{"id":29801,"date":"2001-04-09T00:00:00","date_gmt":"2001-04-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-k-streetlite-electric-vs-regional-provident-fund-on-9-april-2001"},"modified":"2018-09-13T01:07:34","modified_gmt":"2018-09-12T19:37:34","slug":"ms-k-streetlite-electric-vs-regional-provident-fund-on-9-april-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-k-streetlite-electric-vs-regional-provident-fund-on-9-april-2001","title":{"rendered":"M\/S K. Streetlite Electric &#8230; vs Regional Provident Fund &#8230; on 9 April, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">M\/S K. Streetlite Electric &#8230; vs Regional Provident Fund &#8230; on 9 April, 2001<\/div>\n<div class=\"doc_author\">Author: R Babu<\/div>\n<div class=\"doc_bench\">Bench: S. Rajendra Babu, Shivaraj V. Patil<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 6498  of  1998\n\n\n\nPETITIONER:\nM\/S K. STREETLITE ELECTRIC CORPORATION\n\n\tVs.\n\nRESPONDENT:\nREGIONAL PROVIDENT FUND COMMISSIONER, HARYANA\n\nDATE OF JUDGMENT:\t09\/04\/2001\n\nBENCH:\nS. Rajendra Babu &amp; Shivaraj V. Patil\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>J   U\tD   G\tM   E\tN   T<br \/>\nRAJENDRA BABU,\tJ.  :\n<\/p>\n<p>L&#8230;I&#8230;T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T..J<\/p>\n<p>    A  notice  dated December 30, 1986 was served  upon\t the<br \/>\nappellant  to  show cause why damages under Section 14-B  of<br \/>\nthe Employees Provident Funds &amp; Misc.  Provisions Act, 1952<br \/>\n[hereinafter  referred to as the Act] for period from July<br \/>\n1976  to June 1980 be imposed upon the appellant.  On  March<br \/>\n13,  1987  an  order  was made by  the\trespondent  imposing<br \/>\ndamages\t to  the  extent  of Rs.  88,731.25  on\t account  of<br \/>\nbelated\t deposit  of the amount towards the provident  fund.<br \/>\nThe appellant claimed that delay in depositing the amount in<br \/>\ncertain\t cases\tis  only for a few days;  that even  so\t the<br \/>\nrespondent  had assessed the damages in most of the cases at<br \/>\n100%  and that the actual loss suffered by the respondent is<br \/>\nonly  to  the extent of Rs.  664\/-.  Challenging  the  order<br \/>\ndated  March 13, 1987 the appellant filed a writ petition in<br \/>\nthe  High  Court  contending  that   the  order\t is  not  in<br \/>\naccordance with the instructions issued on November 3, 1982;<br \/>\nthat  the  order  has been passed at a\tvery  belated  stage<br \/>\ninasmuch  as  for the period ending in July 1976 the  notice<br \/>\nhas  been  issued  in the year 1987;  that  para  32(A)\t was<br \/>\ninserted  into the scheme after the amendment of the Act  as<br \/>\nunder:\n<\/p>\n<p>Period of Default<br \/>\nRate of Damages<br \/>\n[%age of arrears<br \/>\nper annum]<\/p>\n<p>(a) Less than two months<br \/>\n<span class=\"hidden_text\">17<\/span>\n<\/p>\n<p>(b) Two months and above but less than<br \/>\nfour months<br \/>\n<span class=\"hidden_text\">22<\/span>\n<\/p>\n<p>(c) Four months and above but less than six<br \/>\nmonths<br \/>\n<span class=\"hidden_text\">27<\/span>\n<\/p>\n<p>(d) Six months and above<br \/>\n<span class=\"hidden_text\">37<\/span><\/p>\n<p>    The\t writ  petition\t was resisted by the  respondent  by<br \/>\ntaking\tthe  stand  that  the damages have  been  levied  in<br \/>\naccordance  with law.  The Division Bench of the High  Court<br \/>\ndismissed  the writ petition filed by the appellant.   Hence<br \/>\nthis appeal by special leave.\n<\/p>\n<p>    In this appeal, it is contended that :\n<\/p>\n<p>    (i)\t the action has been initiated very late inasmuch as<br \/>\nthe  proceedings had been initiated from 10 to 6 years later<br \/>\nthan  the  default  stated  to have been  committed  by\t the<br \/>\nappellant;  and<\/p>\n<p>    (ii) the Central Government had instructed under Section<br \/>\n20  of the Act that the damages at the rate of 25% per annum<br \/>\ncan be levied.\n<\/p>\n<p>    These  two contentions stood rejected by the High Court.<br \/>\nFirstly,  that delay in initiating proceedings under Section<br \/>\n14-B  of  the Act will not be a ground for setting aside  an<br \/>\norder  imposing damages unless specific plea of prejudice is<br \/>\nraised\t before\t  the  Provident   Fund\t  Commissioner\t and<br \/>\nestablished  and further that the instructions given by\t the<br \/>\nCentral\t Government do not have any binding force.  The High<br \/>\nCourt  adverted\t to the decision of this Court in  <a href=\"\/doc\/1899862\/\">Hindustan<br \/>\nTimes  Ltd.  vs.  Union of India &amp; Ors.,<\/a> 1998(2) SCC 242, to<br \/>\nreach  this  conclusion.  In that case, this Court  examined<br \/>\nthe scheme of the provisions of the Act in relation to delay<br \/>\nin  passing of the order.  It was stated that the mere\tfact<br \/>\nthat  the proceedings are initiated or demand for damages is<br \/>\nmade  after several years cannot, by itself, be a ground for<br \/>\ndrawing\t an  inference\tof waiver of that the  employer\t was<br \/>\nlulled\tinto a belief that no proceedings under Section 14-B<br \/>\nwould  be  taken  and mere delay in initiating\tsuch  action<br \/>\ncannot\tamount\tto  prejudice inasmuch as such\tdelay  would<br \/>\nresult\tin  allowing the employer to use the monies for\t his<br \/>\nown purposes or for his business especially when there is no<br \/>\nadditional  provision for charging interest on such  amount.<br \/>\nHowever,  the employer can claim prejudice if there is proof<br \/>\nthat  between  the  period  of\t default  and  the  date  of<br \/>\ninitiation  of action under Section 14-B he has altered\t his<br \/>\nposition  to  his  detriment to such an extent that  if\t the<br \/>\nrecovery  is  made  after  a  large  number  of\t years,\t the<br \/>\nprejudice  to  him is of an irretrievable nature,  and\tsuch<br \/>\nprejudice  can\talso  be established by\t stating  reason  of<br \/>\nnon-availability  of  records  of  the\tpersonnel  by  which<br \/>\nevidence  it could be established that there was some  basis<br \/>\nfor delay in making the payments.  Therefore, this Court was<br \/>\nof  the opinion that such delay, by itself, would not result<br \/>\nin any prejudice.  In the present case, the High Court found<br \/>\nthat  no such prejudice was either pleaded or proved.  Hence<br \/>\nthe first contention stands rejected.\n<\/p>\n<p>    The\t second contention need not be examined in the\tview<br \/>\nwe  propose to take in the matter.  Even if we hold that the<br \/>\nCentral\t Government instructions issued under Section 20  of<br \/>\nthe  Act  are  not  binding  on\t the  respondent,  still  in<br \/>\nassessing  the\tdamages it will be necessary for us to\ttake<br \/>\nnote of the manner in which the amounts of damages have been<br \/>\nlevied\tand  appropriately consider as to what would be\t the<br \/>\ncorrect\t rate of damages to be imposed under Section 14-B of<br \/>\nthe  Act.   The\t statement of calculation  prepared  by\t the<br \/>\nrespondent  regarding  delay in payments discloses that\t the<br \/>\nrespondent  has\t imposed  damages at  different\t rates,\t for<br \/>\nexample,  for the month of July 1976 the rate of damages  is<br \/>\n50%  whereas  the period of default is over month, while  in<br \/>\ncase of December 1976 the damages imposed upon the appellant<br \/>\nare  at\t the rate of 20% though the period of delay is\tover<br \/>\ntwo  months,  in  the case of delay for April  1988  damages<br \/>\nimposed are at the rate of 30% though the period of delay is<br \/>\nonly one month.\t In certain cases, even for a delay of below<br \/>\n15  days, like October 1977, damages at the rate of 85% have<br \/>\nbeen  imposed, while for another period though the delay  is<br \/>\nfor  six months 65% damages have been levied.  Therefore, it<br \/>\nis  not\t possible  to discern the rationale adopted  by\t the<br \/>\nrespondent  in the matter of imposition of penalty.  In\t the<br \/>\ncircumstances, therefore, it would have been appropriate for<br \/>\nus  to\tset  aside  the order and remit the  matter  to\t the<br \/>\nrespondent,  but  we do not think that such an\texercise  is<br \/>\nnecessary  after  such\ta long period.\tIn  this  case,\t the<br \/>\namount due towards provident fund has already been deposited<br \/>\nand this Court, by order dated December 18, 1998, granted an<br \/>\ninterim relief to the extent of 75% of the amount of damages<br \/>\nsought\tto be recovered, while out of the disputed amount of<br \/>\ndamages\t (that\tis,  Rs.  88,731.25), 25% had  already\tbeen<br \/>\ndirected  to  be deposited.  In that view of the matter,  we<br \/>\nthink,\tit is appropriate to confine the damages leviable in<br \/>\nthis  case on an over all consideration to the extent of 25%<br \/>\nof the total damages imposed.\n<\/p>\n<p>    The\t appeal is, therefore, partly allowed and the  order<br \/>\nmade   by  the\tProvident   Fund  Commissioner\tis  modified<br \/>\naccordingly.  No costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India M\/S K. Streetlite Electric &#8230; vs Regional Provident Fund &#8230; on 9 April, 2001 Author: R Babu Bench: S. Rajendra Babu, Shivaraj V. Patil CASE NO.: Appeal (civil) 6498 of 1998 PETITIONER: M\/S K. STREETLITE ELECTRIC CORPORATION Vs. RESPONDENT: REGIONAL PROVIDENT FUND COMMISSIONER, HARYANA DATE OF JUDGMENT: 09\/04\/2001 BENCH: S. Rajendra [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-29801","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>M\/S K. 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