Damages cannot be levied under Section 14B of the EPF Act without mens rea for non-payment and non-deposit of provident fund amounts.

JUDGMENT

Prathiba M. Singh, J. - This hearing has been done through video conferencing.

2. The present petition has been filed challenging the impugned order dated 19th April, 2021 passed by the CGIT-cum-Labour Court. Vide the impugned order, the Tribunal has allowed the appeal of the RespondentCompany challenging the original order dated 27th February, 2020 passed by the RPFC-II under Section 14B of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter, 'EPF Act') imposing damages of Rs. 1,72,434/- on the Respondent-Company. The operative portion of the order reads:

"The appeal be and the same is allowed. The impugned order dated 27.02.2020 passed by the RPFC u/s 14B is hereby set aside. The Respondent is directed to refund the entire damage amount recovered from the appellant during the pendency of the appeal within one month from the date of communication of this order without interest failing which the amount shall carry interest @9% per annum from the date of recovery and till the payment is made. No order can be passed to direct the respondent to refund the interest recovered in excess since the tribunal lacks jurisdiction in respect of any order passed u/s 7Q of the Act. The appellant is at liberty of moving the appropriate forum for refund of the same."

3. The challenge is to the effect that the damages which were imposed by the RPFC-II were justified in as much as there was a delay by the RespondentCompany in depositing the provident fund dues, which delay is admittedly between 15 to 50 days.

4. The submission of Mr. Rajesh Kumar, ld. counsel is that mere financial difficulty, which is pleaded by the Respondent-Company, cannot be a ground to not levy damages, especially when delay was within the knowledge of the Respondent-Company and was knowingly incurred. He relies upon the judgment of the ld. Supreme Court in Hindustan Times Ltd. v. Union of India & Ors., (1998) 2 SCC 242 which clearly lays down the proposition that power cuts, financial problems etc. cannot be a ground for not levying damages.

5. On the other hand, Ms. Sanjana Bali, ld. counsel appearing for the Respondent-Company, submits that the initial notice which was received was itself completely defective. She submits that though the entire record is not filed here, the Company had made a detailed representation giving complete particulars as to the manner in which the payments were made and the reasons for the delay. In fact, according to her, the reasons were completely justified and would show that there was no mens rea or even mala fide intended by the Respondent-Company. She submits that the Tribunal has gone into the merits of the case to adjudicate the issue in favour of the Respondent-Company and this case is not one for remand.

6. A perusal of the chronology of events in the present case shows that an inquiry was initiated by the Petitioner under Section 14B and 7Q of the EPF Act for the period January, 2011 to July, 2018. Summons were issued to the Respondent-Company vide notice dated 18th September 2019. The Respondent-Company filed a detailed representation before the authority and thereafter, a revised calculation sheet was issued. It was brought to the notice of the authority, in the representation, that some of the periods for which violation was alleged in the summons are overlapping with an earlier proceeding and notice issued where the Respondent-Company has already been granted interim protection. The Department representative, thereafter, submitted his final report after considering the representation of the Respondent-Company. Vide order dated 27th February, 2020, the RPFC-II passed an order directing payment of damages to the tune of Rs.1,72,434/-. The relevant extract of the said order reads as under:-

"It is directed that the employer in relation to the establishment shall deposit an amount of Rs. 1,72,434/-(Rupees One Lakh Seventy Two Thousand Four Hundred Thirty Four only) towards Damages for the period 04/2