IMPORTANT POINT
The Appellate Tribunal under the Employees' Provident Funds and Miscellaneous Provisions Act has the authority to reduce or waive damages imposed on employers for default in contributions, contrary to claims of exclusive power by the Central Board.

JUDGMENT :

(R. Vijayakumar, J.)

(Prayer: Writ Appeal filed under Clause 15 of Letters Patent, to allow the writ appeal and set aside the order dated 12.02.2019 passed in WP(MD).No.2412 of 2010 on the file of this Court.)

The writ petitioner is the appellant. The petitioner had challenged the order passed by the Employees Provident Fund Appellate Tribunal on 03.03.2009 in A.T.A.No.37(13)/2004.

2. The writ Court after considering the submissions made on either side, had arrived a finding that the order of the Appellate Tribunal restricting the damages up to 15 % per annum is legally correct and had proceeded to dismiss the writ petition. Challenging the same, present writ appeal has been filed.

(A). Factual Background:

3. The second respondent in the writ appeal had suffered an order under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 on 26.12.2003. Aggrieved over the same, the Management had filed an appeal before the Appellate Tribunal in A.T.A.No. 37/(13) of 2004. The Appellate Tribunal under the impugned order dated 03.03.2009 had restricted the damages up to 15% per annum. This order has been confirmed by the writ Court.

4. Challenging the same, the present appeal has been filed by the Regional Provident Fund Commissioner, Madurai.

(B). Contentions of the learned counsel appearing for the appellant are as follows:

5. The Appellate Tribunal as well as the writ Court have not taken into consideration the amendment that was made to Section 14-B of the Act with effect from 26.09.2008. The Appellate Tribunal has no power whatsoever to revise the damages imposed by the Original Authority under Section 14-B read with Sections 32A and 32B of Employees' Provident Fund Scheme 1952. He had further contended that gross reduction in the levy of damages will have an adverse impact on the entire scheme itself. Unless the Provident fund is maintained intact, there is every chance that it could be defeated causing irreparable loss to the workman employed.

6.The learned counsel had further contended that as per Paragraph No. 32A of EPF Scheme, damages have to be levied at the rates furnished therein and there is no discretion whatsoever to the officials under the said Act. If the legislature had intended to fix the maximum limit, they would have mentioned so. He had further contended that the question of mensrea would not arise in the case of imposition of damages under Section 14-B of the Act in view of the fact that it is not a criminal liability, but only a civil liability.

7. He had further contended that the financial difficulties of the management cannot be a reason for reducing the quantum of damages. When the management had deliberately and intentionally delayed the payment of contribution, there is no ground or discretion whatsoever to the authorities to reduce the quantum of damages as prescribed under the statute.

8. We have carefully considered the submissions made on the side of the appellant and perused the material records.

(C). Discussion:

9.The primary contention of the learned counsel appearing for the appellant is that the power to reduce or waive the damages levied under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is within the exclusive domain of the Central Board constituted under Section 5-A of the Act. The Provident Fund Commissioner or the Appellate Tribunal formed under Section 11-I of the Act have no power whatsoever either to reduce or waive the damages.

10. Section 14-B, 7-I and 7.L of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 are extracted as follows:

“Section 14-B. Power to recovery 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 be transferred by him under subsection (2) of section 15 [or sub-section (5) of section 17] or in the payment of any charges payable under any other