Central Board of Trustees Employees Provident Fund Vs M/S Holy Cross Girls Higher Secondary School

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2025:CGHC:10688-DB

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WA No. 151 of 2025

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1 - Central Board Of Trustees Employees Provident Fund Through- The Regional Provident Fund Commissioner- Ii (Rpfc), Block-D, Scheme No. 32, Indira Gandhi Vyavsayik Parisar, Pandri, Raipur, District Raipur (C.G.) - 492004

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... appellant

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versus

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1 - M/s Holy Cross Girls Higher Secondary School Through Its Principal, Post Gholeng, District Jashpur (C.G.)

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2 - The Central Government Industrial Tribunal Cum Labour Court/ Epf Appellate Tribunal, Jabalpur (M.P.)

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... Respondent(s)

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For Petitioner(s) : Mr. Sunil Pillai, Advocate

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Hon'ble Mr. Ramesh Sinha, Chief Justice Hon'ble Mr. Ravindra Kumar Agrawal, Judge Order on Board

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Per Ramesh Sinha, Chief Justice 05. 03.2025

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1. Heard on I.A. No. 02/2025 which is the application for condonation of delay in filing the writ appeal. The writ appeal is barred by 6 days. Learned counsel for the appellant would submit that due to the movement of the file in official proceeding to obtain the necessary sanctioned, the delay has been occurred in filing the writ appeal which is bona fide and may be condoned. On due

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consideration and for the reasons mentioned in the application, the delay of 6 days in filing the writ appeal is condoned. I.A. No. 02/2025 is allowed.

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2. The present writ appeal has been filed by the writ appellant against the order dated 27.11.2024, passed by learned Single Judge in WPL No. 223/2024 whereby the writ petition filed by the petitioner/ writ appellant has been dismissed.

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3. The brief facts of the case are that the petitioner is a body corporate under the provisions of Employee Provident Fund & Misc. Provisions Act, 1952 (hereinafter called as the Act of 1952). The Section 5C of the Act of 1952 provides the board of trustees to be body corporate. The function of the petitioner is to provide social security to employees working in any establishment engaging 20 or more persons on any day which provides for compulsory deduction of provident fund for employees and a contribution from the employer which is deposited in the workers account in the EPF Office. It also provides for insurance and pensionary benefits to the employees. The provident fund and other contribution have to be deposited by the employer by the 15^th day of next month in which the employee have worked in the establishment and the dues become payable to him. In case of failure to deposit the legitimate dues of workers, the EPFO under Section 7 A of the Act can initiate recovery action for the purpose of compelling the employee to deposit the dues of the worker. After deposit of the principle amount levy of penalty and damages under Section 70 and Section 14B of the Act of 1952 has also been provided for the interest on delayed payment by the employee and also acted as deterrence from them. The respondent No. 1 is an establishment covered under the Employees Provident Fund & Misc. Provisions Act, 1952 with effect from 31.03.1982 vide code No. CG 4037 and the employer establishment is having the statutorily obligation comply with the provisions of the Act of 1952. Since, the respondent No. 1 had failed to comply with the provisions of the Act of 1952, a proceeding

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under Section 7A of the Act of 1952 was initiated by issuing show cause notice and summons. After affording opportunity of hearing to the respondent No. 1 and an order was issued, however, no compliance was made by the respondent No. 1. The letter was issued on 15.01.2007 to the respondent No. 1 and in reply to that, the respondent No. 1 vide its letter dated 09/07/2008 replied that the amount is lying with the District Education Officer, Jashpur which could not be transferred without his order and then the District Education Officer, Jashpur and after the several communication, the District Education Officer, Jashpur authorised for transfer of the funds from their account towards EPF dues and EPFO and an amount of Rs. 44,51,993/- was deposited in EPF, EPFO and other dues on 24.03.2008 and 21.07.2010 respectively. Subsequently, certain other dues have also been deposited with the petitioner.

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4. Under the Employees Provident Funds Scheme, 1952, the statutory duty mandated upon the employer to compulsory deduct provident fund contribution from its employees and timely deposit the same together with employer contribute in the workers account in the EPFO. The failure of respondent No. 1 in compliance of para 38 of the said scheme of 1952 let an enquiry under Section 14B of the act of 1952 which was initiated for determination of dues from the period of April 1982 to July, 2010, April 2011 to May 2011, September 2011, November 2011 and February 2012.

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5. The competent authority had initiated proceedings against the Respondent No. 1 under the Act of 1952 as the respondent No. 1 had defaulted in compliance with the provisions of Section 14B and 7Q of the Act of 1952 and the summon was issued on 15/06/2012. In the proceeding the respondent No. 1 has admitted the delay in depositing the contribution and therefore, as per the mandate of the Act as well as the Scheme of 1952, the respondent No. 1 is required to compensate the loss and to deposit funds due to delayed remittance by the establishment. The establishment was required to remit

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dues within prescribed period as provided under the Para 38(1) of EPS Scheme, 1952. The Para 30(1) of the Scheme of 1952 also provides that the employee is required to remit statutory dues in the first instance on its own. The competent authority by its order dated 04/09/2012 repaid damages under Section 14B of the Act of 1952 and interest under Section 7Q of the said Act. The amount repaid under Section 14B was Rs. 33,35,025/- and interest under Section 7Q of the said Act was Rs. 35,75,554/-.

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6. Being aggrieved by the order dated 04/09/2012, the respondent No. 1 filed an appeal before the EPF Appellate Tribunal bearing EPF Appeal No. 66/2017 and the learned Tribunal vide its order dated 26/06/2024 allowed the appeal and the respondent No. 1 affirming the liability under Section 7Q of the Act of 1952 whereas the liability under Section 14B of the Act of 1952 has been reduced to 25% of the assessed amount to the said order dated 26/06/2024 passed by the Appellate Tribunal was under challenge before the learned Single Judge in the said WPL No. 223/2024.

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7. The said WPL No. 223/2024 came up for hearing before the learned Single Judge on 27.11.2024 and after hearing the parties, the writ petition heard by the petitioner/ writ appellant has been dismissed which is under challenge in the present writ appeal.

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8. Learned counsel for the writ appellant would submit that the learned Single Judge did not distinguish the case relied upon by the writ appellant which is passed by coordinate Bench of this Court i.e. WPL No. 199/2013 (Central Board of Trustees Vs. M/s Vidyut Grih Higher Secondary Vidyalaya and Anr.) He would further submit that as per the judgment passed by the Hon’ble Supreme Court reported in 2022 SCC Online SC 223 Horticulture Experiment Station Gonikoppal, Coorg Vs. Regional Provident Fund Organization, held that any default or delay in payment of EPF contribution by the employee is a sine qua non for imposition of levy of damages under

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Section 14B of the Act of 1952, yet the amount levied under Section 14B of the Act of 1952 has been reduced to 25%. When the delay is undisputed, the authority cannot be expected to applyable to causes to forth by the concerned establishment for the delayed remittance of contributions, the mode and method prescribed in the scheme as to be meditorily followed by the establishment failing which the provisions of Section 7Q as well as 14B gets attracted. The maximum percentage of damage was increased from 21% to 100% of the arrear and in the present case levy of damages was for default committed for a long period and therefore the 100% levy cannot be faulted. The impugned order dated 27/06/2024 passed by the appellate authority is against the mandatory provisions of the Act as well as law laid down by the Hon’ble Supreme Court in the field and is not sustainable. Therefore, the impugned order passed by learned Single Judge may be set aside and the relief claimed in the writ petition may be granted to the writ appellant.

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9. We have heard learned counsel for the appellant and perused the document annexed with the writ petition as well as the writ appeal.

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10. It is not in dispute in the present appeal that the respondent No. 1 has deposited the required EPF contribution belatedly as per Para 38 of Scheme of 1952 and have defaulted in payment of contribution to the funds as stipulated under Section 14B of the Act of 1952. The learned Single Judge while concurring with the view taken by the Kerala High Court in the matter of Central Board of Trustees Vs. Bake ‘N’ Joy Hot Bakery and Anr. (order dated 04/01/2024 passed in WPC No. 35163 of 2019) has hold that reducing the penalty/ damages to 25% of the assessed amount by the Appellate Tribunal is just and proper and has dismissed the writ petition filed by the petitioner.

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11. From perusal of the order dated 26/06/2024 passed by the Central Government Industrial Tribunal/ Employees Provident Fund Appellate Tribunal, Jabalpur in EPF Appeal No. 66/2017 (Annexure-P/1), it is quite vivid that the M.P. High Court has considered the law laid down by the Hon’ble Apex Court in the matter of Navin Vidya Bhawan Vs. Union of India reported in 2015 SCC Online MP 4504 in which the judgment passed by Hon’ble Supreme Court in the matter of RPF Commissioner Vs. SD College reported in (1997) 1 SCC 241 and Halwasiya Vidya Vihar Vs. Regional P.F. Commissioner reported in (2006) 4 SCC 46 have been considered and the Appellate Tribunal has passed its order by reducing the damages to 25% under Section 14B of the Act of 1952. The consideration in para 11 of the said order dated 26.06.2024 is necessary to reproduce here which is as under :-

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As regards the liability of the Appellant Establishment to pay damages under Section 14B of the Act for the late deposits and assessment, the learned counsel for the appellant has referred to decision of Hon'ble the High Court of M.P. in Naveen Vidya Bhawan Vs, Union of India (2015)(111) CLR 484. Manu/MP/0814/2015 , the facts of the case referred are identical with the case in hand. In the referred case, Hon'ble Higth Court of M.P. has reduced the damages under Section 14B of the Act to 25% of the assessed amount. Keeping in view the facts and circumstances which are similar to the case in hand, para 7 & 9 of this judgment are, being reproduced as follows:-

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A Division Bench of this Court in Assistant Provident Fund Commissioner vs Aktiram Madhyamik : Writ-Appeal No.454/2006 decided on 2.1.2007 [2007-11-LLJ/372] had an occasion to dwell upon the aspect as raised and after taking into consideration the decision by the Supreme Court in RPF Commissioner vs S.D. College (1997) 1 SCC 241 and Halwasia Vidya Vihar vs Regional P. F. Commissioner (2006) 4 SCC 46 the Division Bench affirmed the verdict by learned Singia Judge of reducing the damage to 25% was held

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“2. This appeal under Section 2 of the MP. Uchcha Nyayalay (Nyayalaypesth ko Appeal Adhiniyam, is directed against the

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order dated September 5, 2006 passed in W.P.2564/2005 by the learned Single Judge whereby learned Single Judge has reduced the damages imposed by the Assistant Provident Fund Commissioner to 25% on deposit of dues of provident fund by the employer (petitioner before the Single Judge) The original petitioner was granted coverage under the Act for payment of Employees Provident Fund as per the provisions of Act. It was not disputed that pursuant to the letter dated January 27, 2000 (Annexure P/1) the petitioner was asked to deposit the contribution for the period July 10, 1983 to September 22, 1997 on or before April 15, 2000 whereas it was actually deposited on June 30, 2000 that too a small sum of Rs.13,303/- Further, a sum of Rs. 43,362/- was deposited on July 17, 2000. Learned Assistant Commissioner, finding that admittedly there was delay in depositing the provident fund, invoked the provisions of Section 14-B of Employees Provident Funds and Miscellaneous Provisions Act, 1952 (for short the Act) and impose the damages in the sum of Rs. 37,590/- This amount was reduced by the learned single Judge to 25% of the damages and the interest charged under Section 17-Q of the Act was maintained. In doing so learned single Judge fortified his order by the decision in RPF Commissioner vs SD College AIR 1997 SC 3645: (1997) 1 SCC 241: 1997-II-LLJ-55 and Halwasis Vidya Vihar Haryana vs Regional Provident Fund Commissioner AIR 2006 SC 1767 (2006) 4 SCC 46: 2006-II-LLJ-497 . violation/delay in deposit of employees provident fund, there is no choice but to impose damages to the maximum extent under said provision. Section 14-B of the Act read as under:-

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Power to recover damages:- Where an employer makes default in the payment of any contribution to the Fund (The Family Pension Fund or the Insurance Fund) or in the transfer of accumulations required to be transferred by him under sub-section (2) of Section 15 or sub-section (5) of section 17 or in the payment of any charges payable under any other provision of this Act or of any scheme or Insurance Scheme or under any of the conditions specified under Section 17 the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazettee, in this behalf may recover from the employer by way of penalty such damages, not exceeding the amount or arrears, as may be specified to impose. Thereafter taking note of his order on 17 September 2014, a Coordinate Bench of this Court has disposed of more than 10 identical writ petitions and in those cases, following directions were issued in para-3:-

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From perusal of provisions as extract hereinabove, though it is clear that the department has power to impose damages in case of non0 deposit/ delayed deposit of the provident

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fund, it is only discretionary to impose damages as is clear from the word “may” used in the Provision. We are, therefore, not impressed by the submission that full damages are compulsory under Section 14-B of the Act. Learned Judge has maintained the damages to the extent of 25% of the original demand and has maintained the interest charge under Section 17-Q We are, therefore, of the view that the learned single Judge in his discretion, has rightly acted within the parameters of the provisions. We, therefore, do not find any substance in this appeal. Both the appeals are, therefore, dismissed.”

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to maintain parity with the decision in Assistant Provident Fund Commissioner vs Ashram Madhyamik (Supra), the damages levied in these batch of writ petitions is reduced to 25%.”

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12. From perusal of the order dated 26/06/2024 passed by the Appellate Tribunal as well as the order passed by learned Single Judge and also on going through the documents annexed with the petition and relevant provision of law, we are of the opinion that the authority concerned may recover the damages from the employer by way of penalty and such damages not exeeding the amount of arrears as may be specified in the scheme. After considering the facts and circumstances of the case as well as the law laid down by the Hon’ble Supreme Court and M.P. High Court, the Appellate Tribunal has reduced the damages to 25% of the assessed amount as assessed under Section 14B of the Act of 1952 in which we do not find any perversity or illegality. The order passed by learned Single Judge is based on proper appreciation of the facts of the case as well as provisions of law and also the ratio laid down by the Kerala High Court in Bake ‘N’ Joy Hot Bakery Case (Supra).

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13. Upon perusing the impugned order, we notice that the same has been rendered by the learned Single Judge with cogent and justifiable reasons. In an intra-court appeal, no interference is usually warranted unless palpable infirmities are noticed. Learned Single Judge while dismissing the writ

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petition by the impugned order has adverted to all the facts of the case. We

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do not find any fault in the impugned order.

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14. Consequently, the writ appeal is liable to be and is hereby dismissed.

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Sd/-

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(Ravindra Kumar Agrawal) Judge