Full Judgment Text
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PETITIONER:
R.P.F. COMMR.
Vs.
RESPONDENT:
K.T. ROLLING MILLS PVT. LTD
DATE OF JUDGMENT22/11/1994
BENCH:
HANSARIA B.L. (J)
BENCH:
HANSARIA B.L. (J)
KULDIP SINGH (J)
CITATION:
1995 AIR 943 1995 SCC (1) 181
JT 1995 (1) 138 1994 SCALE (4)1023
ACT:
HEADNOTE:
JUDGMENT:
The Judgment of the Court was delivered by
B.L. HANSARIA, J. The Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952 (hereinafter the ’Act’)
was enacted to serve beneficent purpose and it does
constitute a welfare measure, as it seeks to create a fund
which could be drawn upon by certain categories of employees
working in factories and some establishments to meet
pressing demands, so also to provide pension after the
employees have ceased to be in
+ From the Judgment and Order dated 12-7-1993 of the Bombay
High Court A. No. 384 of 1993 in W.P. No. 3271 of 1987
182
service. So the Act has to be construed in such a way, in
case two views be possible, which advances the object. This
has been the outlook of the Court for over three decades by
now, as the same was first focussed in R.P.F Commr v. Shree
Krishna Metal Manufacturing Co.1 and was reiterated in R.PE
Commr v. Shibu Metal Works2.
2.The purpose of the aforesaid prologue is to find out as
to when power under Section 14-B of the Act should be
allowed to be used and whether it would in consonance with
the object sought to be achieved by the Act if delay in
invoking the power is allowed to stand in the way. As in
the present case we are concerned with the order of the
Regional Provident Fund Commissioner, Maharashtra (the
Commissioner) levying damages on the respondent for default
in the payment of the contribution in exercise of power
under Section 14-B, let it be noted what this Court had said
about this section in Organo Chemical Industries v. Union of
India3. In that case this Court was called upon to decide
the constitutionality of Section 14-B, which was challenged
as violative of Article 14 having conferred unguided power.
It rejected the contention. It also spelt out the purpose
of imposition of damages, stating that the same was meant to
penalise defaulting employer, as also to provide reparation
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for the amount of loss suffered by the employees. It was
pointed out that it is not only a warning to employers in
general not to commit a breach of the statutory
requirements, but at the same time it is meant to provide
compensation or redress to the beneficiaries i.e. to
recompense the employees for the loss sustained by them.
3.There is no dispute in the present case that the
respondent had defaulted in depositing the contributions
both its own and as well as of the employees in time. The
Commissioner, after applying his mind to the period of delay
as well as to the quantum, imposed a sum of Rs 52,034.80 as
damages. The order of the Commissioner came to be
challenged before the Bombay High Court by the respondent
who has set aside the order solely on the ground that the
proceeding was bad because of unreasonable delay in
initiating the same. The Court pointed out that though
Section 14-B has not laid down any period of limitation, the
power has to be exercised within reasonable time. As the
default related to the period from July 1968 to October
1977, relating to which proceedings came to be initiated in
1985, the High Court regarded the delay as unreasonable, and
so, fatal. The Regional Provident Fund Commissioner has
preferred this appeal with the aid of Article 136 of the
Constitution.
4.There can be no dispute in law that when a power is
conferred by statute without mentioning the period within
which it could be invoked, the same has to be done within
reasonable period, as all powers must be exercised
reasonably, and exercise of the same within reasonable
period would be a facet of reasonableness. When this appeal
was heard by us on
1 1962 Supp (3) SCR 815: AIR 1962 SC 1536: (1962) 1 LJ 427
2 (1965) 2 SCR 72: AIR 1965 SC 1076: (1965) 1 LLJ 473
3 (1979) 4 SCC 573 : 1980 SCC (L&S) 92 : (1980) 1 SCR 61
183
7-9-1994 and when this aspect of the matter came to our
notice, we desired an affidavit from the Commissioner to put
on record regarding the point of time when he came to know
about the default and to explain the cause of delay.
Pursuant to that order, the Commissioner filed his affidavit
on 10-11-1994, according to which the power of levying
damages came to be delegated to the Commissioner by an order
dated 17-10-1973. As, however, large number of
establishments were in existence in the State of Maharashtra
the number of which in 1985 was 22,189 and there was only
one Regional Provident Fund Commissioner having power to
levy damages, delay was caused in detection of the cases of
belated payment. According to the affidavit, the default at
hand was located on 19-4-1985 and the damages came to be
levied by order dated 5-11-1986.
5. The aforesaid shows that the delay was of 12 years viewed
generally and was of 1 1/2 years qua the case at hand.
Though the general period of delay is quite long,
unreasonably long, but if it is borne in mind that in view
of large number of establishments in the State of
Maharashtra, default at hand came to notice only in April
1985, the killing effect of delay gets eroded. We do not,
therefore, think if the order merits to be struck down on
the ground of delay, when it is also kept in mind that the
default related even to the contribution of the employees,
which money the respondent (after deducting the same from
the wages of the employees) must have used for its own
purpose and that too without paying any interest, at the
cost of those for whose benefit it was meant. Any different
stand would encourage the employers to thwart the object of
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the Act, which cannot be permitted.
6. Shri Mohan, learned counsel for the respondent, pleads
that keeping in view what had been ordered by this Court in
Christian Medical College and Brown Memorial Hospital v.
R.PE Commr4, we may not sustain the order of the
Commissioner. In that case dues were not paid in time
because of some controversy as to whether hospitals are
covered by the Act. It was, therefore, contended that as
the appellants would be complying with the provisions of the
Act and would pay all the arrears, damages for delayed
payment of the arrears may not be approved. This Court,
having regard to the facts of that case, accepted the
submission. The facts of the present case are entirely
different.
7.We, therefore, set aside the impugned judgment of the
High Court. But then we state that the respondent would not
be called upon to pay any interest on the damages as fixed
by the Commissioner, if it would pay the entire amount
within two months from today. On the failure of the
respondent to so pay, it shall have to pay interest at the
rate of 18% from today till full realisation.
8. The appeal is allowed accordingly. No order as to
costs.
4 1989 Supp (2) SCC 95 : 1989 SCC (L&S) 568
184