JUDGMENT Srinivasan, J. 1. The Commissioner of Regional Provident Fund, Tamil Nadu and Pondicherry, who is the first defendant in the suit is the appellant. A show cause notice was issued under Ex. B-3 to the plaintiff as to why a sum of Rs. 918.70 should not be levied as penal damages for delayed payments of contributions to the Employees' Provident Fund. The Plaintiff challenged the validity of the notice and filed the suit for a declaration that the notice is illegal and for a consequential injunction restraining the defendants from taking any coercive steps to collect the penal damages. Both the courts below have concurrently upheld the claim of the plaintiff and granted a decree as prayed for. The Lower appellate court has found that the notice Ex.B-3 is not in consonance with the provisions of Section 14-B of the Employee's Provident Funds and Miscellaneous Provisions Act, 1952, and that a reasonable opportunity should be given to the Plaintiff before the levy of damages is determined by the defendants. 2. Learned Counsel for the appellant contends that there is a distinction between the amounts due and recoverable under Section 7-A of the Act and the damages due and recoverable under Section 14-B of the Act. According to learned Counsel the elaborate procedure prescribed in Section 7-A would apply only to cases of contributions and not to cases of levy of damages Section 14-B of the Act reads thus: Where an employer makes default in payment of any contribution to the Fund, the Family Fund or the Insurance Fund or in the transfer of accumulations required to be transferred by him under Sub-section (2) of Section 15 or Sub-section (5) of Section 17, or in the payment of any charges payable under any other provisions of this act or of any scheme or Insurance Scheme or under any of the conditions specified under Section 17, the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the official Gazette in this behalf, may recover from the employer such damages, not exceeding the amount of arrears, as it may think fit to impose. A proviso was introduced by Act 40 of 1973 and it is in the following terms: Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard. 3. A proviso was introduced by Act 40 of 1973 and it is in the following terms: Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard. 3. Before the introduction of the proviso, this Court held in Madras-Bangalore Transport Company v. Regional Provident Fund Commissioner. Madras (1969)2 L.L.J. 136, that Section 7-A of the Act would apply even though levy of damages is under Section 14-B of the Act and that an enquiry should be held before levying damages. Ramakrishnan, J., who decided the case observed that damages under Section 14-B of the Act being a penal levy, though" imposed by an administrative authority, it will be necessary that the affected party is given an opportunity to show cause before it is levied on him. The relevant portion of the judgment reads as follows: Once it is held, as laid, down in the above decision which I respectfully follow, that the damages under Section 14-B is a penal-levy, though imposed by an administrative authority, it will be necessary that the affected party is given an opportunity to show cause, before it is levied on him. He may have several defences which may be valid, and which he may urge, for mitigating the penalty. Learned Counsel for the respondent has referred to a Government order which has prescribed slab rates for the computation of the amount of damages, giving it almost an automatic character with no margin for the exercise of discretion by the authority who imposes the damages in the first instance. Though Section 14-B states that the damages have to be recovered by the appropriate Government, it is urged by counsel for the respondent that what happens in practice is that the Provident Fund Commissioner, by virtue of a delegation, automatically imposes damages according to the slab rates in the Government order leaving it to the party to move the Government subsequently for relief by way of reduction of the amount. It appears to me that such a method of imposing a levy, which is definitely penal in character, cannot be upheld. To begin with, the section uses the word 'may', thereby importing an element of discretion which can be invoked by the affected party, if he has adequate reasons to explain the delay in making the remittance in any given month. To begin with, the section uses the word 'may', thereby importing an element of discretion which can be invoked by the affected party, if he has adequate reasons to explain the delay in making the remittance in any given month. Under the scheme of the slab-system introduced by the Government order, it would appear as if the authority, who imposes the damages initially, had no discretion to deviate from the slab-system which he has got to follow automatically. But it is that authority who has to deal first with the contributor, and consequently the same authority has to consider any explanation that the contributor has got to offer. Therefore, the provision under the slab-system by which one authority automatically levies certain amounts by way of penalty without reference to any mitigating circumstances, and then the affected party thereafter has to move the higher authority, namely, the Government, for relief against such levy, cannot in my opinion, be viewed as a substitute for the normal rule of natural justice which has to be followed in the case of penal levies, viz., that the party affected should be given a chance of making representations contra even before the original levy itself. The learned Judge has also referred to the judgment of a Division Bench in Regional Provident Fund Commissioner, Madras v. K.R. Subbaier Tape Factory, Woraiyur (1966)2 L.L.J. 676 , wherein it was held that, Section 7-A of the Act had provided for an examination of the question of liability to pay damages under Section 14-B of the Act in disputed cases. 4. In Ouchterlony Valley Estates (1938) Ltd. v.. Regional Provident Fund Commissioner, Madras, 37 F.J.R. 404, Ismail, J., took a similar view and observed that Section 7-A(1) and 7-A(3) would apply to a case of levy of damages. 5. The view taken by this Court in the cases has not in any way been altered by the introduction of the proviso to Section 14-B of the Act. In fact, the proviso has only confirmed the position in law as enunciated by this Court. Therefore, the view taken by the courts below that the impugned notice Ex.B-3 is not valid and the appellant should have issued a notice to the respondents before deciding to levy damages is correct. 6. In fact, the proviso has only confirmed the position in law as enunciated by this Court. Therefore, the view taken by the courts below that the impugned notice Ex.B-3 is not valid and the appellant should have issued a notice to the respondents before deciding to levy damages is correct. 6. Learned Counsel for the appellant places reliance on the judgment of a Division Bench of the Delhi High Court in Atlantic Engineering Services (P) Ltd. v. Union of India and Anr. (1979)2 L.L.J. 136 . Reliance is placed on the following observations made by the Bench; The learned Counsel then questioned the determination of damages by the Government as arbitrary. He said that the very fact that a table has been prepared by the Government and it was sent to the petitioner with the show cause shows that the Government did not apply its mind and was mechanical in making the demand for damages. On the contrary, we are of the view that framing of the table of damages by the Government is a salutary measure for the guidance of the officers of the Government who act under Section 14-B. Under the table the amount of damages is related to be delay in payment of the contribution. This method of determining damages is entirely reasonable and it shows that no officer acting under Section 14-B can act arbitrarily, but must follow this reasonable guideline made by the Government. Further this is only a guideline. It is not a determination. The actual decision as to what damages would be in a particular case is made only after hearing the employer and assessing the particular facts of his case. This was done in the present case. 7. The question which has arisen before me did not arise before the Division Bench of the Delhi High Court. The Bench had no occasion to express their opinion on this question. Hence, the judgment of the Division Bench will not apply to the present case. No inference can be drawn from the above observations of the Division Bench that they took the view which is now put forward by learned Counsel for the appellant. 8. In the result, the second appeal has to fail and it is dismissed. There will be no order as to costs.