For the imposition of damages under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, the establishment of mens rea is not a mandatory requirement. Once a delay in remittance of statutory contributions is proved, the liability for damages is triggered.

J U D G M E N T

This writ petition has been filed challenging Ext.P3 order of the Central Government Industrial Tribunal-Cum-Labour Court, Ernakulam in Appeal No.44 of 2020, whereby the damages imposed on the petitioner under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the “1952 Act”) were reduced by waiving 37% of the amount of damages assessed by the Regional Provident Fund Commissioner, Ernakulam.

2. The learned counsel appearing for the petitioner submits that the delay in making payment of the contributions in respect of its employees was not wilful. It is submitted that the delay occurred owing to the delay in obtaining funds from the National Co-operative Development Corporation, a Government of India undertaking. It is further submitted that the petitioner was established with the help of a grant-in-aid provided by the National Co-operative Development Corporation through the ‘Kerala State Federation of Scheduled Caste and Scheduled Tribes Development Co-operative Limited’. It is submitted that the determination under Section 7A of the 1952 Act in respect of the petitioner has been challenged and is pending consideration before this Court as W.P.(C)No.34282 of 2019. It is submitted that the Tribunal did not consider the peculiar facts and circumstances of the case while deciding that the waiver should be limited to 37%. It is submitted that there was no wilful default on the part of the petitioner and that the delay occurred only for reasons mentioned above. It is submitted that, in such circumstances, the Tribunal ought to have waived the damages completely or at least to a much larger extent.

3. The learned Standing Counsel appearing for the Provident Fund Department would point out that in the case of the petitioner, the delay in payment of contribution was substantial. It is submitted that the delay in payment of the contributions was for the period from 20.10.2000 to 04.09.2019. It is further submitted that even the amount determined as contribution payable by the petitioner in proceedings under Section 7A of the 1952 Act has not been paid by the petitioner, stating that the writ petition challenging the determination is pending before this Court. It is submitted that the waiver granted by the Tribunal is substantial. It is further submitted that the question of establishing mens rea does not arise as the Supreme Court in Horticultural Experiment Station Gonikoppal, Coorg v. Regional Provident Fund Organisation, 2022 KHC OnLine 6221, has taken the view that the concept of mens rea need not be established for the purposes of imposing damages under Section 14B of the 1952 Act.

4. Having heard the learned counsel appearing for the petitioner and the learned Standing Counsel appearing for the Provident Fund Department, I am of the view that the petitioner has not made out any case for interference with Ext.P3 order of the Central Government Industrial Tribunal Cum Labour Court, Ernakulam in Appeal No.44 of 2020. With the decision of the Supreme Court in Horticultural Experiment Station Gonikoppal (supra), it is now established that mens rea is not a necessary concomitant for the purposes of imposing damages under Section 14B of the 1952 Act. If a delay in making contributions is established, damages under Section 14B of the 1952 Act can be imposed. Therefore, the only question to be considered is the reasonableness of the amount of damages imposed by the Provident Fund Authority. On an appreciation of the contentions taken before the Tribunal, the amount of damages has been reduced by 37%. It is not disputed before me that the damages imposed by the Provident Fund Authority were at the rate of 100%. Therefore, I am of the view that the Tribunal has already granted substan