Delhi High Court
M/S Sanghvi Writing Points Pvt. Ltd vs Union Of India & Ors on 11 November, 2025
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 4th November, 2025
Judgment pronounced on: 11th November, 2025
+ W.P.(C) 5039/2018, CM APPL. 31423/2018& CM APPL. 2526/2020
M/S SANGHVI WRITING POINTS PVT. LTD. .....Petitioner
Through: Ms. Anushree Kapadia and
Mr.Shivank Saran Singh, Advocates.
versus
UNION OF INDIA & ORS .....Respondents
Through: Mr. Vinod Tiwari, Mr. Rajesh Kumar
and Mr. Manish Mohan, Advocates.
CORAM:
HON'BLE MS. JUSTICE CHANDRASEKHARAN SUDHA
JUDGMENT
CHANDRASEKHARAN SUDHA, J.
1. This writ petition under Article 226 of the Constitution of
India has been filed challenging Annexure A1 order dated
16.04.2010 of the Employees' Provident Fund Appellate Tribunal,
New Delhi (the Tribunal) in ATA No. 553(5) of 2009, whereby the
order dated 18.05.2009 passed by respondent no. 3 directing the
petitioner to pay damages amounting to ₹ 23,56,669/- for the delay
in payment of provident fund and administrative charges for the
period from May 1983 to February 2006 in addition to an amount
of ₹ 4,82,496/- towards interest under Section 7Q of the
Employees Provident Fund and Miscellaneous Provisions Act,
1952 (The Act) was confirmed.
2. According to the writ petitioner/ a Company, engaged in
the manufacture of different types of pens, at one point of time,
they had about 140 workers in its employment. The petitioner had
been paying all its dues under the Act till March 2002. However,
from the year 2002 onwards, due to managerial problems, the
Company had been incurring huge losses due to which some of the
dues were remitted belatedly. On 31.07.2001, the petitioner filed a
reference before the Board for Industrial and Financial
Reconstruction (the BIFR) being case No. 316/2000, pursuant to
which the petitioner was declared a Sick Industrial Company. On
01.03.2006, the petitioner sought waiver/reduction in respect of the
damages that became payable under the Act. However, there was
no response from the respondents. The petitioner on 28.08.2006
received a show cause notice from respondents no. 3, as per which
the petitioner was directed to pay a sum of ₹ 7,84,881/- under
Section 7Q of the Act and damages to the tune of ₹ 23,56,669/-
under Section 14B of the Act for the period starting from May
1983 to February 2006. Such a show cause notice is contrary to
the provisions of law. On 13.09.2006, the petitioner replied stating
that the Company had been declared a Sick Unit by the BIFR and
that it had addressed BIFR and the respondents seeking a waiver of
damages. Thereafter, several communications took place between
the petitioner and the respondents pertaining to waiver of interest
and damages. However, vide letter dated 09.05.2007, respondent
no. 2 rejected the request for waiver of interest. On 18.05.2009, the
petitioner was directed to pay damages to the tune of ₹ 23,56,669/-
for the delay in making contributions to the provident fund along
with administrative charges for the period commencing from May
1983 to February 2006 in addition to an amount of ₹ 4,82,496/-
towards interest under Section 7Q of the Act within 15 days from
the date of receipt of the order. The said order is unsustainable as
dues under Section 7Q of the Act had already been paid and as
damages was imposed without considering the request for
reduction/waiver and that too at a time when the Company was a
sick unit. Aggrieved by the said order, the petitioner preferred an
appeal, i.e. ATA No. 553(5) of 2009 before the Tribunal. The
Tribunal on 16.04.2010 dismissed the appeal, thereby confirming
the order dated 18.05.2009 of respondent no. 3.
2.1 Aggrieved by the order of the Tribunal dated 16.04.2010,
the petitioner on 27.09.2012 filed a writ petition before this Court,
the diary number being 159430/2012. Respondent no. 3 was
informed about the same and they were requested to await the
outcome of the petition. As and when the petitioner received
reminders and demand notices from respondent no. 3, the
petitioner was made to understand by their counsel that a writ
petition had already been filed before this Court and that it
continues to be with the Registry. On 08.01.2018, the petitioner
again received a demand notice directing them to deposit an
amount of ₹ 2,37,888/- towards interest under Section 7Q of the
Act. This was followed by another demand notice dated
29.01.2018 from respondent no. 3 directing the petitioner to
deposit a sum of ₹ 25,95,557/- within 15 days from the date of
receipt of the notice. When the petitioner continued to receive
demand letters from the respondents, the petitioner in March 2018
made further inquiries with their counsel. However, the counsel
replied by e-mail dated 17.03.2018 that he was not inclined to
represent them any further. Hence, the petitioner availed the
services of another lawyer and on inquiries with the Registry of
this Court came to know that no paper(s) relating to the matter
were available with the Registry and that the file had been returned
to the earlier counsel as they were defective. The petitioner was all
along under the bona fide belief and faith that the counsel who had
been engaged earlier had done the needful and that the writ
petition was pending consideration of this Court. On realising that
no writ petition had been filed, another counsel was engaged and
the present writ petition was filed. The delay in challenging the
impugned order is unintentional and was beyond the control of the
petitioner.
3. The petition is opposed by respondents no. 2 to 4 who
have filed counter affidavit contending that the petition is not
maintainable as it has been filed after a period of 8 years of the
passing of the impugned order by the Tribunal. It is also
contended that this Court lacks territorial jurisdiction as the
impugned order has been passed by the Tribunal in Gujarat.
4. It was submitted on behalf of learned counsel for
respondents no. 2 to 4 that Annexure A-1 impugned order in this
case was passed in the year 2010. However, the present petition
has been filed after a delay of more than 8 years, which aspect
alone is sufficient to dismiss this petition. My attention was also
drawn to Rule 7 of the Tribunal (Procedure) Rules, 1997 (the
Rules). In support of the argument, reference was made to the
dictums in Saint Soldier Modern Senior Secondary School
versus Regional Provident Fund Commissioner, (2014) SCC
OnLine Del 3140; Prudential Spinners Ltd. Versus Employees
P.F. Appellate Tribunal, 92007) SCC OnLine Del 203;
Horticulture Experiment Station Gonikoppal, Coorg versus
Regional Provident Fund Organization, (2022) 4 SCC 516 and
Latheef K.A. versus Union of India and Ors. and W.P.(C) No.
2191/2020(Y).
5. On the other hand, it was submitted by learned counsel for
the petitioner that they were under the bona fide belief that the
counsel engaged earlier had in fact filed a writ petition challenging
the impugned order. As and when they received demand notices
and reminders from respondent no. 3, they had made enquiries and
on all such occasions, they were made to understand that the writ
petition was pending. It was only much later, the counsel
concerned expressed his reservation in continuing with the brief.
Hence, the petitioner engaged a new lawyer and filed the present
petition. To substantiate the arguments, he draws my attention to
Annexures A/40, A/45, A/46, A/48 and A/52. Reference was also
made to the dictums in M/s Solidaire India Limited versus The
Employees Provident Fund Appellate Tribunal and Anr.,
(2011) SCC OnLine Mad 1647; Rafiq and Anr. versus
Munshilal and Anr., (1981) 2 SCC 788; Bank of India versus
M/s Mehta Brothers and Ors., 1991 SCC Online Del 140; N.
Balakrishnan versus M. Krishnamurthy, (1998) 7 SCC 123;
Perumon Bhagvathy Devaswom, Perinadu Village versus
Bhargavi Amma, (2008) 8 SCC 321; Oryx Fisheries (P) Ltd.
Versus Union of India, (2010) 13 SCC 427; Gujarat Electricity
Board versus Assistant Provident Fund Commissioner, (2011)
SCC OnLine Guj 2050 and Indian Telephone Industries Ltd.
Versus Asstt. P.F. Commissioner and Ors., (2006) SCC OnLine
Ker 726.
6. Heard both sides.
7. In M/s Solidaire India Limited (supra), it has been held
that levy of damages under Section 14B of the Act is not automatic
and the same being a penal provision, it must be construed strictly.
The existence of mens rea or willful default is a necessary element
before imposing damages. The authorities should not act
mechanically by applying the maximum rate without considering
the mitigating circumstances such as sickness of the establishment,
attachment of assets or suspension o operations.
7.1 In Rafiq (supra), it has been held that a party should not
suffer due to the inaction, deliberate omission or misdemeanor of
their counsel.
7.2 In M/s Mehta Brothers (supra), it has been held that
negligence of the counsel concerned should not automatically
defeat a litigant's right to justice and delay ought to be condoned
when sufficient cause is shown by the party as procedure lapses by
lawyers cannot always be attributed to the client.
7.3 In N. Balakrishnan (supra), it has been held that
condonation of delay is a matter of discretion of the Court. In the
absence of anything to show mala fide or deliberate delay as a
dilatory tactic, the Court should normally condone the delay.
7.4 In Perumon Bhagvathy Devaswom (supra), the
circumstances under which Courts normally condone delay have
been referred to.
7.5 In Oryx Fisheries (P) Ltd. (supra), it has been held that
a quasi-judicial authority while acting in exercise of its statutory
power must act fairly and with an open mind while initiating a
show cause proceeding. A show cause proceeding is meant to give
the person proceeded against a reasonable opportunity of making
his objections and prepare his defence against the proposed
charges indicated under the notice. The authorities must record
reasons in its order and absence of reasons in the original order
cannot be compensated by disclosure of the reasons in the
appellate order.
7.6 In Gujarat Electricity Board (supra), it has been held
that where default is found, but there is no apparent fault, the
quantum of damages under Section 14B of the Act should be
compensatory rather than penal.
7.7 In Indian Telephone Industries Ltd. (supra), it has been
held that damages under Section 14B of the Act are penal and not
automatic and the authorities must exercise discretion on
culpability with speaking order.
8. Now coming to the decisions relied on by the respondents.
In Saint Soldier Modern Senior Secondary School (supra), it has
been held that the provisions of the Limitation Act, 1963 including
Sections 5 and 14 cannot be invoked to extend or exclude any
period beyond the statutory limit. Accordingly, the Tribunal cannot
condone or exclude any delay exceeding the time expressly
allowed under the Act.
8.1 In Prudential Spinners Ltd. (supra), it has been held
that the Tribunal can condone the delay in filing an appeal only up
to a maximum period of 120 days, i.e. 60 days prescribed plus an
additional 60 days on sufficient cause(s) being shown. Once the
statutory period expires, the appeal is barred by limitation and
cannot be entertained on equitable or discretionary grounds.
8.2 In Horticulture Experiment Station Gonikoppal,
Coorg (supra), it has been held that mens rea or actus reus is not
an essential element for imposing penalty or damages for breach of
civil obligations and liabilities.
8.3 Finally, in Latheef K.A. (supra), it has been held that
under Section 7Q of the Act, the levy of interest for delayed
remittance of contribution is automatic and mandatory arising by
operation of law and not dependent on any adjudicatory discretion
of the authority. The provision does not permit any condonation or
waiver of delay as interest is compensatory in nature and accrues
for the benefit of the employees. It has been further held that
while the right to appeal does not extend to Section 7Q of the Act,
an employer must be allowed a limited opportunity to contest only
the computation of interest which must be determined fairly in
accordance with the statute.
9. Admittedly, the impugned order, i.e. Anneuxre A-1 was
passed on 16.04.2010. As pointed out by learned counsel for
respondents no. 2 to 4, as per Sub-Rule (2) to Rule 7 of the
aforesaid Rules, any person aggrieved by an order of an authority
under the Act has to file an appeal within 60 days from the date of
the order. The 1st proviso says that if the Tribunal is satisfied that
the appellant was prevented by sufficient cause from preferring an
appeal within the statutory period, the time may be extended by a
further period of 60 days. It is true that the petitioner Company
has filed the appeal before the Tribunal within the time prescribed.
It is also true that no time limit has been prescribed for filing a writ
for challenging the order of the Tribunal. However, it has to be
filed within a reasonable time of the passing of the impugned
order.
10. During the course of arguments, a specific query was put
by this Court to the learned counsel for the petitioner as to whether
the petitioner had taken any action against the lawyer who is
alleged to have misled the petitioner into believing that a writ
petition had been filed as early in the year 2012, when actually no
effective steps had been taken in the said direction. The reply was
in the negative and it was submitted that no complaint or action
had been taken against the lawyer as the petitioner did not want to
cause any inconvenience to the lawyer concerned. If the petitioner
is to be believed, the lawyer who had been engaged kept assuring
them for about 8 years that necessary steps had been taken for
challenging the impugned order. I will now examine whether this
case of the petitioner is true from the documents relied on by them.
11. Annexure A-40 says that a petition had been presented
before the Registry of this Court on 27.09.2012, the diary number
of which is stated to be 159430/2012. Annexure A-45 dated
15.09.2016 is a letter sent by the petitioner informing the Assistant
Provident Fund Commissioner, Recovery Officer, Ahmedabad that
a writ petition challenging the impugned order has been filed.
Copy of the writ petition was also served on the authority
concerned. Annexure A-46 is an e-mail dated 11.01.2017 stated to
have been sent by the lawyer concerned to the petitioner stating
that the matter filed in this Court continues to be with the Registry
and that attempts are being made to ascertain the status of the same
for which 4 weeks' time was sought. Annexure A-48 dated
13.03.2017 is yet another letter written by the petitioner to the
Assistant Provident Fund Commissioner informing that the matter
was still pending before this Court and also seeking time to
ascertain the status of the writ petition Annexure A-52 dated
17.03.2018 is stated to be a letter written by the counsel concerned,
the relevant portion of which reads thus:-
"Case was file in delhi high court on 27/9/2012.
Sincere (sic) were out of touch for the past 6 years I am
not in a position to comment on the status of the same.
additionally I am very busy. I may not be able to pursue
above case." (emphasis supplied)
12. Annexure A-52, their own document, disproves the case
put forward by the petitioner that they were all along in touch with
the lawyer concerned and that the lawyer had misled them into
believing that a writ petition had in fact been filed, which was
pending consideration before this Court. Annexure A-52 makes it
clear that for about 6 years, the petitioner Company never ever
contacted the lawyer and hence the latter withdrew from the brief.
Therefore, the reason cited that there was fault or omission on the
part of the lawyer concerned is apparently false/incorrect. Had the
petitioner been misled by the lawyer concerned and made to belive
for years together that proceedings had been initiated against the
impugned order when in fact, no effective steps had been taken, it
is improbable for the former to have not taken any action against
the lawyer concerned. As pointed out by the learned counsel for
the respondents, the Act is a beneficial legislation meant for the
benefit of the employees and hence the reason why specific time
limit has been provided for challenging the orders of the
authorities concerned. In the case on hand, more than sufficient
time/opportunity is seen to have been granted to the petitioner to
vindicate their grievances. Despite the same, no effective steps
were taken to challenge the impugned order. The decisions cited
by the petitioner do not in any way advance the case of the
petitioner.
13. The reason given for the inordinate delay in filing the
appeal has turned out to be false. The present writ petition seems
to be a mere delaying tactics. I find no infirmity or illegality in the
impugned order.
14. Hence, the writ petition sans merit is dismissed.
CHANDRASEKHARAN SUDHA
(JUDGE)
NOVEMBER 11,2025
kd/
