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2003 DIGILAW 134 (CAL)

DALGAON AGRO INDUSTRIES LTD. v. UNION OF INDIA

2003-03-21

PRATAP KUMAR RAY

body2003
PRATAP KR. RAY, J. ( 1 ) IN this writ application, the petitioner, dalgaon Agro Industries Ltd. , a company incorporated and registered under the Indian companies Act, 1956, has challenged the notice dated January 15, 1983 issued on behalf of Regional Provident Fund Commissioner, west Bengal being Annexure 'c' of the writ application, the Notice dated January 15, 1983 issued by Regional Provident Fund commissioner, West Bengal, the Andaman and nicobar Island Annexure 'd' as well as the final order passed by the Regional Provident fund Commissioner, West Bengal dated July 19, 1984 being Annexure 'g' of this writ application. The petitioner has prayed the following reliefs: (A) A writ of and/or in the nature of mandamus commanding the respondents to cancel, rescind and/or withdraw the impugned notices being Annexures 'c' and 'd' and impugned order being Annexure 'g' to this application. (B) A writ of and/or in the nature of certiorari directing the respondents to transmit the entire records of the case before this Hon'ble Court pertaining to Annexures 'c', 'd' and 'g' to the application and to certify the same so that conscionable justice may be administered by quashing the same. (C) A writ of and/or in the nature of prohibition prohibiting the respondents from taking any Section pursuant to the impugned notices being Annexures 'c' and 'd' to this application and from proceeding any further with the impugned order being annexure 'g' hereto. (D) Rule Nisi in terms of prayers (a), (b) and (c ). ( 2 ) BY the impugned order dated July 19, 1984, Regional Provident Fund Commissioner, west Bengal hereinafter referred to for brevity, "said Commissioner" on exercise of the power conferred upon him under Section 14-B of the employees' Provident Funds and miscellaneous Provisions Act, 1952 hereinafter referred to as said Act for brevity, levied damages for delayed payments of provident Fund contributions, deposit linked insurance contributions and Family Pension fund contributions and charged respective administrative charges on issue of Provident fund contribution and linked Insurance contributions. Same has been assailed by the present petitioner on two fold grounds, namely that the levy of damage at the flat rate of 100% maximum, irrespective of the period of delay was unreasonable and unfair and on other ground that the delay in payments as made by tasati Tea Estate, whose asset was vested up on the present petitioner by the order dated december 17, 1979 of the Hon'ble High Court at Calcutta whether could be charged legally by directing payments on imposition of levy of damage upon the petitioner who came into existence on March 31, 1979. This writ application has been opposed by the respondents No. 1 and 2 namely Union of India and Provident Fund Commissioner, West bengal by filing Affidavit-in-Opposition affirmed on August 26, 1985. ( 3 ) IN course of hearing as per direction of the Court, learned advocate for the respondents has submitted before this Court, the working sheet and the particulars relating to the fixation of levy of damage on account of the delayed payments of the said contributions, which was referred to the learned advocate for the respondents by the Assistant Provident Fund commissioner, Sub-Regional Office, jalpaiguri by his forwarding letter dated february 20, 2002 addressed to the Regional provident Fund Commissioner, West Bengal. This Court while hearing the argument directed to supply the xerox copy of such computation sheet on levy of damage in respect of the said contributions to the petitioner and allowed hearing in respect of such calculation sheet fixing the different rates of damage as well as fixation of the different percentage of levy as imposed under different heads. Let this letter dated February 20, 2002 and the computation sheet be considered as part of the record and be kept with the record. ( 4 ) LEARNED advocate for the petitioner has assailed the impugned order at the time of argument on three points as follows: (A) The said Commissioner at a flat rate of 100% imposed levy on damage without taking into account of the period of delay, which varies from three days to six months as indicated in the writ application. ( 4 ) LEARNED advocate for the petitioner has assailed the impugned order at the time of argument on three points as follows: (A) The said Commissioner at a flat rate of 100% imposed levy on damage without taking into account of the period of delay, which varies from three days to six months as indicated in the writ application. (B) The levy of damage due to the delay of payments of statutory contributions by tasati Tea Estate prior to June 30, 1979 was not the liability of the present petitioner since the said Tasati Tea Estate was acquired by the petitioner under a scheme of arrangement with effect from June 30, 1979. (C) That in identical case of Hindustan bobbins Ltd. decided by the self-same commissioner, damages were levied not in flat rate but in terms of the slab as framed by him namely for delay of fifteen days 1% damage, 2% damage for delays beyond one month etc. Hence, the action of this self-same (sic) Commissioner levying damages at the flat rate of 100% irrespective of the time of delay was denial of constitutional protection under Article 14 of the Constitution of India. ( 5 ) SO far as the point No. (a) is concerned that the imposition of levy of damages at the flat rate of 100% as urged by the learned advocate for the petitioner is not legally sustainable in view of the records that is computation sheet as produced before this court by the respondents wherefrom it reveals that the said Commissioner levied the damages not in the flat rate of 100% but on different rates ranging from 5%, 10%, 12. 5%, 15%, 17. 5% 20%, 22%, 23%, 24%, 25%, 27. 5%, 30%, 50%, 65% and 100% respectively in respect of different duration of delay on different years upon giving the details of chart to that effect. After having knowledge of such computation sheet as was supplied to the petitioner as per order of this Court, the petitioner did not controvert the basis of this computation sheet and accordingly the point as urged that at the flat rate of 100%, the damages were levied, has no legal basis. On perusal of the computation sheet, this Court is of the view that the levy of damages as fixed by the said Commissioner to pass the impugned order is not unfair and unreasonable. On perusal of the computation sheet, this Court is of the view that the levy of damages as fixed by the said Commissioner to pass the impugned order is not unfair and unreasonable. In this context, the Court is not unmindful of the act that already by judgment of Apex Court it has been settled that Section 14-B of the said Act is not violative of Article 14 of the Constitution of India whereby and whereunder there is a scope of imposition of damage even to the tune of 100% at the pre-amended stage of the Act. This present case is of the pre- amended stage wherein by the provision under Section 14-B, the Regional provident Fund Commissioner was vested with the power to impose the damages not exceeding amount of arrears. The Apex Court in the judgment as passed in the case Organo chemical Industries and Ors. v. Union of India and Ors. , reported in AIR 1979 SC 1803 : 1979 (4) SCC 573 : 1979-II- LLJ-416, held that said section is infra vires. Paragraph 39 of the said report reads thus at p. 427 of LLJ:"39. Learned counsel for the petitioners, however, contends that in the instant case, the period of arrears varies from less than one month to more than 12 months and, therefore, the imposition of damages at the flat rate of hundred per cent for all the defaults irrespective of their duration, is not only capricious but arbitrary. The submission is that if the intention of the legislature was to make good the loss caused by default of an employer, there could be no rational basis to quantify the damages at hundred per cent in case of default for a period less than one month and those for a period more than 12 months. It is urged that the fixation of upper limit at hundred per cent is no guideline. If the object of the Legislation is to be achieved, the guidelines must specify a uniform method to quantify damages after considering all essentials like loss or injury sustained, the circumstances under which the default occurred, negligence, if any, etc. It is said that the damages under Section 14-B, which is the pecuniary reparation due must be correlated to all these factors. It is said that the damages under Section 14-B, which is the pecuniary reparation due must be correlated to all these factors. In support of his contention, he drew our attention to Section 10-F of the Coal Mines provident Fund and Miscellaneous provisions Act, 1948 (sic), which uses the words 'damages not exceeding twentyfive per cent' like Section 14-B of the Act, and also to a tabular chart provided under that act itself showing that the amount of damages was correlated to the period of arrears; We regret, we cannot appreciate this line of reasoning. Section 10-F of the act of 1948 came up for consideration before this Court in Commr. of Coal Mines provident Fund, Dhanbad v. J. P. Lalla, 1976 (1) SCC 964 : 1976-II-LLJ-91. This court observed, firstly, that the determination of damages is not 'an inflexible application of a rigid formula', and secondly, the words 'as it may think fit to impose' show that the authority is required to apply its mind to the facts and circumstances of the case. The contention that in the absence of any guidelines for the quantification of damages, Section 14-B is violative of Article 14 of the Constitution, must, therefore, fail. " ( 6 ) HAVING regard to the settled law in this field, it appears that the said Commissioner was vested with the power to levy damages even to the tune of 100% of the arrears. However, in the instant case, it appears that the said commissioner without levying damages to the tune of 100% levied damages within the range of 5% to 100% respectively, for different periods of defaults as it appears from the computation chart. Hence, having regard to all these facts, the contention of the learned advocate for the petitioner fails. The judgment as referred to by the learned advocate for the petitioner being Niky Tasha (India) Pvt. Ltd. v. R. P. F. Commissioner, Haryana and Ors. 1995-I-LLJ-282 (P andh) and Star of Gujarat textile Mills Ltd. v. Regl. P. F. Commissioner and Anr. 1993-I-LU-1023 (Guj-DB) are not applicable in the present case while the Court is dealing with the scope of Section 14-B of the said Act at the pre-amended stage when the commissioner was vested with the power to levy damages to the tune of 100% on arrears. Even factually the said judgments will not rescue the petitioner. 1993-I-LU-1023 (Guj-DB) are not applicable in the present case while the Court is dealing with the scope of Section 14-B of the said Act at the pre-amended stage when the commissioner was vested with the power to levy damages to the tune of 100% on arrears. Even factually the said judgments will not rescue the petitioner. In the instant case, as from the computation sheet, it appears that at the flat rate of 100%, the damage was not levied. In that view factually and legally in both ways, the submission of the learned advocate for the petitioner fails. Point No. (a) is accordingly answered. ( 7 ) SO far as the point No. (b) is concerned about the liability of the present petitioner in respect of the defaults of payments as made by tasati Tea Estate also has no legal basis in view of the clear statutory mandate to that effect in the said Act. The Provident Fund commissioner considered this aspect of the matter in the impugned order referring Section 17-B of the said Act. Section 17-B of said Act reads thus:"17-B. Liability in case of transfer of establishment- Where an employer, in relation to an establishment, transfers that establishment in whole or in part, by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally be liable to pay the contribution and other sums due from the employer under any provision of this Act or the Scheme or [the (Pension) Scheme of the Insurance Scheme], as the case may be, in respect of the period up to the date of such transfer: provided that the liability of the transferee shall be limited to the value of the assets obtained by him by such transfer. " ( 8 ) IN view of the language of the said Act, using the word 'shall' it is the mandatory provision by which liability for delayed payment of damage was carried upon the present petitioner. Hence, the argument of the learned advocate to that effect fails. Besides, that point has been considered and discussed by commissioner in the impugned order and no new material has been placed before the Court that the present petitioner is not legally entitled to shoulder the liability of Tasati Tea Estate. Hence, the point No. (b) is answered against the petitioner. Besides, that point has been considered and discussed by commissioner in the impugned order and no new material has been placed before the Court that the present petitioner is not legally entitled to shoulder the liability of Tasati Tea Estate. Hence, the point No. (b) is answered against the petitioner. ( 9 ) SO far as the point No. (c) is concerned about the action of the Commissioner in dealing with the case of the petitioner qua his action in dealing with the Hindustan Bobbins Limited case and thereby infringement of the Article 14 of the Constitution of India, now to be dealt with. Before dealing with the matter, the judgment of the Apex Court would be helpful to answer the point. Article 14 of the constitution of India is not a negative concept but it is a positive concept whereby party raising the issue on Article 14 of the constitution of India urging the point of discrimination in treatment, first has to satisfy that the relief as prayed for has a legal root and/or basis to claim. After having satisfaction of such that the claim is sustainable under the law and person concerned has a legal right to claim, the question on discrimination in treatment will have the foundation to pray for relief in that angle. In the case of Gurusharan singh and Ors. v. New Delhi Municipal committee and Ors. , reported in AIR 1996 SC 1175 : 1996 (2) SCC 459 , the Apex Court has already settled the said question. Para 9 of the report in the said case Gurusharan Singh (supra) reads thus:"apart from that even if it is assumed that concession was shown to such stall-holders by the NDMC the appellants cannot make grievance in respect of discrimination under article 14 of the Constitution. Having agreed to the terms of allotment they cannot legitimately claim that they should also be treated in the same manner. There appears to be some confusion in respect of the scope of article 14 of the Constitution which guarantees equality before law to all citizens. This guarantee of equality before law is a positive concept and it cannot be enforced by a citizen or Court in a negative manner. There appears to be some confusion in respect of the scope of article 14 of the Constitution which guarantees equality before law to all citizens. This guarantee of equality before law is a positive concept and it cannot be enforced by a citizen or Court in a negative manner. To put it in other words, if any illegality or irregularity has been committed in favour of any individual or a group of individuals, others cannot invoke the jurisdiction of the high Court or of this Court, that the same irregularity or illegality be committed by the state or an authority which can be held to be a State within the meaning of Article 12 of the Constitution, so far such petitioners are concerned, on the reasoning that they have been denied the benefits which have been extended to others although in an irregular or illegal manner. Such petitioners can question the validity of orders which are said to have been passed in favour of persons who were not entitled to the same, but they cannot claim orders which are not sanctioned by law in their favour on principle of equality before law. Neither article 14 of the Constitution conceives within the equality clause this concept nor article 226 empowers the High Court to enforce such claim of equality before law. If such claims are enforced, it shall amount to directing to continue and perpetuate an illegal procedure or an illegal order for extending similar benefits to others. Before a claim based on equality clause is upheld, it must be established by the petitioner that his claim being just and legal, has been denied to him, while it has been extended to others and in this process there has been a discrimination. None of the 98 stall-holders was impleaded a party to the writ petitions. The appellants questioned the validity of the allotment of 98 shops on concessional rates, without trade zoning restrictions in favour of the stall-holders of Panchkuian Road, but they were primarily interested that same concessions in respect of licence fee and relaxation in trade zoning restrictions, be also extended to them. Any such claim on their behalf cannot be entertained on the basis of concept of equality before law as enshrined in Article 14 of the Constitution. Any such claim on their behalf cannot be entertained on the basis of concept of equality before law as enshrined in Article 14 of the Constitution. " ( 10 ) THE point as urged by the learned advocate for the petitioner on discrimination in treatment by the Commissioner by referring to the case of Hindustan Bobbins Limited (supra)is to be looked into in the angle of said view of apex Court if the petitioner can satisfy that petitioner legally is entitled to get relief as per the statute. As already referred to that Section 14-B of the said Act, in the Organo Chemicals case (supra), has already passed the test of ultra uires by declaring that the said provision is not in conflict with Article 14 of the Constitution of India, the petitioner legally cannot claim that he was not bound to pay 100% damages on arrears in terms of Section 14-B of the said Act. ( 11 ) HENCE, the doctrine of identical treatment for identical cases as urged, referring the case of Hindustan Bobbins Limited (supra)is a negative approach and it has no legal stand. Furthermore, from the impugned order read with computation sheet, which is now a part of the record, it appears that damage was not levied at the flat rate of 100% and it varies from 2% to 100% under different slabs on the basis of time of default and period of default. Once the Commissioner has considered the issue and fixed the damages accordingly, there is no violation of Section 14-B of the said Act. Besides, in the Hindustan Bobbins Limited case, the party therein raised an issue for reconsideration of the levy order dated October 10, 1980 in terms of the order of the Hon'bfe high Court of Calcutta in the writ application as filed by the Hindustan Bobbins Limited. Considering the order of the Hon'ble Court at calcutta as passed earlier, the Commissioner levied damages on slab basis namely up to 15 days - 1%, 15 to 31 days - 2% and so on. Considering the order of the Hon'ble Court at calcutta as passed earlier, the Commissioner levied damages on slab basis namely up to 15 days - 1%, 15 to 31 days - 2% and so on. In the instant case, there was no similar factual materials placed before the Commissioner and before this Court also no challenge made on the computation sheet as subsequently produced by the respondents whereby the said commissioner calculated the damages in the ratio of 2% to 100% respectively on considering the time of default and period of default in a year. The said computation sheet has not been challenged as violative of any: provision of the Act and/or Constitutional provision. The discrimination point as taken, referring the case of Hindustan Bobbins limited, hence, is not legally sustainable. From the computation sheet, it appears that there was no unfair and unreasonable treatment meted out to the petitioner. Hence the point No. (c) fails. ( 12 ) HAVING regard to such and on the basis of the aforesaid reasoning, this Court is of the view that the petitioner is not entitled to get any relief in this writ application. The default as made by the petitioner is a contribution of the poor workers under statutory scheme of Family pension and Provident Fund. It has already been settled that those contributions have a root on social justice concept. If not paid in proper time, penalty by way of damages has been prescribed as a remedial measure to benefit the poor workers. Hence, having regard to such provision of the said Act, which is nothing but a provision on social security to the poorer person of the society and more particularly for the workers, this Court is not inclined to interfere with the impugned order passed by the commissioner. Accordingly, the writ application fails with a cost of 200 G. M. , which is to be paid by the petitioner to the contesting respondents No. 1 and 2 within a month from this date, failing which the same would be recoverable as arrear land revenue in accordance with law. March 21, 2003 ( 13 ) STAY as prayed for is refused. ( 14 ) LET urgent xerox certified copy of this order, if applied for, be given to the learned advocates appearing for the parties expeditiously.