CORAMTHE HONOURABLE MR v. Employees Provident Fund Appellate Tribunal (Ministry of Labour and Employment

3.M/s.Narasimha Mills P Ltd., Rep by its Managing Director...2nd respondent inW.P.No.17519/20104.M/s.Bhavani Mills Ltd., Rep. By its Managing Director, Shri Ananda Kumar...2nd respondent inW.P.No.17520/20105.M/s.Indian Express Publication(Madurai)Ltd., Coimbatore. ...2nd respondent inW.P.No.17521/20106.M/s.Kwality Spinning Mills Ltd., Pollachi....2nd respondent inW.P.No.21135/20107.M/s.Sri Venkatesa Mills Ltd.,Udamalpet....2nd respondent inW.P.No.21136/20108.M/s.The Coimbatore Pioneer Mills Ltd., Coimbatore....2nd respondent inW.P.No.21137/20109.M/s.Sri Ramalinga Choodambikai Mills Ltd., Rep. By its Director A.Rajagopal...2nd respondent inW.P.No.21138/201010.M/s.Venkata Ganga Textiles,Annur, Coimbatore....2nd respondent inW.P.No.21139/201011.M/s.Sujay Spinner, Rep. By its Managing Partner...2nd respondent in Coimbatore.W.P.No.21140/201012.M/s.The Dhanalakshmi Mills Ltd., Tirupur....2nd respondent in W.P.No.21141/201013.M/s.The Coimbatore Pioneer Mills Ltd.,Peelamdedu, Coimbatore....2nd respondent inW.P.No.21142/201014.M/s.Sri Balasubramania Mills Ltd.,Uppllipalayam, Coimbatore....2nd respondent inW.P.No.21143/201015.M/s.Indian Express Publication (Madurai) Ltd.,Coimbatore....2nd respondent inW.P.No.21144/2010 https://hcservices.ecourts.gov.in/hcservices/

16.M/s.Bar Wood Coffee Estate, Rep. By its Managing Director, Gudalur. ...2nd respondent inW.P.No.22081/201017.M/s.Bar Wood Coffee Estate, Rep. By its Managing Director, Gudalur. ...2nd respondent inW.P.No.22082/201018.M/s.Chikmoyar Coffee Estate, Rep. By its Managing Director. ...2nd respondent in Gudalur.W.P.No.22083/201019.M/s.Chikmoyar Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22084/201020.M/s.Chikmoyar Coffee Estate, Rep. By its Managing Director. Gudalur. ...2nd respondent inW.P.No.22085/201021.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22096/201022.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22097/201023.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22098/201024.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22099/201025.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22100/201026.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. ...2nd respondent in Gudalur.W.P.No.22101/2010 https://hcservices.ecourts.gov.in/hcservices/

27.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. ...2nd respondent in Gudalur. W.P.No.22805/201028.M/s.Silver Cloud Coffee Estate, Rep. By its Managing Director. Gudalur....2nd respondent inW.P.No.22806/201029.The Recovery Officer/ Assistant Provident Fund Commissioner, (Special Damages Cell) Enforcement Employees Provident Fund Organisation, Sub-Regional office, Bhavishyanidhi Bhavan Post Box NO.3875, Dr.Balasundaram Road, Coimbatore – 641 018....Respondent inW.P.No.31365/2004,2nd respondent inW.P.No.4616/2005,W.P.Nos.12155 and 12156/20103rd respondent inW.P.No.7564/201130.The Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Sub-Regional Office, Bhavishyanidhi Bhavan Post Box No.3875, Dr.Balasundaram Road, Coimbatore – 641 018....1st respondent inW.P.No.4616/2005...1st Respondent inW.P.No.16840/2010,2nd respondent inW.P.No.7564/2011,W.P.No.16838/201031.The Regional Provident Fund Commissioner, Coimbatore – 641 018....1st respondent inW.P.Nos.24877 and 24878/2009,1st W.P.Nos.12155 and 12156/2010,W.P.No.15729/2010,3rd respondent inW.P.No.16838/201032.Union of India represented by Ministry of Industry, Udyog Bhavan, New Delhi – 110 011.33.Appellate Authority for Industrial and Financial Reconstruction, Government of India, 10th Floor, Jeevan Prakash, 25, Kasturba Gandhi Marg, https://hcservices.ecourts.gov.in/hcservices/ New Delhi – 110 001.34.Board for Industrial and financial Reconstruction, 22nd Floor, Jawahar Vyapar Bhavan, No.1, Tolstoy Marg, New Delhi – 700 001.35.Industrial Investment Bank of India, No.19, Netaji Subhas Road, Calcutta, 700 001.36.Dhanalakshmi Mills Limited, 130, B.S.Sundaram Road, Tirupur – 641 601.37.State Bank of India, Central Office, Post Box No.12, Madame Gama Road, Mumbai – 400 021.38.Industrial Development Bank of India, IDBI Tower, Cuffe parade, Mumbai – 400 021.39.The Secretary to Government of Tamil Nadu, Industries Department, Fort St.George, Chennai – 600 009.40.Central Provident Fund Commissioner, HUDCO Vishala 14, Bhikaji Cama Place, New Delhi 110 066.41.Employees State Insurance Corporation, ESIC Building, Kotla Road, Behind Foreign Post Office, New Delhi....Respondents 1 to 10 inW.P.No.20938/2004W.P.No.17518/2010 Writ Petition under Article 226 of the Constitution of Indiapraying for a Writ of Certiorari, to call for the records of theproceedings of the first respondent in ATA No.63(13)/2008 andquash the order dt.22.4.2009 passed there-under.WP.Nos.17519 to 17521, 21135 to 21144, 22081 to 22085, 22096 to22101, 22805 & 22806/10:- Writ of Certiorari to call for therecords of the 1st respondent ln ATA.Nos.531(13)/08, 552/(13)/08,861(13)/05, 119(13)/07, 51(13)/07, 348(13)/07, 740(13)/03, 520(13)/09, 21(13)/07, 79(13)/06, 26(13)/08, 22(13)/07, 489(15)/06,734(13)/04, 514(13)/08, 594(13)/03, 735(13)/04, 517(13)08, 518(13)/08, 917(13)/04, 916(13)/04, 596(13)/03, 918(13)/04, 515(13)/08, 516(13)/08, 595(13)/03 respectively and quash the order dated https://hcservices.ecourts.gov.in/hcservices/

24.9.2009, 22.4.2009, 17.4.2009, 21.5.2009, 3.9.2009, 22.5.2009,10.7.2009, 24.9.2009, 10.7.2009, 22.4.2009, 22.5.2009, 10.7.2009,17.4.2009 10.7.2009, 10.7.2009, 10.7.2009, 10.7.2009, 10.7.2009,13.7.2009, 13.7.2009, 13.7.2009, 13.7.2009, 13.7.2009 13.7.200913.7.2009 13.7.2009 passed there under. W.P.No.31365/2004 Writ Petition under Article 226 of the Constitution ofIndia praying for a Writ of Certiorarified mandamus, to call forthe entire records of the respondent in his proceedingsNo.TN/CBE/PDC/51/ Proceedings/2004 dated 15.10.2004 and quash thesame and consequently forbear the respondent from recovering thedamages from the petitioner.W.P.No.4616/2005 Writ Petition under Article 226 of the Constitution ofIndia praying for a Writ of Certiorarified mandamus, to call forthe entire records of the 1st respondent in his proceedings inTN/CB/PDC/51/2005 dated 27.1.2005 and the proceedings of thesecond respondent in TN/Recy/Cbe/PDC/51/2005 dated 27.01.2005 andquash the same and consequently forbear the Respondents fromrecovering the interest on penal damages from the petitioner.W.P.Nos.24877 and 24878 of 2009Writ Petitions under Article 226 of the Constitution of Indiapraying for a Writ of Certiorari, calling for the records of therespondents in the order dated 24.9.2009 in Appeal No.531(13)/2009confirming the interest and restricting the damages by 0.5% p.a.Of the arrears of contribution respectively as demanded by thefirst respondent vide its proceedings in No.TN/CBE/RO/3427/PDC/CC13/2009 and PDC/TN/CBE/Circle/13/TN/3427/2009 respectively dated7.7.2009 and to quash the same.W.P.No.16840/2010Writ Petition under Article 226 of the Constitution of Indiapraying for a Writ of Certiorari, to call for the records andquash the letter bearing reference No.TN/CBE/RO/Recovery/1166/2010 dt.2.7.2010 on the file of the respondentAssistant PF Commissioner Employees Provident Fund Organization,Sub-Regional Office, Coimbatore.W.P.No.7564/2011Writ Petition under Article 226 of the Constitution of Indiapraying for a Writ of Certiorari, to call for the records andquash the Common Order dt.22.4.2009 passed in A.T.A.63(13) of2008, A.T.A.552(13) of 2008 and confirmed by order dt.11.8.2010by the 1st respondent Employees Provident Fund Appellate TribunalNew Delhi and consequently forbear the 2nd respondent The Asst.Provident Fund Commissioner Employees Provident FundOrganisation, Sub-Regional Office, Dr.Balasundaram RoadCoimbatore-641 018, from initiating any coercive proceedings forrecovery of damages from the petitioner establishment pursuant tothe aforesaid dt.11.8.2010. https://hcservices.ecourts.gov.in/hcservices/ W.P.Nos.12155 and 12156/2010Writ Petitions under Article 226 of the Constitution of Indiapraying for a Writ of Certiorari, Calling for the records in theproceedings of the 2nd respondent herein made inRef.E.P.F.C.P1.No.CB/CBE/896 and 4283/ENF/Circle-18 RRCNo.10000182 and 10000183/2009-10 respectively dt.25.5.2010 andquash the same.W.P.No.15729 of 2010Writ Petition under Article 226 of the Constitution of Indiapraying for a Writ of mandamus, directing the respondent to refundthe amount of Rs.14,94,676/- along with interest at the rate of12% till the date of payment as per the representation of thepetitioner dated 03.06.2010 after deducting the penal interest.W.P.No.16838/2010Writ Petition under Article 226 of the Constitution of Indiapraying for a Writ of Certiorari, calling for the records of the1st respondent by its order dated 10.07.09 in ATA 740 (13) 2003and the consequential recovery order of the 2nd respondent dated07.04.2010 in Proceedings No.TN/CBE/RO/Recovery/47/2010 quash thesame.W.P.No.20938/2004Writ Petition under Article 226 of the Constitution of Indiapraying for a Writ of mandamus, directing the 4and 5th respondentsto complete the process of sale in coordination and under thesupervision of the 4th respondent (Operating Agency) for sale ofthe assets of Mill B of the 5th respondent and the surplus land ofMill A of the 5th respondent and consequently direct the 4threspondent (operating agency) to distribute the sale proceeds tothe employees against their dues, other statutory dues and thecreditors and direct the respondents 9 and 10 to consider waiverof penal interest and damages payable by the 5th respondentcompany viz., M/s.Dhanalakshmi Mills Limited.For Petitioner inW.P.Nos.17518 to 17521/2010W.P.Nos.21135 to 21144/2010 W.P.Nos.22081 to 22085/2010W.P.Nos.22096 to 22101/2010W.P.Nos.22805 and 22806/2010 : Mr.M.JayaramanW.P.Nos.31365 of 2004W.P.No.4616 of 2005 : Mr.M.Venkatachalapathy,SC for Mr.M.SriramW.P.Nos.24877 and 24878/2009 : M/s.RadhagopalanW.P.No.16840/2010 W.P.No.7564/2011 : Mr.S.Ravi for M/s.Gupta and Ravi https://hcservices.ecourts.gov.in/hcservices/ W.P.Nos.12155,12156 and 15729/2010 : Mr.K.KalyanasundaramW.P.No.16838/2010 : Mr.S.Ravindran for M/s.T.S.Gopalan and Co.W.P.No.20938/2004 Mr.M.Suresh KumarFor Respondents : Mr.S.Sivakumar for R2 in W.P.Nos.17519 and 17521/2010 Ms.Rita Chandrasekar for R2 in W.P.No.21135/2010R2-NA Mr.K.Kalyanasundaram for R2(in WPs.21140 & in W.P.Nos.21137 and 21139/2010, 21144/2010) W.P.Nos.21142 and 21143/2010 W.P.Nos.22081 and 22084/2010 W.P.No.22806/2010 W.P.Nos.22096 to 22101/2010 Mr.S.Ravindran for M/s.T.S.Gopalan and Co. for R2 in W.P.No.21138/2010 Mr.S.Ravi for M/s.Gupta and Ravi for R2 in W.P.No.21141/2010 Ms.V.J.Latha for R1 and R2 in W.P.No.31365/2004 and W.P.No.4616/2005 Mr.K.Gunasekaran,ACGSC for R1 in W.P.Nos.24877 and 24878/2009, W.P.No.16840/2010, W.P.No.7564/2011 Mr.M.Jayaraman for R1 and R2 in W.P.Nos.12155 and 12156/2010 in W.P.No.15729/2010 in W.P.No.16838/2010 Mr.K.Balachandran, ACGSC for R1 M/s.Shivakumar for R4 M/s.S.Arun Kumar for R6 M/s.K.Gunasekar for R9 in W.P.No.20938/2004 R1- Tribunal (in WPs.22081 to 22084/10 22806/10 & 22096 to 22101/10, 21140 to 21144/10 R2- Tribunal (in WPs.24877 & 24818/09) https://hcservices.ecourts.gov.in/hcservices/ C O M M O N O R D E RHeard both sides in respect of first batch on 15.06.2011and on 17.06.2011 in respect of the second batch. The issuesinvolved in all the writ petitions arose out of the Employees'Provident Funds and Miscellaneous Provisions Act, 1952 (for shortPF Act).2. In majority of the writ petitions, surprisingly, thepetitioner is the Assistant Provident Fund Commissioner,Coimbatore. He has come forward to file the writ petitionsaggrieved by the various orders passed by the Employees ProvidentFund Appellate Tribunal constituted under Section 7D of the PFAct. 3. The writ petitions came to be filed under the followingcircumstances; against various orders passed by the authoritiesunder the PF Act, including by the very same Assistant ProvidentFund Commissioner (APFC for short), Coimbatore, some of theaggrieved employers preferred appeals before the Tribunal underSection 7I of the PF Act.4. The Employees' Provident Funds Appellate Tribunal is ajudicial Tribunal constituted by the PF Act. It has power toentertain appeals against the order passed by the authority eitherunder Section 7A, or Section 7B, or Section 7C, or Section 14B ofthe PF Act. The Tribunal entertained the appeal and whileupholding the orders of the PF authorities in levying damages andinterest, however reduced the quantum of damages paid by theemployer. The quantum of damages fixed by the Tribunal variedfrom case to case and it ranged from 5% to 15% per annumdepending upon the circumstances pleaded by the employers and alsothe case put forth by the PF Department. 5. Aggrieved by the reduction of the damages, the APFC hadfiled number of writ petitions. Some of the employers aggrieved bythe very same order of the Tribunal in fixing damages at aparticular rate and in not granting entire relief at the notifiedrate or damages payable per annum, have filed the writ petitionsin some of the cases. In some cases, the employers have also comeforward seeking for refund of the amount consequent upon thedetermination by the Tribunal. In some cases, it was for settingaside the show causes notice issued as to why arrest warrantsshould not be issued against the employers. In some cases,instead of going before the Tribunal, they have filed writpetitions challenging the notices of attachment of the propertiespursuant to the execution proceedings initiated by the PFauthorities. In only one writ petition, a Trade Union had filed awrit petition seeking for a direction to the authorities to sellthe properties to satisfy the dues of the workmen and also for aconsequential direction to the PF and ESI authorities to waive the https://hcservices.ecourts.gov.in/hcservices/ levy of damages and penal interest on account of the fact that themill was sick.6. The following tabular column will show the nature ofwrit petitions, names of the parties, the orders of the Tribunalunder which the writ petitions are filed and the relief if anygranted by the Tribunal and also cases where cross writ petitionswere filed by the Employers as well as other miscellaneous reliefsclaimed by the Employers:-I. Writ Petitions filed by the Assistant Provident FundCommissioner, Coimbatore:Sl.NoW.P.No.Name of theEmployerTribunal OrderAppeal againstand dateReliefgranted byTribunal117518/2010Bhavani Mills Ltd.ATA No.63(13)/2008 Dt :22.04.09Damagesrestricted to10% p.a. onarrears 217519/2010Narasimha Mills(P) LtdATA No.531(13)/2008 Dt :24.09.09Damagesrestricted to10% p.a. onarrears 317520/2010Bhavani Mills Ltd.ATA No.552(13)/2008 Dt :22.04.09Damagesrestricted to10% p.a. onarrears 417521/2010Indian ExpressPublication(Madurai) Ltd,CoimbatoreATA No.861(13)/2005Dt : 17.04.2009Damagesrestricted to15% p.a. onarrears 521135/2010Kwality SpinningMills Ltd.,ATA No.119(13)/2007Dt : 21.05.2009Damagesrestricted to10% p.a. onarrears 621136/2010Sri VenkatesaMills Ltd.,ATA No.51(13)/2007Dt : 03.09.2009Damagesrestricted to5% p.a. onarrears 721137/2010The CoimbatorePioneer MillsLtd., CoimbatoreATA No.348(13)/2007Dt : 22.05.2009Damagesrestricted to5% p.a. onarrears 821138/2010Sri RamalingaChoodambikai MillsLtd.,ATA No.740(13)/2003Dt : 10.07.2009Damagesrestricted to10% p.a. onarrears https://hcservices.ecourts.gov.in/hcservices/ Sl.NoW.P.No.Name of theEmployerTribunal OrderAppeal againstand dateReliefgranted byTribunal921139/2010Venkata GangaTextilesATA No.520(13)/2009Dt : 24.09.2009Damagesrestricted to5% p.a. onarrears 1021140/2010Sujay Spinner ATA No.21(13)/2007Dt : 10.07.2009Damagesrestricted to5% p.a. onarrears 1121141/2010The DhanalakshmiMills Ltd.,ATA No.79(13)/2006Dt : 22.04.2009Damagesrestricted to10% p.a. onarrears 1221142/2010The CoimbatorePioneer Mills Ltd.ATA No.26(13)/2008Dt : 22.05.2009Damagesrestricted to5% p.a. onarrears 1321143/2010Sri BalasubramaniaMills LtdATA No.22(13)/2007Dt : 10.07.2009Damagesrestricted to5% p.a. onarrears 1421144/2010Indian ExpressPublication(Madurai) Ltd.,CoimbatoreATA No.489(15)/2006Dt : 17.04.2009Damagesrestricted to15% p.a. onarrears 1522081/2010Bar Wood Estate,GudalurATA No.734(13)/2004Dt : 10.07.20091622082/2010Bar Wood Estate,GudalurATA No.514(13)/2008Dt : 10.07.2009Damagesrestricted to5% p.a. onarrears 1722083/20101822084/20101922085/2010Chikmoyar CoffeeEstateATA No.594(13)/2002Dt : 10.07.2009ATA No.735(13)/2004Dt : 10.07.2009ATA No.517(13)/2008Dt : 10.07.2009Damagesrestricted to5% p.a. onarrears https://hcservices.ecourts.gov.in/hcservices/ Sl.NoW.P.No.Name of theEmployerTribunal OrderAppeal againstand dateReliefgranted byTribunal2022096/2010Silver CloudCoffee EstateLtd., GudalurATA No.518(13)/2008Dt : 13.07.20092122097/2010Silver CloudCoffee EstateLtd., GudalurATA No.917(13)/2004Dt : 13.07.20092222098/2010Silver CloudCoffee EstateLtd., GudalurATA No.916(13)/200413.07.20092322099/2010Silver CloudCoffee EstateLtd., GudalurATA No.596(13)/200413.07.20092422100/2010Silver CloudCoffee EstateLtd., GudalurATA No.918(13)/200413.07.20092522101/2010Silver CloudCoffee EstateLtd., GudalurATA No.515(13)/200813.07.20092622805/2010Silver CloudCoffee EstateLtd., GudalurATA No.516(13)/200813.07.20092722806/2010Silver CloudCoffee EstateLtd., GudalurATA No.595(13)/200313.07.2009Damagesrestricted to5% p.a. onarrears II. Writ Petitions filed by the various Employers challenging theorders passed by the EPF Tribunal and PF Authorities and caseswhere different reliefs were claimedSl.NoW.P.No.EmployerOrderChallenged/Relief claimedand dateRemarks 2831365/2004Sri VenkatesaMills LtdDamages andinterest dt: 15.10.200410% amount paidtowards damages insubsequentproceedings whenchallenged by theEmployer, theTribunal gave 5%(subject matter ofchallenge inW.P.No.21136/2010filed by APFC) https://hcservices.ecourts.gov.in/hcservices/ Sl.NoW.P.No.EmployerOrderChallenged/Relief claimedand dateRemarks 294616/2005Sri VenkatesaMills LtdRecoverycertificateand attachmentnotice dt: 27.01.20053024877/2009The NarasimhaMills LtdAppeal No.531(13)/2009dt 24.09.2009To set aside theinterest claimed3124878/2009The NarasimhaMills LtdAppeal No.531(13)/2009dt: 24.09.2009To set aside thedamages @ 5% p.a.As against thesame order, APFChas filedW.P.No.17519/20103216840/2010Bhavani MillsLtdShow cause asto why warrantof arrestshould not beissued dt: 02.07.2010337564/2011Bhavani MillsLtdATA 63(13)/2008dt:22.04.2009confirmed byATA 552(13)/2008 dt:11.08.2010As against thesaid order, APFChas filedW.P.No.17518/20103412155/2010Silver Cloud TeaFactory Notice beforeattachmentdated25.05.20103515729/2010Silver Cloud TeaFactorySeeking forrefund ofRs.14,94,676/-on account ofthe comonorder passedby theTribunal inATA 596(13)/2003 and batchdt: 13.07.2009Common order isunder challenge inW.P.Nos.22096 to22101/2010 & 22805and 22806/2010 byAPFC https://hcservices.ecourts.gov.in/hcservices/ Sl.NoW.P.No.EmployerOrderChallenged/Relief claimedand dateRemarks 3612156/2010Chikmoyar CoffeeEstateNotice beforeattachment.Common orderin ATA 594(13)/2002 andtwo othersdated10.07.2009Tribunal granteddamages to be paid@ 5% p.a.(Subject matter ofchallenge inW.P.Nos.22083 to22085/2010)3716838/2010Sri RamalingaChoodambikaiMills LtdATA 740(13)/2003 dt:10.07.2009 andtheconsequentialrecovery orderdated07.04.2010The order of theTribunal is underchallenge inW.P.No.21138/2010filed by APFCIII Writ petition filed by the Trade Union:-Sl.NoW.P.No.EmployerOrder Challenged/Reliefclaimed 120938/2004Coimbatore DistrictMill Workers Union(AITUC)Seeks for a direction to theIndustrial Investment Bankof India andM/s.Dhanalakshmi Mills Ltdto complete the process ofsale under supervision ofthe operating agency for thesale of the assets of the'B' Mill and the surplusland in 'A' mill and for aconsequential direction tothe operating agency todistribute the sale proceedst the employees againsttheir dues and otherstatutory dues and to directthe Central provident FundCommissoner – R) and the ESICorporation R10 to considerwaiver of penal interest anddamages payable byM/s.Dhanalakshmi Mills.7. On behalf of the PF Department, Mr.M.Jayaraman, learnedStanding Counsel contended that the Tribunal had erred in partly https://hcservices.ecourts.gov.in/hcservices/ allowing the claims of the employers and reducing the quantum ofdamages drastically. The Tribunal also erred in holding that theauthority had not discharged its functions properly and there wasa lack of application of mind and discretion. If the Tribunal isof the opinion that the authority had not discharged his quasijudicial function, then it should have remanded the matters forfresh disposal by the authority himself. The learned counsel forthe APFC also submitted that the power to levy damages flowed fromSection 14B of the PF Act r/w Para 32A of the Employers PF Scheme1952. The scheme itself provides for levy of damages on the basisof the period and the rate of damages and therefore fixing anadhoc amounts on uniform rates is contrary to the Act and theScheme.8. Per contra, various learned counsels appearing for theemployers contended that the APFC had no locus standi to file writpetitions challenging the orders passed by the PF Tribunal. Theauthorities are quasi judicial authorities. Therefore, havingdetermined the liability of the employers and when their ordersare challenged before the judicial Tribunal, viz., EPF Tribunal,then any determination by the Tribunal is binding on the parties.Hence, the authority cannot file such writ petitions challengingthe orders of the Tribunal.9. In this context, reference was made to an unreportedjudgment of this Court in Regional Provident Fund Commissoner,Tirunelveli v. M/s.Prabha Beverages Private Ltd., Marthandam(W.P.No.3462 of 1999) dated 22.10.2008. Reliance was placed uponparagraphs 7 to 9, which reads as follows:-"7. In more or less similar circumstances, under the CinematographAct, the Supreme Court vide its decision in Union of India -vs-K.M.Sankarappa reported in (2001) 1 SCC 582 held in para 7, whichis as follows:-"7. ........The executive cannot sit in an appeal or review orrevise a judicial order. The Appellate Tribunal consisting ofexperts decides matters quasi-judicially. A Secretary and/orMinister cannot sit in appeal or revision over those decisions.At the highest, the Government may apply to the Tribunal itselffor a review, if circumstances so warrant. But the Governmentwould be bound by the ultimate decision of the Tribunal". (emphasis added)8. When the Central Board of Film Certification came up beforethis Court challenging the order of the Tribunal, a Division Benchof this Court, to which I am (K.Chandru,J.) a party, had anoccasion to consider the locus standi of the Central Board of FilmCertification in Central Board of Film Certification -vs-Yadavalaya Films ((2007) 2 MLJ 604). In para 22, it was observedas follows:- "22. In our opinion, it is doubtful whether these appeals aremaintainable, in view of the decision of the Supreme Court inUnion of India -vs- K.M.Shankarappa, AIR 2000 SC 3678: (2001) 1SCC 582: (2001) 1 MLJ 146(SC)."9.In the present case, except that the petitioner was verysensitive about his own order being reversed by the Tribunal, https://hcservices.ecourts.gov.in/hcservices/ there is no case for them to come to this Court challenging theorder of the Tribunal, which had given sound reasoning forreversing the order passed by the first respondent."10. Reference was also made to a recent judgment of theBombay High Court in Assistant Provident Fund Commissioner, Goa v.Nirmitee Holidays (P) Ltd., Pune reported in 2011-II-LLJ-469(Bom).Reliance was placed upon the following passage found in paragraph4, which is as follows:-"4. ...It is well-settled that an authority while dischargingquasi-judicial functions cannot challenge the order passed by theAppellate Authority, reversing his/her order. In my consideredopinion, the ratio laid down in the case of Village Panchayat ofVelim v. Shri Valentine S.K.F.Rebello and Another (supra) and inthe case of Village Panchayat of Sancoale and Another v. M-TechDevelopers Ltd.(supra), relied upon by the learned counsel for therespondent would be squarely applicable. I do not find any meritin the submission of Mr.Singh, learned counsel appearing for thepetitioner that the petition is maintainable since the petitionerhimself is not benefited by challenging the order passed by theAppellate Authority and he has filed the present petition only toprotect the interest of the employees of the respondent. In myopinion, this issue does not arise in the present petition. Anauthority exercising judicial or quasi-judicial functions; is noteven supposed to defend its own order when challenged beforehigher forum. In this connection, it would be appropriate to referto the judgment of the Apex Court in the case of Syed Yakoob v.K.S.Radhakrishnan and Others, AIR 1964 SC 477, in which the ApexCourt has held that the Tribunals are not suppose to defend hisown orders unless allegations are made against them. It istherefore well-settled that the Tribunal discharging quasi-judicial functions its not supposed to defend its action even whenits order are challenged before the higher forum, as has been heldin the case of Syed Yakoob v. K.S.Radhakrishnan and Others(supra)."11. Without prejudice to the said submission, it wascontended that the Tribunal ought not to have upheld the claim fordamages in the absence of any compelling reasons to levy damages.In any event, the authority should have found out that whetherthere was any due on the date on which the damages were levied. Inthis context Mr.S.Ravindran, learned counsel appearing for thepetitioner in W.P.No.16838 of 2010 relied upon the judgment of theDelhi High Court in Hi-Tech Vocational Training Centre v.Assistant Provident Fund Commissioner reported in 2011 LLR 231. Herelied upon the following passages found in paragraphs 18 and 20,which is as follows:-"18.There is another interesting aspect of the matter which doesnot appear to have been considered in any of the judgmentsaforesaid. Section 14B empowers imposition of "penalty" byrecovery of "such damages, not exceeding the amount of arrears",when an employer makes "default in the payment of any contributionto the Fund..." The language suggests that for power under Section14B to be exercised, if not on the date of levy of damages, at https://hcservices.ecourts.gov.in/hcservices/ least on the date of invocation of Section 14B, there must be a"default" coupled with "arrears". There can be no "arrears" if thecontribution to the Fund has already been paid, even if belatedly.Black's Law Dictionary, 6th Edition defines "arrears" as moneywhich is overdue and "unpaid". What has already been paid, cannotbe "arrears". If there are no "arrears" there can be nocomputation of damages not exceeding the arrears. Though Section14B itself refers to the scheme qua computation of rate of damagesbut para 32A of the Scheme also uses the word arrears inconjunction with period of default. It thus cannot be said thatunder the Scheme recovery of damages without the contributionbeing in arrears is possible.20.In my opinion, the aforesaid dicta squarely applies to Section14B also. The proceedings for imposition of penalty thereundercan be initiated only if there are arrears and then, maximumdamages of equal to arrears can be recovered. However, theproceedings cannot be commenced if there are no arrears on thatdate, even if there has been delay in payments."12. It is submitted that the percentage of damages fixedby the Tribunal should be a one time payment and not based uponannual basis. Lastly, it was also submitted that the Tribunalitself in some cases had reduced the quantum of damages to 5% andsimilar relief should have been granted to the petitioners. Atleast in a case where in W.P.No.16838 of 2010, the Tribunal gaverelief to the very same employer in an earlier occasion and thatorder should have been obeyed in case of that employer. Apart fromthe cases where the Tribunal's order is under challenge, theparties submitted that once the Tribunal has determined thepercentage of the damages, then the Department should haverefunded the amount paid in excess by the employer and it cannotfurther institute execution machinery. Only on that basis, theTribunal's orders are under challenge before this Court.13. Before proceeding to deal with the rival contentions,the case pleaded before the Tribunal will have to be looked into:The Employers pleaded before the Tribunal that due torecession in the industry, there was a delay; but the delay wasnot willful or wanton. Therefore, the imposition of uniform ratewas unwarranted. They had also placed reliance upon the judgmentof the Supreme Court in M/s.Hindustan Steel Limited v. The Stateof Orissa reported in (1969) 2 SCC 627. Reliance was placed uponthe following passage: " ....An order imposing penalty for failure to carry out astatutory obligation is the result of a quasi-criminal proceeding,and penalty will not ordinarily be imposed unless the partyobliged either acted deliberately in defiance of law or was guiltyof conduct contumacious or dishonest, or acted in consciousdisregard of its obligation. Penalty will not also be imposedmerely because it is lawful to do so. Whether penalty should beimposed for failure to perform a statutory obligation is a matter https://hcservices.ecourts.gov.in/hcservices/ of discretion of the authority to be exercised judicially and on aconsideration of all the relevant circumstances. Even if a minimumpenalty is prescribed, the authority competent to impose thepenalty will be justified in refusing to impose penalty, whenthere is a technical or venial breach of the provisions of the Actor where the breach flows from a bona fide belief that theoffender is not liable to act in the manner prescribed by thestatute...."14. It was submitted by them that the power under Section14B of the PF Act is a quasi-judicial power and the discretionexercised must be for sound and objective considerations. Para 32Aof the Scheme is only a guideline and not intended for amechanical application. Reliance was placed upon judgment of theKerala High Court in Indian Telephone Industries Ltd., v. APFC andOthers reported in 2006 (3)KLJ 698 and of the Bombay High Court inM/s.Cable Corporation of India Ltd. v. Union of India reported in2006(3)CLR 349 (Bom). In both the judgments, it was held by theHigh Court that belated remittance of PF dues liability to paydamages does not arise automatically, but the same will have to bedecided by the PF Authorities by applying mind to the merits ofthe case and no arithmetic calculation can be made. The SupremeCourt in Organo Chemical Industries and another v. Union of Indiaand others reported in AIR 1979 SC 1803 had observed that whilefixing the amount of damages, the PF authorities generally takesinto consideration the various factors vis-à-vis the number ofdefaults, the period of delay, the frequency of defaults and theamount involved. Subsequently similar view was taken by theOrissa High Court in Bhubaneswar City Distribution Division v.Union of India reported in 1998 II LLJ 1044, wherein, it wasobserved that delayed payment of contribution does not ipso factoinvite levy of damages. If the employer furnishes sufficient causefor the delay, the authority may not levy damages in a given case.15. Opposing the appeals, on behalf of the department, itwas argued that financial crisis cannot be a ground for delayedremittance of PF dues. On that ground, no waiver of damages can bemade. They placed reliance upon the judgment of the Kerala HighCourt in RPFC v. M/s.Bharat Plywood and Timber Products Ltd.,reported in 1980 LIC 446 (Kerala) and the judgment of the OrissaHigh Court in Esskay Machinery P Ltd., v. RPFC reported in 1999 ILLJ 1001 (Orissa). The authority after analyzing the rivalcontentions came to the conclusion that while damages cancertainly be levied for delayed remittance of PF, the authorityhad not followed the various guidelines and dictum of the SupremeCourt and the High Court. There was no enquiry or finding of factthat the employers had deliberately withheld the PF Contributionand also the Enquiry Officer had not exercised his discretionvis-à-vis the actual reasons for the delay in remittance of the PFdues. Therefore, since the orders under appeal were suffered fromlegal infirmities, the Tribunal found that the employer should notbe unjustly punished. But at the same time, it found that thefinancial difficulties expressed by the employer cannot be aground for delayed remittance. Therefore, keeping in view the https://hcservices.ecourts.gov.in/hcservices/ reasons and circumstances in which the default in remittance of PFdues occurred, ends of justice is to be met by restricting thelevy of damages to a particular percentage. It is this orderwhich is under challenge mostly by the Department and in somecases by the employers.16. Taking note of the first objection by the employerregarding the maintainability of the writ petitions, this Court isof the view that the writ petitions cannot be rejected on theground of locus standi of the APFC. Taking note of the peculiarposition that the PF authorities are to play under the PF Act, thechallenge by the authorities of the order of the Tribunal cannotbe rejected on the ground of want of jurisdiction. It must benoted that the authorities are playing multifarious role under theprovisions of the PF Act including investigation, enforcement,quasi judicial determination of the rights of the parties,prosecution of the erring employers as well as securing the rightsof workmen, who also contribute PF subscriptions.17. The Bombay High Court in the judgment in NirmiteeHolidays's case (cited supra) proceeded on the basis that thequasi judicial authorities are not expected to defend theirproceedings before appellate forum and hence they cannot challengethe orders of the Tribunal cannot be accepted. Under Section 7K(2)of the PF Act, the Act provides for the authority to authorizeone or more legal practitioners to present its case with referenceto any appeal before the Tribunal. Further under Section 7L of thePF Act, the Tribunal is expected to give opportunities to theparties to the appeal and to pass such orders as it may think fit.Under Section 7L(3) of the Act, the Tribunal is mandated to givecopies of its orders to both parties to the appeal. Though underSection 7L(4) of the PF Act, it is stated that any order made bythe Tribunal finally disposing of an appeal shall not bequestioned in any Court of law, the same has no relevance to awrit petition filed under Article 226 of the constitution. In theunreported decision in M/s.Prabha Beverages's Case (cited supra),this Court had merely expressed doubts about the maintainabilityof the writ petition and it did not give any categorical findingon the said issue. It was only observed that without even a primafacie case in their favour, the APFC ought not have filed thatwrit petition. Hence, that judgment is not an authority to decidethe issue involved.18. Since the authorities were allowed to be representedbefore the Tribunal even by engaging a legal practitioner andthey were also heard during the proceedings by the Tribunal andthat order was directed to be issued to them, certainly they havelocus standi to challenge the proceedings of the Tribunal beforethe High Court. The finality that is attached to the Tribunal'sorder under Section 7L(4) of the PF Act will not apply to theproceedings initiated under Article 226. It must also be notedthat that the PF authorities are holding the amount collectingfrom the employee and employer in Trust and therefore, asTrustees, they are bound to maintain the funds of the Trust with https://hcservices.ecourts.gov.in/hcservices/ greater vigil and for any loss caused to the funds of the Trust asTrustees, they may be held responsible. Therefore, if any orderof the Tribunal is manifestly erroneous or passed withoutjurisdiction, the authority can challenge the same in a writpetition under Article 226 of the Constitution.19. In this context, it is necessary to refer to certaindecisions of the Supreme Court which will have a bearing on thesaid matter:-i) In State of Orissa v. Union of India reported in 1995Supp (2) SCC 154, the State Government exercising power under theMines Act was held to have locus standi to sue the CentralGovernment. Paragraph 12 of the judgment may be usefully referredto:"12. In this connection, it is necessary to note that in the firstplace, the State Government is not merely an authority subordinateto the Central Government which would, undoubtedly, be bound bythe revisional orders of the superior authority. It is also theowner of the mines and minerals in question. If it is directed toissue a mining lease in favour of any party, it has locus standito challenge that order under Article 226 of the Constitution ofIndia."ii)In Ghulam Qadir v. Special Tribunal reported in (2002)1 SCC 33, the Supreme Court has held that a petition under Article226 can be filed by any aggrieved person. In Paragraph 38, theSupreme Court held as follows:-"38. There is no dispute regarding the legal proposition that therights under Article 226 of the Constitution of India can beenforced only by an aggrieved person except in the case where thewrit prayed for is for habeas corpus or quo warranto. Anotherexception in the general rule is the filing of a writ petition inpublic interest. The existence of the legal right of thepetitioner which is alleged to have been violated is thefoundation for invoking the jurisdiction of the High Court underthe aforesaid article. The orthodox rule of interpretationregarding the locus standi of a person to reach the court hasundergone a sea change with the development of constitutional lawin our country and the constitutional courts have been adopting aliberal approach in dealing with the cases or dislodging the claimof a litigant merely on hypertechnical grounds. If a personapproaching the court can satisfy that the impugned action islikely to adversely affect his right which is shown to be havingsource in some statutory provision, the petition filed by such aperson cannot be rejected on the ground of his not having thelocus standi. In other words, if the person is found to be notmerely a stranger having no right whatsoever to any post orproperty, he cannot be non-suited on the ground of his not havingthe locus standi."iii) In State of M.P. v. Babu Lal reported in (1977) 2 SCC435, the Supreme Court held that if a Court acts illegally, then aWrit of Certiorari lie against its order. Paragraph 5 may beusefully extracted: https://hcservices.ecourts.gov.in/hcservices/ "5. One of the principles on which certiorari is issued is wherethe court acts illegally and there is error on the face of record.If the court usurps the jurisdiction, the record is corrected bycertiorari. This case is a glaring instance of such violation oflaw. The High Court was in error in not issuing writ ofcertiorari."iv)In M.S. Jayaraj v. Commr. of Excise reported in (2000)7 SCC 552, the Supreme Court set out the guiding principles behindthe concept of locus stand and Paragraphs 12 and 14 reads asfollows:-"12. In this context we noticed that this Court has changed fromthe earlier strict interpretation regarding locus standi asadopted in Nagar Rice & Flour Mills v. N. Teekappa Gowda & Bros.1and Jasbhai Motibhai Desai v. Roshan Kumar2 and a much widercanvass has been adopted in later years regarding a person’sentitlement to move the High Court involving writ jurisdiction. Afour-Judge Bench in Jasbhai Motibhai Desai2 pointed out threecategories of persons vis-à-vis the locus standi: (1) a personaggrieved; (2) a stranger; and (3) a busybody or a meddlesomeinterloper. Learned Judges in that decision pointed out thatanyone belonging to the third category is easily distinguishableand such person interferes in things which do not concern him ashe masquerades to be a crusader of justice. The judgment hascautioned that the High Court should do well to reject thepetitions of such busybody at the threshold itself. Then theirLordships observed the following:(SCC p.683, para 38)“38. The distinction between the first and second categories ofapplicants, though real, is not always well demarcated. The firstcategory has, as it were, two concentric zones; a solid centralzone of certainty, and a grey outer circle of lessening certaintyin a sliding centrifugal scale, with an outermost nebulous fringeof uncertainty. Applicants falling within the central zone arethose whose legal rights have been infringed. Such applicantsundoubtedly stand in the category of ‘persons aggrieved’. In thegrey outer circle the bounds which separate the first categoryfrom the second, intermix, interfuse and overlap increasingly in acentrifugal direction. All persons in this outer zone may not be‘persons aggrieved’.”14. In the light of the expanded concept of the locus standi andalso in view of the finding of the Division Bench of the HighCourt that the order of the Excise Commissioner was passed inviolation of law, we do not wish to nip the motion out solely onthe ground of locus standi. If the Excise Commissioner has noauthority to permit a liquor shop owner to move out of the range(for which auction was held) and have his business in anotherrange it would be improper to allow such an order to remain aliveand operative on the sole ground that the person who filed thewrit petition has strictly no locus standi. So we proceed toconsider the contentions on merits."20. Therefore, this Court is unable to agree with thereasoning of by the Bombay High Court in Nirmitee Holidays's case(cited supra). The unreported judgment of this Court in Prabha https://hcservices.ecourts.gov.in/hcservices/ Beverages's case (cited supra) cannot be said to have decided theissue finally. Further, in that case, this Court went into themerits of the matter and only passed a passing reference. Hence,the objections stands overruled. At the same time, it must becautioned that the PF authorities should not come on appealwithout a strong legal case and for the mere sake of filing writpetitions. This word of caution is only rendered so that thisCourt is not clogged with unnecessary writ petitions thereby,leading to docket explosions. Hence the objection raised in thisregard is overruled.21. With reference to nature of power vested under Section14B of the Act for levy of damages and the scope for levying suchdamages came to be considered elaborately in the judgment of theSupreme Court in Hindustan Times Ltd. v. Union of India reportedin (1998) 2 SCC 242. In paragraphs 15 and 17, the Supreme Courtobserved as follows:-"15. In Commr. of Coal Mines Provident Fund v. J.P. Lalla & Sons3,interpreting Section 10-F of the Coal Mines Provident Fund andBonus Scheme Act, 1948, it was stated by this Court that by theuse of the words “may levy damages”, in case of default in paymentof contribution, and the words “as it may think fit to impose”, itwas clear that the determination was not based on the inflexibleapplication of a rigid formula and that by these words, theauthorities were to apply their mind to the facts andcircumstances of the case. As a duty was judicially imposed on theauthority, principles of natural justice were implied. In OrganoChemical Industries v. Union of India4 where the vires of the Actwere upheld, this Court laid down that while passing orders underSection 14-B, the authority was acting in a “quasi-judicial”capacity and was bound to give reasons for its orders. The levywas not necessarily proportionate to the loss incurred by theemployee inasmuch as it was partly compensatory and partly penal.17. As to the manner in which the authority concerned could arriveat the “damages”, A.P. Sen, J. stated that the authority usuallytakes into consideration, — as was done in that case — the numberof defaults, the period of delay, the frequency of defaults andthe amounts involved. The damages were to be compensatory andpenal as well and hence principles of estimation of damages underthe law of contract or torts, were not applicable." 22. At the same time, equitable considerations are out ofplace in the levy of damages and that the question of prejudicebeing caused to an erring employer cannot be accepted. TheSupreme Court also ruled out that if there is any long delay inmaking their claim by the Department also cannot come to therescue of the employer and there cannot be any limitation in suchcircumstances. In the very same judgment, in paragraphs 22, 24and 25 these issues have also been dealt with:"22. The reason is that while in the above cases decided by thisCourt the exercise of powers by the authority at a very belatedstage was likely to result in the deprivation of property whichrightly and lawfully belonged to the person concerned, the https://hcservices.ecourts.gov.in/hcservices/ position under Section 14-B of the Act of an employer is totallydifferent. The employer who has defaulted in making over thecontributions to the Trust Fund had, on the other hand, the use ofmonies which did not belong to him at all. Such a situation cannotbe compared to the above line of cases which involve prolongedsuspense in regard to deprivation of property. In fact, in casesunder Section 14-B if the Regional Provident Fund Commissioner hadmade computations earlier and sent a demand immediately after theamounts fell due, the defaulter would not have been able to usethese monies for his own purposes or for his business. In ouropinion, it does not lie in the mouth of such a person to say thatby reason of delay in the exercise of powers under Section 14-B,he has suffered loss. On the other hand, the defaulter hasobviously had the benefit of the “boon of delay” which “is so dearto debtors”, as pointed out by the Privy Council in NagendranathDe v. Sureshchandra De10. In that case, it was observed thatequitable considerations were out of place in matters oflimitation and the strict grammatical construction alone was theguide. Sir Dinshaw Mulla stated:“Nor in such a case as this is the judgment-debtor prejudiced. Hemay indeed obtain the boon of delay, which is so dear to debtors,and if he is virtuously inclined there is nothing to prevent hispaying what he owes into court.”(emphasis supplied)The position of the employer in case of default under Section 14-Bis no different. 24. We shall now refer to the judgments of some of the High Courtsto cull out some broad guidelines. The Orissa High Court in OrissaForest Development Corpn. Ltd. v. R.P.F. Commr.13 and a SingleJudge of the Punjab & Haryana High Court in Amin Chand & Sons v.State of Punjab14 have held like the Single Judge of the BombayHigh Court in K.T. Rolling Mills case11, that if there was unduedelay in initiating action under Section 14-B which the Courtthought was unreasonable, on that sole ground the demand could bestruck down. With great respect, this view is, as already stated,clearly wrong. The judgment of this Court in K.T. Rolling Millscase12 having been reversed by this Court, the above view is nolonger good law. In fact, the Punjab judgment was rightly reversedin appeal in State of Punjab v. Amin Chand & Sons15. The viewtaken by the learned Single Judge of the Punjab & Haryana HighCourt in 1965 has also been rightly dissented by the Delhi HighCourt in Birla Cotton Spg. & Wvg. Mills Ltd. v. Union of India16;by the Gujarat High Court in Gandhidham case17; the Patna HighCourt in Inter State Transport Agency v. R.P.F. Commr.18 and theAllahabad High Court in Northern India Press Works v. R.P.F.Commr.1925. The Gujarat High Court in Gandhidham Spg. & Mfg. Co. Ltd. v.R.P.F. Commr.17 (to which one of us Majmudar, J. was a party),laid down a principle that “prejudice” on account of delay couldarise if it was proved that it was “irretrievable”. There it wasobserved that for purposes of Section 14-B, there is no period oflimitation prescribed and that for any negligence on the part of https://hcservices.ecourts.gov.in/hcservices/ the Department in taking proceedings the employees, who are thirdparties, cannot suffer. It was further observed:“The only question that would really survive is the one whether onthe facts and circumstances of a given case, the show-cause noticeissued after lapse of time can be said to be issued beyondreasonable time. The test whether lapse of time is reasonable ornot will depend upon the further fact whether the employer in themeantime has changed his position to his detriment and is likelyto be irretrievably prejudiced by the belated issuance of such ashow-cause notice.” (emphasis supplied)It was also stated that such a defence of irretrievable prejudiceon account of delay, was to be pleaded and proved in the reply tothe show-cause notice. We may add that if such a plea is rejectedby the Department, it cannot be raised in the High Court unlessspecifically pleaded. The above principle of prejudice laid downby the Gujarat High Court in Gandhidham Spg. & Mfg. Co. Ltd.17(Guj) has been followed by the Bombay High Court in Saoner TalukaGinning, Pressing and Dal Mill Prakriya v. R.P.F. Commr.20; SuperProcessors v. Union of India21."23. The Supreme Court also held that if an employer wantsrelief, necessary pleadings must be raised before the Departmentand must be strictly proved as found in paragraph 26 of the samejudgment, which is as follows:-"26. A different aspect of prejudice was referred to in SushmaFabrics (P) Ltd. v. Union of India22 by a learned Single Judge ofthe Bombay High Court. It was stated that in some cases therecould be serious prejudice on account of abnormal delay in takingproceedings under Section 14-B, either because the records oraccounts of the defaulter are lost or on account of the personnelconcerned acquainted with the facts of a bygone period no longerbeing available for unearthing the facts. But such pleas must beraised before the Department and strictly proved. In case suchfacts are proved it is possible in some cases that there isirretrievable prejudice."24. The judgment in Hindustan Times's case (cited supra)came to be quoted with approval in the subsequent judgment in K.Streetlite Electric Corpn. v. RPF Commissioner reported in (2001)4 SCC 449. In paragraph 4, the Supreme Court observed as follows:-"4. .....The High Court adverted to the decision of this Court inHindustan Times Ltd. v. Union of India1 to reach this conclusion.In that case, this Court examined the scheme of the provisions ofthe Act in relation to delay in passing of the order. It wasstated that the mere fact that the proceedings are initiated ordemand for damages is made after several years cannot, by itself,be a ground for drawing an inference of waiver or that theemployer was lulled into a belief that no proceedings underSection 14-B would be taken and mere delay in initiating suchaction cannot amount to prejudice inasmuch as such delay wouldresult in allowing the employer to use the monies for his ownpurposes or for his business especially when there is no https://hcservices.ecourts.gov.in/hcservices/ additional provision for charging interest on such amount.However, the employer can claim prejudice if there is proof thatbetween the period of default and the date of initiation of actionunder Section 14-B he has altered his position to his detriment tosuch an extent that if the recovery is made after a large numberof years, the prejudice to him is of an irretrievable nature, andsuch prejudice can also be established by stating reason of non-availability of records of the personnel by which evidence itcould be established that there was some basis for delay in makingthe payments. Therefore, this Court was of the opinion that suchdelay, by itself, would not result in any prejudice. In thepresent case, the High Court found that no such prejudice waseither pleaded or proved. Hence the first contention standsrejected."25. At the same time, in the Streetlite Electric Case(cited supra), the Supreme Court also interfered with an orderpassed by the PF Authorities mechanically by levying damages underSection 14B of the Act based upon a Central Government's circular.While setting aside the order passed by the authorities, theSupreme Court did not remit the matter for fresh consideration. Onthe other hand, on an overall consideration, the Court itselfreduced the damages to 25% of the amounts claimed. In paragraph5, the Supreme Court held as follows:-"5. The second contention need not be examined in the view wepropose to take in the matter. Even if we hold that the CentralGovernment instructions issued under Section 20 of the Act are notbinding on the respondent, still in assessing the damages it willbe necessary for us to take note of the manner in which theamounts of damages have been levied and appropriately consider asto what would be the correct rate of damages to be imposed underSection 14-B of the Act. The statement of calculation prepared bythe respondent regarding delay in payments discloses that therespondent has imposed damages at different rates, for example,for the month of July 1976 the rate of damages is 50% whereas theperiod of default is over a month, while in case of December 1976the damages imposed upon the appellant are at the rate of 20%though the period of delay is over two months, in the case ofdelay for April 1988 damages imposed are at the rate of 30% thoughthe period of delay is only one month. In certain cases, even fora delay of below 15 days, like October 1977, damages at the rateof 85% have been imposed, while for another period though thedelay is for six months 65% damages have been levied. Therefore,it is not possible to discern the rationale adopted by therespondent in the matter of imposition of penalty. In thecircumstances, therefore, it would have been appropriate for us toset aside the order and remit the matter to the respondent, but wedo not think that such an exercise is necessary after such a longperiod. In this case, the amount due towards provident fund hasalready been deposited and this Court, by order dated 18-12-1998,granted an interim relief to the extent of 75% of the amount ofdamages sought to be recovered, while out of the disputed amountof damages (that is, Rs.88,731.25) 25% had already been directedto be deposited. In that view of the matter, we think, it is https://hcservices.ecourts.gov.in/hcservices/ appropriate to confine the damages leviable in this case on anoverall consideration to the extent of 25% of the total damagesimposed."26. In this context, it is necessary to refer to thesecond proviso to Section 14B of the PF Act wherein, the CentralBoard was given power to reduce or waive the damages levied underSection 14B of the PF Act if it is a sick industrial company andin respect of which a scheme for rehabilitation was sanctioned bythe BIFR. The parliament did not stop with giving power only toCentral PF Board alone in dealing with the question of damages.By the amendment introduced by the Central Act 33/1988 alsoclothed the power on the EPF Tribunal to entertain appealsagainst the order levying damages under Section 14B of the Act.The Tribunal was not only given an appellate power but also underSection 7(2), it was also entrusted with the same power which arevested with the officers under Section 7A of the PF Act. Further,under Section 7L(1) of the PF Act, the Tribunal has also beengiven power either to determine, modify or annul the orderappealed against. It can also refer the case back to the authoritywhich passed the order for fresh adjudication. 27. If it is seen in this context, then the argument madeby the learned Standing Counsel for the PF Authorities that theTribunal has no power to modify the order must necessarily fail.Therefore, it must be held that the Tribunal has the power to gointo all aspects of an appeal including the power to modify theorders passed by the authorities in leving damages.28. The other submission made by the learned StandingCounsel that the Tribunal should not have fixed a flat rate andmust have gone by Section 14B read with Para 32A of the Schemealso does not stand to reason. As held by the Supreme Court inStreetlite Electric case (cited supra), it cannot makearithmetical formula of levying damages and it should depend uponseveral factors. In the present case, the Tribunal had kept inmind the parameters of exercising such jurisdiction and had fixeddamages for different appeals at different rates ranging from 5%to 15% per annum as can be seen from the tabular column set outabove. Therefore, the contentions raised by the learned counselfor the PF Department must necessarily fail. The impugned ordersneed not be remanded for fresh disposal. In the StreetliteElectric case, the Supreme Court had reduced the damages to 25%of the amounts levied by exercising its own power in the interestof justice.29. The submission made by the learned counsels for theemployers that the damages cannot be based upon an annual basisbut should be adhoc amount also cannot be accepted. If anystatutory guidelines is required, a perusal of Para 32A of the PFScheme will clearly show that the rate of damages are based uponpercentage of arrears per annum only. Therefore, the Tribunal iswell within its right to indicate the damages on annual basis. https://hcservices.ecourts.gov.in/hcservices/

30. It must be noted that the Employers had the benefit ofthe appellate authority viz., (the Tribunal) exercising his powerunder Section 7I r/w Section 7L of the PF Act by reducing thedamages and quantifying it. The petitioners did not plead beforethe PF authorities with any concrete materials for either totalwaiver or for any reduction. 31. Even the contention raised by Mr.Ravindran ofM/s.T.S.Gopalan and Co., learned counsel for the petitioner inW.P.No.16838 of 2010 based upon the Delhi High Court judgment inHi-Tech Vocational Training Centre's case that no damages can belevied if there were no arrears on the date of the deductioncannot be a correct position of law in the light of the judgmentof the Supreme Court in Hindustan Times Limited's case. The otherargument that in some some writ petitions that they had filed fora review before the Tribunal to follow its own earlier order toreduce the damages to 5% as was done in another case also cannotstand to reason. The Tribunal has got discretion to award damagesin respect of each case and there cannot be any fixed percentagefor all such matters. One employer cannot take advantage or seekparity with an order passed in another case by another employerand it had to depend upon facts of each case. 32. Under the circumstances, the following writ petitionswill stand dismissed:-W.P.Nos.17518 to 17521 of 2010, W.P.Nos.21135 to 21144 of 2010,W.P.Nos.22081 to 22085 of 2010,W.P.Nos.22096 to 22101 of 2010,W.P.Nos.22805 and 22806 of 2010,W.P.Nos.24877 and 24878 of 2009,W.P.No.16840 of 2010,W.P.No.7564 of 2011 andW.P.No.16838 of 201033. With reference to W.P.Nos.31365 of 2004 and 4616 of2005 filed by Sree Venkatesa Mills Ltd., the same also mustnecessarily fail in the light of the above orders. But at the sametime, in W.P.No.21136 of 2010, the Tribunal's order in ATA No.51(13)/2007 dated 03.09.2009 was dismissed, the mills are entitledto have benefit of the order only in respect of that notification.In other respects, for the other claims, there is no impedimentfor the PF Department in claiming the amounts passed by theauthorities as there was no challenge to the orders for the periodnot covered by the order passed by the Tribunal. Hence,W.P.No.31365 of 2004 and W.P.No.4616 of 2005 will be disposed ofwith a direction to the PF Department to take note of the fact theamounts were claimed to have been paid already by the mills andhence it should rework their calculation. If any amounts are stilldue, they are at liberty to claim the same. 34. W.P.Nos.12155, 15729 of 2010 and W.P.No.12156 of 2010are concerned, if any attachment was made for amounts which aredisallowed by the Tribunal, then no attachment proceedings can be https://hcservices.ecourts.gov.in/hcservices/ initiated by the Department. If the petitioner estate is entitledfor refund of the amount consequent upon Tribunal's order beingconfirmed, then the PF authorities are directed to refund theamount by calculating the excess amount paid by the estate. Hence,W.P.Nos.12155 and 15729 of 2010 and W.P.No.12156 of 2010 aredisposed of accordingly. 35. W.P.No.20938 of 2004 is filed by a Trade Union,seeking for a waiver of damages and interest against the PFDepartment. No orders are produced and if at all, it is theemployer who alone can be said to be aggrieved by the levy ofinterest and damages and the employer has not come before thisCourt challenging the same. Therefore, the second portion of theprayer made in the writ petition cannot be granted. With referenceto the first portion of bringing the property to sale isconcerned, it is for the PF and ESI Departments to exercise theirpower vested on them and it is not for this Court to suggest themethod by which property can be sold. In so far as the claim ofthe workmen are concerned, though they may have a preferentialclaim over the other claims, but with reference to the firstcharge over the property and also the primacy given over the saidcharge is concerned, the subject matter of the said issue issquarely covered by the judgment of the Supreme Court inMaharashtra State Cooperative Bank Limited v. Assistant ProvidentFund Commissioner and others reported in (2009) 10 SCC 123.Therefore, no contrary directions can be issued in that writpetition. Hence, WP.No.20938 of 2004 stands dismissed. 36. In view of the above, all the miscellaneous petitionswill stand dismissed. However, parties are allowed to bear theirown costs in all the writ petitions.svkiSd/-Deputy Registrar//True Copy//Sub Asst. RegistrarTo1.The Employees Provident Fund Appellate Tribunal (Ministry of Labour and Employment, Government of India) Scope Minor, Core II,4th Floor, Lakshmi Nagar District Centre, Lakshmi Nagar, New Delhi – 110 092. https://hcservices.ecourts.gov.in/hcservices/

2.The Recovery Officer/ Assistant Provident Fund Commissioner, (Special Damages Cell) Enforcement Employees Provident Fund Organisation, Sub-Regional office, Post Box NO.3875, Dr.Balasundaram Road, Coimbatore – 641 018.3.The Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Sub-Regional Office, Bhavishyanidhi Bhavan Post Box No.3875, Dr.Balasundaram Road, Coimbatore – 641 018.4.The Regional Provident Fund Commissioner, Coimbatore – 641 018.5.The Secretary, Union of India, Ministry of Industry, Udyog Bhavan, New Delhi – 110 011.6.The Appellate Authority for Industrial and Financial Reconstruction, Government of India, 10th Floor, Jeevan Prakash, 25, Kasturba Gandhi Marg, New Delhi – 110 001.7.The Board for Industrial and financial Reconstruction, 22nd Floor, Jawahar Vyapar Bhavan, No.1, Tolstoy Marg, New Delhi – 700 001.8.The Industrial Investment Bank of India, No.19, Netaji Subhas Road, Calcutta, 700 001.9.State Bank of India, Central Office,Post Box No.12, Madame Gama Road, Mumbai – 400 021.10.Industrial Development Bank of India, IDBI Tower, Cuffe parade, Mumbai – 400 021.11.The Secretary to Government of Tamil Nadu, Industries Department, Fort St.George, Chennai – 600 009. https://hcservices.ecourts.gov.in/hcservices/

12.Central Provident Fund Commissioner, HUDCO Vishala,14, Bhikaji Cama Place, New Delhi 110 066.13.Employees State Insurance Corporation, ESIC Building, Kotla Road, Behind Foreign Post Office, New Delhi.+ 1 cc to M/s. Aiyar & Dolia, Advocate SR No.35555+ 1 cc to Mr. M. Jayaraman, Advocate SR No.35784+ 1 cc to M/s. K. Kalyanasundaram, Advocate SR No.36012+ 1 cc to M/s. Gupta & Ravi, Advocate SR No.35567+ 1 cc to M/s. M. Sriram, Advocate SR No.35459+ 1 cc to M/s. V.J. Latha, Advocate SR No.35470+ 1 cc to M/s. V.J. Latha, Advocate SR No.35471+ 1 cc to Mrs. S. Radha Gopalan, Advocate SR No.36263+ 1 cc to M/s. K. Gunasekar, Advocate SR No.35627+ 1 cc to Mrs. S. Radha Gopalan, Advocate SR No.36261+ 1 cc to M/s. K. Kalyanasundaram, Advocate SR No.36013+ 1 cc to M/s. T.S. Gopalan & Co, Advocate SR No.35375+ 1 cc to M/s. S. Arunkumar, Advocate SR No.35818+ 1 cc to Mr. K. Gunasekar, Advocate SR No.35628+ 1 cc to M/s. Shivakumar & Suresh, Advocate SR No.35420RV(CO)SR/22.7.2011Order inW.P.Nos.17518 to 17521,21135 to 21144,22081 to 22085, 22096 to 22101,22805 and 22806 of 2010, 4616 of 2005,31365 of 2004, 24877 and 24878 of 2009,16840 of 2010, 7564 of 2011,12155, 15729,12156, 16838 of 2010and 20938 of 2004