Assistant Provident Fund v. The Presiding Officer,

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 01.10.2024

CORAM:

THE HONOURABLE MR.JUSTICE B.PUGALENDHI and WMP(MD)No.6862 of 2016 Assistant Provident Fund Commissioner, Employees Provident Fund Organization, P.B.No.588, Sree Complex, 'D' Block, No.18, Madurai Road, Tiruchirappalli.

.. Petitioner v.

1.The Presiding Officer, Employee's Provident Fund Appellate Tribunal, Scope Minor, Core II, 4th Floor, Lakshmi Nagar District Centre, Lakshmi Nagar, New Delhi.

2.M/s.Naga Civil Engineering Construction Contractors, 111, Main Road, Salakarai, Periyakrishnapuram Post, Trichy District.

Rep. Through its Proprietor .. Respondents 1/8

PRAYER: Petition filed under Article 226 of the Constitution of India seeking issuance of a Writ of Certiorarified Mandamus calling for the records relating to the order passed by the first respondent in A.T.A.No. 222(13)2014, dated 17.06.2014, quash the same as unconstitutional and consequently, directing the second respondent to pay the amount in Ref.No.SDC/TN/TRY/81604/Circle-11/SRO-TRY/2014 dated 11.02.2014, within a stipulated time limit.

For Petitioner : Mr.N.Dilip Kumar For Respondents : No appearance *****

ORDER

This writ petition is filed by the petitioner / Assistant Provident Fund Commissioner as against the order passed by the first respondent / Tribunal in ATA.No.222(13)2014, dated 17.06.2014, modifying the penalty imposed by the petitioner, vide proceedings dated 11.02.2014, u/s.14B of the Employees' Provident Fund and Misc. Provisions Act, 1952 [EPF Act]. 2/8

2.The second respondent is an establishment covered under the EPF Act. With an allegation that the establishment has failed to pay the contribution as required u/s.6, 6A, 6C of the Act in time, the petitioner / original authority has initiated proceedings u/s.14B of the EPF Act, by issuing summons and imposed penal damages to the tune of Rs.90,411/- u/s.14B and interest to the tune of Rs.43,405/- u/s.7Q of the EPF Act. This order was challenged by the second respondent / establishment before the first respondent / Tribunal and the Tribunal, by its order dated 17.06.2014, has modified the penal damages by restricting the damages to 25% of the actual amount levied by the petitioner. Aggrieved over the same, the present writ petition has been filed.

3.Learned Standing Counsel for the petitioner / original authority submitted that the penal damages has been imposed as per the guidelines in Para 32A of the EPF Scheme. However, the Tribunal, without any reasons, has simply modified the order restricting to 25% of the damages, which was already imposed as per the scheme. He further submitted that the second respondent / establishment has not made out any case for 3/8

reducing the damages, however, the Tribunal has mechanically passed this order. Therefore, the impugned order is liable to be set aside. 4.Though notice has been served on the second respondent / establishment, there is no representation for the second respondent. 5.This Court considered the submissions made by the petitioner's Counsel and perused the orders passed by the original authority and the appellate authority.

6.The appellate authority has modified the damages to 25%, by holding that there was no mens rea, that the damages was imposed by the original authority without providing sufficient opportunity to the establishment and also in a mechanical manner by taking into account of the table as provided in Para 32A of the EPF Scheme. 7.The question with regard to mens rea is no longer res integra, inasmuch a Full Bench of this Court in Sun Pressing (P) Ltd and Others v. 4/8

Presiding Officer and Others [2024 (1) Writ L.R. 801] has held that mens rea or actus reus is not an essential requirement or sine quo non for levying penalty under Section 14B of the Act. Therefore, this finding of the Tribunal lacks merit. However, before levying damages in terms of Section 14B of the Act, the authority is required to follow the principles of natural justice and to consider all the mitigating circumstances projected by the employer / establishment. The Full Bench further held that there should be proper application of mind, objectively, on the merits of the case and in any event, the authority cannot resort to the arithmetical calculation or for levying damages as per Para 32A of the Scheme, without considering the mitigating circumstances.

8.In the case on hand, the petitioner / original authority has initiated proceedings as against the second respondent / establishment, by issuing summons dated 28.11.2013 fixing the date of enquiry as 06.01.2014. On 06.01.2014, the Proprietor of the second respondent has appeared and admitted the delay in remittance. However, he has not pleaded any innocence or offered any reasons for not paying the dues in time. Therefore, 5/8

the original authority has concluded the proceedings and imposed the penalty to an extent of Rs.90,411/- together with interest to an extent of Rs. 43,405/-, by order dated 11.02.2014.

9.The original authority has passed this order, only after considering the establishment's case. If there is any delay in remitting the dues, then the original authority is entitled to conduct enquiry and impose damages, as provided under Para 32A of the EPF Scheme. However, without any valid ground, the appellate authority has came to a conclusion that there is no willful default by the second respondent / establishment in remitting the dues. When the second respondent himself has admitted the delay and has not offered any reasons for the delay, it is not known as to how the Tribunal has came to a conclusion that there is no willful default. Therefore, this finding of the Tribunal also lack merit. 10.For the foregoing reasons and discussions, this Court is inclined to interfere with the order passed by the Tribunal. Accordingly, the order passed by the first respondent / Tribunal in ATA.No.222(13)2014, dated 6/8

17.06.2014 is set aside and the order passed by the petitioner / original authority dated 11.02.2014 stands revived.

In the result, this writ petition stands allowed. No costs. Consequently, connected miscellaneous petition is closed. Index :

Yes / No 01.10.2024 NCC :

Yes / No Internet :

Yes gk 7/8

B.PUGALENDHI, J.

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