Mens rea or actus reus is not an essential element for imposing penalty or damages for breach of civil obligations and liabilities under the EPF Act.

JUDGMENT :

1. The Central Board of Trustees of the Employees Provident Fund has filed this writ petition through the Regional Provident Fund Commissioner, Regional Office, V.K. Complex, Fort Road, Kannur, challenging Ext.P3 order of the Central Government Industrial Tribunal-Cum-Labour Court (in short ‘the Tribunal’) Ernakulam in Appeal No. 117 of 2019, which was an appeal filed by the 1st respondent challenging levy of damages under Section 14 (B) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (in short ‘the EPF Act’). Through Ext.P3 order, the Tribunal has reduced the amount of damages to 50% of the amount levied for reasons stated in the order.

2. The learned counsel appearing for the petitioner would submit that the levy of damages under Section 14 (B) of the EPF Act is statutory. It is submitted that this is a case where there was a clear disregard to the obligation under law to pay the contributions in respect of the employees in question. It is submitted that the contributions had been collected from the employees and had to be remitted to the Department together with the employer's contribution. It is submitted that after collecting/deducting the employee part of the contribution, the 1st respondent had failed to remit the amount to the Department and therefore, the levy of damages was perfectly justified and in tune with the statutory provisions. It is submitted that the Tribunal had without just cause interfered with the order levying damages and had reduced the damages to 50% of the amount levied.

3. The learned counsel appearing for the 1st respondent would submit that there is no illegality in Ext.P3 order of the Tribunal. It is submitted that the reasons which made with the Tribunal in granting relief to the 1st respondent is evident from the order itself. It is submitted that the Tribunal had clearly found that this was a case where the coverage and liability under the EPF Act had been disputed by the organization. It is submitted that it was also found that the business was being run by the husband of the present proprietor, who had passed away in 2004 after suffering from a certain illness, for which he had to take treatment in Bombay. It is submitted that the Tribunal has found that the proceedings in which the coverage of the establishment was determined were not properly prosecuted by the late husband of the petitioner on account of his illness and that an appeal filed against those proceedings was also dismissed for non-prosecution. It is submitted that it is clear from the judgment of the Supreme Court in Employees’ State Insurance Corporation vs. HMT Ltd. and Another, (2008) 3 SCC 35 as also from the judgment of the Supreme Court in Mcleod Russel India Limited vs. Regional Provident Fund Commissioner, Jalpaiguri and Others, (2014) 15 SCC 263 that unless there is mens rea or actus reus and a conscious and willful disregard of obligations under the EPF Act, there could not be an automatic imposition of damages at 100%. It is submitted that in the facts and circumstances of the case, the order of the Tribunal in Appeal No. 117 of 2019 reducing the damage to 50% cannot be said to be unreasonable warranting the interference at the hands of this Court in the exercise of the jurisdiction vested in this Court under Article 226 of the Constitution of India.

4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the 1st respondent, I am of the view that there is considerable merit in the contention taken by the learned counsel appearing for the 1st respondent. The facts which compelled the Tribunal to take a view that this was not a case where the damages had to be levied at 100% is spelt out in the order itself. These reasons have already been noticed by this Court while considering the submissions of the learned counsel appearing for the 1st respondent. Indeed, the requirement of mens rea and/or actus reus is no longer a necessary ingredient t