JUDGMENT 1. - While exercising powers under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Act of 1952"), the Regional Provident Fund Commissioner-II, Udaipur by order dated 15.9.2008 assessed damages in a tune of Rs. 99,77,983/- against the petitioner for delayed payment of the Employees Provident Fund Contributions; the Employees Pension Scheme, 1995; the Insurance Fund Contributions and the Administrative Charges of EPF Scheme, 1952/EDLI Scheme, 1976. By the same order the Regional Provident Fund Commissioner-II, Udaipur also determined a sum of Rs. 19,55,678/- as interest payable by the petitioner employer against the amount said to be due. An appeal giving challenge to the order aforesaid came to be rejected by the Employees Provident Fund Appellate Tribunal under an order dated 15.2.2010. Being aggrieved by the orders aforesaid this petition for writ is preferred. 2. The facts necessary to be noticed for adjudication of this petition for writ are as follows:- 3. The petitioner is a society registered under the Rajasthan Societies Registration Act, 1958 and is involved in several community upliftment activities including all round development of rural life, promotion of community organisations to foster leadership and encourage people's participation in integrated rural development, establishment of rural workers training centers, training groups of people for voluntary service towards the promotion of social welfare, promotion programmes relating to adult and non formal education, establishment of libraries, reading rooms etc. and several other philanthropic programmes. The society is receiving grants and funds from international and national donors including the grants under Government projects. The society is absolutely a non profit earning non Governmental organisation. 4. In the year 1984, a fund in the name of "security fund" was created by the petitioner society to have contributions from salary of its employees and also a contribution of employers. A trust in the name of "Seva Mandir Employees Provident Fund" was also created on 2.11.1992 for extending benefits of provident fund to its employees. The amount lying in "security fund" was transferred to the "Seva Mandir Employees Provident Fund". A trust in the name of "Seva Mandir Employees Provident Fund" was also created on 2.11.1992 for extending benefits of provident fund to its employees. The amount lying in "security fund" was transferred to the "Seva Mandir Employees Provident Fund". Looking to creation of "Seva Mandir Employees Provident Fund" the petitioner society was under a belief about nonapplication of the Act of 1952, however, the Sub Regional Provident Fund Commissioner, Udaipur undertook an inquiry as per the provisions of Section 7-A of the Act of 1952 and the Regional Provident Fund Commissioner, Udaipur vide order dated 1.2.1999 held the petitioner covered under the Act of 1952 w. e. f. 1.4.1984. The petitioner being aggrieved by the order dated 1.2.1999 preferred an appeal before the Employees Provident Fund Appellate Tribunal, New Delhi, that came to be dismissed, however, a petition for writ preferred by the petitioner before Hon'ble Delhi High Court came to be disposed of with a direction to learned Employees Provident Fund Appellate Tribunal to reconsider the issue on merits. During pendency of the appeal the petitioner society was advised to accept application of the provisions of the Act of 1952, thus, the appeal was withdrawn and the funds created by the petitioner were transferred to the Regional Provident Fund Commissioner. A sum of Rs. 2,07,19,293/- was deposited with Regional Provident Fund Commissioner against the liability of provident fund for the period from 1.4.1984 to September, 2002. Suffice to mention that the amount aforesaid is inclusive of an interest in a tune of Rs. 49,11,300/-. 5. Before withdrawal of the appeal aforesaid, the petitioner was called upon under a notice dated 6.12.2003 issued by the Assistant Provident Fund Commissioner, Udaipur to show cause as to why damages for delayed payment as per Section 14-B of the Act of 1952 be not levied. The notice aforesaid was pertaining to the period from April, 1984 to March, 1999. An another notice dated 9.5.2008 for recovery of damages for the period commencing from April, 1999 to November, 2001 was also issued. In pursuant to the notices aforesaid the representative of the petitioner appeared before the Assistant Regional Provident Fund Commissioner and made efforts to impress that the petitioner being a non Governmental organisation and being involved in social upliftment activities should not be subjected to the damages. In pursuant to the notices aforesaid the representative of the petitioner appeared before the Assistant Regional Provident Fund Commissioner and made efforts to impress that the petitioner being a non Governmental organisation and being involved in social upliftment activities should not be subjected to the damages. It was also contended on behalf of the petitioner that whatever delay or default caused in effecting the provisions of the Act of 1952 i. e. due to a bonafide belief about non-application of the provisions due to creation of a provident fund scheme by the society itself. The Regional Provident Fund Commissioner, however, chose to pass the order dated 15.9.2008 subjecting the petitioner to suffer damages in a tune of Rs. 79,22,305/- as per provisions of Section 14-B of the Act of 1952 and the interest in a tune of Rs. 99,55,678/- as per provisions of Section 7-Q of the Act of 1952. Aggrieved by the order dated 15.9.2008 the petitioner preferred an appeal before the Employees Provident Fund Appellate Tribunal, but that came to be rejected vide the order dated 15.2.2010. 6. While questioning correctness of the orders aforesaid the argument advanced by counsel for the petitioner is that the Regional Provident as well as the Employees Provident Fund Appellate Tribunal failed to appreciate that there was no ill-will on part of the petitioner in not applying the provisions of the Act of 1952. The petitioner was maintaining an account of provident fund by creating a trust and, therefore, it was advised not to avail the provisions of 1952. Subsequent thereto after making an inquiry under Section 7-A, the application of the Act of 1952 was contested by the petitioner, however, ultimately a decision was taken to accept the application of the Act of 1952, therefore, the appeal pending consideration before the Employees Provident Fund Appellate Tribunal, New Delhi was withdrawn and the amount due was deposited with Regional Provident Fund Commissioner. No occasion as such was existing to subject the petitioner with damages. It is also submitted on behalf of the petitioner that the provisions of Section 14-B of the Act of 1952 cloths the competent authority with a broad discretion for determination and recovery of damages by examining existing circumstances, but in the case of the petitioner the discretion has not been exercised judiciously. It is also submitted on behalf of the petitioner that the provisions of Section 14-B of the Act of 1952 cloths the competent authority with a broad discretion for determination and recovery of damages by examining existing circumstances, but in the case of the petitioner the discretion has not been exercised judiciously. According to learned counsel the petitioner being a non Governmental organisation and being a non profit earning society should have not been subjected to the damages. 7. Per contra, as per reply to the writ petition preferred on behalf of the respondents the petitioner failed to deposit due provident fund amount within the period prescribed after decision taken by the competent authority under Section 7-A of the Act of 1952, therefore, was rightly subjected to the damages and interest on delayed payment. It is stated that the noble cause for which non Governmental organisation (NGO) is working, does not entitle it for getting any exemption from the provisions of the Act. As per the respondents no waiver of the damages could have been made as i. e. applicable only to sick companies for which board of industrial and financial reconstruction has sanctioned rehabilitation scheme. 8. A rejoinder to the reply is given on behalf of the petitioner mainly reiterating the factual and legal position already stated in the writ petition. 9. Heard counsel for the parties. 10. The question requires examination in this petition for writ is only with regard to the correctness of the order passed by the Regional Provident Fund Commissioner-II, Udaipur to recover damages and interest from the petitioner and the order of its affirmance by the Employees Provident Fund Appellate Tribunal, New Delhi. 11. Section 14-B of the Act of 1952 reads as under:- "14B. Power to recover damages. 11. Section 14-B of the Act of 1952 reads as under:- "14B. 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 subsection (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 by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme. 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 1986), subject to such terms and conditions as may be specified in the Scheme." 12. From perusal of the provision aforesaid it is apparent that the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government by notification in Official Gazette exercises powers under Section 14-B. While exercising such power, a reasonable opportunity of being heard is required to be afforded to the employer, thus, the process is quasi judicial by nature, and the determination and recovery of damages is not mandatory but discretionary as the term used is "may recover from the employer". This power is not required to be exercised ipse dixit but only after consideration of all the circumstances and factors causing default in the payment of any contribution to the fund, the pension found or the insurance fund or in the transfer of accumulations required to be transferred by the employer 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 the Act of 1952 or of any scheme or insurance scheme or under any of the conditions specified under Section 17. If the intention of the legislature would have been for imposing and recovering a mandatory damages by way of penalty in the eventualities aforesaid, then there would have been no need for using the term "may recover" in Section 14-B and further to provide reasonable opportunity of being heard to the employer. 13. In the instant matter the competent authority i. e. the Regional Provident Fund Commissioner-II, Udaipur while imposing and making an order for recovery of damages stated that "The establishment has not objected the dates of deposit and since there is delay in deposits, the damages under section 14-B and interest under Section 7-Q of the Act is leviable. " The competent authority ordered to recover damages only on the count of delay occurred. No other circumstance or factor as agitated by the petitioner has been taken into consideration. Such ipse dixit exercise is not stipulated under the Act of 1952. The provision of Section 14-B of the Act of 1952, as already stated, cloths the competent authority with a quasi judicial power and that clearly indicates to examine all existing circumstances and other relevant factors while computing and recovering damages from an employer. A line of distinction may occur while considering a cause pertaining to recovery of damages on basis of the nature of the establishment/employer. There may be different considerations while considering a case of a profit earning industry and a non profit earning charitable/non Governmental organisation. These factors deserve minute consideration by the authority competent, thus, the discretion under Section 14-B should be exercised judiciously by taking into consideration all the circumstances and factors attached with such establishments. However, in the case in hand exercise of powers ipse dixit is quite apparent. These factors deserve minute consideration by the authority competent, thus, the discretion under Section 14-B should be exercised judiciously by taking into consideration all the circumstances and factors attached with such establishments. However, in the case in hand exercise of powers ipse dixit is quite apparent. The competent authority has subjected the petitioner with recovery of damages without considering relevant factors and mainly on the count of delay occurred in satisfying the default. The authority has also not taken into consideration the reasons for causing delay. 14. The Tribunal also failed to understand the spirit of the provisions of Section 14-B of the Act of 1952. The Tribunal as a matter of fact passed an order which is apparently a non-speaking and unreasoned one. While dismissing the appeal the total discussion made by the Tribunal is as under:- "The contention that the Act is not applicable has no merits because the applicability of the Act was decided u/s 7-A proceedings the same could be challenged in the other proceedings if the order was a nullity. The appellant had not challenged the order passed u/s 7-A and there is no material to hold that the said order is void order. Deposit by mistake and ignorance of Law is not a valid reason. In the case of Galwasia Vidya Mandir v. RPFC reported in 2006 Vol IV SCC at page 46 the lordship held that "Remittance ought had been made to the PF Scheme and not to the State Govt. " The perusal of the decision makes it clear that mistake on deposit is not a valid ground. The appellant was provided ample opportunity, so there are not breach of principle of natural justice. The order suffers from no infirmity. Hence ordered that the appeal is stands dismissed." 15. The Tribunal has not at all taken into consideration the objective conditions addressed by the petitioner in appeal memo while challenging the order passed by the Regional Provident Fund Commissioner-II, Udaipur exercising powers under Section 14-B of the Act of 1952. The order, as a matter of fact, do not disclose any adequate reason to accept the findings arrived by the Regional Provident Fund Commissioner and to negativate the arguments of the petitioner. 16. In view of the discussions made above, I am having no hesitation in setting aside the impugned orders. Accordingly, this petition for writ is allowed. The order, as a matter of fact, do not disclose any adequate reason to accept the findings arrived by the Regional Provident Fund Commissioner and to negativate the arguments of the petitioner. 16. In view of the discussions made above, I am having no hesitation in setting aside the impugned orders. Accordingly, this petition for writ is allowed. The order dated 15.9.2008 passed by the Regional Provident Fund Commissioner-II, Udaipur and the order dated 15.2.2010 passed by the Employees' Provident Fund Appellate Tribunal, New Delhi are set aside. The matter is remanded to the Regional Provident Fund Commissioner-II, Udaipur to reconsider the issue with regard to imposition of damages as per Section 14-B of the Act of 1952 upon the petitioner afresh in accordance with law by keeping in mind the observations made above. 17. No order to costs.Petition allowed. *******