IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.16291 of 2005 (O&M) Date of decision: 31.3.2010 DCM Limited -----Appellant Vs. State of Haryana and others -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE ALOK SINGH Present:- Mr.R.L.Batta, Sr.Advate with Mr. Nikhil Batta, Advocate for the petitioner. --- Adarsh Kumar Goel,J. 1. This petition seeks quashing of notices dated 14.1.2004, 31.1.2004, 12.8.2004, 27.6.2005, 10.8.2005, 24.9.2005, Annexures P.1, P.2, P.4, P.6, P.8 and P.9 seeking to recover fee under the Haryana Rural Development Fund Act, 1986 (for short, ‘the Act) for the years 1991-92 to 1993-94. 2. Case of the petitioner is that vide minutes dated 19.5.1992, Annexure P.10, a decision was taken that in case of cotton lint and maize, market fee will not be levied in the State of Haryana if the same had already been paid in the originating State. Accordingly from 30.7.1993, there was an amendment to the Haryana Rural Development Fund Rules, 1987 and HRDF fee was exempted on agricultural produce brought for CWP No.16291 of 2005 (O&M) processing from outside the State. However, on 14.1.2004, the petitioner received notice Annexure P.1 requiring it to deposit an amount of Rs.8,53,772/- on account of HRDF fee, which was followed by further notices. The demand was barred by limitation under Article 113 of the Schedule to the Limitation Act, 1963 and was also against statutory obligation under section 5(3) of the Act which required the burden of fee to be passed on to the purchaser, implying thereby that the demand could not be raised for the first time after a long period which may prejudice the right of the petitioner for passing on the burden to the next purchaser. 3. In the reply, explanation given for the delay is pendency of some litigation in this Court and in the Hon’ble Supreme Court. 4. We have heard learned counsel for the petitioner as there is no appearance for the contesting respondents. 5. Learned counsel for the petitioner submitted that the recovery will be barred by limitation under Article 113 of the Schedule to the Limitation Act and if the said period is not held to be applicable, recovery beyond reasonable time was not permissible. It was further submitted that no proper procedure for assessment had been taken and objections of the petitioner have not been considered. Reliance has been placed 2 CWP No.16291 of 2005 (O&M) on following judgments of the Hon’ble Supreme Court:- i) The Kerala State Electricity Board, Trivandrum v. T.P.Kunhaliumma , AIR 1977 SC 282 On applicability of Article 137 of the Schedule to the Limitation Act. ii) State of Kerala and others v. V.R.Kalliyanikutty and another, AIR 1999 SC 1305 New Delhi Municipal Committee v. Kalu Ram and another, AIR 1976 SC 1637. On recovery being time-barred. It was submitted that the above judgments have been followed by this Court in Municipal Committee, Bhatinda v. Jaswant Rai and others, 1990(2) PLR 402, Hari Narain (deceased) by LRs Lalit Kumar Sharma and others v. Subhash Chander and others, AIR 1985 P&H 211 and by the Kerala High Court in Dat Pethe and another v. District Collector, Ernakulam and others, AIR 1976 Kerala 37. It was further submitted that judgment of the Hon’ble Supreme Court in M/s Hindustan Times Limited v. Union of India and others, AIR 1998 SC 688 was not applicable. 3 CWP No.16291 of 2005 (O&M) 6. We are unable to accept the plea of limitation raised on behalf of the petitioner in view of judgment of the Hon’ble Supreme Court in M/s Hindustan Times Limited, which in our opinion applies to the present case. The judgments relied upon by the petitioner are distinguishable as the same relate to period of filing suit or other proceedings. Reference may be made to observations in Paras 18 to 21 and 28:- “18. Now the Act does not contain any provision prescribing a period of limitation for assessment or recovery of damages. The monies payable into the Fund are for the ultimate benefit of the employees but there is no provision by which the employees can directly recover these amounts. The power of computation and recovery are both vested in the Regional Provident Commissioner or other officer as provided in Section 14-B. Recovery is not by way of suit. Initially, 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 u/Sections 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 than 6 months. By Act 33/88, the charge was extended to the employee's share of contribution as well. 4 CWP No.16291 of 2005 (O&M) 19. In spite of all these amendments, over a period of more than thirty years, the legislature did not think fit to make any provisions 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 by suit, the provisions of the Indian Limitation Act, 1963 are not attracted. In Nityanand M. Joshi v. Life Insurance Corporation of India, (1970) 1 SCR 396 : (AIR 1970 SC 209), 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 by the concerned authority under S. 14-B. Further in Bombay Gas Co. Ltd. v. Gopal Bhiva,(1964) 3 SCR 709 : (AIR 1964 SC 752), it has been held that in respect of an application under Section 33(c) (2) of the Industrial Disputes Act, 1947, there is no period of limitation. In that context, it was stated that the Courts could not imply a period of limitation. It was observed (at p. 757 of AIR) : "It seems that where the legislature has made no provision for limitation, it would not be open to the Court to introduce any such limitation on the grounds of fairness or justice" 5 CWP No.16291 of 2005 (O&M) The above decisions have been recently accepted in Mukri Gopalan v. Cheppilet, (1995) 5 SCC 5 (at pp. 20-22) : (1995 AIR SCW 3389 (at Pp. 3398-3400) to which one of us (Majmudar, J.) was a party while dealing with the applicability of Section 29(2) of the Limitation Act, 1963 to Courts or Tribunals. We may also point out in this connection that several High Courts have rightly taken the view that there is no period of limitation for exercise of the power under Section 14-B of the Act. 20. It is true that a principle has been laid down in State of Gujarat v. Patil Raghav Natha, (1969) 2 SCC 187 : (AIR 1969 SC 1297), while dealing with suo motu revisional jurisdiction that though there is no period of limitation prescribed for exercise of that power, still such a power must be exercised within reasonable time. The said judgment has been applied in matters relating to Section 6 of the Land Acquisition Act in a large number of cases, which were all referred to recently in Ram Chand v. Union of India, (1994) 1 SCC 44 : (1993 AIR SCW 3479). In our view, this line of cases cannot ordinarily apply to monies withheld by a defaulter, who holds them in trust. 6 CWP No.16291 of 2005 (O&M) 21. The reason is that while in the above cases decided by this Court the exercise of powers by the authority at a very belated stage was likely to result in the deprivation of property which rightly and lawfully belonged to the person concerned, the position under Section 14-B of the Act of an employer is totally different. The employer who has defaulted in making over the contributions to the Trust Fund had, on the other hand, the use of monies which did not belong to him at all. Such a situation cannot be compared to the above line of cases which involve prolonged suspense in regard to deprivation of property. In fact, in cases under Section 14-B if the Regional Provident Commissioner had made computations earlier and sent a demand immediately after the 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 14- B, 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 Dey v. Suresh Chandra Dey, (1933) ILR 60 Cal 1 : (AIR 1932 PC 165). In that case, it was observed that equitable considerations were out of place in matters of 7 CWP No.16291 of 2005 (O&M) 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. He 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. Xx xxx xxx xxxx 28. From the aforesaid decisions, the following principles can be summarised. The authority under Section 14-B has to apply his mind to the facts of the case and the reply to the show cause notice and pass a reasoned order after following principles of natural justice and giving a reasonable opportunity of being heard; the Regional Provident Fund Commissioner usually takes into consideration the number of defaults, the period of delay, the frequency of default and the amounts involved; default on the part of the employer based on plea of power-cut, financial problems relating to other indebtedness or the delay in realisation 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 8 CWP No.16291 of 2005 (O&M) 14-B. 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 14-B would be taken; mere delay in initiating action under Section 14-B 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 14-B, he has changed his position to his detriment to such an extent that if the recovery is made after a large number of years, the prejudice to him is of an "irretrievable" nature; he might also claim prejudice upon proof of loss of all the relevant records and/or non-availability the personnel who were, several years back in charge of these payments and provided he further establishes that there is no other way he can reconstruct the record or produce evidence; or there are other similar grounds which could lead to 'irretrievable" prejudice; further, in such cases of "irretrievable" prejudice, the defaulter 9 CWP No.16291 of 2005 (O&M) must take the necessary pleas in defence in the reply to the show cause notice and must satisfy the concerned authority with acceptable material; if those pleas are rejected, he cannot raise them in the High Court unless there is a clear pleading in the writ petition to that effect.” (Underlining supplied) 7. As regards passing of burden of fee, the same does not depend on assessment and the plea of prejudice is without any basis. 8. We, thus, do not find any legal bar to assessment and levy of HRDF fee. However, we direct the assessing authority to give hearing to the petitioner and pass a fresh order on merits in accordance with law. 9. The petition is disposed of. (Adarsh Kumar Goel) Judge March 31 , 2010 (Alok Singh) ‘gs’ Judge 10