Apex Public School v. Central Board of Trustees

ORDER %

15.09.2015

¶1Issue turned on an OM dated May 29, 1990 and its interpretation placed by a Division Bench of this Court in the judgment reported as (2008) 2 LLJ 939 Systems and Stampins & Anr. Vs. Employees Provident Fund Appellate Tribunal & Ors.

¶2Before the introduction of Section 7Q in the Employees Provident Fund Miscellaneous Provisions Act, 1952, for late deposit of provident fund dues proceedings used to be initiated under Section 14B of the Act for levy of damages, which was interpreted by the Supreme Court as a compensatory amount to be paid by the employer for the benefit of the employees who used to lose benefit of interest if the amount was credited in time; also having the element of a penalty upon the employer.

¶3To lay down guidelines as to how amount under Section 14B should be computed the department had framed a policy as per which maximum amount leviable under Section 14B was restricted to 25% of the amount in default.

¶4OM dated May 29, 1990 was issued noting that with the introduction of Section 7Q, 12% simple interest per annum became statutorily payable for late deposit of the amount and therefore the desirability of revising the policy fixing percentage of the amount to be charged under Section 14B. The tabular form of the revised policy would thus translate as under:- LPA No.398/2015 & coim.matters r Period of delay Revised rates of damages Interest chargeable under Section &Q Total Existing rate of damages (Percentage Per Annum)

(i) months or less

(ii) Over months but less than 4 months

(Hi) Over months but less than 6 months

27.

(iv) Over . months

¶5In System and Stammns's case the circular, the dispute relating theretoand the decisionof the Courtwas in paragraphs6 to 8, whichread as under;- "6. The circular dated May 29, 1990 provides that all defaultersthereaftershall be liable to pay interestat the rate specifiedin column 1, that is, from 5 to 25 per cent depending upon the periodof defaultas damages under Section 14-Bof the Act. The defaulters in addition are liable to pay interest chargeableunder Section 7-Qof the Act at the rate of 12per cent per annum as mentionedin the 2nd column. The rates mentionedin column3 ofthecircular is thesum total ofcolumn Nos. 1 and 2. The total amount varies between 17 to 37per cent per annum depending upon the period of default:Thus, for defaultofless than two months, the defaulterbecomesliableto pay damagesat the rate of5per centper annum under'Section 14-B and also interest under Section 7-Q of the Act at the rate of 12 per cent per annum. Therefore, the defaulter becomes liable to pay damages under Section 14-Band interestunder LPANo.398/2015 & conn.matters v. Section 7-Qat the rate of 17 per cent per annum. This is less than theoriginalrate ofdamagesof25per centper annumas it existed before the circular dated May 29, 1990 was issued. Similarly,for defaults between two months and less thanfour monthsthe defaulter becomesliable topay damages at the rate of10per cent per annum under Section 14-B and interest at the rate of 12per centper annum; underSection 7-Q after July 1, 1997 or 22 per cent in all. For defaults of more than four months but less than six months each defaulter becomes liable to pay interest and damages at the rate of 27 per cent per annum and in defaultsofoversix months interestand damages at the rate of37per centper annum. Thusfor defaults beyond4 months the amountpayable increasedfrom theflat rate of25% per annum.

¶7The stand of the respondent however, is that even after July 1, 1997 the defaulter is liable to pay 'Total" mentioned in column 3 as well as interest at the rate of 12 per cent per annum under Section 7Q of the Act or 29%), 34%, 39% & 49% for the respective periods of default. This stand of the respondents cannot be accepted as it is contrary to their own circular dated May 29, 1990. As per the respondent defaulter will be made to pay interest under Section 7-Q at the rate of 12 percent even when he has paid damages as per the rate mentioned in column 3 which includes interest under Section 7-Q. Thus he will pay interest under Section 7-Q twice. It is clear from the circular that once interest is chargeable under Section 7-Q ofthe Act, the defaulter should be asked topay damages as per the percentage specified in column 1, that is, between 5 to 25 per annum depending upon the period of default. The third column mentions the total of the revised rate of damages and interest chargeable under Section 7-Q. Column 3 cannot be regarded as rate of damages after July 1, 1997, when interest became payable under Section 7-Q ofthe Act.

¶8Accordingly, we partly allow the present appeals with the direction to the Regional Provident Funds Commissioner to calculate the amount payable by the appellants for various periods of default in terms of the office memorandum dated LPA No.398/2015 & coiin.matters May 29, 1990 as has been explainedabove. The appeal is accordingly disposed of.No order as to the costs."

¶6The appellantsfiled three writ petitionswhichhave been disposedof by the learned Single Judge vide three identicallyworded, but separate orders,two datedMay 08, 2015 andthe thirddatedMay 11, 2015;and as we proceededto hear argumentsin the appealit dawnedthatthe learnedSingle Judgehas decidedthe threewritpetitionswithoutnotingthe facts on which the decision(s)had to be pronounced. As we proceededto cull out the relevantfacts, learnedcounselfor the respondentpointedout that there are none. Learned counsel for the appellant concedes that the three writ petitionsfiledweretotallyill-drafted.

¶7With referenceto the assessmentorderspassedand challengedin the writ petitionswe find no pleadingsto show that apart from the statutory interest@12% per annum chargeableunder Section7Q, while computing amountpayableunder Section 14B, interestwas being chargedtwice over, as was the case found by the DivisionBench in Systems and Stampins^s case. Learned counselfor the appellantconcedesto said fact.

¶8Facedwiththe situationaforesaid,prayermade by learnedcounselfdt the appellantis thatthe threeimpugnedordersdatedMay 08, 2015,May 08, 2015 and May 11, 2015 dismissing W.P.(C) No.2022/2011, W.P.(C) No.2313/2011and W.P.(C)No.5068/2014respectivelymay be set asideand the threewrit petitionsmay be dismissedas withdrawnwith libertygranted to the appellantto challengethe orderswhichwere in challengein the three writpetitions;but aftermakingnecessarypleadings.

¶9Though learned counsel for the respondentopposes the prayer but since he accepts the fact that actionableavermentshave not been made in LPANo.398/2015&conn.matters Page5of6 n the writ petition and the impugnedjudgment is theoretical in nature without dealingwith the backdropfacts; and indeedthere were none to be noted,we are inclinedto acceptthe prayermade by the appellantand recompensethe respondent the trouble of being litigated twice.

¶10The appeals are disposed of setting aside the three impugnedorders dated May 08, 2015 dismissing W.P.(C) No.2313/2011, May 08, 2015 dismissingW.P.(C) No.2022/2011and May 11, 2015 dismissingW.P.(C) No.5068/2014. The three writ petitions are dismissed as withdrawn with liberty granted to the appellants to challenge the three orders which were challenged in the three writ petitions but upon payment of cost in sum of ^20,000/- each to the respondent. SEPTEMBER 15,2015 mamta ~? Pvea PRADEEP NAN

OG, J.

MUKTA GUPTA, J. -7o ro.^)^124-g-o7/^0) 5-LPANo.398/2015 & conn.matters

$-7 to 9 * IN THE HIGH COURT OF DELHI AT NEW DELHI LPA 398/2015 APEX SECURITY AND DETECTIVE FORCE PVT LTD Appellant Represented by: Mr.S.P.Arora, Advocate with Mr.Rajiv Arora, Advocate versus CENTRAL BOARD OF TRUSTEES Respondent Representedby: Mr.KeshavMohan, Advocatewith Mr.Piyush Choudhary, Advocate LPA 399/2015 APEX PUBLIC SCHOOL Appellant Representedby: Mr.S.P.Arora,Advocatewith Mr.Rajiv Arora, Advocate versus CENTRAL BOARD OF TRUSTEES Respondent Representedby: Mr.KeshavMohan,Advocatewith Mr.Piyush Choudhary, Advocate LPA 400/2015 M/S ROAD TRANSPORT CORPORATION Appellant Representedby: Mr.S.P.Arora,Advocatewith Mr.Rajiv Arora, Advocate versus CENTRAL BOARD OF TRUSTEES EPF LPA No.398/2015 & conn.matters ORGANIZATION Respondent Represented by: Mr.R.C.Chawla, Advocate CORAM: HON'BLE MR. JUSTICE PRADEEP NANDRAJOG HON'BLE MS. JUSTICE MUKTA GUPTA