TaxTMI 
TaxTMI 
1998 (1) TMI 511
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.... a non-speaking order merely saying "dismissed". It is against the said judgment that this appeal has been preferred. The facts of the case are as follows: The appellant is the employer. On account of delay in payment of provident fund contributions, a notice was issued on 23.3.71 by the Department complaining of delays in remitting the provident fund amounts for the period July 65, October 65, December 65 to March 1966, August 1966, September 1966, December 1966 to February 67, July 67 to August 67, January 68, April 68 to November 68 and September 1972 and stating that the amounts were credited in the accounts of the department only after 20th of the 'following' months. The appellant was requested to inform whether the cheques for these months were "tendered" "on or before 20th of the following month" to which the payment relates. The appellant sent a letter dated 19.12.1872 giving only the dates on which the cheques were signed by the appellant. Therefore, the department sent a further letter dated 10.1.1973 asking the appellant to furnish "proof of the dates of presentation of cheques". It does not appear that the appellant sen....
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....m 1965 to 1968 was arbitrary and unreasonable, that the demand was dropped in 1971 and must be deemed to have been waived and that going by the dates of the cheques, the payments must be deemed to be in time. We have heard Sri Harish Chandra for the department. At the outset, we may sat that the Division Bench of the High Court of Delhi ought to have given reasons at least briefly, which dismissing the writ petition in limine. As stated in Fauja Singh vs. Jaspal Kaur [1996 (4) SCC 461], on the plainest consideration of justice, the High Court should have given reasons. The absence or reasons has deprived the Supreme Court from knowing the circumstances which weighed with the High Court to dismiss the matter in limine. It was an unsatisfactory method of disposal. The necessity to provide reasons, howsoever brief, in support of the High Courts' conclusions is too obvious to be reiterated. Obligation to give reasons introduces clarity and excludes or at any rate minimises the chances of arbitrariness and the higher forum can test the correctness of those reasons. It becomes difficult for this Court in all such cases to remit the matters to the High Court inasmuch as by the time c....
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....as may be specified in the scheme. The section itself, after the 1973 amendment, now provides that before levying and recovering damages, the employer shall be given a reasonable opportunity of being hear. The scheme referred to in Section 15-B is the Employees Provident Scheme 1952, so far as provident fund contributions are concerned. Under clause 29 of the said Scheme, the contribution payable by the employer shall be equal to the contribution payable by the employee. Under clause 32(3). "any sum deducted by an employer from the wages of an employee under this scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted" Therefore, the scheme creates a fiction of entrustment. Clause 38 deals with the mode of payment and says that the employer shall, before paying the member his wages in respect of any period or part of period for which contributions are payable, deduct the employees contribution from his wages which together with his own contribution as well as an administrative charge, shall be paid within 15 days of the close of every month into the Fund by separate bank drafts or cheques, &qu....
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....authorities were to apply their mind to the facts and circumstances of the case. As a duty was judicially imposed on the authority, principles of natural justice were implied. In Organo Chemical Industries & Another vs. Union of India & Others [1980 (1) SCR 61], where the vires of the Act were upheld, this Court laid down that while passing orders under section 14-B, the authority was acting in a 'quais-judicial' capacity and was bound to give reasons for its orders. The levy was not necessarily proportionate to the loss incurred by the employee inasmuch as it was partly compensatory and partly penal. Organo case itself was one where there were delays in payment of the contributions and the explanations given were rejects. The order of the Commissioner interfered with by the Supreme Court. There the default related to the period from March to October 1975 and again from December 1975 to November, 1976. The show cause notice was issued on 7.6.1977 and in response, the appellants stated that the remittal was delayed "due to difficulties beyond their control and.... there were disputes between partners of the firm, there was a power-cut of 60%..... w.e.f.May 6, 1974 an d....
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....it was provided that the arrears could be recovered in the same manner as arrears of land revenue. But by Act 37/53 section 14-B was amended providing for a special procedure under section 8-B to 8-G. By Act 40/73 section 11 was amended by making the amount a first charge on the assets of the establishment if the arrears of employee's contribution were for a period of more that 6 months. By Act 33/88, the charge was extended to the employee's share of contribution as well. In spite of all these amendments, over a period of more than thirty years, the legislature did not think fit to make any provision prescribing a period of limitation. This in our opinion is significant and it is clear that it is not the legislative intention to prescribe any period of limitation for computing and recovering the arrears. As the amounts are due to the Trust Fund and the recovery is not be suit, the provisions of the Indian Limitation Act, 1963 are not attracts. In Nityanand M. Joshi vs. Life Insurance Corporation of India [1970 (1) SCR 396], it has been held that the Limitation Act, 1963 has no application to Labour Courts and, in our view, that principle is equally applicable to recovery ....
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....he e amounts fell due, the defaulter would not have been able to use these monies for his own purposes or for his business. In our opinion, it does not lie in the mouth of such a person to say that by reason of delay in the exercise of powers under section 14B, he has suffered loss. On the other hand, the defaulter has obviously had the benefit of the 'boon of delay' which "is so dear to debtors", as pointed out by the Privy Council in Nagendranath Dev vs. Suresh Chandra Dev [ILR 60 Cal. 1(PC)]. In that case, it was observed that equitable considerations were out of place in matters of limitation and the strict grammatical construction alone was the guide. Sir Dinshaw Mulla stated: "Nor in such a case as this is the judgment debtor prejudiced. Be may indeed obtain the boon of delay, which is so dear to debtors and if he is virtuously inclined there is nothing to prevent his paying what he owes into Court." The position of the employer in case of default under section 14-B is no different. A learned Single Judge of the Bombay High Court in K.T.Rolling Mills vs. R.M.Gandhi [1994 LLJ. 66] was dealing with a case like the one before us where the default o....
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....nd the Allahabad High Court in The Northern India Press Works vs. Regional Provident Fund Commissioner, U.P. & Others [1983 LIC 1314 (All)]. The Gujarat High Court in Gandhidham Spinning & Mfg. Co. Ltd, vs. Regional Provident Fund Commissioner & Another [1987 Lab. I.C. 659 (Guj.)] (to which, one of us Majmudar, J. was a party), laid down a principle that 'prejudice' on account of delay could arise if it was proved that it was "irretrievable". There it was observed that for purposes of section 14B, there is no period of limitation prescribed and that for any negligence on the part of the Department in taking proceedings the employees, who are third parties, cannot suffer. It was further observed: "The only question that would really survive is the one whether on the facts and circumstances of a given case, the show cause notice issued after lapse of time can be said to be issued beyond reasonable time. The test whether lapse of time is reasonable or no will depend upon the further fact whether the employer in the meantime has changed his position to his detriment and is likely to be irretrievably prejudiced by the belated issuance of such a show cause notice....
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.... frequency of default and the amounts involved; default on the part of the employer based on pleas of power cut, financial problems relating to other indebtedness or the delay in realisations of amounts paid by the cheques or drafts, cannot be justifiable grounds for the employer to escape liability; there is no period of limitation prescribed by the legislature for initiating action for recovery of damages under section 14B. The fact that proceedings are initiated or demand for damages is made after several years cannot by itself be a ground for drawing an inference of waiver or that the employer was lulled into a belief that no proceedings under section 14B would be taken; mere delay in initiating action under section 14B cannot amount to prejudice inasmuch as the delay on the part of the department, would have only allowed the employer to use the monies for his own purposes or for his business especially when there is no additional provision for charging interest. However, the employer can claim prejudice if there is proof that between the period of default and the date of initiation of action under section 14B, he had changed his position to his detriment to such an extent that....