The discretionary power to reduce damages under Section 14-B of the Employees Provident Fund and Miscellaneous Provisions Act 1952 should be exercised cautiously, with genuine reasons recorded in writing, and only on exceptional circumstances.

JUDGMENT :

(Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorari, to call for the records relating to the proceedings of the 1st respondent dated 18.11.2014 in ATA No.1020(13) 2014 and quash the order passed therein.)1. The writ petition has been filed questioning the validity of the order passed by the 1st respondent in proceedings dated 18.11.2014.

2. The petitioner is Regional Provident Fund Commissioner and the 2nd respondent defaulted in payment of Provident Fund contributions and other statutory charges for the period from April 2009 to February 2012. The employer was issued with a show cause notice informing the proposed levy of damages for the default committed by the 2nd respondent Establishment duly annexing the statement showing the wage month, due date and amount payable in the respective Accounts.

3. The 2nd respondent preferred an appeal to the Employees Provident Fund Appellate Tribunal and the tribunal passed a final order setting aside the order issued by the original authority. Challenging the said order, the present writ petition has been filed.

4. The issues raised by the writ petitioner with reference to the impugned order is no more res integra and this Court has considered the similar issue in W.P.No.6643 of 2014 and passed an order on 18.10.2019 and the said writ petition was also filed by the Regional Provident Fund Commissioner, Coimbatore, who is the petitioner in the present writ petition.

5. The said order passed by this Court in W.P.No.6643 of 2014 was taken by way of an appeal before the Hon'ble Division Bench in W.A.No.101 of 2020 and the Division Bench also confirmed the order on 12.02.2020. The said order was challenged before the Hon'ble Supreme Court of India and the said Special Leave to Appeal was also disposed of by the Hon'ble three Judges Bench of the Supreme Court of India.

6. This Court has passed an order in W.P.No.6643 of 2014, as under

“7. Let us now consider the spirit of Section 14-B of the Employees Provident Fund and Miscellaneous Provisions Act 1952. Undoubtedly, Section 14-B of the Act provides Power to the authorities to recover damages. Where an employer makes default in the payment of any contribution to the Fund, the [Pension] Fund or the [Insurance Fund] or in the transfer of accumulations required to him, then they are empowered to impose penalty. Such damages not exceeding the amount of arrears, as may be specified in the Scheme.

8. However, Proviso Clause to Section 14-B of the Act enumerates that the Central Board may reduce or waive the damages levied under this section in relation to an establishment, which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under Section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), subject to such terms and conditions as may be specified in the Scheme.

9. In the present writ petition on hand, the second respondent-Textile Corporation is unable to establish that the company was sick and declared as a sick industry under the provisions of the Act. Only, if an application was moved by the second respondent before the Board for Industrial and Financial Reconstruction (BIFR) to declare the company, the second respondent may not be eligible for such a reduction of damages imposed by the competent authority under the provisions of the Employees Provident Fund Act. Therefore, it is not as if, a mere representation of a person should be considered for the purpose of reduction of the quantum of damages. Any such reduction with reference to the Proviso Clause to Section 14-B of the Act, must be done with sufficient reasoning, which is to be recorded in writing. Contrarily, the Tribunal cannot adopt a mechanical approach of reducing the damages merely based on certain blanket statements. Unless there is an adequate proof to establish and ther