ORDER : Paresh Upadhyay, J. 1. Challenge in this petition is made by the Establishment to the order passed by the Assistant Provident Fund Commissioner, Regional Office at Surat, dated 1.5.2015 in purported exercise of its powers under Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ('the Act'). By the impugned order, the authority has levied interest of Rs. 8,14,020 on the petitioner. This amount is stated to have been deposited by the petitioner, without prejudice, to avoid any coercive action. Rule. 2. Heard learned advocates. 3. Mr. Dave, learned advocate for the petitioner has submitted that, the petitioner establishment was extending the benefits to its employees, which were not less beneficial than what is provided under the Act and therefore exemption was asked for by it, which was granted by the authorities vide order dated 24.10.1989. It is submitted that lately, the petitioner suffered various difficulties at the hands of the respondent authorities, inspite of the strict compliance by it and therefore it was thought prudent not to continue with the exemption and therefore request was made by the petitioner to the respondent authorities that they intend to surrender the exemption which may be accepted. On 9.3.2010 a Show Cause Notice was issued, which according to the petitioner was illegal exercise of powers and the same was responded on merits, inter alia informing therein that exemption be withdrawn with effect from 1.4.2010. The issue remained in correspondence and ultimately on 19.12.2013, the Assistant Provident Fund Commissioner wrote letter to the petitioner informing that the request has been accepted. It is submitted that the accumulated amount of the fund was already deposited by the petitioner with the respondent, prior thereto and there was no occasion for the authorities to issue any notice as to why no action be taken against the petitioner. It is submitted that, the very issuance of show cause notice was without any authority of law and in any case the final order was without authority of law, in view of the provisions of Section 17(5) of the Act, read with Para 28 of the Scheme, read with Section 7Q of the Act. It is submitted that the impugned order be quashed and set aside and the amount which is already deposited by the petitioner be directed to be refunded. 4. On the other hand, Mr. It is submitted that the impugned order be quashed and set aside and the amount which is already deposited by the petitioner be directed to be refunded. 4. On the other hand, Mr. Lakhani, learned advocate for the respondent authorities has submitted that when the exemption granted by the authorities was sought to be surrendered with effect from 1.4.2010, it was incumbent upon the petitioner to refund the amount lying with it to the authorities immediately and since the said amount was not returned within 10 days from 1.4.2010, the authorities were well within its right to take out proceedings under Section 7Q of the Act and therefore this Court may not interfere. It is submitted that this petition be dismissed. 5. Before the rival contentions are dealt with, it is necessary to refer to the relevant provisions. 5.1 Section 7Q of the Act reads as under. "7Q. Interest payable by the employer. The employer shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the Scheme on any amount due from him under this Act from the date on which the amount has become so due till the date of its actual payment: Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of interest charged by any scheduled bank." 5.2 Relevant part of section 17(5) of the Act reads as under. "17. Power to exempt. (1) ... ... (2) ... ... (3) ... ... (4) ... ... "17. Power to exempt. (1) ... ... (2) ... ... (3) ... ... (4) ... ... (5) Where any exemption granted under sub-section (1), sub-section [(1C)] [sub-section (2), sub-section (2A) or sub-section (2B)] is cancelled, the amount of accumulations to the credit of every employee to whom such exemption applied, in the Provident Fund [the [Pension] Fund or the Insurance Fund] of the establishment in which he is employed [together with any amount forfeited from the employer's share of contribution to the credit of the employee who leaves the employment before the completion of the full period of service] shall be transferred within such time and in such manner as may be specified in the Scheme or the [Pension] Scheme [or the Insurance Scheme] to the credit of his account in the Fund or the [Pension] [Fund or the Insurance Fund], as the case may be." 5.3 Para: 28 of the Scheme framed under the Act, reads as under. "28. Transfer of accumulations from existing Provident Funds. (1) Every authority in charge of or entrusted with the management of, any Provident Fund in existence [omitted by G.S.R. 897, dated 6th September, 1985 (w.e.f. 21.9.1985)] the accumulations wherein are to be transferred to the Fund under sub-section (2) of section 15 of the Act, [or sub-section (5) of section 17 thereof, as the case may be] shall, [omitted by G.S.R. 897, dated 6th September, 1985 (w.e.f. 21.9.1985)] (i) send to the [Certain words omitted by G.S.R. 1845, dated 28th November, 1963 (w.e.f. 30.11.1963)] Commissioner a statement showing the amount standing to the credit of each subscriber on the date of the transfer, the total accumulations to the credit of subscribers generally on that date and the advances, if any, taken by the subscribers [within twenty-five days of the application of the Scheme, or cancellation of exemption, as the case may be]. (ii) transfer to the Fund in the manner specified in sub-paragraph (2) the total accumulations standing to the credit of the subscribers in relation to each [factory or other establishment] [within ten days of the application of the Scheme, or cancellation of the exemption, as the case may be, in case of liquid cash in bank and within thirty days in case of securities], and (iii) transfer to the [Central Board] all pass books, books of account and other documents relating to the said accumulation. (2) All accumulations standing to the credit of the subscribers, howsoever invested, shall be transferred to the Fund by the authority aforesaid in cash: [Provided that where the whole or any part of such accumulations consists of investments in Government securities, [or in securities guaranteed by appropriate Government as regards repayment of principal and payment of interest or in both]. The authority making the transfer to the Fund shall transfer those securities at the price for which they were actually purchased or transfer a sum equivalent to such price. In case, however, the whole or any part of such accumulations is invested in National Savings Certificates or National Plan Saving Certificates, the appreciated value of such certificates at the time of the transfer will be taken into account in determining the amount of the accumulations to be transferred, provided that the difference between the face value of such certificate and their appreciated value at the time of the transfer has already been credited to the accounts of the subscribers. [Provided further that where the whole or any part of such accumulations consists of investments in [securities bearing no guarantee of an appropriate Government as regards repayment of principal and repayment of interest], the Central Government may, in exceptional cases, allow acceptance of the transfer of such securities from the authority making the transfer to the Fund at the price for which they were actually purchased.] [Explanation. The total amount of provident fund accumulations includes interest thereon and the authority in charge of the Fund shall transfer in cash any balance of interest on investments which happens to be undistributed on the date of the transfer, or realised or realisable for the period prior to the registration of the securities in the name of the Central Board of Trustees, Employees' Provident Fund.] (3) Any cash transferred under sub-paragraph (2) shall be deposited in any office or branch of the Reserve Bank of India or the [State Bank of India] to the credit of the [Central Board] and the receipt obtained in respect thereof shall be forwarded to the [certain words omitted by G.S.R. 1845, dated 28th November, 1963 (w.e.f. 30.11.1963)] Commissioner. Provided that where there is no office or branch of either of the two Banks at the place where the [factory or other establishment] is situated the amount shall be credited to the [Central Board] by means of a Reserve Bank of India [Governmental Draft at par]. (4) The accumulations transferred to the Fund in accordance with this paragraph shall be credited to the account of each of the members of the Fund, to the extent to which he may be entitled thereto having regard to the statement furnished by the authority aforesaid. (5) When the accumulations in any such Provident Fund as is referred to in sub-paragraph (1) have been so transferred to the Fund, the [certain words omitted by G.S.R. 1845, dated 28th November, 1963 (w.e.f. 30.11.1963)] Commissioner may, by notification in the Gazette of India, declare that the subscribers of such Provident Fund have now become members of the Fund and that the accumulations aforesaid have now become vested in the [Central Board]." 6. Having heard learned advocates for the respective parties and having gone through the material on record and keeping the relevant statutory provisions, quoted above, in view, this Court finds as under. 6.1 The question of transfer of funds to the authorities crops up only after the exemption is withdrawn by the authorities. The exemption is withdrawn by the authorities vide letter dated 19.12.2013, which reads as under. "Sir, Please refer to your letter dated 2.11.2012 through which you have requested to cancel the exemption w.e.f. 1.4.2010. Your request is accepted by Competent Authority." 6.2 On conjoint reading of the decision of the authorities as contained in the communication dated 19.12.2013, the provisions of Section 17(5) of the Act and Para: 28 of the Scheme framed under the Act, this Court finds that, in the present case, the petitioner was under no obligation to transfer the amount to the respondent authorities before 29.12.2013. It is not in dispute that, the accumulations in the fund was already transferred to the authorities prior thereto. The proceedings taken out by the respondent authorities against the petitioner, in this fact situation, was unwarranted. The impugned order therefore needs to be quashed and set aside. 6.3 At this stage, the bona fide of the petitioner should also be verified. The proceedings taken out by the respondent authorities against the petitioner, in this fact situation, was unwarranted. The impugned order therefore needs to be quashed and set aside. 6.3 At this stage, the bona fide of the petitioner should also be verified. It should not happen that on one hand the exemption is sought to be surrendered from 1.4.2010 which is accepted on 19.12.2013 and in the interregnum there is vacuum or the petitioner establishment exploits that situation against the workmen. There is material on record to suggest that the petitioner has not done anything which is otherwise detrimental to the interest of the workmen. The amount lying with the petitioner, was already transferred to the fund (of the department) with interest thereon, the details of which are referred to by the authorities in the impugned order itself. It is also to be noted that, some amount was deposited by the petitioner with such securities, which carried interest less than what is prescribed by the respondent authorities, and the differential amount is also made good by the petitioner. Under these circumstances, this Court finds that, even on merits, there was no occasion for the respondent authorities to take out any proceeding against the petitioner for alleged breach of provisions of the Act. Thus the impugned order is unsustainable in law and was unwarranted on facts. On both the counts the same needs to be quashed and set aside. 7. Though the impugned order is interfered with for the reasons recorded above, additionally it needs to be recorded that, the impugned exercise was taken out by the office of the Regional Provident Fund Commissioner at Surat. The deterioration in the functioning of the said office is taken note of by this Court in number of cases. Reference in this regard can be made to the orders of this Court in Special Civil Application No. 3911 of 2014 dated 5.11.2014, Letters Patent Appeal No. 1050 of 2015 dated 26.11.2015 and Special Civil Application No. 11997 of 2012 dated 30.9.2013. The respondent No. 2 is again reminded to look into the affairs of the said office. For the reasons recorded above, following order is passed. 7.1 This petition is allowed. 7.2 The impugned order passed by the Assistant Provident Fund Commissioner, Surat dated 1.5.2015 is quashed and set aside. 7.3 The amount of Rs. The respondent No. 2 is again reminded to look into the affairs of the said office. For the reasons recorded above, following order is passed. 7.1 This petition is allowed. 7.2 The impugned order passed by the Assistant Provident Fund Commissioner, Surat dated 1.5.2015 is quashed and set aside. 7.3 The amount of Rs. 8,14,020 shall be refunded to the petitioner within a period of six weeks from today. 7.4 The petitioner is also entitled to get interest on the above amount. The rate of interest, as per the policy of the department is indicated to be 9% p.a. (vide para: 5 of the order dated 5.11.2014 in Special Civil Application No. 3911 of 2014). The amount of interest shall be paid to the petitioner within a period of two months from today. 7.5 Rule is made absolute to the above extent. No order as to costs.