The levy of damages under the EPF Act requires consideration of the employer's financial status and adherence to natural justice principles.

COMMON ORDER

M/s.Sri Venkatesa Paper and Board, a Company, incorporated under the Companies Act, failed to remit the EPF contribution for the period from September 2002 to May 2005 in time and it was paid belatedly. Therefore, a proceeding was initiated by the EPF Authority as against the Management. The EPF Authority, vide order dated 22.10.2013, has levied damages to the tune of Rs.51,35,380/-, for the belated payment of EPF contribution for the period from September 2002 to May 2005, under Section 14-B of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to the 'Act'). Challenging the same, the Management has preferred an appeal under Section 7-I of the Act before the Appellate Tribunal in ATA No. 746(13)2013. The Tribunal, by order dated 29.11.2013, allowed the appeal, holding that since the Company was under financial crisis, it was referred to BIFR and therefore, there is no mens rea and actus rea on the part of the Company for the delayed payment of EPF contrbution;

further, the levy of damages for the belated payment is not a mandatory one, however, the Authority has levied damages under Section 14-B of the Act. The Tribunal has also found that EPF contribution recovered by the Authority has not been credited to the workers. Challenging the order of the Appellate Tribunal passed in ATA No.746(13)2013, dated 29.11.2013, the EPF Authority has preferred W.P.(MD)No.10006 of 2015.

2. While so, the EPF Authority has also initiated a similar proceedings for the belated payment of EPF contribution for the period from 10/1999 to 11/2005, 06/2005 to 03/2009, 04/2009 to 03/2015 as against the very same Management and passed another order dated 12.10.2023, levying damages of Rs.1,28,15,688/- under Section 14B of the Act and also issued a demand letter dated 12.10.2023, claiming interest of Rs.52,40,796/- for the belated payment of EPF contribution, under Section 7Q of the Act. Challenging the same, the Management has filed the writ petition in W.P.(MD)No.27781 of 2023.

3. Since both the writ petitions are arising out of the damages levied under Section 14B of the Act, as against the Management/M/s.Sri Venkatesa Paper & Board, both the writ petitions are taken up together and being disposed of by way of this common order.

4. The learned counsel appearing for EPF Authority challenged the order of the Appellate Tribunal on its observations that the Appellate Tribunal has set aside the order dated 22.10.2013 passed under Section 14-B of the Act that there is no mens rea and actus rea. The learned counsel, by relying on a Judgment of the Hon'ble Supreme Court in Horticulture Experiment Station, Coorge vs. Regional Provident Fund Organisation reported in (2022) 4 SCC 516, submitted that the requirement of mens rea and actus rea has already been settled by the Hon'ble Supreme Court that it is not an essential element for imposing penalty or damages for breach of civil obligations and liabilities. Therefore, the findings of the Tribunal for setting aside the order passed under Section 14-B of the Act, are not correct. The learned counsel, by relying on various orders of this Court, submitted that in various cases, this Court, by applying the principles laid down by the Hon'ble Supreme Court in Horticulture's case, set aside the order passed by the Tribunal and directed the Management to pay the EPF contribution. Therefore, according to the learned counsel, the order passed by the Appellate Tribunal mainly based on mens rea needs to be interfered with.

5. With regard to the other writ petition filed by the Management in W.P.(MD)No.27781 of 2023, the learned counsel for the EPF Authority clai