1999 (1) TMI 544 - HC - Indian Laws

Summary

Issues:
1. Challenge to impugned order seeking damages for delay in payment of provident fund dues.
2. Interpretation of liability under the Acquisition Act.
3. Responsibility for payment of damages between the company and National Textile Corporation.
4. Enforcement of damages against Central Government or National Textile Corporation.
5. Application of provisions of Provident Funds Act to determine liability.

Analysis:

1. The writ petition challenges an order seeking damages for delayed payment of provident fund dues. The petitioners argue that the damages fall under "employees dues on account of provident fund" as per the Acquisition Act, making the Central Government solely responsible for payment due to delays caused by them.

2. The interpretation of liability under the Acquisition Act is crucial. The Act specifies that liabilities of the company shall be discharged from the amount fixed for acquisition. The Act also outlines the appointment of a Commissioner of Payments to investigate and determine claims against the company, with priority given to employee dues, including provident fund contributions.

3. The issue of responsibility for payment of damages arises between the company and National Textile Corporation. The petitioners assert that the Corporation took over management of the textile units, making them accountable for damages. However, the counter argues that the company retained control during the period in question, shifting the burden back to the company.

4. The enforcement of damages against the Central Government or National Textile Corporation is scrutinized. The order emphasizes that liabilities incurred before the appointed day shall be enforceable against the company, not the Government or Corporation, as per the Act's provisions.

5. The application of Provident Funds Act provisions to determine liability is significant. The order clarifies that damages for contravention of the Act are the company's liability, as incurred before the appointed day. Thus, the company is held responsible for the damages, rejecting arguments for shifting liability to the Central Government or National Textile Corporation. The writ petition is dismissed, upholding the impugned order for damages.