1. The petitioner-Belgaum Co-operative Cotton Spinning Mills Limited has filed this petition aggrieved by the order passed by the Employees’ Provident Fund Tribunal, New Delhi, rejecting their appeal in ATA No.631(6)2001 upholding the levy of damages under Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short ‘the Act’).

2. The reasons assigned by the learned Tribunal in the impugned order are quoted below for ready reference:

“6. The applicability of the EPF Act is not disputed. Also, the default in depositing the EPF Contribution is admitted. The only ground taken for default is financial problem and that the establishment became sick unit. In the case of M/s Sky Machinery Ltd. Vs. RPFC reported in 1998 LLR page 925 the Hon’ble High Court of Orissa held that, “financial crunch will not be sufficient for waiving penal damages for delay in depositing the PF contribution.”

7. The second contention that the appellant establishment became a sick unit also is not a justifiable ground for default in payment of EPF Contribution. In the case of M/s Vikram Poddar Vs. RPFC reported in 2001 Vol. 2 LLJ page 518, the Hon’ble High Court of Kolkata held that, “merely because the company is a sick company and it has been referred to BIFR is not an impediment in recovering the dues of Provident Fund.”

8. Thus, in view of the discussion held above, since, the financial difficulty is not a sufficient ground justifying the delay in depositing the EPF dues, the order of the EPF Authority appears to be correct one and there is no inconsistency noticed in the order of the Authority. Hence ordered, in terms of the above, the appeal is dismissed. Copy of order be sent to both the parties. File be consigned to record room.

Sd/-

(Srikanta Nayak)

Presiding Officer”

3. Learned counsel for the petitioner Mr. V.M. Sheelavant has urged before this Court that the petitioner Co-operative Society, which was running a Spinning Mill, had run into financial trouble for the reasons beyond its control and on account of the prolonged workmen strike and lay-off, the petitioner-Company was unable to carry on its production regularly and on account of such financial crunch, it was impossible to pay provident fund dues along with contribution of the employer Society also in time. That details of such under production because workmen struck the work, is given in paragraph (4) of the Writ Petition. He has also submitted that even the State Government declared the petitioner Mill as a “Relief Undertaking” vide Annexure ‘A’ order dated 07th April 1994 under the provisions of Karnataka Relief Undertakings (Special Provisions) Act, 1977 (Karnataka Act 24 of 1977). He, therefore, submitted that the impugned order is a non-speaking order and deserves to be set aside.

4. On the other hand, the learned counsel for the Provident Fund Department, Mr. P.V. Gunjal, urged that the compliance with the provisions of the Act is not saved or avoided by mere declaration of the petitioner’s unit as a Relief Undertaking under order at Annexure ‘A’ dated 07th April 1994 and the petitioner-Society did not even pay the employees’ contribution collected from the wages of the employees concerned. He submitted that the Tribunal has rightly relied upon the judgment referred in the impugned order and has upheld the levy of damages under Section 14B of the Act.

5. I have heard the learned counsels for the parties at some length and perused the provisions of the Act and the impugned order.

6. Section 14B of the Act reads as under:

“14B. Power to recover damages.-Where an employer makes default in the payment of any contribution to the Fund, the 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 und