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2003 DIGILAW 1097 (JHR)

BHARAT STEEL INDUSTRIES v. UNION OF INDIA

2003-09-08

M.Y.EQBAL

body2003
Judgment : M. Y. EQBAL, J. ( 1 ) HEARD the parties. ( 2 ) PETITIONER has challenged the impugned order dated 1/07/1994 which was communicated vide letter dated 28/12/1994 by which respondent No. 2, Regional provident Fund Commissioner, Ranchi in exercise of power under Section 14-B of the employees Provident Funds and miscellaneous Provisions Act, 1952 assessed the damages for the delayed payment of provident fund/family pension fund/deposit of insurance fund and administrative charges for the period from February, 198 2/10/1984. The proceeding for recovery of damages was initiated in 1994 and the damages together with administrative charges was assessed at Rs. 18,765 and a demand notice was served upon the petitioner. ( 3 ) MR. Saurabh Arun, learned counsel for the petitioner assailed the impugned order mainly on the ground that the proceeding initiated by the respondents in the year 1994 itself became barred by limitation. According to the learned counsel even no limitation was provided under Section 14-B of the said Act then, as proceeding for recovery of the damages ought to have been initiated within, three years from the date of default in payment of the provident fund amount within time in terms of Article 137 of the Limitation Act. Learned counsel submitted that on receipt of the demand notice petitioner by letter dated dec 27/12/1994 informed the Regional provident Fund Commissioner that petitioner unit was running with financial crisis and was declared sick by the Director of Industries, bihar, Patna and as such it is requested to waive off the amount of levy of penal damages imposed. ( 4 ) MR. P. P. N. Roy, learned counsel for the respondents on the other hand submitted that there is no limitation prescribed in initiating action for the recovery of the damages as contemplated under Section 14-B of the said act. Learned counsel submitted that in spite of service of notice of the proceeding, petitioner did not choose to appear and hence the authority rightly assessed the damages for the delayed payment of provident fund amount. Learned counsel submitted that in spite of service of notice of the proceeding, petitioner did not choose to appear and hence the authority rightly assessed the damages for the delayed payment of provident fund amount. ( 5 ) SECTION 14-B of the Employees provident Funds and Miscellaneous Provisions act, 1952 reads as under:" 14-B - Power to recover damages- Where an employer makes default in the payment of any contribution to the Fund [the (Pension) 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 [pension 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 provision 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 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]: provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard: provided further that the Central Board may reduce or waive the damages levied under this Section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for industrial and Financial Reconstruction established under Section 4 of the Sick industrial Companies (Special Provisions)act, 1985 (1 of 1985), subject to such terms and conditions as may be specified in the scheme. "( 6 ) FROM perusal of the aforesaid provisions, it is manifest that no limitation is prescribed for taking action by the authority for the recovery of the damages in default of the employer in payment of any contribution to the fund. ( 7 ) ON the question of limitation there are divergent views of different High Courts. One view is that even if no period of limitation is prescribed under Section 14-B of the said Act, the authority must exercise power within a reasonable time. ( 7 ) ON the question of limitation there are divergent views of different High Courts. One view is that even if no period of limitation is prescribed under Section 14-B of the said Act, the authority must exercise power within a reasonable time. In other words reasonable time may be taken as prescribed under Article 137 of the Limitation Act. But the views of other High Courts including Patna High Court is that since it is a benevolent legislation, no separate proceeding is to be initiated under section 14-B of the Act for the recovery of the damages, as such question of limitation does not arise. ( 8 ) A Division Bench of the Patna High court in the case of Inter State Transport agency, Sitamarhi v. Regional Provident Fund commissioner 1983 LIC 940, observed as under:"the learned counsels argument on the question of limitation cannot be accepted, as it overlooks two important criteria for the attraction of Article 137 of the Limitation act namely : (a) The said Article is restricted to applications only, and (b) it must be an application to a Court governed by a Civil Procedure Code or the Criminal procedure Code. The said application may be under a local or a special Act filed before a Court for judicial decision as in the case of Kerala state Electricity Board, AIR 1977 SC 282 . For attraction either of Article 181 of limitation Act, 1908 or of Article 137 of limitation Act, 1963 there has to be an application for invoking the right, is established principle of law supported by preponderance of judicial opinion. The plain language of the article also justifies the said conclusion. The rest therefore, in my opinion is to see whether the Court is not bound to exercise its power and do the particular things unless moved by an application, for the applicability of Article 137 of the Limitation Act to a particular application. The said application must further be to a court which has to decide the application judicially. Bearing in view the twin tests aforesaid, the submissions of the learned counsel is wholly unacceptable. There is no need for any application for a proceeding under Section 14-B and/or Section 7- A of the Provident funds Act. It is the duty of the executive to do the act suo motu independently of any application, to say loosely a ministerial act. There is no need for any application for a proceeding under Section 14-B and/or Section 7- A of the Provident funds Act. It is the duty of the executive to do the act suo motu independently of any application, to say loosely a ministerial act. Further the authorities under Provident fund Act are neither Civil Courts nor criminal Courts, even though the said authorities may have to act judicially and even follow some of the procedures laid down under the Civil Procedure Code. In that regard these bodies have all the trappings of the Courts but not Courts in the technical sense of the word. I may, at once, state that reliance placed on cases of S. V. Lachwani v. Kanchan Lai, 1978 Lab. IC 868 (Bom.) (supra) and State v. Prajatantra Prachar Samiti 1981 Lab. IC 1367 (Orissa), (supra) by the petitioners counsel is wholly misplaced inasmuch as those cases relate to prosecutions arising out of default in making the deposit and interpretation of the term "continuing offence" for the purpose of Section 472, Cr. Procedure Code. Similarly Balkrishnas case AIR 1959 SC 798 relates to Section 23 of Limitation Act, 1963 dealing with "continuous wrong". These cases therefore are wholly irrelevant for our purpose. So far as the case of Amin Chand, AIR 1965 Punj. 441 (supra) is concerned, it is a decision on the principle of waiver, as the damage proceeding was initiated after lapse of several years. This case was not approved by a Bench of Allahabad High Court in the case of Regional Provident Fund Commr. , up. v. Allahabad Canning, 1978 Lab. IC 998 (supra ). The principle of waiver and limitation in relation to damage proceeding under the Act, did not find favour with a bench of ourown High Court in the case of hindustan Malleables v. Regional provident Fund Commr. , 1978 Lab. IC 930 (supra ). Similarly Andhra Pradesh High court did not approve of the view expressed in Aminchands case in the case of the divisional Engineer M. R. T. , 1979 Lab. IC 187 (AP) (supra ). Aminchands case itself (supra) was overruled in letters patent appeal vide State of Punjab v. Aminchand 1970 (37) FJR 92. In the case of T. C. M. Woollen Mills Ltd. v. Regional Provident fund Commr. reported in 1981 Lab. IC 187 (AP) (supra ). Aminchands case itself (supra) was overruled in letters patent appeal vide State of Punjab v. Aminchand 1970 (37) FJR 92. In the case of T. C. M. Woollen Mills Ltd. v. Regional Provident fund Commr. reported in 1981 Lab. IC 267, a Bench of the same High Court refused to follow Aminchands case, I fail to understand how can there be waiver of statutory right, since at law, right of action arising on an instrument or arising otherwise "can be discharged either by release under seal or by accord and satisfaction. . . . waiver is an abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and evidence if the right is thereafter asserted. The standing Counsel relying upon Annexures 4,5,7 and 8 demonstrated that the matter was very much being pursued by the department against the petitioner, from time to time, which showed a conduct contrary to the submission of the learned counsel of the petitioner. " ( 9 ) BE that as it may, I would first like to decide whether the impugned order needs interference by this Court under Article 226 of the Constitution of India. ( 10 ) ADMITTEDLY, proceeding was initiated by the respondents for recovery of the damages in the year 1994 and notice as contemplated under rule was issued to the petitioner. It is specific case of the petitioner that notice of the proceeding was served upon the petitioner but the date fixed for hearing was not communicated to the petitioner, as a result whereof petitioner could not appear on the date fixed. In this regard paras 10 and 11 of the writ petition are worth to be quoted herein below:"para 10.-That the case was fixed for hearing on 1/07/1994 and the said date was not communicated to the petitioner as a result whereof the petitioner could not appear on the date fixed. Para 11.-That the respondent No. 2 vide letter dated 20/12/1994 intimated the order passed on 1/07/1994 by which damage for delayed payment was assessed. " ( 11 ) IT is specific case of the petitioner that the date fixed for order i. e. , 1/07/1994 was not communicated to the petitioner, as a result whereof petitioner could not appear on the date fixed. " ( 11 ) IT is specific case of the petitioner that the date fixed for order i. e. , 1/07/1994 was not communicated to the petitioner, as a result whereof petitioner could not appear on the date fixed. This statement has been categorically controverted and denied by the respondents and it is stated that adequate opportunities were afforded to the petitioner for personal hearing on 31/01/199 4/03/199 4/05/1994 and 25/06/1994. It is further stated that final notice for hearing on 1/07/1994 was personally served by the Area Enforcement officer in person and the petitioner had received it on 25/06/1994. A copy of the notice with acknowledgment of receipt has been annexed as Annexure A to the counter affidavit. ( 12 ) FROM perusal of the Annexures A, it appears that notice dated 25/06/1994 fixing 1/07/1994 as the date of hearing was personally received by the employer on June 25, 1994. It is, therefore, clear that the petitioner has made false statement in paras 10 and 11 of the writ petition. It further shows that petitioner did not take any interest to participate in the hearing and to take his stand before the controlling authority. The authority having no alternative proceeded with the matter and on the admitted fact that the contribution in the fund was deposited by the petitioner after delay of 2-3 months, the impugned order was passed. In such circumstances, I do not find any reason to interfere with the impugned order passed by the respondent authority. ( 13 ) SO far the ground taken by the petitioner that on account of the industry having been declared as sick industry, petitioner is entitled to waiver of damages for that petitioner will have to approach the Central Board by filing appropriate application for the waiver or reduction of the amount of damages levied against him. In the facts of the case, petitioner is given liberty to move the Central Board for the waiver on reduction of the damages levied by the impugned order. ( 14 ) WITH the aforesaid observation this writ application is dismissed. ( 15 ) LET it be clarified that if Central Board has not yet been constituted then petitioner will file application before the competent authority. --- *** --- .