Shamsher Bahadur, J.
1. The petitioner, Pioneer Sports Works (Private), Ltd. (hereinafter called the company), has invoked the jurisdiction of this Court under Article 226 of the Constitution of India to enforce refund of certain payments made by it to respondent 2, Regional Provident Fund Commissioner, Punjab and Himachal Pradesh, and also to restrain this functionary from recovering the sum of Rs. 401.20 as damages. The amount actually paid by the petitioner to respondent 2 as contributions to provident fund is Rs. 5,000 odd.
2. The company claims to be small-scale cottage industry for the manufacture of sports goods and is operating from Jullunder City since the partition. The company was informed by Regional Provident Fund Commissioner, respondent 2, on 5 February 1962, that it had employed 50 persons on 31 August 1961, and has become liable to make contributions in accordance with the scheme appended with the Employees' Provident Funds Act, 1952 (hereinafter called the Act). The company was informed that it was liable to make contributions with effect from 1 September 1961. On account of the late discovery that the company was covered by the Employees' Provident Fund Scheme, a concession was made that for the pre-discovery period from 1 September 1961 to 31 January 1962, contributions may be made by instalments only with respect to the employer's share, under the scheme. It was, however, mentioned specifically in this letter that the company ' had already rendered ' itself liable for damages under Section 14B of the Act.
3. It is not disputed that the company made the payments of the contributions of employer's share in accordance with the concessions allowed to them in respect of the pre-discovery period. The amount of payments so made approximate Rs. 5,500.
4. It is submitted by Sri Sarhadi that, in view of the recent decision of a Division Bench of this Court, he is no longer in a position to press for the recovery of the amount which has already been paid in respect of the employer's contribution to the scheme. This decision of Chief Justice Falshaw and Grover, J., in Kapur Bhimber Union v. Regional Provident Fund Commissioner, Punjab, and Anr. 1966-I L.L.J. 870, made it clear that the liability to contribute to the fund started on 1 November 1952, when the Act came into force, and employer and the eligible employees have to make contributions to the fund from that date. Merely because no demand for contribution was made for a few years the demand cannot be deemed to have been waived. On this authority it is rightly submitted by the learned Deputy Advocate-General, appearing for the Regional Provident Fund Commissioner, that the demand could be made for payment for pre-discovery period if the company had been in operation, as indeed it was. All that Sri Sarhadi contends is that till the decision was given by the Division Bench in Kapur Bhimber Union case 1966-I L.L.J. 870 (vide supra), the matter was doubtful. He does not press for the recovery of this amount any longer.
5. Sri Sarhadi, however, submits that the demand for damages is not warranted by the provisions of Section 14B of the Act which says that:
14B. Where an employer makes a default in the payment of any contribution to the fund or in the transfer of accumulations required to be transferred by him under Sub-section (2) of Section 15 or in the payment of any charges payable under any other provision of this Act or of any scheme or under any of the conditions specified under Section 17, the appropriate Government may recover from the employer such damages, not exceeding twenty-five per cent of the amount of arrears, as it may think fit to impose.
While respondent 2 had allowed the petitioner to clear the arrears of provident fund contribution due for the period October 1961 to January 1962, 'in four equal monthly instalments, it was made clear that the extension would not affect his right to claim damages under Section 14B. Respondent 2 had taken the view that the petitioner had committed default in making the contributions with respect to September 1961. to January 1962, and, for the first time, a levy of damages under Section 14B was made on 14 August 1962, when annexure D was sent to the company. It was mentioned in this letter that the charges in respect of the company for the period September to November 1961 had not been paid in time and, therefore, damages were imposed, at the rate of 5 to 15 per cent. The total amount computed as damages for these three months is Rs. 378.50 and Rs. 22.70 (total Rs. 401.20). No damages for December 1961 to January 1962, have yet been computed and it was mentioned in annexure D that these would be intimated 'to you in due course.' Sri Sarhadi strongly contends that the contribution having been paid, though not without demur, when asked for no question of any default arose. It was doubtful when the payment was made whether in respect of the pre-discovery period contributions could be levied and there are decisions of some Courts which support him. It is only because of the decision of this Court given in Kapur Bhimber Union case 1966-I L.L.J. 870 (vide supra) that Sri Sarhadi in the course of arguments has abandoned the claim in respect of the amount paid on account of the pre-discovery period. It was for the first time on 14 August 1962 that damages were levied and it is to be borne in mind that this was when the amount on account of contributions had actually been paid. It is argued by Sri Sarhadi that no damages could have been levied in respect of non-payment of a sum which had already been paid. It is urged by Sri Sarhadi that the failure to pay contributions must be wilful and deliberate before damages could be levied under Section 14B. The company, though under protest, made the payment within the period specified in the notice demanding payment of contributions. It is worthy of note that the petitioner was given some concession in making the payment for the contributions in respect of the pre-discovery period. In the circumstances, it seems to me that the levy of damages is unlawful and unjustifiable.
6. I would accordingly allow this petition to the extent that the sum of Rs. 401.20 demanded from the petitioner as damages will not be recovered. The demand for December 1961 and January 1962, which is yet to be made, will consequently not be pressed. As the petitioner has only partially succeeded there would be no order as to costs of this petition. Petition allowed.