The court affirmed that while the Regional Provident Fund Commissioner can remit part of the penalty under Section 14B, it cannot remit the entire penalty, emphasizing the need for fair adjudication.

JUDGMENT :

I.P. Mukerji, C.J.

1.North Eastern Electric Power Corporation Limited (the respondent) is an establishment covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the Act), the Employees’ Provident Funds Scheme, 1952, Employees’ Deposit-Linked Insurance Scheme, 1976 and Employees’ Pension Scheme, 1995 framed thereunder. The respondent was required to remit the contribution along with the administrative charges within 15 days of the close of every month.

2. They did not do so.

3. Under Section 14B of the Act on such default, it became liable to pay penalty in the form of damages not exceeding the arrear at the rates specified in Para 32A of the EPF Scheme, 1952, Para 5 of the EPS, 1995 and 8A of EDLI Scheme, 1976, at the following rates:

4. The respondent was also liable to pay interest under Section 7Q of the Act on such delayed payment. There was default on the part of the respondent from 1^st April, 1996 to 31^st March, 2014.

5. The office of the Regional Provident Fund Commissioner SRO, Shillong made a detailed calculation of such delay, interest and damages. On 21^st October, 2021, the Commissioner issued a show cause notice to the respondent. They were asked to appear before the authority on 29^th October, 2021.

6. Hearings were given by the appellant to the respondent on or from 29^th October, 2021.

7. From what appears in the averments in the writ petition, the respondent pleaded that the deposit of contribution beyond time was unintentional. As the period covered was about 25 years, the records were not available. Then a plea was made before the adjudicating authority that the demand was for a long period of time and that great prejudice would be caused to the respondent if it had to pay the damages computed for this whole period. A reasonable stand be taken by the adjudicating authority, citing judgments of the Supreme Court and High Court.

8. Finally on 6^th February, 2023, the Regional Provident Fund Commissioner-II, Shillong by an order directed the respondent to pay damages of Rs.60,57,874/-.

9. By the instant writ petition, the respondent challenged this adjudication order.

10. Upon filing of affidavits it came up for consideration before a learned single judge of this Court. By the impugned judgment and order dated 5^th August, 2024 he set aside the show cause notice dated 21^st October, 2021 and 3^rd February, 2023.

11. This appeal involves interpretation and application of Section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

12. Section 14B is inserted below:

“14B. Power to recover damages.– Where an employer makes default in the payment of any contribution to the Fund [the [Pension] Fund or the Insurance Fund] or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 [or sub-section (5) of section 17] or in the payment of any charges payable under any other provision of this Act or of [any Scheme or Insurance Scheme] or under any of the conditions specified under section 17, [the Central Provident Fund Commissioner or such other officer as may be authorized by the Central Government, by notification in the Official Gazette, in this behalf] may recover [from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme:]

[Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard:]

[Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for industrial and Financial Reconstruction e