Financial difficulties do not justify delayed remittance of provident fund contribution, and lack of mens rea is not a sufficient defense.

JUDGMENT

Alok Aradhe, J. - The petitioner in this petition under Article 227 of the Constitution of India has assailed the validity of the order dated 02.11.2015 passed by the Regional Provident Fund Commissioner by which the Regional Provident Fund Commissioner in exercise of powers under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act' for short) has imposed a penalty of Rs. 26,54,218/- as damages and has further directed the petitioner to pay a sum of Rs. 13,85,278/- as interest. The petitioner has also assailed the validity of the order dated 26.06.2020 passed by the Employees' Provident Fund Appellate Tribunal (hereinafter referred to as 'the tribunal' for short) by which the appeal preferred by the petitioner has been dismissed and the aforesaid order passed by the Regional Provident Fund Commissioner has been affirmed.

2. Facts leading to filing of this appeal in nutshell are that the petitioner is a company engaged in the business of manufacture of readymade garments viz., trousers. The employees of the petitioners are covered under the provisions of the Act. It is the case of the petitioner that sometime in the year 2012, buyers of the petitioner viz., Hasbro Clothing and S. Kumar Limited viz., the public limited companies defaulted in making payments to the petitioner, as a result of which the cash flow of the petitioner was affected. It is stated that on account of the aforesaid financial difficulty, there was a delay on the part of the petitioner in remitting the amount to provident fund contribution for the period from April 2013 to January 2015. The Regional Provident Fund Commissioner issued a notice dated 21.08.2015 to the petitioner by which the petitioner was asked to show cause as to how a sum of Rs. 26,54,218/- be not imposed as damages under Section 14B of the Act and the petitioner be not directed to pay a sum of Rs. 13,85,278/- as interest. The petitioner submitted a reply to the aforesaid notice in which inter alia it was pointed out that on account of bad debts, there was a delay in remitting the amount of provident fund contribution for a period from April 2013 to January 2015.

3. The Regional Provident Fund Commissioner however, by an order dated 02.11.2015 inter alia held that the plea of financial set back due to non payment from the debts of the petitioner cannot be a sufficient ground for non payment of statutory dues in time. It was further held that the petitioner is continuously in default of provident fund contribution to the extent that employees share of contribution, which was deducted from the salary of the employees has also been deposited on time. Accordingly, the penalty for a sum of Rs. 26,54,218/- under Section 14B was directed to be paid as damages under Section 14B of the Act. In addition, the petitioner was directed to pay a sum of Rs. 13,85,278/- as interest. Being aggrieved, the petitioner filed the appeal before the tribunal. The tribunal by an order dated 2.06.2020, inter alia, held that the documents furnished by the petitioner itself does not substantiate the contention of the petitioner with regard to its precarious financial condition. It was further held that the situation arising out of the pandemic is not a good ground to interfere with the order passed by the Regional Provident Fund Commissioner. Accordingly, the appeal preferred by the petitioner was dismissed. In the aforesaid factual background, this petition has been filed.

4. Learned counsel for the petitioner submitted that the petitioner has deposited an amount of Rs. 13,85,278/- towards interest. It is further submitted that a bench of this court by an order dated 22.09.2020 had directed the petitioner to deposit 50% of the amount of damages and in compliance of the aforesaid order, the petitioner has deposited Rs. 13,27,399/-. It is also submitted that the petitioner suffered financial hardship and due to circumstances beyond its control could