IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27^TH DAY OF JANUARY, 2026 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MR. JUSTICE S RACHAIAH WRIT PETITION NO. 6617 OF 2023 (L-PF)

BETWEEN:

1. THE REGIONAL PROVIDENT FUND COMMISSIONER BHAVISHYANIDHI BHAVAN, NO.13, RAJA RAM MOHAN ROY ROAD, BENGALURU – 560 025.

Dig itally …PETITIONER signed by SREEDHARAN (BY SRI. SHWETHA ANAND, ADVOCATE)

BANGALORE SUSHMA LAKSHMI Location: High AND:

Court of Karnataka

1. M/S CANBANK FINANCIAL SERVICES LTD., SRI UDAY SHANBHAG, REPRESENTED BY GROUP EXECUTIVE, NO.14, NAVEEN COMPLEX, 6^TH FLOOR, M.G.ROAD, BANGALORE – 560 001.

…RESPONDENT (BY SRI. K VIJENDRA, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT QUASHING THE PORTION OF THE IMPUGNED ORDER OF THE HON’BLE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL-CUM-LABOUR COURT DATED 7^TH DECEMBER 2020 PASSED IN APPEAL No. 543/2017 THEREBY MODIFYING THE ORDER DATED 12.12.2002 ON THE FILE No. KN/PF/RO/BNG/PD/1410/13181/02-03 AS PER ANNEXURE-A AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE D K SINGH and HON'BLE MR. JUSTICE S RACHAIAH

ORAL ORDER

(PER: HON'BLE MR. JUSTICE D K SINGH)

1. Heard Smt.Swetha Anand, learned counsel for the petitioner/ Regional Provident Fund Commissioner and Sri.K.Vijendra for the respondent company.

2. The present petition has been filed by the Regional Provident Fund Commissioner (hereinafter referred as ‘RPFC’) impugning the order dated 07.12.2020 passed by the Central Government Industrial Tribunal-Cum-Labour Court, Bengaluru (hereinafter referred as ‘CGIT’) in EPF No.543/2017, whereby the CGIT has modified the order dated 12.12.2002 passed by the RPFC levying damages for the delayed payment of EPF contribution and non- compliance of Section 14-B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred as ‘EPF Act’) for the period of July, 1990 to August, 1997, thereby reducing the same by 50% and directing the respondent to deposit Rs.9,83,500/- as against Rs.19,66,985/-, the quantum of amount of the damages assessed by the RPFC.

3. The RPFC, Bengaluru by the order dated 12.12.2002 imposed the penalty of damages of Rs.19,66,985/- under Section 14-B of the EPF Act on delayed payment of provident fund contribution for the period June, 1997 to July, 1997 on the respondent company.

4. The damages in the nature of penalty were levied after a lapse of 5 years, the matter was sub-judice till 04.07.1997. Thereafter, the respondent company was permitted to seek exemption, consequent upon which the respondent filed an application seeking exemption, which was refused. On its refusal, promptly the respondent had paid the PF contribution and interest of Rs.19,90,000/-

within the stipulated time.

5. The levy of damages was contested by filing an appeal before the CGIT. The learned Tribunal, after considering the provisions of Section 14-B of the EPF Act, noted that the matter was sub-judice for a long time between 16.09.1993 to 01.04.1997 and thereafter until the prayer of the respondent company to exempt the establishment under Section 17 of the EPF Act was considered by the RPFC by the order dated 02.09.1997. The CGIT, relying on the judgment of the Hon'ble Supreme Court in the case of Mcleod Russel India Ltd. v. Regional Provident Fund Commissioner, Jalpaiguri and others, (2014) 15 SCC 263 held that there should be mens rea for avoiding payment of the EPF contribution. In the present case, as soon as the application for exemption was refused, the respondent had deposited the EPF contribution. It was also held that there was nothing to disclose that how the damages have been calculated to be Rs.19,19,000/-.

6. The CGIT also took note of para-32A of the EPF scheme, which prescribes the rates of damages on the percentage of arrears of EPF contributio