The High Court reduced the damages under Section 14 B of the EPF Act from 60% to 25% for the petitioner, a partnership firm, which voluntarily enrolled employees but delayed application for a code number and subsequent remittances.
Damages under Section 14 B of the EPF Act restricted to 25% instead of 60%.
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
TUESDAY, THE 5TH DAY OF MARCH 2024 / 15TH PHALGUNA, 1945
WP(C) NO. 1389 OF 2020
PETITIONER:
M/s. SHREYAS MARKETING,
39/582 A, ‘SUDHARMA’, MONASTRY ROAD,
ERNAKULAM-682011, REPRESENTED BY ITS MANAGING
PARTNER ANANDKUMAR PAI.
BY ADVS.
SRI.P.RAMAKRISHNAN
SMT.PREETHI RAMAKRISHNAN (P-212)
SRI.C.ANIL KUMAR
SMT.ASHA K.SHENOY
SRI.PRATAP ABRAHAM VARGHESE
RESPONDENTS:
1 ASSISTANT PROVIDENT FUND COMMISSIONER, SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI-682 017.2 THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL CUM LABOUR COURT, KARSHAKA ROAD, ERNAKULAM, KOCHI-682 011.BY ADV SRI.S.PRASANTH (SC)(EPFO)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
05.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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J U D G M E N T
The petitioner is a partnership firm. Admittedly the number of employees in the establishment of the petitioner had reached 20 in the month of June 2011. According to the petitioner, the establishment was not covered under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the ‘EPF Act’) on account of the fact that all the employees were receiving wages in excess of Rs.6,500/- per month. However, the petitioner voluntarily went and applied for enrolling his employees under the Provident Fund Scheme and applied for allotment of a code number on 25-03-2013. According to the petitioner, the said code number was issued only on 21-08-2015.
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the entire amount payable by the petitioner as contribution together with any applicable interest was remitted by the petitioner following determination of the amounts payable under Section 7A of the EPF Act. It is submitted that without considering the mitigating circumstances, the authorities imposed penalty at 100%. It is submitted that the petitioner challenged the same before the Appellate Tribunal and the Tribunal by Ext.P4 order refused to set aside the imposition of penalty and instead reduced the penalty to 60%. It is submitted that the petitioner has, pursuant to the interim order of this Court dated 20-01-2020 in the writ petition, remitted an amount equivalent to 25% of the damages levied. It is submitted that in the facts and circumstances of the case no damages are leviable and the petitioner should have been absolved of the liabilities to pay damages.
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its own showing, covered by the provisions of the EPF Act and the Scheme framed thereunder from June 2011. It is submitted that even according to the petitioner, it submitted an application for allotment of code number only in the year 2013. It is submitted that even in the allotment of code number, there is absolutely no delay. It is submitted that the code number was allotted immediately but the communication regarding allotment of code number was issued only later. It is submitted that allotment of code number is not a sine qua non for making contributions under the EPF Scheme and therefore the petitioner cannot contend that the delay in allotment of code number led to delay in remittance of Employees Provident Fund contribution. It is submitted that the Appellate Tribunal, on a consideration of the facts and circumstances of the case, has reduced the damages under Section 14 B of the EPF Act to 60% instead of 100% and since the Appellate Tribunal has already exercised its discretion in the matter, the petitioner is not entitled to any further relief. It is submitted that the decision of the Bombay High Court in
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Messrs Shapoorji Nusserwanji & Co. v. The Chairman, Board of Trustees of the Employees Provident Fund Scheme, 1952; 1968 SCC OnLine Bom 95 , is authority for the proposition that the delay, if any, in allotment of code number cannot absolve the petitioner from liability to damages.
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only on 20-03-2013. Even after the allotment of code number on 20-08-2015 there has been a delay in remittance of Employees Provident Fund dues. Therefore, the petitioner cannot be completely absolve from liability to pay damages under Section 14 B of the EPF Act. However, in the overall facts and circumstances of the case and especially considering the fact that the petitioner had voluntarily approached the authorities for enrolling its employees under the Scheme, I am of the opinion that the percentage of damages can be reduced to 25%. Therefore, in the facts and circumstances of the case I am of the opinion that the damages can be restricted to 25% instead of 60%.
Writ petition is disposed of accordingly.
Sd/-
GOPINATH P.
JUDGE
ats
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APPENDIX OF WP(C) 1389/2020
PETITIONER’S EXHIBITS
EXHIBIT P1TRUE COPY OF LETTER DATED 21.08.2015 ISSUED
BY EPF ORGANIZATION.
EXHIBIT P2TRUE COPY OF ORDERS DATED 18.05.2016 ISSUED
UNDER SECTION 14 B BY THE 1ST RESPONDENT.
EXHIBIT P3TRUE COPY OF APPEAL MEMORANDUM IN A-KL.NO.51
OF 2016 BEFORE THE BANGALORE BENCH OF THE EPF
APPELLATE TRIBUNAL.
EXHIBIT P4TRUE COPY OF ORDER DATED 15.10.2019 IN APPEAL
NO.76/2018.
3 issues framed by the court
Whether the petitioner is completely absolved from liability to pay damages under Section 14 B of the EPF Act.
What percentage of damages under Section 14 B of the EPF Act should be imposed on the petitioner considering mitigating circumstances.
Whether the delay in allotment of a code number absolves the petitioner from liability to pay damages.
Colour shows how this judgement treated each authority
Messrs Shapoorji Nusserwanji & Co. v. The Chairman, Board of Trustees of the Employees Provident Fund Scheme, 1952Referred¶26
Messrs Shapoorji Nusserwanji & Co. v. The Chairman, Board of Trustees of the Employees Provident Fund Scheme, 1952; 1968 SCC OnLine Bom 95
2 provisions across 1 enactments
M/s. SHREYAS MARKETING
1 ASSISTANT PROVIDENT FUND COMMISSIONER
THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL CUM LABOUR COURT
GOPINATH P.
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court