ASSISTANT PROVIDENT FUND COMMISSIONER Vs. STERLING LAB

JUDGEMENT

(1.) This Writ petition has been filed as against the order passed by the Appellate Authority under the Employees Provident Fund and Miscellaneous Provisions Act dtd. 19/9/2014 in A.T.A. No.631(13) of 2014, wherein the respondent herein has preferred an appeal as against the order passed by the Regional Provident Fund Commissioner, Salem dtd. 2/1/2014 by quantifying the damages under Sec. 14-B of the Act and Para 32-A of the Scheme to the tune of Rs.9,62,060.00. The Appellate Authority allowed the appeal through an order dtd. 19/9/2014. Aggrieved by the said order, the Assistant Provident Fund Commissioner, Salem has preferred this Writ petition.

(2.) The learned counsel appearing for the petitioner would submit that the respondent establishment is covered under the Employees Provident Fund and Miscellaneous Provisions Act and also allotted a Code No.TN/28392. The respondent is a chronic defaulter in payment of Provident Fund contributions and other dues from 09/2006 to 03/2013. The belated remittance of EPF dues by the respondent attracted the provision of Sec. 14B of the EPF & MP Act. Thereby, the Authorities quantified the damages to the tune of Rs.9,62,060.00 and a Show Cause Notice was issued on 18/10/2013 and personal hearing was also afforded on 13/11/2013 and thereafter, on behalf of the respondent, none attended the personal hearing. Thereafter, enquiry was posted to 17/12/2013. On that day also, no one appeared. The respondent has neither appeared nor sent any representation. Therefore, the Authority passed the order by quantifying the amount of Rs.9,62,060.00 for the period from 09/2006 to 03/2013. Thereafter, the respondent preferred an appeal as against the order before the Appellate Authority and the Appellate Authority erroneously allowed the appeal by holding that Sec. 14-B of the Act uses the words 'may recover' and also limited the jurisdiction of the Authority to levy penalty, not exceeding the amount of arrears. Para 32-A of the Scheme provides a sliding scale for the imposition of damages. Therefore, the determination of damages is not an inflexible application of a rigid formula and the words 'may recover' shows that the Authority is required to apply its mind to the facts and circumstances of the case and also referred the judgment of Hon'ble Supreme Court in M/s. Hindustan Steel Ltd., vs. The State of Orissa reported in AIR 1970 SC 253 and set aside the order by referring the judgment of Hon'ble Supreme Court in HMT Limited case. The Appellate Tribunal failed to consider that as per the case law of Horticulture Experiment Station Gonikoppal, Coorg vs. The Regional Provident Fund Organization, mensrea has no relevance to levy the damages under Sec. 14-B of the Act. Therefore, the order passed by the Authority by setting aside the order of the Authority in quantifying the damages is against law and the same is liable to be quashed.

(3.) The learned counsel appearing for the respondent would submit that the respondent made payments belatedly. However, already the entire contributions were paid and the interest also awarded by the Authority. However, the Appellate Authority, after applying mind, as per the judgment of Hon'ble Supreme Court, has correctly allowed the appeal by holding that in appropriate cases, the Authority can waive and reduce the damages. As far as the judgment of Hon'ble Supreme Court in Horticulture Experiment Station Gonikoppal, Coorg vs. The Regional Provident Fund Organization is concerned, it was subsequent to the judgment of HMT Limited case and the order passed by the Appellate Authority. Moreover, there is an enormous delay in filing the Writ petition. The order passed by the Appellate Authority was on 19/9/2014, but without explaining any reason for such an huge delay, the present Writ petition has been filed only on 7/6/2023, after 9 years.