Judgment:
D. Sreedevi, J.
1. The Ernakulam District Co-operative Bank Limited (hereinafter referred to as 'the Bank') is an Apex Co-operative Bank constituted and registered under the Kerala Co-operative Societies Act, 1969. The provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 are applicable to the Bank (hereinafter referred to as 'the Act'). As per the provisions of the Act the Bank is required to deposit the employer's and employees' share of Employees' Provident Fund and Family Pension Fund contributions and the Employer's share of Insurance Fund contributions, together with the Administrative/charges/Inspection charges within 15 days of the close of the respective month.
2. It is alleged in the petition that the petitioner had been regularly paying the contributions without any default. But, the petitioner could not effect prompt payments during the months of August and October in the year 1989 and January to April, July, September to November, 1990 due to unavoidable reasons. The Regional Provident Fund Commissioner, who is the first respondent in this case has issued Ext. P1 notice to the petitioner for belated payment and why penalty (sic) shall not be levied on the petitioner for belated remittances and contributions. Petitioner submitted explanation. According to the petitioner the delay in making the payment is not wilful as it was because of the increase in the work load in the Bank. In September, 1990 it is stated that the workmen employed in the Bank were on strike and the work was completely paralysed and hence the petitioner could not remit the contributions in time.
3. It is alleged in the petition that without considering the objections of the petitioner the first respondent issued Ext. P2 order directing the petitioner to pay a damage of Rs. 11,931/-. Therefore, the petitioner has filed this original petition for a writ of certiorari quashing Ext. P2 order.
4. The first respondent filed a counter stating that the employer of the establishment has to pay the dues to the various accounts of the Fund within 15 days of the close of every month and in case he fails to pay the dues in time, the Regional Provident Fund Commissioner can impose damages not exceeding the amount of arrears for the period in default, as per the powers conferred upon him under Section 14B of the Act. Section 14B provides as follows:
'Power to recover damages: Where an employer makes default in the payment of any contribution to the Fund [the Family 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]'.
Thus, it is clear from Section 14B of the Act that if an employer makes default in the payment of any contribution to the Fund, he shall be liable to pay the amount by way of penalty such damages, not exceeding the amount of arrears as may be specified in the Scheme.
5. While dealing with the scope of Section 14B of the Act regarding the fixation of quantum of damages this Court in the decision reported in Bharat Plywood and Timber Products (P) Ltd. v. Employees' Provident Fund Commissioner, Trivandrum and Ors. (1977-I-LLJ-379)(Ker) held as follows:
'Section 14B clearly indicates that an employer is liable to pay damages if he has made default in payment of the contribution. Merely, because of the amount had been paid earlier to the order under Section 14B, it cannot be contended that there was no default in payment on the due date if the amount was paid only subsequent to the due date. Any delay in paying the amount under Section 6 causes loss to the beneficiaries of the scheme: such as loss of interest and the like. This is the loss that is sought to be recovered from the defaulter for the purpose of indemnifying the beneficiaries of the scheme-namely, the employees - to the extent of the loss suffered. The defaulter under Section 14B, is therefore, liable to pay damages which represent the loss; but not anything more, as such recovery would amount to penalty, and that is not permitted under the Section,'
6. In view of the above decision the respondent can claim only the loss incurred to the beneficiaries. Even though, there is sufficient reason for the petitioner to make belated payment that is not a ground for granting exemption to the petitioner from paying penalty or damages. Therefore, in the light of the above decision, I feel that 12% interest for belated payment will be a sufficient compensation for the loss to the beneficiaries.
7. Therefore, I allow this original petition directing the respondents to fix the quantum of damages caused due to belated payment, after hearing the petitioner. The damages shall be equal to 12% interest on the contribution to be remitted by the petitioner. The respondents may calculate the interest for the days of delay and issue notice to the petitioner. On receipt of the notice the petitioner shall remit the amount within one month from the date of receipt of the notice, failing which the respondents can realise the amount in a lumpsum.