05.03.2025 Court No.13 Item No. 2&3 sudipta FMA 1206 of 2024 With MAT 1781 of 2024 The India Jute and Industries Ltd. & Anr.

Vs.

The Regional Provident Fund Commissioner- II Sub-

Regional Office, Howrah & Ors.

Mr. Soumya Majumdar, Mr. Shounak Mukhopadhayay, Ms. Urmi Sengupta Ms. Sonia Nandy …. For the Appellants.

Ms. Aparna Banerjee …. For the respondents.

1. Heard learned counsel for the parties. The brief facts relevant to the appeal are as follows:-

2. With effect from 1^st November, 1952, the appellant employer enjoyed exemption under Section 17 (1) (a) of the EPF and MP Act, 1952. The exemption came to be cancelled vide order dated 27th October, 2010 issued by the Labour Department of the Government of India in exercise of power under Section 17 (4). The employer was consequently required to transfer all past accumulation to the EPF Authorities.

3. Initially the employer challenged the cancellation of exemption by way of a writ petition being WP 1755 (W) of 2011. An order of status quo was passed by this Court. It must be understood that the cancellation of exemption remained and the employer was protected by the Court against transfer of past accumulation to the PF Authorities. However, two years later on 20^th March, 2013, the employer, conceded before the Single Bench that they were no longer interested in opposing the cancellation of exemption. The order of status quo was vacated and the writ petition was dismissed.

4. The employer thereafter started taking steps for remitting the PF accumulation of the employees, past and present, to the EPF authorities. The EPF on their part, may have acted, with indiscretion. On one hand, they demanded remittance of past accumulations and on the other have frozen the bank accounts of the Trust and the employer.

5. It is an admitted position that both the employer as well as the EPF Authorities have written to the authorities i.e. the banks and the issuers of permitted securities to pre-close, encash and transfer the deposits made by the Trust of the PF funds of the employees of the appellant. Such correspondence ensued for sometime. The banks and issuers took their time and also negotiated with the PF authorities against immediate pre-closure of the securities and/or deposits for their commercial interests.

6. All the past accumulations of PF have since finally reached the PF Authorities sometime late in the year 2013. Thereafter the PF Authorities thereafter issued notices under Section 14B of the Act of 1952 against the appellant claiming damages and interest for the period from 01.01.2014 to 30.09. 2015. The PF Authorities are of the view that they are entitled to impose damages and claim interest for the delay by the employer remittance of past accumulations consequent upon the cancellation of examination under Section 17 given to the employer.

7. Mr. Majumdar would advance two-fold argument before this Court.

a. Firstly, that the maturity value of the securities in which the PF funds were invested by the trust was inclusive of interest. The principal sum invested plus interest has been transferred to the PF authorities. The imposition of further interest, would amount to a double jeopardy. It is also argued that delay by the issuers of bonds and securities, in pre-closure and remittance to the PF Authorities cannot be saddled on the employer.

b. The employer appellant even otherwise had no mens rea or actus reus to delay any transfer of past accumulations from the trust to the PF authorities. The question of any penalty being imposed under Section 14B, particularly, for acts and omissions under Section 17 of the Act of 1952 cannot and does not arise.

8. Ms. Banerjee, learned counsel for the PF Authorities, has submitted that for the period, for which the employees obstructed the transfer of accumulations to the PF Authorities, post cancellation of exemption, has been duly factored by the PF Authorities and the employer has not been saddled with any liability for such period.

9. The right to cl