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TMI Blog1968 (9) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... rges payable under the scheme made under the provisions of the Act, the Regional Provident Fund Commissioner called upon them to pay damages determined under Section 14B of that Act. The amount demanded of Fernandes was ₹ 12,760/- which consisted of amounts described as penal interest and penal damages. Similarly, the amount demanded of Mizar Govinda Annappa Pai was ₹ 19,318/-. 2. We are asked in these Writ Petitions to quash those demands on the ground that there was no proper determination of the damages which could be demanded under Section 14B of the Employees' Provident Funds Act, 1952 which would be referred to in the course of this judgment as the Act. 3. That section reads: Where an employer makes default i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars arrears arrears arrears arrears 3rd 10% of 15% of 20% of 25% of default arrears arrears arrears arrears 4th 15% of 20% of 25% of default arrears arrears arrears 5th 20% of 25% of default arrears arrears 6th 25% of default arrears 5. The office of the Regional Provident Fund Commissioner, therefore made the arithmetic directed by that table and arrived at the sums which the petitioners were called upon to pay. 6. Mr. Jagannatha Shetty contends that it was the duty of the State Government under Section 14B of the Act to determined the sum of money which could be recovered as damages under its provisions in each case which came up before it and that it could not make a formula of universal application such as the one which the table ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what the State Government did in the case before us was to evolve a rigid and inflexible formula for the computation of damages. It is clear that a general scheme of that description is not authorised by Section 14B. The damages which could be recovered under that section are in the nature of a punishment or penalty as explained by the High Court of Patna in R. B. H. M. Jute Mills (Private) Ltd. v. Regional Provident Funds Commissioner, Bihar (1958) ILR 37 Pat 47, and it is the duty of the appropriate Government in every case which arises before it to decide whether any damages should be recovered at all, and if so how much. 9. Section 14B does not compel recovery of damages in each case in which there is a default, nor does it specify t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the question whether any damages should be recovered and if so their measure, the only factors which have relevance are the number of defaults and their duration. It overlooks the relevance of other factors, an exhaustive catalogue of which is of course not possible. 11. The power created by Section 14B is to determine the amount of those damages as Government may think fit to impose. The words may recover occurring in the concluding part of that section demonstrate that in a given case Government have no power, if the circumstances justify the conclusion, to decide against the recovery of any damages, and it is that power of which the State Government stood denuded by the prescription of a rigid formula which in its opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not be less than 2% of the arrears. It again directs that where the delay in the payment is for a period more than a month and not more than two months, damages equivalent to 5% of the arrears should be recovered. So the amount of damages payable would be the same where there is a delay during a period of a month and one or during the full period of two months. It will also be observed that whereas a person who has defaulted during a period of one month should pay damages amounting to 2% of the arrears, a person who is a defaulter for a period of a month and one day becomes liable to pay a sum equivalent to 5% of the arrears. The same odd feature of the table is discernible with respect to all the six defaults to which it refers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut is clear that this postulate is unacceptable since the authority which could exercise power under Section 14-B is the authority in whom that power resides at the point of time when the determination has to be made, irrespective of the period of default. We were intimated by both sides that the notification by which there was delegation, has since been rescinded and that the power which was so delegated has been recalled by the State Government. So, it is clear that although it was possible for Government notwithstanding the delegation to exercise power which it had so delegated, that power exclusively vests in Government after the delegated power was recalled. That being so and with respect to the defaults with which we are concerned in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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