Allowed

The Assistant Provident Fund Commissioner v. The Presiding Officer

Madras HC18 Oct 2024WP(MD)/2072/2020

Case brief

AI extract

What is this about?

The Madurai Bench allowed the petition challenging the EPF Appellate Tribunal's order, which had set aside penalty damages imposed for failure to remit employee provident fund contributions. The court quashed the Tribunal's order, citing that mens rea is not required under Section 14B of the EPF Act and the penalty was properly imposed.

What did the court decide?

The order of the Tribunal dated 18.11.2014 setting aside the penalty is set aside; the order dated 22.05.2014 imposing penalty is revived.

The Assistant Provident Fund Commissioner Vs… — Pension and Retirement Benefits | Madras HC (2024)

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WP(MD)No.2072 of 2020

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED : 18.10.2024

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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WP(MD)No.2072 of 2020 and

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WMP(MD)Nos.1740, 1741 of 2020

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Assistant Provident Fund Commissioner, Office of the Regional Provident Fund Commissioner, P.B.No.588, Sree Complex, 'D' Block, No.18, Madurai Road, Tiruchirappalli.

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.. Petitioner

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1.The Presiding Officer, Employee's Provident Fund Appellate Tribunal, Scope Minor, Core II, 4^th Floor, Lakshmi Nagar District Centre, Lakshmi Nagar, New Delhi.

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2.M/s.New Security Force, Trunk Road, Rabi Nagar, T.V.Koil, Trichy – 625 005. Rep. Through its Business Manager

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.. Respondents

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.2072 of 2020

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PRAYER: Petition filed under Article 226 of the Constitution of India

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seeking issuance of a Writ of Certiorari calling for the records relating to the order passed by the first respondent in A.T.A.No.448(13)2014, dated 18.11.2014 and quash the same.

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For Petitioner : Mr.I.Pinaygash For Respondents : No appearance *****

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ORDER

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This writ petition is filed by the petitioner / Assistant Provident Fund Commissioner as against the order passed by the first respondent / Tribunal in ATA.No.448(13)2014, dated 18.11.2014, setting aside the penalty imposed by the petitioner, vide proceedings dated 22.05.2014, u/s.14B of the Employees' Provident Fund and Misc. Provisions Act, 1952 [EPF Act].

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2.The second respondent is an establishment covered under the EPF

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Act. With an allegation that the establishment has failed to pay the contribution as required u/s.6, 6A, 6C of the Act in time, the petitioner /

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.2072 of 2020

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original authority has initiated proceedings u/s.14B of the EPF Act, by issuing summons and imposed damages to the tune of Rs.20,08,413/- u/s. 14B and interest to the tune of Rs.9,76,447/- u/s.7Q of the EPF Act. This order was challenged by the second respondent / establishment before the first respondent / Tribunal and the Tribunal, by its order dated 18.11.2014, has set aside the damages imposed by the original authority and permitted the establishment to remit the interest in 24 instalments. Aggrieved over the same, the present writ petition has been filed.

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3.Learned Standing Counsel for the petitioner / original authority submitted that the penal damages has been imposed as per the guidelines in Para 32A of the EPF Scheme. However, the Tribunal, without any reasons, has simply set aside the order. He further submitted that the second respondent / establishment has not made out any case, however, the Tribunal has mechanically passed this order.

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4.Though notice has been served on the second respondent / establishment, there is no representation for the second respondent.

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.2072 of 2020

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5.This Court considered the rival submissions made by the learned Counsel on either side and perused the orders passed by the original authority and the appellate authority.

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6.The appellate authority has interfered with the order passed by the original authority, by holding that there was no mens rea , that the damages was imposed by the original authority without providing sufficient opportunity to the establishment and also in a mechanical manner by taking into account of the table as provided in Para 32A of the EPF Scheme.

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7.The question with regard to mens rea is no longer res integra , inasmuch a Full Bench of this Court in Sun Pressing (P) Ltd and Others v. Presiding Officer and Others [ 2024 (1) Writ L.R. 801 ] has held that mens rea or actus reus is not an essential requirement or sine quo non for levying penalty under Section 14B of the Act. Therefore, this finding of the Tribunal lacks merit. However, before levying damages in terms of Section 14B of the Act, the authority is required to follow the principles of natural justice 4/7

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.2072 of 2020

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and to consider all the mitigating circumstances projected by the employer / establishment. The Full Bench further held that there should be proper application of mind, objectively, on the merits of the case and in any event, the authority cannot resort to the arithmetical calculation or for levying damages as per Para 32A of the Scheme, without considering the mitigating circumstances.

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8.In the case on hand, the petitioner / original authority has initiated proceedings as against the second respondent / establishment, by issuing summons dated 09.12.2013 fixing the date of enquiry as 13.12.2013. From 13.12.2013, the enquiry was adjourned to 03.01.2014, 05.02.2014 and 05.03.2014, on which dates, the representatives of the establishment appeared. Thereafter, the original authority has concluded the proceedings and imposed the penalty to an extent of Rs.20,08,413/- together with interest to an extent of Rs.9,76,447/-, by order dated 22.05.2014.

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9.The original authority has passed this order, only after considering the establishment's case. If there is any delay in remitting the dues, then the 5/7

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.2072 of 2020

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original authority is entitled to conduct enquiry and impose damages, as provided under Section 14B of the Act and as per Para 32A of the EPF Scheme. However, without any valid ground, the appellate authority has came to a conclusion that there is no willful default by the second respondent / establishment in remitting the dues. Therefore, this finding of the Tribunal also lack merit.

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10.For the foregoing reasons and discussions, this Court is inclined to interfere with the order passed by the Tribunal. Accordingly, the order passed by the first respondent / Tribunal in ATA.No.448(13)2014, dated 18.11.2014 is set aside and the order passed by the petitioner / original authority dated 22.05.2014 stands revived.

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In the result, this writ petition stands allowed. No costs. Consequently, connected miscellaneous petitions are closed.

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Index : Yes / No 18.10.2024 NCC : Yes / No Internet : Yes gk 6/7

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.2072 of 2020

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B.PUGALENDHI, J.

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