IMPORTANT POINT
Delay in EPF contributions results in automatic penalties under Section 14B, independent of intent, reinforcing the strict liability principle in social welfare legislation.

ORDER:

Surepalli Nanda, J.

Heard Mr P.U.Bhaskara Rao, learned counsel appearing on behalf of the petitioner and Ms T.Bala Jayasree, learned standing counsel appearing on behalf of the respondent.

2. The petitioner filed the present writ petition seeking prayer as under:

“to issue a Writ, order or direction more especially in the nature of Mandamus declaring the order dated 04/08/2022 passed by the Respondent herein imposing interest U/s 7Q of EPF and Miscellaneous Provisions Act 1952 and the subsequent order passed in EPF Appeal No 3 of 2023 dated 13/01/2023 by Central Government Industrial Tribunal-cum-EPF Tribunal directing the Petitioner Firm to pay 20% of damages U/s 14B as well as Rs. 39,61,362/- towards interest U/s 7Q of the said Act as irregular, improper and unjustified and consequently set aside the same.”

3. PERUSED THE RECORD

A. The order dated 17.02.2023 passed in the present writ petition, is as under:

“Petitioner herein had filed an appeal under Section 7-I of the EPF and MP Act, 1952 challenging order dated 04.08.2022 passed by respondent under Section 14-B of the Act and it had also filed an application under Section 7(O) of the Act to waive or reduce the condition of pre-deposit. Vide impugned order dated 13.01.2023 in EPF Appeal No.3 of 2023, Central Government lndustrial Tribunal cum Labour Court, Hyderabad cum EPF Tribunal granted stay of operation of the impugned order on the condition of petitioner remitting an amount of 20% of the due amount determined under Section 14-B of the Act within four weeks from the date of order and an amount of Rs.39,61,632/- towards interest levied under Section 7(Q) of the Act.

As stated supra, in the impugned order dated 13.01.2023, Tribunal specifically mentioned that the petitioner herein had filed an appeal challenging the order passed under Section 14-B of the Act. Even then, Tribunal directed the petitioner to deposit an amount of Rs.39,61,632/-. Petitioner had filed copy of the order dated 04.08.2022 No.AP/HYD/2052725/PD-517/T-1/2022-23/325 passed under Section 7(Q) of the Act. Same number is mentioned in the impugned order. However, Sri G.Venkateshwarlu, learned counsel appearing for respondent Corporation on instructions would submit that the order under challenge before the Tribunal is under Section 14- B of the Act. ln the impugned order, there is no consideration of the principle laid down by Hon'ble Apex Court in M/s Shiv Harbal Research Laboratory vs. Assistant P.F. Commissioner' reported in 2016 LLR 55.

It is apt to note that in the said judgment, Hon'ble Apex Court categorically held that, there is nothing to indicate that any part of the amount awarded under Section 14- B of the Act was required to be deposited at the time of filing of the appeal. Therefore, the impugned order is contrary to the provisions of the Act and also principle laid down by Apex Court in the aforesaid judgment. ln view of the same, matter requires examination.

Therefore, till 14.03.2023, there shall be interim suspension of the impugned order dated 13.01.2023 in EPF appeal No.2 of 2O23 passed by Central Government lndustrial Tribunal cum Labour Court, Hyderabad to the extent of directing the petitioner to remit an amount of 20% of the amount determined under Section 14-B of the Act and an amount of Rs.39,61,632/- towards interest within four (04) weeks from the date of order.

However, it is made clear that proceedings before the Tribunal in the aforesaid appeal may go on.

List on 14.03.2023.

B) The respondent filed counter affidavit and in particular, paras XIII, XIV, XV, XVI, XVII, XVIII, XIX read as under :

“XIII. It is respectfully submit that, the Hon'ble Delhi High Court in the decision in M/s Atlantic Engg. Services Vs Union of India, 1979 Lab. I.C 695 observed that "The damages are to be imposed. The word "imposed" is more akin to the imposition of penalty rather than the determination of damages as is done in a case under the contract or torts. The reason is that in section 14-B the def