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Judgment
Prathiba M. Singh, J
This hearing has been done through video conferencing.
CM APPL.20823/2021 (for exemption)
Allowed, subject to all just exceptions. Application is disposed of.
W.P.(C) 6630/2021 & CM APPL.20822/2021 (for stay)
The present petition has been filed challenging order dated 28 th April, 2021 passed by the Central Government Industrial Tribunal-cum-Labour
Court (hereinafter referred as “CGITâ€). By the said order, the levy of interest and imposition of damages under Sections 7Q and 14B of the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter, “Actâ€) have both been upheld by the CGIT.
Insofar as the order under Section 7Q of the Act is concerned, the CGIT has held that the same is not appealable as two separate orders under
Sections 14B and 7Q of the Act have been passed. Insofar as the appeal qua the imposition of damages under Section 14B of the Act is concerned,
the CGIT has upheld the imposition of damages on the ground that mens rea has been established.
Mr. A.K. Singla, ld. Senior Counsel appearing for the Petitioner has made two submissions. Firstly, he submits that in terms of the judgment of the
Supreme Court in Arcot Textile Mills Ltd. v. RPFC & Ors., (2013) 16 SCC 1, whenever a composite order is passed by the authority under Sections
7Q and 14B of the Act, the same would be appealable before the CGIT. In the present case, the show cause notice dated 26th June, 2018 is the same
notice in respect of both interest and damages. Written submissions were also common. Even the order which has been passed was communicated by
a common covering letter. Both orders bear the same number i.e., No.4841 and are dated 17th September, 2018. Ld. counsel further submits that the
text of both these orders is also the same and therefore, they should be treated as a composite order though they may be shown to be separate orders.
Thus, the CGIT is incorrect in holding that the orders would not be appealable.
Secondly, his submission is that the imposition of damages is also not valid inasmuch as, as per the notification, the authority which has imposed the
damages does not have the power to do so. According to ld. Sr. counsel, the power to levy damages and order recovery are two distinct powers
which have been conferred under the Act. Unless there is a specific notification for each of the issues, the authority cannot exercise the said power.
On behalf of the department, Mr. Rajesh Kumar, ld. Counsel submits that in this case, the Petitioner is a chronic defaulter and was involved in
various fraudulent activities. In fact, there are criminal complaints pending against the Petitioner. He further submits that the computation chart would
show that the Petitioner is a frequent defaulter and the number of defaults are several in number and huge amounts are involved. He thus submits that
he would like to file a reply to this petition and place on record relevant documents.
The Court has perused the impugned order. Insofar as the arguments qua the appealable nature of an order passed under Section 7Q of the Act is
concerned, there is no doubt that the orders, though passed separately, bear the same number and all the proceedings before the authority have been
common, commencing from the show cause notice till the final order.
Thus, this Court is of the opinion that the appeal under Section 7Q of the Act ought to have been decided by the CGIT on merits. However, in this
case, since the matter is composite in nature and the damages under Section 14Q of the Act have been upheld by CGIT, no useful purpose would be
served in remanding the matter back to the CGIT.
The other feature of this case that this Court notices is that qua almost every default, even if there is a delay of a few days, both interest and
damages are levied under Sections 7Q and 14B of the Act. This Court would like to examine this issue as to whether damages were leviable in
respect of all the defaults or only some of the defaults where the deposits are considerably delayed.
Issue notice. Notice is accepted by Mr. Rajesh Kumar, ld. Counsel for the Respondents. Let the counter affidavit be filed within six weeks.
Rejoinder thereto, if any, be filed within four weeks thereafter.
The total amount of levy by way of interest and damages is to the tune of Rs.4.37 crores. Accordingly, subject to the deposit of a sum of Rs.2
crores before the ld. Registrar General of this Court, the impugned order shall remain stayed. The said deposit shall be made within a period of 6
weeks and shall be kept in the form of an FDR on auto renewal mode. If the Respondent-authority is able to identify any of the beneficiaries, the
Respondent is permitted to move an application seeking release of pro-rata amount in this regard.
List before the Registrar on 28th September, 2021 for completion of pleadings.
List before Court on 30th October, 2021.