Mens rea is not required for imposing damages under Section 14B of the Employees' Provident Funds Act; penalties must reflect the circumstances of each case.

JUDGMENT :

S.S. SUNDAR, J.

1. In all these writ petitions, the orders passed by the Employees'Provident Fund Appellate Tribunal as against the orders levying penalty under Section 14 -B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “the Act”) on account of belated payment of provident fund contributions are under challenge. While W.P.(MD)Nos.7339 and 9688 of 2013 have been preferred by the employer concerned, W.P.(MD)Nos.2765 & 2782 of 2014 have been preferred by the Assistant Provident Fund Commissioner, Employees' Provident Fund Organisation, Madurai.

2. By the orders impugned in W.P.(MD)Nos.7339 & 9688 of 2013, the Appellate Tribunal, while examining the legality of the orders passed by the original authority levying damages under Section 14B of the Act for delayed payments of the provident fund contributions payable by the employer at the rates specified under Para 32A of the Employees' Provident Funds Scheme, 1952, reduced the quantum of damages to be paid by the employer to fifty percent of the amount, levied even after holding that the original authority has not rendered any finding to the effect that the employer had wilfully or deliberately withheld the contributions or that the employer had unlawfully diverted the funds collected from the employees' for its business use. Aggrieved thereby, the employer concerned have preferred the above writ petitions. However, by the orders impugned in W.P.No.2765 and 2782 of 2014, the Appellate Tribunal, in the Appeals preferred against similar orders of writ petitioners levying damages under Section 14B of the Act, as against two other employers, after recording similar findings, held that the damages levied against the employers are not legally sustainable, but they should pay damages at the rate of five percent per annum with effect from the passing of impugned order by the original authority. The said orders have been questioned by the Assistant Provident Fund Commissioner, Madurai in W.P.(MD)Nos.2765 & 2782 of 2014.

3. When the writ petitions were listed before a learned single Judge of this Court, it was brought to the notice of the learned Judge the divergent views expressed by the Division Benches of this Court. A Division Bench in DWC Employees Co-operative Canteen Limited v. Presiding Officer, Employees' Provident Fund Appellate Tribunal in the order dated 19.04.2018 passed in W.A. (MD) No. 1494 of 2011 has taken the view that in the absence of mens rea, there is no question of claiming damages from the employer. Similarly, in a subsequent decision in R.D.34 Ariyakudi Primary Agricultural Co-operative Bank v. Employees' Provident Fund Appellate Tribunal in the order dated 16.12.2019 in W.A. (MD) No. 516 of 2012, it has been held that mens rea is an essential ingredient, and unless the Assistant Provident Fund Commissioner applies his mind to the fact as to whether the reason put forth by the employer is sufficient to waive payment or not, the order of the authority determining the liability for penal damages under Section 14 -B of the Act would stand vitiated. However, the learned s