IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION NO : 25119 of 2005 Between: M/s.Fakr-e-Millat High School, rep.by its Secretary & Correspondent,Md.Rafiuddin, S/o.Shaik Mohammad Line Galli street,Nizamabad, resident of Line Galli, Nizamabad,Pin-503001, Andhra Pradesh ..... PETITIONER AND The Regional Provident Fund Commissioner-II, Employee Provident Fund Organisation Sub-regional Officer, Nayakal Raod, Nizamabad-503001, Andhra Pradesh .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue a writ particularly inthe nature of Certiorary or any other appropriate writ or direction to the respondents setting aside the claim of damage in the orders in ATA.No.29(1)/2001 dated 22.9.2205 of the Appellate Tribunal, New Delhi read with the order in proceedings No.AP/SRO/NZB/P.D.Cell/19695/99/182 dated 13.7.1999 of the Regional Provident Commissioner-II, Nizamabd, Andhra Pradesh or pass any other order or orders as deemed fit and proper in the circumstances of the case, in the interest of Justice. Counsel for the Petitioner:MR.MOHD YOUSUFUDDIN Counsel for the Respondent No.: SMT.CHINTALAPUDI LAKSHMI KUMARI HON’BLE SRI JUSTICE V. ESWARAIAH WRIT PETITION NO. 25119 OF 2005 ORAL ORDER: The petitioner questions the order of the Regional Provident Fund Commissioner-II, Employees Provident Fund Organisation- Appellate Tribunal, dated 22nd September 2005 made in ATA No. 29(1)/2001 in reducing the arrears of amount to the tune of Rs. 2,29,405/- for the delayed remittances of PF dues instead of Rs. 1,64,585.40 as illegal and arbitrary. While admitting the Writ Petition, this Court granted interim stay on 2.11.2005 on condition of the petitioner depositing a sum of Rs. 64,585/- within three months from the date of that order. It is stated that the petitioner deposited the said amount. The balance amount payable is only Rs. 1,00,000/-. It is stated by the learned counsel appearing for the petitioner that the petitioner is a minority, non-profit and voluntary organization and therefore, for the contribution amount payable towards the employees provident fund, this court has granted instalments to pay the amount and therefore, levying any damages under Section 14 of the Employees Insurance Act, does not arise. The brief facts of the case are that the petitioner-School is covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and as against the payment of contribution under Section 7-A demanding a sum of Rs. 4,39,121/- vide proceedings of the Assistant Provident Fund Commissioner, Nizamabad dated 4.6.1997, the petitioner filed Writ Petition No. 14931 of 1997, which was disposed of on 22.7.1997 subject to condition of depositing a sum of Rs. 1,00,000/-. Pursuant to the said order, the matter was enquired again and orders under Section 7-A of the Act have been passed on 24.9.1998 holding that the petitioner has already paid a sum of Rs. 1,00,000/- and therefore, the petitioner is liable to pay remaining amount of Rs. 1,64,000/-, which is liable to be paid within 15 days. The said amount finally became recoverable pursuant to the said final order dated 24.9.1993. It is stated that the contribution amount payable is from the month of August 1988 to May 1996 and the remaining dues payable after deducting Rs. 1 lakh which was already paid on 2.9.1997. No doubt the said amount was permitted to be paid in instalments but it is stated that as there was delay in remitting the contribution amount from August 1988 to May 1996, the petitioner is liable to pay damages under Section 14-B of the Act. Accordingly, the Regional Provident Fund Commissioner passed an order dated 13.7.1999 levying the damages of Rs. 2,29,405/- under Section 14-B of the Act for the said period. Questioning the said order dated 13.7.1999, the petitioner filed ATA No. 29(1) of 2001 on the file of Employees Provident Fund Appellate Tribunal and the said Tribunal took note of the fact that initially the order dated 4.6.1997 was passed determining the contribution amount to the tune of Rs. 4,39, 121/- and questioning the said order W.P.No. 14931 of 1997 was filed which was allowed setting aside the said order subject to condition of paying Rs. 1,00,000/- within six weeks. The damages cannot be levied more than the amount payable towards the contribution, but the damages are levied at Rs. 2,29,405/- under Section 14-B therefore, the same is illegal. The damages cannot be exceeded the amount of arrears. Arrears finally determined at Rs. 1,64,585-40 and therefore, the damages that were imposed were restricted to Rs. 1,64, 585.40. Admittedly, there is a delay in paying the contribution amount and therefore, the original demand order dated 4.6.1997 was set aside and after the remand the arrears were arrived at Rs. 1,64,585- 40. It is not open for the department to levy penalty on the amount of Rs. 1,00,000/- which was already deposited pursuant to the orders of this Court. Therefore, the tribunal has rightly held that the levy of damages on the amount paid at Rs. 1,00,000/- pursuant to the orders of this court as illegal and arbitrary. Therefore, the only question that arises for consideration is as to whether the levy of damages at Rs. 1,64,585/- is legal or valid. Under Section 14-B where an employee makes default in the payment of any contribution, the competent authority is entitled to levy penalty not exceeding the amount of arrears . The maximum limit to levy the penalty of such damages are equal to the amounts but not exceeding. There is no embargo to levy less penalty towards damages also. Neither the respondents or the appellate authority has considered the contentions of the petitioner for reduction of damages. The appellate tribunal having compounded the amount of damages equally to the amount, has not considered for reduction of such damages and therefore, having regard to the facts that the petitioner is a non-profitable educational institution, I am of the opinion that it is just and proper to reduce the damages amount. Accordingly, the damages as reduced by the appellate Tribunal are further reduced to Rs. 1,14,585/-. As the petitioner already paid a sum of Rs. 64,585/- the petitioner is liable to pay a further sum of Rs. 50,000/- towards damages. Having regard to the peculiar facts and circumstances of the case a lenient view has been taken by reducing the damages amount of Rs. 1,64,585/- to Rs. 1,14,585/-. The balance amount of Rs. 50,000/- is directed to be paid within four weeks from today failing which the respondents are entitled to collect the interest at the rate of 12% per annum. Accordingly, the Writ Petition is disposed of. No order as to costs. ____________________ V. ESWARAIAH, J Date: 01.04.2008 KA ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. The Regional Provident Fund Commissioner-II, Employee Provident Fund Organisation, Sub-regional Officer, Nayakal Raod, Nizamabad-503001, Andhra Pradesh 2 2CCs to G.P. for Home, High Court buildings, High Court of A.P. Hyderabad 3 2CD copies