(Prayer: Writ Petition filed under Article 226 of Constitution of India, to issue a Writ of Certiorarified Mandamus calling for the records of the respondent relating to the order passed No. MD/MDU/PDC/M-05/20567/7Q/2023 dated 23.11.2023 passed by the respondent, directing the petitioners to remit the interest amounting to Rs. 1,25,424/-, and quash the same as void and illegal.

Writ Petition filed under Article 226 of Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records of the respondent relating to the order passed No. MD/MDU/PDC/M-05/20567/14B/2023 dated 23.11.2023 passed by the respondent, directing the petitioner to remit the damages amounting to Rs.2,51,595/-, and quash the same as void and illegal.)

Common Order:

1. W.P.(MD) No.31277 of 2023 has been filed seeking issuance of a Writ of Certiorarified Mandamus to quash the order directing the petitioner to remit interest under Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, amounting to Rs.1,25,424/-.

2. W.P.(MD) No.31278 of 2023 has been filed seeking issuance of a Writ of Certiorarified Mandamus to quash the order directing the petitioner to remit damages under Section 14B of the said Act amounting to Rs.2,51,595/-.

3. Since both the Writ Petitions arise out of the same proceedings and involve common questions of fact and law, they are disposed of by this common order.

4. The learned counsel appearing for the petitioner submitted that the petitioner is a Government-funded Co-operative Spinning Mill established for providing employment to the economically weaker sections, particularly members of the Adi-Dravidar community, and is not a profitoriented organisation. The Mill had been declared as a Relief Undertaking under the provisions of the Tamil Nadu Relief Undertakings (Special Provisions) Act, 1969, and remained closed for several years after implementation of the Voluntary Retirement Scheme introduced by the Government. The Mill was reopened only on 18.02.2015 with financial assistance from the Government and is entirely dependent upon Government funds even for payment of salaries and statutory dues, including provident fund contributions. Therefore, the delay in remittance of provident fund contributions was neither wilful nor deliberate but occurred solely on account of financial constraints and delayed release of Government funds.

5. The learned counsel further submitted that the petitioner is entitled to the benefit of the proviso to Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It is further contended that a substantial portion of the period covered by the impugned proceedings, namely from April 2018 to October 2022 and February 2023, coincided with the COVID-19 pandemic, during which the Employees' Provident Fund Organisation itself had issued a Circular dated 15.05.2020 indicating that coercive proceedings for levy of damages need not be initiated in appropriate cases. It is therefore contended that the levy of damages and interest would cause severe financial hardship to the petitioner Mill, which is already running at a loss, and consequently the impugned orders are liable to be set aside.

6. The learned counsel for the petitioner fairly submitted that, insofar as the liability towards interest under Section 7Q of the Act is concerned, the petitioner is willing to remit the same, provided reasonable instalments are granted by this Court. Insofar as the damages levied under Section 14B of the Act are concerned, reliance was placed on the judgment of this Court in Ramanathapuram District Cooperative Spinning Mills Ltd. v. Central Board of Trustees, Employees' Provident Fund Organisation, in W.A.(MD) No.228 of 2011 and batch, decided on 11.03.2014, wherein this Court reduced the damages payable by similarly placed Co-operative Spinning Mills.

7. Considering the submissions made and taking note of the fact that the petitioner is a Government-funded Co-operative Spinning Mill, which has been functioning under severe financial constraints, this Court is inclined to extend the same benefit as granted in the above judgment.

8. Accordingly, the impugned order levying damages under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, is modified, and the damages payable by the petitioner are reduced to 25% of the amount determined by the respondent.

9. Insofar as the interest payable under Section 7Q of the Act is concerned, the petitioner is permitted to pay the entire interest amount in five (5) equal monthly instalments. The first instalment shall be paid on or before the 15th day of the succeeding month, and the remaining instalments shall be paid on or before the 15th day of each succeeding month thereafter.

10. With the above modification and directions, these Writ Petitions are partly allowed. There shall be no order as to costs. Consequently, the connected Miscellaneous Petitions are closed.