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TMI Blog2014 (7) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... s constituted in view of a reference submitted by a Single Judge in Writ Petition No. 16037(W), who had entertained an opinion which differed with three earlier decisions rendered by Single Judges in three separate matters. Along with the aforestated writ petition, an appeal pending before a Division Bench against one of those Single Judge decisions was also taken up by the Special Bench. In this Appeal, therefore, we have primarily to consider whether the exposition of law by the Special Bench in Dalgaon Agro Industries Ltd. is the logical and acceptable view. 3. The factual matrix obtaining in the case at hand, succinctly stated, is that M/s. Mathura Tea Estate, P.O. Mathura Bagan, District Jalpaiguri, West Bengal, owned by Saroda Tea Company Ltd., indubitably an establishment covered by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ('the EPF Act' for brevity), had defaulted in remitting the contributions and accumulations payable under the EPF Act and the sundry Schemes formulated under that statute. It was in those circumstances that the Regional Provident Fund Commissioner ('RPF Commissioner' for brevity), Jalpaiguri, West Bengal, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damages. It was this Order of the RPF Commissioner that failed to find favour with the learned Single Judge of the High Court at Calcutta, who set aside the Commissioner's Orders and directed the said Authority to reconsider the issues within a period of three months. The learned Single Judge had drawn reliance from the ruling reported as The Regional Provident Fund Commissioner, Mangalore v. Karnataka Forest Plantations Corporation Ltd., Bangalore 2000 (1) LLJ 1134, which had ruled that on an interpretation of Section 17B the transferee employer would be liable to pay all outstanding contributions even for the period preceding the transfer, but it could not be fastened with punitive liability for acts of omission or commission of the previous employer for the period anterior to the transfer. It will bear reiteration that in terms of the judgment of the Division Bench impugned before us, the decision of the learned Single Judge in its own turn was reversed on the application of the dictum of the Special Three-Judge Bench in Dalgaon Agro Industries Ltd. 4. The Special Bench of the High Court of Calcutta in Dalgaon Agro Industries Ltd. has rendered a detailed judgment on the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification. Section 2(e) "employer" means - (i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory Under Clause (f) of Sub-section (1) of Section 7 of the Factories Act, 1948 (63 of 1948), the person so named; and (ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent; Section 7A. Determination of moneys due from employers. - (1) The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner or any Assistant Provident Fund Commissioner may, by or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployer makes default in the payment of any contribution to the Fund the Pension Fund or the Insurance Fund or in the transfer of accumulations required to be transferred by him Under Sub-section (2) of Section 15 or Sub-section (5) of Section 17 or in the payment of any charges payable under any other provision of this Act or of any Scheme or Insurance Scheme or under any of the conditions specified Under Section 17, the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf may recover from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme. Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard. Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established Under Section 4 of the Sick Industrial Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise it would not have endeavoured to explore which party/employer was 'guilty' of the infraction of the statutory provisions. The reasoning of the Karnataka decision is evidently flawed and runs counter to the intendment of the EPF Act as is crystal clear from a perusal of its Preamble (supra); and manifests the ingenuity that employers may devise to circumvent liability. 7. Mr. Jayant Bhushan, learned Senior Counsel for the Appellant has sought sustainment for his submissions from Employees' State Insurance Corporation v. HMT Ltd. (2008) 3 SCC 35, but in our consideration, in vain. In that case, the ESIC raised a claim for deposit of interest on outstanding contributions of the management under the ESIC Act and the concerned Regulations, and in addition thereto levied damages in terms of Section 85B of the Employees' State Insurance Act, 1948 ('ESIC Act' for brevity). Section 85B of the ESIC Act is essentially para materia Section 14B of the EPF Act, and therefore this decision assumes great importance. The submission of the HMT Management was that damages ought not to be levied, since Section 85B was an enabling provision and did not intend to make lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the quantum thereof since it is not inflexible that 100 per cent of the arrears has to be imposed in all the cases. Alternatively stated, if damages have been imposed Under Section 14B it will be only logical that mens rea and/or actus reus was prevailing at the relevant time. We may also note that this Court had yet again reiterated the well-known but oft ignored principle that High Courts or any Appellate Authority created by a statute should not substitute their perspective of discretion on that of the lower Adjudicatory Authority if the impugned Order does not otherwise manifest perversity in the process of decision taking. HMT Ltd. does not proscribe imposition of damages; that would negate the intent of the legislature. The submission of the Petitioner before us is that the liability was of the erstwhile management and since the Petitioner was not the "employer" at the relevant time, default much less deliberate and wilful default on the part of the Petitioner was absent. However, it seems to us that once these damages have been levied, the quantification and imposition could be recovered from the party which has assumed the management of the concerned establishment. 9. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of Section 14B of the EPF Act cannot be foisted onto his clients. Sections 14, 14A, 14AA, 14AB and 14AC of the EPF Act are the provisions postulating prosecution; in contradistinction Section 14B contemplates the power to "recover from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme". It is true that it is not a river but a mere rivulet that segregates and distinguishes the legal concepts of damages or compensatory damages or exemplary damages or deterrent damages or punitive damages or retributory damages. We shall abjure from writing a dissertation on this compelling legal nodus; save to clarify that modern jurisprudence recognizes that the imposition of punitive damages, quintessentially quasi-criminal in character, can be resorted to even in civil proceedings to deter wilful wrongdoing by making an admonished example of the wrongdoer. This is the essential purpose, it seems to us, of Section 14B of the EPF Act, and an imposition within its confines does not assume criminal prosecution so as to stand proscribed insofar as transfer of establishment from one management/employer to its successor is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m each other as per the enumerations found in the first Sub-section of Section 7I. It also appears logical to us, in the wake of the numerous and different dates of amendments, that Section 7A(2) would also be available to proceedings Under Section 14B of the Act. The applicability Code of Civil Procedure, 1908 to proceedings Under Section 14B has not specifically been barred by the statute. 13. It is necessary to clarify that Eveready Industries (India) Ltd. had in the interregnum of this litigation changed its name to Mcleod Russel India Ltd. In view of our above analysis, it is our considered opinion that the impugned judgment deserves to be upheld. It contains a detailed and logical exposition of facts as well as the law pertaining to the present dispute. We also approve the pithy observations of the RPF Commissioner, Jalpaiguri in the subject Order that failure on the part of the employers to make remittances of accumulations and contributions, undermines the objectives and purposes of the statute. We underscore that the liability of the Fund to pay interest to subscribers regardless of whether employers have paid their dues, runs relentlessly. The Commissioner has specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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