LexCOAL MINES PROVIDENT FUND COMMISSIONER, DHANBAD & OTHER versus J. LALA & SONS
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COAL MINES PROVIDENT FUND COMMISSIONER DHANBAD & OTHER v. J. LALA & SONS February 13, 1976 [A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.J 365 Coal Mines Provident Fund and Bonus Schen1e Act 1948 (XLVI of 1948)- Seclion IOF and 78-Payn1e11t of dun1ages payable by the ernpioyer-W/lether the Coal Mines Prorident Fund Con1nlissioner should give a11 hearillf? to the en1ployer-Mea11i11g of the words '\wtch da1nages" ..... "as it 1nay think -fit to .inipose". Section 1 OF of the Coal Mines Provident Fund and Bonus Scheme Act 1948 is a penal section ·under which for default in the payment of any Provi- ·dent Fund contribution, the Central Government may recover from such employer or person as the case may bi!, such damages, not exceeding 25% of the amount of arrears, as it may think fit to impose. ln respect of the period from July to September, 1968, the respondent employer was asked to pay a sum of Rs. 1455.50 as damages being 25o/o of the arrears of Provident Fund contributions by the appellant to which he filed an objection explaining the delay. The employer's request for waiving the damages was negatived. The writ application of the employer against that order was allowed by the High Court on two grounds, riz. (i) that the computation of damages should arise upon consideration of the facts and circumstances, and (ii) the autho- rities should have given an opportunity to the employer to represent the case. Dismissing the appeal by special leave, the Court, HELD: (1) The provisions contained in s. 78 of the Act indicate first that the Coal Mines Provident Fund Commissioner may determine the amount due from the employer, and seco_nd, for this purpose he may conduct such enquiry as he may deem necessary. Therefore, an enquiry is contemplated. Section 78(3) speaks of reasonable opportunity being given to an employer to represent his case. The provision in s. 1 OF of the Act also indicates that determination of damages is not a mechanical process. The words of import- ance in s. lOF of the Act are "such damages not exceeding 25 per cent of the amount of arrears as it may think fit to imnose". Here the two important features are these : "First the words of importance are "damages not exceeding 25%" show that the determination of damages is not an inflexible application of a rigid formula. Second, the words "as it may think fit to impose" in s. 10F show that the authorities are required to apply their mind to the facts and circumstances of the case. [368A-C] (2) When a body or authority has to determine a matter involving rights judicially, the principle of natural justice is implied if the decision of that body or authority affects individual rights or interests. [368E-F] Indian Sugars & Manufacturers l,td. v. Amravati Services Co-operative A 8 c D E F Society Ltd. & Anr. fl9761 2 S.C.R. 740 and State of Puniab v. K. R. Erry & G Sobhag Rai Mehta [1973] 2 S.C.R. 405, applied. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1363 of I 974. Appeal by special leave from the judgment and order dated the 20th May, 1971 of the Patna High Court at Patna in C.WJ.C. No. 306 of 1969. L. N. Sinha (Ind Giri.ih Chandra, for the appellants H S. N. Mishra, B. P. Singh and A. K. Srivastava, for the res- pondents. 9-L522SC!/76 366 SUPREME COURT REPORTS [1976] 3 S.C.R. A The Judgment of the Court was delivered by RAY, C.J.-This appeal by special leave turns on the question whether the Coal Mines Provident Fund Commissioner is to hear an employer before making an order requiring the employer to pay dama- ges under section lOF of the Coal Mines Provident Fund and Bonus Scheme Act, 1948 (hereinafter referred to as the Act). B The employer being the respondent to this appeal was directed by c D E F G H a letter dated 3 I 4 January, 1969 to pay provident fund contributions amounting to Rs. 5821.21 for the months of July to September, 1968 and damages at the rate of 25 per cent on the above dues amounting to Rs. 1455.50. The employer was required to pay dama- ges under the provisions of section 1 OF of the Act. The employer filed an objection explaining the circumstances under which there was delay in the payment of provident fund contributions. The employer prayed that damages might not be imposed at the rate of 25 per cent for the delay in payment. The employer paid the provident fund contributions. The employer was informed that damages charge
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