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2025 Supreme(Online)(KER) 12331
2024 KER 1336
IN THE HIGH COURT OF KERALA AT ERNAKULAM
GOPINATH P., J.
The District Project Officer, M/s. Sarva Shiksha Abhiyan, Cochin – Petitioner
Versus
The Assistant Provident Fund Commissioner, O/o. The Employees Provident Fund Organisation, Sub Regional Office, KOCHI and Anr. – Respondents
WP(C) NO. 25825 OF 2018
Decided On : 09-01-2024
Advocates Appeared :
For the Petitioner : Smt. Reshmi Thomas - Government Pleader
For the Respondents : Dr. S. Gopakumaran Nair (SR.), Sri. S. Prasanth, SC, Employees Provident Fund Organisation.
SMT. RESHMI THOMAS - GOVERNMENT PLEADER, DR.S.GOPAKUMARAN NAIR (SR.), SRI.S.PRASANTH, SC, EMPLOYEES PROVIDENT FUND ORGANISATION
The authority must consider relevant facts when imposing damages under Section 14B of the EPF Act, despite mens rea not being a necessary ingredient.
Headnote:
(A) Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Sections 7Q and 14B - Challenge to order demanding interest and imposing damages under EPF Act - The petitioner, a non-profit organization, contested the imposition of damages, arguing lack of application of mind by the authority - The court found no grounds for interference with the interest demand but set aside the damages order for lack of consideration of relevant circumstances. (Paras 2-5)
(B) Writ Jurisdiction - The court examined the validity of the damages order under Article 226, noting that while alternate remedies exist, it can intervene if grounds are made out. (Paras 4-5)
Facts of the case:
The petitioner, a non-profit organization, was held liable for interest and damages under the EPF Act for delayed remittance of provident fund dues. The appeal against the damages was filed beyond the condonable period.
Findings of Court:
The court upheld the interest demand but set aside the damages order for lack of proper reasoning and remitted the matter for fresh consideration.
Issues: The main issues were whether the damages were justified and if the authority applied its mind to the relevant facts.
Ratio Decidendi: The court ruled that while mens rea is not required for imposing damages, the authority must consider the facts of each case to determine the appropriate rate of damages.
Result: The damages order was set aside and remitted for reconsideration.
JUDGMENT :
(GOPINATH P., J.)
The District Project Officer, M/s. Sarva Shiksha Abhiyan, Kochi has approached this Court challenging Ext.P8. The document marked as Ext.P8 contains two orders issued by the Assistant Provident Fund Commissioner, Kochi demanding interest under Section 7Q of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the 'EPF Act') and also determining damages under Section 14B of the said Act.
2. The learned Government Pleader appearing for the petitioner would submit that M/s. Sarva Shiksha Abhiyan is a 100% non-profit organization and is a centrally sponsored project that was implemented in the State of Kerala from 2002 on wards. The project was aimed at improving the standard of primary education and facilitating the creation of sufficient infrastructure in primary educational institutions. In order to meet the requirement of the project, several persons were employed on contract basis as well as daily wage basis. It is submitted that the fund for the project was allocated by both the Central and State Governments and the District Project Offices were disbursing amounts including the wages paid to the employees in accordance with the budget prepared for the scheme. There were some communications issued by the State Project Officer regarding remittance of employees provident fund dues and following the same, the Project Officer, Kochi filed an application for enrollment of employees engaged by the project under the EPF Act. By Ext.P4 dated 1.10.2010, it was determined that the provisions of the EPF Act are applicable to the employees engaged in connection with the project. By Ext.P5, it was informed that the coverage would be from 16.9.2003 and not from 20.9.2004 as previously intimated. Thereafter, proceedings were initiated for the levy of damages under Section 14B of the EPF Act and for determining the levy of interest under Section 7Q of the EPF Act. The amount to be remitted towards contribution had already been remitted by the Project Officer. By Ext.P8, it was determined that the petitioner was liable for interest under of the EPF Act as also to damages under of the EPF Act. Though the petitioner chose to prefer an appeal against Ex.P8 proceedings both in respect of the interest levied under of the EPF Act as also in respect of levy of damages under of the EPF Act, the said appeal was preferred beyond time and even beyond the condonable period provided under Rule 7(2) of the Tribunal Procedure Rules, 1997. It is therefore that the petitioner has approached this Court under Art.226 of the Constitution of India, challenging Ext.P8.
3. The learned Government Pleader submits that, at present, the challenge is confined to the levy of damages under Section 14B of the EPF Act. It is submitted that, as noticed in the order dated 13.8.2018 in the present writ petition, the petitioner had undertaken to pay the interest under Section 7Q of the EPF Act. It is submitted that a reading of Ext.P8 order imposing damages under of the EPF Act does not disclose any application of mind to the relevant facts including the fact that the M/s. Sarva Shiksha Abhiyan was a centrally sponsored project intended to improve the quality of primary education in the State. It is submitted that there were no permanent employees for the project and the employees were engaged only on daily wage basis or on contract basis. It is submitted that while the petitioner did not dispute the coverage under the EPF Act, it has a case that, in the background of the peculiar facts of the case, the authority should have considered whether damages under of the Act had to be imposed on the petitioner.
4. The learned Standing Counsel appearing for the Provident Fund Organization would contend that, in so far as the levy of interest under Section 7Q of the EPF Act is concerned, the same is statutory and no appeal would lie to the Tribunal against an order demanding interest under of the Ac
