under S. 14b will suffer evil consequences in the form of civil liability to pay damages not exceeding twenty-five per cent. ( 9 ) WE may point out at this stage that there are no provisions either in the Act or in the Rules regulating the procedure to be followed by the government for the exercise of its power under S. 14b of the Act. In the absence of any statutory provisions to the contrary regulating the procedure to be followed, the principles of natural justice have to be followed by the Government for exercising its power under S. 14b. Having regard to the nature of the power exercisable under S. 14b and the consequences that will ensue to the person against whom an adverse order is passed under the said section, the principles laid down by this Court in the case of saldhana (1) apply with equal force. An order under Sec. 14b of the Act must, in our opinion, be a speaking under containing the reasons in support of the order. An order under Sec. 14b of the Act must, in our opinion, be a speaking under containing the reasons in support of the order. Though the order need not be a very elaborate order as an order of a Court, it must contain reasons in support of the order. The order must disclose that there has been an application of the mind of the Government to the matters in controversy and to the contentions raised by the person against whom an order is passed under the said section. If these requirements are not satisfied, the order would be void in law. ( 10 ) WE may conveniently extract the impugned order of the State government in this case which reads as follows; subject: Levy of Penal Damages"i am directed to refer to your letter dt. 10-5-1969 on the above subject and to state that an establishment covered under the Employees' provident Funds Act 1952 whether automatically or voluntarily is under statutory obligation to comply with the various provisions under the said Act and the Scheme. Since there was delay in the remittances, the establishment has committed defaults in the nature of delayed remittances and, as such levy of penal damages on all such belated remittances is proper and legal. You are therefore informed that the damages as proposed may kindly be remitted within 15 days of the receipt of this communication and a reply thereof may be sent to the Government. If no reply is received action will be taken to recover the damages as per the provisions of the Act. "as already mentioned, the principal contentions raised by the petitioner were that the provisions of the Act are not applicable for a portion of the period in view of S. 16 (1) (b) of the Act; that the petitioner has not committed any default whatsoever, and that the defaults, if any, being on account of a bona fide understanding of the provisions of law no serious action is called for under S. 14b of the Act. We do not find reference to any one of these contentions in the impugned order of the Government. There is only a general statement made in the order that the petitioner is a defaulter and that therefore it is liable to damages. After referring to the letter of the petitioner dt. We do not find reference to any one of these contentions in the impugned order of the Government. There is only a general statement made in the order that the petitioner is a defaulter and that therefore it is liable to damages. After referring to the letter of the petitioner dt. 10-5-1969, it is stated that the petitioner is under an obligation to comply with the provisions of the Act. The order does not disclose that the Government has applied its mind to the contentions raised by the petitioner. As none of the contentions raised by the petitioner has been considered by the State Government, the said order cannot be sustained. ( 11 ) IT was however urged by Sri Chandrakantharaja Urs appearing for the State Government that there is no substance in the contention of the petitioner that it is entitled to any exemption under S. 16 (l) (b) of the act for a portion of the period in question. Though the petitioner commenced business on the 1st of January 1964 and was otherwise entitled to exemption under S. 16 (l) (b) of the Act, it was pointed out that at the request of the petitioner and its employees the provisions of the Act were extended under sub-sec. (4) of S. 1 of the Act. . Sub-sec. (4) of S. 1 provides that notwithstanding anything contained in sub-sec. (3) of S. 1 or sub-sec. (1) of S. 16, where it appears to the Central Government, whether on an application made to it in that behalf or otherwise, that the employer and the majority of employees in relation to any establishment have agreed that the provisions of the Act should be made applicable to the establishment, it may, by notification in the Official Gazette, apply the provisions of the Act to that establishment. It is in exercise of the power delegated by the Central Governmen to the State Government, under S. 19 (a) read with sub-sec. (4) of S. 1 that the State Government has issued a notification bearing No. PLM 90 LPF 65 dt. 15-7-1965, extending the provisions of the Act to the petitioner's establishment at the request of the petitioner and its employees. (4) of S. 1 that the State Government has issued a notification bearing No. PLM 90 LPF 65 dt. 15-7-1965, extending the provisions of the Act to the petitioner's establishment at the request of the petitioner and its employees. A copy of the said notification was placed for our perusal, in view of this notification, it is clear that the contention raised by the petitioner that it is entitled to exemption from the provisions of the Act under S. 16 (l) (b) has to be rejected as being untenable. We therefore do not consider it necessary to require the State Government to consider the contention raised by the petitioner that its establishment is entitled to an exemption under Section 16 (1) (b) of the Act. ( 12 ) IT is no doubt true that the petitioner did make a specific request to the Government that a personal hearing should be given before any action is taken under Section 14b of the Act. The State Government did not say anything about the request made by the petitioner in this behalf. It cannot be said as a matter of law that every person against whom action is taken under S. 14b is entitled to be heard in person. The question as to whether a party against whom action is sought to be taken u|s. l4b should be heard in person or not, depends upon the facts of each case. When a request for personal hearing is made, the Government must apply its mind and decide having regard to the facts of the case and the contentions raised as to whether the matter can be disposed of satisfactorily without affording a personal hearing. We do not express any opinion as to whether the facts and circumstances of this case justify the granting of a personal hearing to the petitioner. That is a matter which the State government should decide having regard to all relevant aspects. For the reasons stated above, we quash the impugned order of the State government dt. 16-8-1969 and direct it to decide the matter afresh in accordance with law and in the light of the observations made in the course of this order. No costs. --- *** --- .