Mens rea is not required for imposing damages under the EPF Act; damages serve as penalties for defaults and ensure employee benefits, emphasizing the need for reasoned decisions from authorities.

JUDGMENT :

SHAMPA DUTT (PAUL), J.

1. The writ application has been preferred by the Central Board of Trustees Employees’ PF Organization praying for quashing of the impugned order dated 20th November, 2014 passed by the Employees' Provident Fund Appellate Tribunal in A.T.A. No. 657 (15) of 2014.

2. The petitioner’s case is that the respondent no.1, M/s Megha Design Private Limited is an establishment covered under the EPF & MP Act, 1952 (in short the said Act) and scheme framed there under, having a Code No. i.e. Establishment I.D. No. WB-Cat-0029568000. Since the respondent no.1 failed to deposit Provident Fund and allied dues for the period from April, 2004 to November, 2012 in time, a proceeding under Section 14B of the said Act was initiated by the Assistant Provident Fund Commissioner under the provisions of the said Act and scheme framed there under.

3. Accordingly, a notice dated 17th March, 2014 was issued by the Assistant Provident Fund Commissioner to the respondent no.1 with an option to either appear in person or through his legal representative on 23rd April, 2014 at around 11.30 A.M. and if the Respondent No. 1 had already made the payments within the respective due dates, then supporting documents of proof of such remittance may be produced on the date of hearing.

4. Since the respondent's representative duly admitted their default in payment of provident fund and allied dues for the aforesaid period, penal damages was determined under sections 14B of the Provident Fund and Miscellaneous Provisions Act, 1952 amounting to Rs. 6,45,194/- by the Assistant Provident Fund Commissioner, Kolkata by his Order dated 30.06.2014.

5. The said establishment was asked to deposit the amount of damages within a period of 15 days from the date of receipt of the said order but the respondent no.1 failed to do so.

6. An appeal being A.T.A. No. 657(15) of 2014 ( Mega Designs Pvt. Ltd. Vs. Asst. Provident Fund Commissioner ) was filed before the Employees Provident Fund Appellate Tribunal, New Delhi (hereinafter referred to as the said Learned Tribunal), challenging the order dated 30.06.2014 passed under Section 14B of the EPF & MP Act, 1952 by the Assistant Provident Fund Commissioner, Kolkata.

7. The Employees Provident Fund Appellate Tribunal passed an order on 20th November, 2014. Operative portion of the said impugned order is quoted hereunder:-

“In this case there are no finding by the Ld. Commission in the impugned order that the appellant had acted with mens rea or actus reus to contravene the statutory provisions.”

8. Hence, the writ application challenging the said award.

9. The tribunal in its order under challenge has further held:-

“In view of the facts and observation made by the respondent in the impugned order, and after hearing the arguments and counter arguments, this Tribunal has come to the decision that the respondent has failed to prove on record that the appellant establishment has willfully defaulted in remitting the provident fund contributions. Accordingly, the impugned order passed by the respondents suffers from serious infirmity. The impugned order passed by the respondent is set aside and the appeal is allowed.”

10. The petitioner has filed a short written note and relied upon the following judgments and has submitted as follows:-

i. Hindustan Times Ltd. vs. Union of India & Ors. (1998) 2 SCC 242

ii. Organo Chemical Industries & Anr. vs. Union of India & Ors. (1979) 4 SCC 573

iii. Horticulture Experiment Station Gonikoppal, Coorg. vs. Regional Provident Fund Organization , (2022) 4 SCC 51