IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.06.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NO.29470 of 2010 and M.P.No.1 of 2010 The Management of W.S.Industries (India) Ltd., 108,Mount Poonamallee Road, Porur, Chennai-600 116. .. Petitioner Vs. The Assistant Provident Fund Commissioner (PDC), Employees Provident Fund Organisation, Regional Office: Tambaram, 3,Rajaji Salai, Tambaram, Chennai-600 045. .. Respondent This writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records in proceeding No.TN/RO/TBM/PDC/5839/55/2010, dated 09.12.2010 on the file of the respondent and to quash the same. For Petitioner : Mr.N.Manoharan For Respondent : Mr.J.Sathyanarayana Prasad ORDER The petitioner has filed the present writ petition seeking to challenge an order dated 09.12.2010 on the file of the respondent Assistant Provident Fund Commissioner, Tambaram. By the aforesaid order, a penalty under Section 14B of the EPF Act was levied against the petitioner. The petitioner management was informed that for the delayed payment of dues to the department, penal damages are entitled to be levied. The stand of the management that there was settlement under Section 18(1) can have no bearing on the management. Therefore, they were informed that in terms of Section 14B read with Section 7-Q, they are bound to pay a sum of Rs.31530/- and also Rs.31,440/- respectively. If the petitioner do not pay the amount, they were also informed that coercive steps will be taken for recovery of the amount. https://hcservices.ecourts.gov.in/hcservices/ 2.It is seen from the records that the workmen engaged by them moved the Labour Court under Section 33C(2) of the Industrial Disputes Act, claiming certain additional amounts towards wages. The matter was taken before the Lok Adalat. On the suggestion made by the Lok Adalat, the petitioner had entered into a settlement under Section 18(1). The petitioner management had agreed to pay certain amounts towards the claim for additional wages. But, in that agreement, it was stated that they will deduct PF out of the amount payable to the workmen and it will be paid to the department. But no additional liability shall be made on the management on any account. Notwithstanding the same, the department had issued notice claiming damages and penal interest on the delayed payment. 3.When notice was issued on 18.6.2010, the petitioner management informed that the issue is covered by Section 18(1) settlement followed by the Lok Adalat proceedings. Therefore, they are not bound to pay any damages. Notwithstanding the same, the impugned order came to be passed. It is challenging the same, the writ petition came to be filed. The same was admitted on 23.12.2010. Pending the writ petition, the interim injunction was granted. 4.On notice from this court, the respondent has filed a counter affidavit, dated 7.4.2011. In the counter affidavit, it was stated that the contribution claimed was in respect of the additional wages and when they were not paid to the workmen, the workmen had moved the labour court. It does not mean that the contribution shall start after determination by the labour court on the said issue. Even without determination by the Labour Court, the matter was settled through aegis of Lok Adalat. A mere entering into settlement will not take away the jurisdiction of the department from levying damages and penal interest. 5.However, Mr.N.Manoharan, learned counsel for the petitioner placed reliance upon a division bench judgment of the Kerala High Court in The Regional Director, E.S.I. Corporation, Trichur Vs. T.K.Bhaskaran reported in 1997 Lab.I.C. 1115. He referred to paragraph 5 of the said judgment which is as follows: "5.Further question to be considered is whether the respondent is liable to pay damages in the facts and circumstances of this case even if there was a delay in making the payment of the contribution. This aspect has to be considered in the light of the principle laid down by this Court in the Regional Director, E.S.I. Corporation V. Sakhti Tiles, (1988) 2 Ker LJ 280. This Court has held that the Corporation will not be justified in levying the damages in cases where the employer, or the person, who is bound to pay the amount in respect of the contribution payable in this regard, is able to offer sufficient or cogent explanation for non-remittance, or in cases where there is only a technical or venial https://hcservices.ecourts.gov.in/hcservices/ breach of the provision of the Act, or there exists bona fide circumstances, which will point out that there was no deliberate omission on the part of the employer. Since the failure to carry out the statutory obligation should be adjudicated by a quasi judicial enquiry and the levy of damages is quasi penal in character, such damages will not ordinarily be imposed unless the party obliged to pay the amount due, acted either deliberately or in defiance of law, or was guilty of contumacious or dishonest conduct, or acted in conscious disregard of its obligation...." 6.It must be noted that the settlement reached between the parties cannot take away the jurisdiction of the authorities in determining the amount due and payable. 7.In this context, the Supreme Court in Union of India v. Ogale Glass Works reported in (1971) 2 SCC 678 has held in paragraph 47 as follows: "47.Admittedly the appellants were not parties to the award. No doubt under the Industrial Disputes Act the award will be binding, as against the respondent and its workmen. But the appellants are seeking in these proceedings to enforce the statutory duty cast upon them to collect the contributions due from the respondent which again is a statutory liability under the Act and the Scheme. The object of the appellants in enforcing the Act is only to discharge the statutory duty enjoined on them for the benefit of the employees concerned. In view of the decision of this Court, it is clear that the Act and the Scheme apply to all the sections of the respondent, and if so it follows that the respondent is liable to make contributions and that at the rate specified in the Act." 8.The said judgment of the Supreme Court was quoted and followed by the Bombay High Court in Gosalia Shipping Pvt. Ltd., Goa and another Vs. Regional Provident Fund Commissioner, Goa and another reported in 1997-II-LLJ 38 (Bom). In paragraph 11, the Bombay High Court had observed as follows: "11....This Judgment of the Apex Court should conclude the matter. Therefore any settlement and the Award between the parties cannot be binding on an Authority under the Act who can arrive at a conclusion based on all materials available including settlements if any produced before him." 9.Further, the management never challenged the said order by way of any appeal under Section 7-I. Therefore, it is not a fit case where this court can grant any relief to the petitioner. Hence https://hcservices.ecourts.gov.in/hcservices/ the writ petition will stand dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petition stands closed. Sd/ Asst.Registrar //True Copy// Sub.Asst.Registrar vvk To The Assistant Provident Fund Commissioner (PDC), Employees Provident Fund Organisation, Regional Office: Tambaram, 3,Rajaji Salai, Tambaram, Chennai-600 045. 2 cc to Mr.N.Manoharan , Advocate, Sr.No.32046 1 cc to Mr.J.Sathya Narayana Prasad , Advocate, Sr.No.32366 W.P.NO.29470 of 2010 bs(co) pmk.20.6.2011 https://hcservices.ecourts.gov.in/hcservices/