Allowed

The Regional Provident Fund Commissioner-Ii v. M/s. Madhangi Enterprises Pvt. Ltd.

Madras HC20 Nov 2025WP(MD)/19953/2022

Case brief

AI extract

What is this about?

The Madurai Bench quashed an EPF Appellate Tribunal order that reduced damages under Section 14B of the EPF Act. The Court held that mens rea is not required for such civil liabilities and confirmed the original levy order.

What did the court decide?

The impugned order of the EPF Appellate Tribunal reducing damages is quashed. The order of the original authority levying damages is confirmed.

The Regional Provident Fund Commissioner-Ii… — Pension and Retirement Benefits | Madras HC (2025)

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W.P(MD)No.19953 of 2022

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 20.11.2025

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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The Regional Provident Fund Commissioner-II, Employees Provident Fund Organization, Regional Office, No.1, Lady Doak College Road, Chokkikulam, Madurai – 625 002.

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... Petitioner

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M/s. Madhangi Enterprises Pvt Ltd., Door No.189 Bye Pass Road, Madurai-625010. ...Respondent

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PRAYER: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Certiorari, calling for the records pertaining to the impugned order of the C.G.I.T, cum EPF Appellate Tribunal, Chennai in EPFA 345/2017 (ATA 1120 (13)/14) dated 22.10.2021 and quash the same by confirming the order passed by the Assistant Provident Fund Commissioner, Madurai under Section 14B of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 in his vide proceedings No.TN/ RO/ MDU/57980/RO/Circle7/PDC/LD/2014, dated 09.10.2014.

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For Petitioner : Mr.A.John Xavier For R1 to R3 : Mr.M.N.Ramkumar

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O R D E R

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The EPF authority has filed this writ petition as against the order of the EPF Appellate Tribunal in EPFA No.345/2017 (ATA

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1120 (13-14), dated 22.10.2021, in and by which, the levy of damages by the Original Authority has been reduced to 30% of the mensrea. dues determined, on the ground of

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2.The above appeal was filed by the respondent establishment as against the order passed by the EPF Authority, under Section 14B of the EPF Act, levying damages to the tune of Rs.11,71,766/-. The respondent Establishment is covered under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and it was also allotted with the PF code No. MD/MDU/57980. The Establishment has failed to remit the EPF contribution for the period from February 2004 to February 2014. Therefore, the EPF Authority has initiated an enquiry, by issuing a

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show cause notice on 21.01.2014 and also passed an order, levying damages under Section 14B of the Act, by its order, dated 09.10.2014, directing the respondent establishment to pay a sum of Rs.11,35,967/-. Aggrieved over the above order, the respondent Establishment has preferred an appeal before the EPF Appellate Tribunal, under Section 7(I) of the Act, in EPF A.345/2017 (ATA 1120(13/14). The EPF Appellate Tribunal, by its order dated 22.10.2021 has partly allowed the appeal, by reducing the deposit amount as 30%, on the ground that the respondent Establishment was in financial difficulty and there was no mensrea for this belated payment. Challenging the same, the EPF Authority has preferred this writ petition.

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3.The learned Standing counsel appearing for the EPF Authority, by referring to the order of the Honourable Supreme Court in Horticulture Experiment Station, Goorge Vs. Regional Provident Fund Organization , reported in (2022) 4 SCC 516, submits that there cannot be any mensrea or actus reus for imposing

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penalty or damages for breach of civil obligations and liabilities.

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4.The learned counsel appearing for the respondent

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Establishment submits that the Establishment was in financial difficulty at that relevant point of time. Therefore, the Appellate Tribunal has considered the case of the Establishment and also modified the damages levied under Section 14B of the Act, to 30% of the determined dues. Hence, the order passed by the Appellate Tribunal does not warrant any interference.

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5.This Court considered the rival submissions made and also perused the materials placed on record.

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6.The requirement of mens rea has already been discussed

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by the Hon'ble Supreme Court in Horticulture Experiment Station Gonikoppal Vs Regional Provident Fund Organisation reported in (2022) 2 SCC 516 , wherein it has been has held as under:

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“15.Taking note of the exposition of law on the subject, it is well settled that mens rea or actus reus is not

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an essential element for imposing penalty or damages for breach of civil obligations and liabilities.

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19.Taking note of the three-Judge Bench judgment of this Court in Union of India Vs Dharmendra Textile Processors, which is indeed binding on us, we are of the considered view that any default or delay in the payment of EPF contribution by the employer under the Act is a sine qua non for imposition of levy of damages under Section 14-B of the 1952 Act and mens rea or actus reus is not an essential element for imposing penalty / damages for breach of civil obligations / liabilities.”

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7.By reiterating the above, the Hon'ble Full Bench of this Court in Sun Pressing (P) Ltd represented by its the Managing Director, SIDCO Industrial Estate, Madurai Vs. The Presiding Officer

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Employees' Provident Fund Appellate Tribunal, Delhi reported in 2024-1- Writ.L.R.801 has held as under:

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“ Therefore, levy of damages under Section 14-B of the Act is not a criminal liability but a civil liability arising out of a statutory obligation. In view of the principles reiterated by several judgments distinguishing the difference between criminal liability and the civil liability for violation of statutory obligation and the

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judgment in Horticulture Experiment Station ,Gonikoppal, Coorg v. Regional Provident Fund Organization, (2022) 4 SCC 516, we are bound to hold that mens rea or actus reus is not an essential requirement or sine quo non for levying penalty under Section 14-B of the Act.”

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8.The damages levied under Section 14B of the Act has been modified by the Tribunal, on the ground of mensrea and except the ground of mensrea, no valid reasons have been assigned by the Tribunal in the impugned order. In view of the above and following the order passed by the Honourable Supreme Court as well as this Court as stated supra, this writ petition is allowed. The impugned order passed by the EPF Appellate Tribunal, Chennai in EPFA 345/2017 (ATA 1120 (13)/14) dated 22.10.2021 is hereby quashed and the order passed by the original authority is confirmed. No costs.

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20.11.2025

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NCC: Yes/No Index:Yes/No vrn

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