The main legal point established is that the principle of mens rea is not applicable in civil cases, and the conduct of the party, including non-compliance with statutory provisions and failure to respond to show cause notices, is crucial in determining liability under the EPF Act.

P.B. Bajanthri, J.

1. In the instant writ petition, petitioner has challenged the validity of the order passed by Employees Provident Fund Appellate Tribunal (for short “EPFAT”) dated 17.10.2012 (Annexure P/18).

2. 2nd respondent – company was established in the month of September, 1997. Due to non remittance of EPF amount in the petitioner's EPF Department, Enforcement Officer submitted report on 26.02.2008 for the assessment period from April 2002 to August 2008. Competent authority drawn proceedings under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short “EPF Act”) and determined the EPF amount to the tune of Rs. 45,44,476/- on 08.10.2008. The aforesaid amount is stated to have been deposited by the 2nd respondent – company in three installments. Thereafter, EPF authorities proceeded to issue a show cause notice relating to assessment of interest as well as damages under Sections 7Q and 14B of EPF Act on 26.06.2009. 2nd respondent – company did not respond to the show cause notice dated 26.06.2009. Consequently, competent authority determined the interest as well as damages to the tune of Rs. 13,72,054 (interest) and Rs.31,72,988/- (damages). 2nd respondent-company deposited interest portion of Rs.13,72,054/- on 16.09.2009. Whereas levying of damages is concerned, 2nd respondent-company filed an appeal before the EPFAT and appeal was dismissed on 17.08.2011. Consequently, 2nd respondent – company filed rectification application and it was entertained by the EPFAT and allowed the 2nd respondent's appeal on 17.10.2012 with reference to the principle of mens rea. Hence, present petition.

3. Learned counsel for the petitioner submitted that 2nd respondent – company have not complied the provisions of EPF Act insofar as remittance of EPF amount timely during the period from April 2002 to August 2008 which is not disputed by the 2nd respondent – company in view of remittance of determined EPF amount as well as interest levied by the EPF authorities. It was further contended that pursuant to the show cause notice in respect of determination of interest as well as damages under Sections 7Q and 14B of the EPF Act on 26.06.2009 was not answered by the 2nd respondent – company to the extent of furnishing explanation with reference to the determination of interest as well as damages on the belated remittance of EPF amount. Therefore, 2nd respondent – company cannot maintain its appeal before the EPFAT. Having regard to the conduct of the 2nd respondent – company, both in not remitting EPF amount timely and so also in not furnishing the explanation – reply to the show cause notice for determination of interest and damages on the EPF amount, principle of mens rea is not attracted. It was also submitted that levying of damages statutory provisions under the EPF Act is a mandatory provision as held by the Calcutta High Court Full Bench in the case of Dalgaon Agro Industries Ltd. vs. Union of India, reported in 2005 (3) LLJ 356 (Para 53). Learned counsel for the petitioner has also relied on the following decisions:-

(i) The Chairman, SEBI vs. Shriram Mutual Fund and another reported in AIR 2006 SC 2287 (Para No.16);

(ii) Regional Provident Fund Commissioner vs. Bharat Plywood and Timber (Pvt.) Ltd. reported in 1980, Lab IC 446 (Kerala);

(iii) Regional Provident Fund Commissioner vs. M/s Nijjar Agro Foods Ltd. and another – CWP No. 9048 of 2011, decided by this Court on 03.11.2017.

4. On the other hand, learned counsel for the 2nd respondent – company while resisting the contentions of the petitioner, submitted that beneficiaries were not identified, therefore, question of levying damages may not be correct in view of the fact that 2nd respondent has already deposited EPF amount determined under Section 7A of EPF Act. It was further contended that principle of mens rea is attracted and it has been appreciated by the EPFAT in para no.10 while doing so quoted Supreme Court's decision, namely, Em