2025:JHHC:35724 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (L) No. 6347 of 2005 …. SNL Bearing Limited, a company incorporated under the provisions of the Companies Act of 1956 having its office and Works at Ratu, District: Ranchi through its General Manager, Shri Ashok Kumar Ghosh, son of Shri Ranjit Kumar Ghosh working at Ratu, P.O. & P.S. Ratu, District: Ranchi, resident of 186C, Vidalaya Marg, Ashok Nagar, Ranchi ……Petitioner Versus The Regional Provident Fund Commissioner-II, Employees Provident Fund Organisation, Regional Office, Jharkhand, Bhagirathi Complex, Karam Toli, Ranchi ……Respondent With W.P. (C) No. 858 of 2005 …. SNL Bearing Limited, a company incorporated under the provisions of the Companies Act of 1956 having its office and Works at Ratu, District: Ranchi through its General Manager, Shri Ashok Kumar Ghosh, son of Shri Ranjit Kumar Ghosh resident at Ratu, P.O. & P.S. Ratu, District: Ranchi, ……Petitioner Versus 1. The Chief Provident Fund Commissioner, Provident Fund Organization, New Delhi 2. The Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Regional Office, Jharkhand, Bhagirathi Complex, Karam Toli, Ranchi 3. The Recovery Officer, Employees Provident Fund Organisation, Regional Office, Jharkhand, Bhagirathi Complex Toli, Ranchi. ……Respondents ----- CORAM: HON'BLE MR. JUSTICE SANJAY PRASAD ----- For the Petitioners : Mr. Nipun Bakshi, Advocate Mr. Shubham Sinha, Advocate For the Respondents : Mr. Rupesh Singh, Advocate Mr. Jagdeesh, Advocate …… 2 CAV Judgement Delivered on 29.08.2025 Both the above W.P.(L) No. 6347 of 2005 and W.P.(C) No.858 of 2005 are being heard and disposed of together as matter relate to one and same company and order passed by the respondents with regard to affairs of the same petitioner’s company. 2. W.P.(L) No.6347 of 2005 has been filed on behalf of the petitioner company for grant of following reliefs:- (a) Issuance of a writ of or in the nature of a certiorari for quashing the order dated 29.09.2005 whereby the respondent has imposed upon the petitioner company a fine of Rs.5,000/- for not producing the aforesaid records relating to 19 years ago even after recording the petitioner’s statement to the effect that it does not have such old records; (b) Issuance of a writ of or in the nature of a certiorari for quashing the entire proceedings initiated by the respondent whereby he has been calling upon the petitioner to produce documents from the year 1986 onwards in spite of the fact that since 1986 umpteen inspections have already been held and a number of officers of the Provident Fund Department have already carried out inspection from time to time and in spite of the fact that the petitioner has clearly informed the respondent both orally and in writing that such records relating to 19 years ago are not traceable now; and for further ancillary reliefs. 3. 3. W.P.(C) No.858 of 2005 has been filed on behalf of the petitioner company for grant of following reliefs:- (a) Issuance of a writ of or in the nature of a certiorari for quashing the order dated 06.01.2005 passed by the Respondent 3 No.2 purportedly under Section 7-B of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 whereby he has, inter alia, rejected the petitioner’s application for review in a wholly illegal manner, without application of mind, without giving any reasons as regards the facts and ground raised by the petitioner and without even affording any opportunity of hearing to the petitioner(Annexure-9), (b) Issuance of a writ of or in the nature of a mandamus directing the respondents to consider and decide the petitioner’s application under Section 17 of the said Act for grant of exemption in respect of the petitioner’s Provident Fund Trusts duly registered in accordance with law and also recognized by the Income Tax Department and thus qualified and entitled to grant of exemption; (c) Issuance of a writ of or in the nature of a mandamus commanding upon the respondents to grant to the petitioner the exemption as claimed by them in accordance with law and for which they fulfill all necessary conditions and criteria and in spite of which the Respondent No.1 has been sitting tight over the matter for the last about 20 years despite numerous and repeated reminders from time to time all of which are not under dispute; (d) Issuance of appropriate writ or order or direction directing the Respondents No.2 and 3 to refund to the petitioner about Rs.2.00 Lakhs coercively and preemptively realized by them in hot haste by an attachment order dated 18.01.2005 attaching the petitioner’s Bank Account which Indian Bank, Jawan Bhawan Branch, Main Road, Ranchi in which the petitioner has its Current Account No.CA-522 and that too behind the back of the petitioner and without any notice to it. And other ancillary reliefs. 4. Heard Mr. Nipun Bakshi, learned counsel for the 4 petitioner in both the above writ petitions and Shri Rupesh Singh, learned counsel for the Respondent assisted by Mr. Jagdeesh. 5. It is submitted by the learned counsel for the petitioner [in WP(C) No.858 of 2005] that the order dated 07.09.2004 (Annexure-7) by which the petitioner has been directed to pay the due amount of Rs.1,14,62,872.00 and the interest of Rs.46,73,231.00 under Section 7A and 7Q respectively a Employee Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter to be referred as EPF Act) have been imposed by the Regional Provident Fund Commissioner, is illegal, arbitrary and not sustainable in law and as the same has been passed without showing the manner of calculation of said amount and order has been passed on mere presumption and on the basis of the gross salary of the employees. It is further submitted even the impugned order dated 07.09.2004 (i.e. Annexure-7) cover those employees, who have already superannuated/retired or had died and as such their incomes and their contribution already returned but they were also made part of application and taken note while passing an order on 07.09.2004. It is submitted that the Respondent A.P.F.C. or RPFC did not take action for indefinite period and suddenly started enquiry in the year 2002 and has passed impugned order dated 07.09.2004. 6. It is submitted that even the order dated 06.01.2005 by the Assistant P.F. Commissioner, Ranchi in Review Petition filed under Section 7-B of E.P.F. & M.P. Act, 1952 against the order under Section 7-A. of the E.P.F and M.P Act has been rejected illegally, arbitrarily and not sustainable in law. 7. It is submitted that the petitioner has established the Industry in the name of Shri Ram Needle Industries Ltd. and had 5 constituted the Trust in the name of S.N.L Employees Provident Fund and in the year 1984 for the benefit of its employees and provisions of said Act and the provision of E.P.F. and M.P. Act were applicable with effect from 01.04.1983. The petitioner had another Trust in the name of S.N.L Officers Provident Fund Trust for the Welfare of Officers though it was not required to do so under the E.P.F and M.P. Act but the petitioner had established this voluntarily. 8. It is submitted even before the filing application for exemption under Section 17 of said Act, the petitioner had voluntarily formed two Provident Fund Trusts and got them registered and had got them recognized by the Income Tax Department under Section 17 of the EPF and MP Act, 1952. It is submitted that the petitioner had filed an application under Section 17 of EPF and MP Act, seeking exemption from the depositing the contribution with the Provident Fund Department and had submitted the application before the Regional Provident Fund, Commissioner, Patna on 29.01.1987. Even in the said petition dated 29.01.1987, the petitioner had informed the authorities that it has been allotted Code No. BR/5152 for coverage of its worker under the provisions of E.P.F and M.P. Act 1952, the petitioner also pointed out that it had established S.N.L. Employees Provident Fund and also established S.N.L. Officers Provident Fund. However, the matter remained pending with the authorities before the erstwhile State of Bihar. It is submitted that in the 1980s the Head Office of the petitioner was at Calcutta and petitioner company had registered itself with Regional Provident Fund Commissioner, West Bengal who had granted to the petitioner the Code No. WB/23993 dated 30.12.1983. Subsequently, the petitioner 6 decided to set up of Provident Fund Trusts in the year 1994 as mentioned above and the petitioner requested the Regional Provident Fund Commissioner (in short R.P.F.C) Calcutta to cancel the Code and accordingly R.P.F.C, West Bengal cancelled the said Code No.WB/23993 by communicating vide the same letter dated 12.06.1985, which has been enclosed as Annexure 3 in WP(C) No.858 of 2005. 9. It is submitted that the petitioner, thereafter, applied for exemption of its both Trusts i.e. Provident Fund Trust for Officers and Provident Fund Trust for Employees, under Section 17-1 of E.P.F and M.P. Act to the R.P.F.C Patna vide application dated 29.01.1987 (as enclosed as Annexure-2), but nothing was done for long period as such the petitioner had issued reminder and ultimately R.P.F.C, Patna vide letter dated 21.05.1990 as contained in (Annexure-4) in WP(C) No. 858 of 2005 called for certain documents from the petitioners. Thereafter, the petitioner applied the same by sending its reply on 13.06.1990 (which has been enclosed in Annexure-5 in WP(C) No.858 of 2005). The petitioner had also informed the R.P.F.C Patna that the R.P.F.C Calcutta had cancelled the earlier code of the petitioner and the accumulations relating to the employees of the petitioner company had been refunded by it in order to enable the said accumulations to be transferred into the office of aforesaid Provident Fund Trust. The petitioner had also pointed out that the Income Tax Department vide letter dated 27.08.1984 and 04.04.1985 had also recognized the SNL Officers Provident Fund and SNL Employees Provident Fund respectively (as contained in Annexure-6 and Annexure-6/A) in WP(C) No.858 of 2005. Thus, the condition for grant of exemption under Section 17 of E.P.F and M.P. Act was fulfilled on 7 account of recognition of the said two funds by the Income Tax Department under Rule 67(2) of the ITR Rules, which is a condition precedent for filing application under Section 17 of E.P.F and M.P. Act for seeking exemption from the provisions of said Act. It is submitted that the respondent sat over the matter for a long period and suddenly show cause notice was issued upon them and in the year 2002 and an Enquiry was conducted hurriedly and they were held defaulter under Section 7-A of E.P.F and M.P. Act and the authorities imposed a penalty of Rs.1,14,62,872.00 (Rs. One crore fourteen lakhs sixty two thousand eight hundred seventy two) under Section 7-A of E.P.F. and M.P. Act and held liable to pay the interest under Section 7-Q of the said E.P.F & M.P. Act by directing to pay interest of Rs.46,73,231.00/- pursuant to the order by the Assistant P.F. Commissioner, Ranchi (in short to be referred as ‘APFC’). 10. It is submitted that even the petitioner pointed out certain discrepancies in the impugned order dated 07.09.2004 by filing Review Petition on 18.10.2004. However, the Respondent No.2 i.e. the RPFC, Ranchi failed to consider the same and the A.P.F.C, Ranchi rejected the review petition on 06.01.2005 (i.e. Annexure-9) by the A.P.F.C, Ranchi. It is submitted that the order dated 07.09.2004 as contained in Annexure-7 and letter dated 06.01.2005 as contained in Annexure-9 are non-speaking and no reason has been cited for passing the order dated 07.09.2004 Annexure-7 and hence the same are liable to be set aside. 11. In support of his contention, learned counsel for the petitioner has relied upon the Judgment reported in (2010) 9 SCC 496 Para 47, (2013) SCC online Delhi High Court, Para 23. 12. It is further submitted that there is no period of limitation 8 in deciding the exemption application and the petitioner had relied upon the Judgment reported in (1998) 2 SCC 242 at Para 15 and 17, Judgment passed in (1993) (ii) LLM 930 Bombay High Court at Para 21 to 27 of Para 32 and 33 and also the judgment reported in (1995) 1SCC 181 at Para 4. 13. It is submitted that on the question of alternative remedy the learned counsel for the petitioner has relied upon the judgment reported in (2004) 13 SCC 655 at Para 3 to 4 and (2023) SCC Online Supreme Court 1995 Para 5 to 8. 14. Learned counsel also refers provisions of Section 17 (1-A),(2-A),(2-B) and also Section 17(3)(a)(b) of EPF and MF Act. 15. It is further evident that while passing the impugned order dated 07.09.2004 (i.e. Annexure-7) the Respondent had failed to take notice that the employees who had superannuated/retired or the employee who had died invoice favour or their family members, the required contribution and their income have already been returned by the Petitioner Company to its employees and hence the impugned order is also illegal and not sustainable in the eye of law. 16. It is submitted that the application of the petitioner was not decided for last 16 years and suddenly the proceeding under Section 7-A of EPF and MP Act was initiated and vide order dated 07.09.2004 (i.e. Annexure-7) the authorities has imposed the liability upon the petitioner to the extent of Rs.1,14,62,872/- and also enclosed the fine of Rs.46,73,231/- and thereafter the petitioner had filed the Review Petition on 18.10.2004. However, the said Review Petition was rejected vide letter dated 06.01.2005 and which has been challenged by the WP(C) No.858 of 2005 and hence the fine of Rs.5,000/- could not be imposed upon the 9 petitioner for non-production of those documents from 1986 onwards. In support of the contentions, learned counsel for the petitioner has relied upon the following judgments which is as follows:- 1994 II LLJ 1177, 1997 I LLJ 118, 1995 I LIC 1438 and hence the impugned order dated 22.09.2005 (i.e. Annexure-4) may be set aside. 17. It is further submitted that the petitioner has provided three categories of Provident Fund Trust and the Respondent authorities i.e. RPFC and APFC had shown no dispute with regard to the first category of Trust i.e. SNL Officers Trust and also no dispute was shown with the third category of Trust namely SNL Factories Employees Trusts. However, the respondents are mainly aggrieved with the creation of second category of fund known as SNL Employees Provident Fund. 18. Thus, in view of the above the order dated 07.09.2004 Annexure-7 passed by APFC and letter dated 06.01.2005 sent by the APFC, Ranchi Annexure-9 may be set aside and the Respondents may be directed to dispose of and decide the application of the petitioner in the light of provisions of Section 16 of the EPF Act and the Respondent No.2 and 3 are directed to refund Rs. 2,00,000/- to the petitioner which was released by the passing the adjustment order dated 18.01.2005 by which the bank account of the petitioner was attached without issuing any notice and hence this writ petition may be allowed. Argument in WP(L) No.6347 of 2005:- 19. It is submitted that the order dated 29.09.2005 (i.e. Annexure-4) is illegal, arbitrary and not sustainable in the eye of law. It is submitted that the petitioner has already pointed out that the records for the period 1984-86 could not be produced and 10 same has already been lost and even since 1986 umpteen inspection have been held by a number of Officers of Provisional Fund Department time to time and the petitioner has already informed the Respondents in both oral and writing that the search records relating to 19 years ago are not traceable and hence in view of the above, the averments made in WP(L) no.6347 of 2005, this writ petition may be allowed. Argument by the Respondent in W.P.(L) No.6347 of 2005 20. It is submitted that this W.P.(L) No.6347 of 2005 is devoid of merit and fit to be dismissed. It is submitted that the petitioner had failed to produce the old records for the period 1984-1986 deliberately and intentionally. Although, the same were produced before concerned Authorities in the State of West Bengal. It is submitted that when the records pertaining to the same old period in respect of regular employees could be produced by the establishment, non-production of records in respect of contract employees for the same period is obviously willfully and deliberately. It is submitted that the statute does not provide for any limitation under Limitation Act regarding initiation of the proceeding U/S 7-A, the establishment cannot get advantage of non-production of records at the cost of EPF and allied benefits of hundreds of contract employees. Since the establishment, despite repeated directions did not produce the records, the respondent was constrained to impose fine of Rs.5,000/-, in order to compel the petitioner to produce the records. 21. It is further submitted non-production of the documents, even on an affidavit, will not stand in favor of the petitioner company as they were allowed to produce the documents before the A.P.F.C. once they have produced the same before the 11 authorities of the West Bengal for the year 1984-1986 then the petitioners company was under infancy period. Keeping in view the non-compliance for production of records as well as the fact that this proceeding is altogether different one for assessment in respect of contract employees, show-cause notice was issued to the Employer as to why fine of Rs.5,000/- should not be imposed since the establishment did not produce the records deliberately and willfully, a fine of Rs.5000/- was imposed U/s 32 of C.P.C read with Section 7-A(2) of EPF and MP Act, 1952 and hence this W.P(L) No.6347of 2005 may be dismissed. Argument by the Respondent in WP(C) No.858 of 2005 22. On the other hand, learned counsel for the Respondent has submitted that this writ petition WP(C) No.858 of 2005 is devoid of merit and fit to be dismissed. It is submitted that the order dated 07.09.2004 (Annexure-7) and order dated 06.01.2005 (Annexure-9) are fit and no interreference is required. It is submitted that the proceedings under Section 7-A of the Act was initiated for determination of dues in respect of regular employees on 19.02.2002 and after providing as many as 25 opportunities, an order was passed on 07.09.2004 whereby the establishment was directed to deposit Rs.1,14,62,872/- as EPF and allied dues and Rs.46,73,231/- as interest under Section 7-Q for the period involved 4/86 to 2/03. 23. Thereafter, one another proceeding was initiated for determination of dues for the period 4/86 to 8/04 in respect of the employees engaged through the Contractors because a complaint was received from various workers regarding non-extension of EPF & Allied benefit to them since 1986 itself. 24. It is submitted that as per provision contained under para 12 2(f) of EPF & MP Act, the term “employee” includes person engaged through the contractors and a large number of employees engaged through the contractors from 1986 to 2003 had complained that they have not been extended the EPF and Allied benefits as envisaged under statute. 25. It is submitted that assessment u/s 7-A have been assessed on 07.09.2004 in respect of regular employees only on the basis of records produced by the establishment itself. The order passed U/s 7-A of EPF and MP Act is speaking order which depicts that the records produced by the establishment shows that they have deposited the amount in any Trust created on its own; without any approval of the competent authority, the same has to be paid to statutory authority who is duty bound to look after social security in the interest of poor workers. 26. It is submitted that another proceedings U/s 7-A was initiated in respect of contract employees on the basis of large number of complaints received from such contract employees. 27. Learned counsel for the respondent submitted that the present writ petition is not maintainable and the petitioner has got the alternative remedy of filing statutory appeal under Section 7-I of E.P.F and MP Act. However, instead of filing an appeal under Section 7-I of the Act, the petitioner has directly filed the writ petition before this Court and hence the writ petition is not maintainable. 28. It is further submitted that the writ petition is also not tenable, in view of the above fact that the prayer for quashing the order dated 07.09.2004 (Annexure-7) passed in under Section 7-A of the Act and non-consideration and for not taking decision on the application filed under Section 17 of the E.P.F and M.P Act by the 13 petitioner for seeking exemption, have been clubbed together. Learned counsel for the Respondent has strenuously argued on this scope of Section 17 of E.P.F and MP Act and has submitted as per Provision of Section 17 of E.P.F and MP Act, it is evident that provisions of Section 17 of the Act is a discretionary in nature and it is not mandatory in nature. The petitioner has got no equitable right to be granted relief under Section 17 of the Act. 29. It is submitted so far as the Pension scheme is concerned the same is deemed to have been granted after expiry of three months in the light of Section 17 read with Para 39 of Employees Pension Scheme, which says that it would be deemed to have been granted within three months from the date of filing of such application, however, there is no such provision for automatic exemption in case of Employees Provident Fund Scheme. 30. It is submitted that the provision of Section 17-H has been incorporated in this beneficial legislation but it is not the right of the Employer to be considered for grant of exemption on the Act, if the same has not been passed within due time. It is submitted that E.P.F and M.P Act is a special Act and hence the provision of General Clause Act will not apply. 31. So far as, the grant of non-consideration of application for exemption of the petitioner company is concerned, it is further submitted instead of filing the appeal, the petitioner has already moved before the Tribunal. It is submitted that even the Division Bench of this High Court has held that the delay in filing the Appeal cannot be condoned for more than sixty days and for further 60 days that is total 60+60= 120 days. It is submitted that Section 17 of EPF and MP Act provides certain schemes and conditions for grant of subscription of Employees Provident Fund. 14 It is submitted that the petitioner being employer has not transferred the fund of the Trust to the RPFC. 32. It is submitted that a person cannot be allowed to take the advantage of its own wrong as the petitioner has also slept after filing application in the year 1987 and even after reply of the RPFC from the Patna on 21.05.1990 vide Annexure-4. It is submitted that so far as the Respondents are concerned, it has no objection with regards to the first category of Trust i.e. SNL Officers Provident Fund Trust and SNL Employees Labour Fund Trust. 33. However, so far as the Second Trust i.e. SNL Employees Provident fund is concerned, the employees having the salary of Rs.20,000 or minimum is allowed to switch over to SNL Officers Provident Fund Trust which is also not legally permissible as one of the employee, who had entered into the SNL Employees Provident Fund Trust, had to remain there till the age of their superannuation and the action of the petitioner for allowing the workman’s or employees of SNL Officer Provident Fund will amount to depriving them of their right and proper contribution. Even, it is further submitted switching over from SNL Employees Provident Fund Trust to SNL Officer Provident Fund Trust is penal in nature in view of the proviso 2 of Section 406 of Indian Penal Code. It is submitted that cancellation of registration of West Bengal Code No. WB/29223 will not save the petitioner company from the rigors of EPF and MP Act. It is submitted that even as per Section 1(2) and Section 1(3)(a)(b) of EPF and MP Act, coverage cannot be withdrawn once they have entered into SNL Employees Provident Fund Trust. 34. It is submitted that this writ petition is further infructuous 15 in view of above Act after passing of the impugned order dated 07.09.2004 and 06.01.2005 respectively, the petitioner company had started depositing the EPF contribution before the Regional Provident Fund Commissioner (i.e. RPFC) and they are regularly depositing the said contribution before the Office of the RPFC and thus this writ petition is devoid of merit as the petitioner had started depositing EPF contribution. 35. It is further submitted that even the writ petition is bad for not impleading the Union of India as the party in this case. It is submitted that application has been filed before the Central Government for exemption under Section 17 of the EPF Act and hence, the Union of India was a necessary party to be impleaded at that time. It is submitted that Section 7-B of the Act provides for filing a review petition whereas Section 7-I of the Act provides for filing the appeal and it is prescribed that no appeal shall be entertained unless 75 % (percent) of the amount is deposited before the learned Tribunal or the receipt of deposit of 75 percent of the amount due from him under Section 7-A of Act and the appeal may be filed before the Tribunal so that the appeal may be held to be maintainable. Hence, these writ petitions WP(L) No.6347 of 2005 and WP(C) No.858 of 2005 may be dismissed. 36. Having heard learned counsel for both the sides and from going through the records, it transpires [in WP(C) No. 858 of 2005] that the petitioner has established the Industry at Ratu Road at Ranchi in the year 1984 under the Company’s Act 1956. 37. It appears that in order to provide its employees the benefits of Provident Fund even before the provisions of the said Act became applicable to the petitioner’s establishment at Ratu, 16 Ranchi, Two Provident Fund Trusts were floated by the petitioner company with effect from 10.09.1984. 38. At this stage, it will be relevant to refer to Section 2(b), Section 3, 3-a, Section 4 and Section-7, 7-a, 7-b of EPF and MP Act which read as follows:- Section-2(b):- “basic wages” means all emoluments which are earned by an employee while on duty or {on leave or on holidays with wages in either case} in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include. Section-3:- Power to apply Act to an establishment which has a common Provident Fund with another establishment,- Where immediately before this Act becomes applicable to an establishment there is in existence a Provident Fund which is common to the employees in any other establishment, the Central Government may, by notification in the Official Gazette, direct that the provisions of this Act shall also apply to such other establishment. Section-4:- Power to add to Schedule. I-(1) The Central Government may, by notification in the Official Gazette, add to Schedule I any other industry in respect of the employees whereof it is of opinion that a Provident Fund Scheme should be framed under this Act, and thereupon the industry so added shall be deemed to be an industry specified in Schedule I for the purposes of the Act. (2) All notifications under Sub-Section (1) shall be laid before Parliament, as soon as may be, after they are issued. Section-7(B):- Review of order passed under Section 7-A. Sub-section (1) of Section 7(B):- Any person aggrieved 17 by an order made under sub-section (1), but from which no appeal has been preferred under this Act, and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the order was made, or on account of some mistake or error apparent on the face of the record or for any other sufficient reason, desires to obtain a review of such order may apply for a review of that order to be officer who passed the order: Provided that such officer may also on his own motion review his order if he is satisfied that it is necessary so to do on any such ground. Sub-section (2) of Section 7(B):- Every application for review under Sub-section (1) shall be filed in such form and manner and within such time as may be specified in the scheme. Sub-section (3) of Section 7(B):- Where it appears to be Officer receiving an application for review that there is no sufficient ground for a review, he shall reject the application. Sub-section (4) of Section 7(B):- Where the officer is of opinion that the application for review should be granted, he shall grant the same. 39. The condition 13 and 16 of EPF and MP Act read as follow:- “13:- The Board of Trustees shall maintain detailed accounts to show the contributions credited, withdrawal and interest in respect of each employee. The maintenance of such records should preferably be done electronically. The establishments should periodically transmit the details of members’ accounts electronically as and when directed by the CPFC/RPFC. 16:- The Board of Trustees and the Employer shall file such 18 returns monthly/annually as may be prescribed by the Employees’ Provident Fund Organization within the specified time-limit, failing which it will be deemed as a default and the Board of Trustees and employer will jointly and separately be liable for suitable penal action by the Employee’s Provident Fund Organization.” 40. It appears that at the relevant point of time in the year 1984 till 1986 Section 16(1)(b) as it then stood, provided for an infancy period of three years from the date of setting up of the establishment, the Employer was not required to fulfil the obligations of deducting and depositing the Provident Fund Contributions in respect of its Employees. However, with effect from 22.09.1997 by the Amendment Act 10 of 1998, this provision has since been deleted from the statute book. As such the provisions of the said act, at that time, became applicable to the petitioner’s works at Ratu, Ranch only with effect from 01.04.1986. 41. It appears that the petitioner even before application of the said Act, had voluntarily formed two Provident Fund Trusts, had got them registered and had also got them recognized by the Income Tax Department (which is one of the criteria required for availing exemption under Section 17 of the said Act). Accordingly, it made an application for grant of exemption under Section 17 so that instead of depositing the contributions with the Provident Fund Department, the said contributions could be deposited in the aforesaid provident Fund Trusts. 42. It appears that in the eighties only those employees were under the coverage of the said Provident Fund Act, who were drawing salary below Rs.25000/- per month but as a benevolent measure and in order to afford to even such excluded employees 19 the benefits of Provident Fund, this petitioner-company went to the extent of constituting the other Trust by the name of SNL Officers Provident Fund and began to regularly give to such employees the benefits of Provident Fund. 43. It appears that earlier the Head office of the petitioner- company used to be in Calcutta and, as such, at that time, the petitioner-company had got itself registered with the Regional Provident Fund Commissioner of West Bengal, who had granted to the petitioner the code No.WB/23993 dated 30.12.1983. 44. It appears that in the year 1984 the petitioner had decided to set up the Provident Fund Trusts as hereinbefore mentioned and accordingly it was submitted as application before the Regional Provident Fund Commissioner at Calcutta to cancel the aforesaid code number to enable the accumulations lying with the Department to be transferred to the Trusts. The Regional Provident Fund Commissioner (R.P.F.C), West Bengal did the needful by terms of its written communication dated 12.06.1985. 45. It appears that since the accumulations from the Provident Fund Department at Calcutta stood transferred to the Provident Fund Trusts created by the petitioner-company in conformity with the provisions of the said Act, it had applied for exemption of the aforesaid two Trusts under Section 17(1) of the EPF and MP Act, 1952 to the then Regional Provident Fund Commissioner at Patna by terms of its application dated 29.01.1987. 46. It appears that the petitioner’s aforesaid application was followed up by it by sending reminders to the Regional Provident Fund Commissioner on 09.02.1987, 06.03.1987, 22.07.1987, 08.10.1987, 10.01.1990 and 16.01.1990. 47. It appears that the then Regional Provident Fund 20 Commissioner (R.P.F.C.) at Patna acknowledged the petitioner’s application and responded to the same and to the reminders by calling for certain details in connection with the said matter by terms of his letter dated 21.05.1990. 48. It appears that the petitioner had furnished all required details along with its reply and representations dated 13.06.1990 before A.P.F.C, Patna. 49. It appears, since the Code number given by the R.P.F.C at Calcutta had been cancelled and the accumulations relating to the employees of the petitioner-company had been refunded by it in order to enable the said accumulations to be transferred into the coffers of the aforesaid Provident Fund Trusts and since the petitioner had already applied for exemption under Section 17 of the said Act and the petitioner kept on deducting and depositing the Provident Fund Contributions in respect of each and every employee duly and regularly into the said Trusts. 50. It has been held in the case of Godrej Sara Lee Ltd. Vs. Excise & Taxation Officer-cum-Assessing Authority & Ors. reported in 2023 SCC Online SC 95 at Para 5 to 8 as follows:- “Para-5:- A little after the dawn of the Constitution, a Constitution Bench of this Court in its decision reported in [1958] SCR 595 (State of Uttar Pradesh v. Mohammad Nooh) had the occasion to observe as follows : "10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute, (Halsbury's Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has 21 exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies.. . ." Para-6:- At the end of the last century, this court in paragraph 15 of its decision reported in (1998) 8 SCC 1 (Whirlpool Corporation v. Registrar of Trade Marks, Mumbai) carved out the exceptions on the existence whereof a writ court would be justified in entertaining a writ petition despite the party approaching it not having availed the alternative remedy provided by the statute. The same read as under : (i) where the writ petition seeks enforcement of any of the fundamental rights ; (ii) where there is violation of principles of natural justice ; (iii) where the order or the proceedings are wholly without jurisdiction ; or (iv) where the vires of an Act is challenged. Para-7:- Not too long ago, this court in its decision reported in [2021] SCC Online SC 884 (Assistant Commissioner of State Tax v. Commercial Steel Limited)* has reiterated the same principles in paragraph 11. Para-8:- That apart, we may also usefully refer to the decisions of this Court reported in (1977) 2 SCC 724 (State of U. P. v. Indian Hume Pipe Co. Ltd.)** and (2000) 10 SCC 482 (Union of India v. State of Haryana). What appears on a plain reading of the former decision is that whether a certain item falls within an entry in a sales tax statute, raises a pure question of law and if investigation into facts is unnecessary, the High Court could entertain a writ petition in its discretion even though the alternative remedy was not availed of ; and, unless exercise of discretion is shown to be unreasonable or perverse, this Court would not interfere. In the latter decision, this court found the issue raised by the appellant to be pristinely legal requiring determination by the High Court without putting the appellant through the mill of statutory appeals in the hierarchy. What follows from the said decisions is that where the controversy is a purely legal one and it does not * (2021) 93 GSTR 1 (SC). ** (1977) 39 STC 355 (SC). involve disputed questions of fact but only questions of law, then it should be decided by the High Court instead of dismissing the writ petition on the ground of an alternative remedy being available.” 51. It has been held in the case of M/s Kranti Associates Pvt. Ltd. & Anr. Vs. Masood Ahmad Khan & Ors. reported in (2010) 9 SCC 496 at Para 47 and 48 which read as follows:- “Para-47:- Summarising the above discussion, this Court holds: 22 (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. (d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations. (f) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior courts. (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice. (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or “rubber-stamp reasons” is not to be equated with a valid decision-making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision- making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor [(1987) 100 Harvard Law Review 731-37] .) (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29 and Anya v. University of Oxford [2001 23 EWCA Civ 405 (CA)] , wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions”. (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “due process”. Para-48:- For the reasons aforesaid, we set aside the order of the National Consumer Disputes Redressal Commission and remand the matter to the said forum for deciding the matter by passing a reasoned order in the light of the observations made above. Since some time has elapsed, this Court requests the forum to decide the matter as early as possible, preferably within a period of six weeks from the date of service of this order upon it.” 52. Thus, in view of the law laid down by the Hon’ble the Supreme Court of India, this writ petition will be maintainable as there is violation of principles of natural justice by relying upon the judgment passed in the light of case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai reported in (1998) 8 SCC 1 and also in the case of M/s Kranti Associates Pvt. Ltd. & Anr. Vs. Masood Ahmad Khan & Ors. reported in (2010) 9 SCC 496. 53. It has been held in the case of U.P. State Road Transport Corporation Vs. Provident Fund Commissioner reported in 2013 SCC Online Delhi High Court 2164 at Para 23 which reads as follows:- “Para-23:- The Supreme Court in Employees State Insurance Corporation Ltd. v. HMT Ltd. (supra) was dealing with the aspect of interpretation and application of Section 85-B of the Employees State Insurance Act (for short, ‘the ESI Act’). The Scheme contained in Section 85B of the ESI Act is pari materia with the Scheme contained in Section 14-B of the Act. Like under the Act, so also under the ESI Act, the employer is obliged to regularly make deposits with the ESIC to insure the workmen. The only difference is that under the Act, when the employer makes the deposit, the said deposit has two components, namely, the employees' contribution and the employers contribution, however, the deposit made under the ESI Act is only the employers contribution. The Supreme Court examined Section 85B of the ESI Act which, like Section 14-B of the Act uses the expression “may recover” in respect of damages for default in making payment of the amounts due under the ESI Act. The Supreme 24 Court cited several earlier decisions, including those rendered while considering section 14B of the Act, and concluded that the ‘imposition’ of penalty under section 85B of the ESI Act is not a mechanical exercise to be undertaken by the Authority concerned. The imposition of penalty at the prescribed rates is not imperative. Proceedings under section 85B and section 14B of the Act are quasi judicial proceedings, wherein the authority has to apply its mind to the facts of the case and the reply to the show cause notice and to pass a reasoned order after following the principles of natural justice. Several factors go into the determination of the issue of quantification of penalty, such as the period of delay, number of defaults, frequency of default, amount involved etc. In certain situations, the party may be entitled to claim benefit of irretrievable prejudice. The Supreme Court held that penalty provision should be construed strictly. Only because a provision has been made for levy of penalty, the same by itself would not lead to the conclusion that the penalty must be levied in all situations. When discretionary jurisdiction is vested in the authority to levy penal damages, the same could not be construed as imperative. Even where the regulations have been prescribed, general guidelines and upper limits for imposition of damages, it could not be said that in no case mitigating circumstances can be taken into consideration by the adjudicating authority. The authority should indicate the reasons rejecting the justification for delay. The authority should also indicate as to why imposition of damages at the rates specified in the order was required to be made. The Supreme Court in this decision observed as follows: 14. Section 85-B of the Act uses the words “may recover”. Levy of damages thereunder is by way of penalty. The legislature limited the jurisdiction of the authority to levy penalty i.e. not exceeding the amount of arrears. Regulation 31-C of the Regulations, therefore, in our opinion, must be construed keeping in view the language used in the legislative Act and not dehors the same. 15. Our attention, however, has been drawn to a decision of this Court in Hindustan Times Ltd. v. Union of India (1998) 2 SCC 242 wherein it has been laid down: “From the aforesaid decisions, the following principles can be summarized: 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 realization 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 14-B.” 16. It was, however, opined that in certain situations, the employer 25 can claim the benefit of “irretrievable prejudice” in case a demand for damages is made after several years. In that case, this Court was concerned, inter alia, with a question in regard to the effect of levy of damages after a long time. The question which, inter alia, arose for consideration therein was as to whether suo motu revisional jurisdiction could be exercised by the revisional authority at any time it desires. The Court made a distinction between the cases involving “recovery of money” from an employer who had withheld the contributions made by the workmen in trust and other cases. It was in that situation the Court opined supra. We are not concerned with such a situation herein. 17. A penal provision should be construed strictly. Only because a provision has been made for levy of penalty, the same by itself would not lead to the conclusion that penalty must be levied in all situations. Such an intention on the part of the legislature is not decipherable from Section 85-B of the Act. When a discretionary jurisdiction has been conferred on a statutory authority to levy penal damages by reason of an enabling provision, the same cannot be construed as imperative. Even otherwise, an endeavour should be made to construe such penal provisions as discretionary, unless the statute is held to be mandatory in character. 18. In Prestolite (India) Ltd. v. Regional Director [1994 Supp (3) SCC 690 : 1995 SCC (L&S) 202] this Court rejected a contention raised by the Regional Director of Employees' Insurance that under the Employees' State Insurance General Regulations guidelines have been indicated showing as to how damages for delayed payment are to be imposed and since such guidelines have been followed, no exception should be taken thereto made to the impugned adjudication, stating: “5. … Even if the regulations have prescribed general guidelines and the upper limits at which the imposition of damages can be made, it cannot be contended that in no case, the mitigating circumstances can be taken into consideration by the adjudicating authority in finally deciding the matter and it is bound to act mechanically in applying the uppermost limit of the table. In the instant case, it appears to us that the order has been passed without indicating any reason whatsoever as to why grounds for delayed payment were not to be accepted. There is no indication as to why the imposition of damages at the rate specified in the order was required to be made. Simply because the appellant did not appear in person and produce materials to support the objections, the employee's case could not be discarded in limine. On the contrary, the objection ought to have been considered on merits.” 19. In Dilip N. Shroff v. CIT [(2007) 6 SCC 329] this Court stated : (SCC p. 353, para 40) “40. Thus, it appears that there is distinct line of authorities which clearly lays down that in considering a question of penalty, means rea is not a relevant consideration. Even assuming that when the statute says that one is liable for penalty if one furnishes inaccurate particulars, it may or may not by itself be held to be enough if the 26 particulars furnished are found to be inaccurate is anything more needed but the question would still be as to whether reliance placed on some valuation of an approved valuer and, therefore, the furnishing of inaccurate particulars was not deliberate, meaning thereby that an element of mens rea is needed before penalty can be imposed, would have received serious consideration in the light of a large number of decisions of this Court.” 20. We agree with the said view as also for the additional reason that the subordinate legislation cannot override the principal legislative provisions. The statute itself does not say that a penalty has to be levied only in the manner prescribed. It is also not a case where the authority is left with no discretion. The legislation does not provide that adjudication for the purpose of levy of penalty proceeding would be a mere formality or imposition of penalty as also computation of the quantum thereof became a foregone conclusion. Ordinarily, even such a provision would not be held to providing for mandatory imposition of penalty, if the proceeding is an adjudicatory one or compliance with the principles of natural justice is necessary thereunder. 21. Existence of mens rea or actus reus to contravene a statutory provision must also be held to be a necessary ingredient for levy of damages and/or the quantum thereof.” (emphasis supplied) 28. For the aforesaid reasons, I allow these writ petitions and quash the impugned orders passed under Section 14-B and appellate orders in each of these cases. The matter is remanded back to the Assistant Provident Fund Commissioners concerned for re-adjudication of the show cause notices issued to the petitioner under Section 14-B of the Act. The APFC concerned shall provide to the petitioner the basis on which it propose to raise the demand under Section 14-B and charge interest under Section 7Q. The submissions that the petitioner may advance shall also be considered and reasoned orders shall be passed by the APFC concerned dealing with the pleas of the petitioner. In case the petitioner is aggrieved and prefers further appeals before the Appellate Tribunal, the Appellate Tribunal shall also consider the submissions that the petitioner may advance in its appeals and pass reasoned orders after duly considering the same. Needless to state that the APFC and the Appellate Tribunal shall be guided by the relevant rulings applicable in the facts of each case.” 54. It has been held in the case of Hindustan Times Ltd. Vs. Union of India reported in (1998) 2 SCC 242 at Para 15, 23 to 25 and 29 which read as follows:- “Para-15:- In Commr. of Coal Mines Provident Fund v. J.P. Lalla & Sons [(1976) 1 SCC 964 : 1976 SCC (L&S) 161 : (1976) 3 SCR 365] , interpreting Section 10-F of the Coal Mines Provident Fund and Bonus Scheme Act, 1948, it was stated by this Court that by the use of the words “may levy damages”, in case of default in payment of contribution, and the words “as it may think fit to impose”, it was 27 clear that the determination was not based on the inflexible application of a rigid formula and that by these words, the 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 v. Union of India [(1979) 4 SCC 573 : 1980 SCC (L&S) 92 : (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 “quasi-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. Para-23:- A learned Single Judge of the Bombay High Court in K.T. Rolling Mills (P) Ltd. v. R.M. Gandhi [(1994) 1 LLJ 66 (Bom)] was dealing with a case like the one before us where the default occurred because of the delay in realisation of monies paid by cheques. The recovery proceedings were initiated after 12 years and they were quashed solely on the ground of unreasonable delay relying upon Patil Raghav Natha case [(1969) 2 SCC 187] and other cases. The said judgment was reversed in R.P.F. Commr. v. K.T. Rolling Mills (P) Ltd. [(1995) 1 SCC 181 : 1995 SCC (L&S) 272] by this Court holding that while it was true that normally powers for the exercise of which no period is prescribed were to be exercised within a reasonable time, the order in that case was not liable to be struck down not only because in Maharashtra there were 22,189 establishments in 1985 — which made it difficult to monitor delays — but also because the monies must have been used (by the employer) for its own purpose and that too without paying interest, at the cost of those for whose benefit it was meant. Any different stand would, it was held, encourage the employers to thwart the object of the Act, which could not be permitted. We are in respectful agreement with the above observations. Para-24:- We shall now refer to the judgments of some of the High Courts to cull out some broad guidelines. The Orissa High Court in Orissa Forest Development Corpn. Ltd. v. R.P.F. Commr. [(1995) 71 FLR 388 (Ori)] and a Single Judge of the Punjab & Haryana High Court in Amin Chand & Sons v. State of Punjab [AIR 1965 Punj 441] have held like the Single Judge of the Bombay High Court in K.T. Rolling Mills case [(1994) 1 LLJ 66 (Bom)] , that if there was undue delay in initiating action under Section 14-B which the Court thought was unreasonable, on that sole ground the demand could be struck down. With great respect, this view is, as already stated, clearly wrong. The judgment of this Court in K.T. Rolling Mills case [(1995) 1 SCC 181 : 1995 SCC (L&S) 272] having been reversed by this Court, the above view is no longer good law. In fact, the Punjab judgment was rightly reversed in appeal in State of Punjab v. Amin Chand & Sons [(1970) 37 FJR 92 (P&H)] . The view taken by the learned Single Judge of the Punjab & Haryana High Court in 1965 has also been rightly dissented by the Delhi High Court in Birla Cotton Spg. &Wvg. Mills Ltd. v. Union of India [ CWP 390 of 1978 28 dated 29-7-1983 (Del)] ; by the Gujarat High Court in Gandhidham case [GandhidhamSpg. & Mfg. Co. Ltd. v. R.P.F. Commr., 1987 Lab IC 659 : (1987) 1 LLN 813 (Guj)] ; the Patna High Court in Inter State Transport Agency v. R.P.F. Commr. [1983 Lab IC 940 : 1983 Pat LJR 170] and the Allahabad High Court in Northern India Press Works v. R.P.F. Commr. [1983 Lab IC 1314 : (1983) 2 LLN 595 (All)] Para-25:- The Gujarat High Court in GandhidhamSpg. & Mfg. Co. Ltd. v. R.P.F. Commr. [GandhidhamSpg. & Mfg. Co. Ltd. v. R.P.F. Commr., 1987 Lab IC 659 : (1987) 1 LLN 813 (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 14-B, 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 not 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.” (emphasis supplied) It was also stated that such a defence of irretrievable prejudice on account of delay, was to be pleaded and proved in the reply to the show-cause notice. We may add that if such a plea is rejected by the Department, it cannot be raised in the High Court unless specifically pleaded. The above principle of prejudice laid down by the Gujarat High Court in GandhidhamSpg. & Mfg. Co. Ltd. [GandhidhamSpg. & Mfg. Co. Ltd. v. R.P.F. Commr., 1987 Lab IC 659 : (1987) 1 LLN 813 (Guj)] (Guj) has been followed by the Bombay High Court in Saoner Taluka Ginning, Pressing and Dal Mill Prakriya v. R.P.F. Commr. [(1996) 72 FLR 823 (Bom)] ; Super Processors v. Union of India [1992 Lab IC 808 (Bom)].” Para-29:- 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 14-B. The fact that 29 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 of 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 must take the necessary pleas in defence in the reply to the show-cause notice and must satisfy the authority concerned 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.” 55. Learned counsel for the respondent also placed reliance upon the case of Horticulture Experiment Station v. Provident Fund Organization, reported in (2022) 4 SCC 516 at Para 15 and 19 which read as follows. “Para-15:- Taking note of the exposition of law on the subject, it is well-settled that mens rea or actus reus is not an essential element for imposing penalty or damages for breach of civil obligations and liabilities. Para-19:- Taking note of the three-Judge Bench judgment of this Court in Union of India v. Dharamendra Textile Processors [Union of India v. Dharamendra Textile Processors, (2008) 13 SCC 369] , which is indeed binding on us, we are of the considered view that any default or delay in the payment of EPF contribution by the employer under the Act is a sine qua non for imposition of levy of damages under Section 14-B of the 1952 Act and mens rea or actus reus is not an essential element for imposing penalty/damages for breach of civil obligations/liabilities.” 30 56. It further transpires form the perusal of the order dated 07.09.2004 (Annexure-7) passed under Section 7-A of the EPF and MP Act with the calculation chart of the levying fine has not been given. 57. It further transpires that the Respondent had no grievances with regard to the employees who were Officers and who were excluded by virtue of their salary exceeding the salary limit and having kept in the excluded employees category and for which the petitioner created separate Trusts for the Provident Fund namely SNL Officers, Provident Funds. 58. It further transpires that the Respondent had no objection with regard to the another category of employees of its establishment in support of whom it is returning compliance to EPFO, Regional Office, Ranchi. 59. However, the respondents have felt that the petitioner has violated the provisions of EPF and MP Act and held that the existence of SNL Employees Provident Fund Act as well as switching over from non-excluded to excluded category is in violation of EPF and MP Act 1952 by giving the list of 57 employees and they had treated as excluded employees. 60. It further reveals that the impugned order dated 29.09.2005 (Annexure-4) in WP(L) No.6347 of 2005 passed by the respondents that establishment of the petitioner has not produced Wage Register for the period prior 03/1999 on the plea that said department is not traceable although the establishment of the petitioner has produced the balance sheet in the year 1986. 61. Thereafter, the petitioner was directed to pay Rs.1,14,62,872/- towards the due for the period of 04/1986, 202/2003 under Section 7-A of the Act EPF and MP Act, without 31 showing any calculation chart by only taking three years’ salary for the period 1986-87, 1987-88, 1988-89 respectively which is not legally sustainable as the order being passed in the year 2004 but they have taken returns filed by the establishment of the petitioner for the said order. 62. It further reveals even the order dated 06.01.2005 (i.e. Annexure-9) in WP(C) No.858 of 2005 by which the review petition filed under Section 7A is rejected, is illegal and not sustainable in the eye of law as it is complete violation of principles of natural justice in the light of judgment in the case of Godrej Sara Lee Ltd. Vs. Excise & Taxation Officer-cum- Assessing Authority & Ors. reported in 2023 SCC Online SC 95also on account of error of record committed by the Respondent No.2 to the extent that demand/assess has not been challenged. 63. It would appear that Clause 79 of EPF Scheme, 1952 provides special provisions of relaxation pending decision of application of exemption by the industry or factory. 64. It appears that Clause 79 A of said EPF Scheme, 1952 provides for time limit of 45 days for filing review of the refund of amount in question whereas Clause 79 B of EPF Scheme provides time limit for communicating the view of the Central Board of the appropriate Government within three months for the application filed by Industries/Factories/Establishments under Section 17 of E.P.F and M.P Act. 65. Thereafter, the impugned order dated 07.09.2004 (i.e. Annexure-7) in WP(C) No.858 of 2005 is also perverse on the ground that the defence plea taken by the petitioner for payment for depositing the money in A/c-10 and purchase of EDLI policy from policy with effect from 01.04.1996 for towards the account 32 A/c 21 EDLI and plea regarding imposing of interest under Section 7Q were not committed by the Assistant PF Commissioner, Ranchi and without showing the calculation chart of the petitioner or sending any notice to the petitioner for hearing the review petition. 66. 66. Thus, in view of law laid down by the Hon’ble Supreme Court, it is evident that the order dated 06.01.2005 (Annexure-9) in WP(C) No.858 of 2005 has been passed in violation of principles of natural justice as order dated 06.01.2005 has been passed in absence of giving opportunity or hearing to the petitioner. 67. Thus, the impugned order dated 29.09.2004 (i.e. Annexure-7) passed by the Respondent and 06.01.2005 (i.e. Annexure-9) passed by the Respondent, are set aside and the matter is remitted back to the Respondent No.2 to decide the matter fresh within a period of six months from the receipt of the copy of this afresh. 68. So far as the order dated 29.09.2004 to impose of fine of Rs.5000 to the petitioner is concerned in WP(L) No.6347 of 2005 and the same is also liable to be set aside at this stage and the same may be considered by the authorities while deciding the claim of the petitioner under Section 7-A and 7-B of the EPF and MP Act, 1952 afresh. 69. Thus, both the writ petition W.P.(L) No.6347 of 2005 and W.P.(C) No. 858 of 2005 are allowed to the extent indicated above. (Sanjay Prasad, J.) Nishant/- N.A.F.R