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ANIL K. NARENDRAN, P. G. AJITHKUMAR
KERALA STATE CIVIL SUPPLIES CORPORATION LTD. – Appellant
Versus
ASSISTANT PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION, THIRUVANANTHAPURAM – Respondent
JUDGMENT :
P.G. AJITHKUMAR, J.
1. The judgment dated 31.01.2023 dismissing W.P.(C) No. 2084 of 2012 is under challenge in this appeal filed under Section 5(i) of the Kerala High Court Act, 1958. The Kerala State Civil Supplies Corporation Ltd, and its Regional Manager, Thiruvananthapuram are the appellants.
2. The respondent issued a notice dated 24.09.2004 to the appellants by exercising the powers conferred under Sections 7Q and 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (the Act) owing to the belated payment of provident fund contribution, employees’ family pension fund contribution, deposit linked insurance fund contribution, administrative charges and inspection charges for the period from March, 1997 to February, 2003. The interest component was Rs.1,21,366/-and damages was Rs.3,50,736/-totalling Rs.4,72,102/-. After considering the objection raised about the computation, the amount was refixed as per Ext. P3 order dated 16.12.2004 as Rs.2,58,159/-i.e., 68,536 under Section 7Q and Rs.1,89,623/-under Section 14B of the Act. Against that order an appeal was preferred before the Provident Fund Appellate Tribunal, New Delhi. However, the respondent
The discretion of the Provident Fund Commissioner in imposing damages under Section 14B must consider the bona fides of the employer's reasons for delay, and damages can be set at a rate lower than t....
For the imposition of damages under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, the establishment of mens rea is not a mandatory requirement. Once a delay in r....
Financial difficulties do not justify delayed remittance of provident fund contribution, and lack of mens rea is not a sufficient defense.
The court established that while imposing damages under the Act, the circumstances around the delay should be considered, rather than imposing 100% damages mandatorily.
Damages for delayed payment under the EPF Act cannot exceed the amount of arrears, and interest cannot be levied on penal amounts without statutory authority.
Employers are liable to pay damages for delayed contributions to the provident fund, assessed based on beneficiary losses, irrespective of the reasons for delay.
Mens rea is not required for imposing damages under Section 14B of the Act; damages can be levied based on default in payment of provident fund contributions.
Damages under S.14B of the Employees' Provident Funds Act are penal and not compensatory, allowing for mechanical imposition up to 25% without ascertaining actual loss.
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