KARE HEALTH SPECIALTIES PVT LTD Vs. REGIONAL PROVIDENT FUND COMMISSIONERII, HAVING OFFICE AT BHAVISHYA NIDHI BHAVAN

JUDGEMENT

(1.) The challenge in this petition is to the order dated 18.06.2007, passed by the respondent-Regional Provident Fund Commissioner (Commissioner, for short), which order has been confirmed by the Employees Provident Fund Appellate Tribunal, New Delhi (Tribunal, for short), thereby imposing damages by way of penalty, under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (Act, for short). By the impugned order, a penalty of Rs.5,56,632/- has been imposed on account of the alleged default of the petitioner to deposit the provident fund contribution.

(2.) On behalf of the petitioner, reliance is placed on the decision of the Supreme Court in the case of Mcleod Russel India Limited Vs. Regional Provident Fund Commissioner, Jalpaiguri & Others, 2014 15 SCC 263, in order to submit that finding as to existance of mens rea/actus reus, is a necessary requirement for imposition of damages by way of penalty. It is submitted that neither the Commissioner nor the Tribunal has recorded a finding that there was mens rea on the part of the petitioner in defaulting the payment of provident fund contribution. The learned Counsel pointed out that there was a Trust created, which was duly acknowledged by the Income Tax Department and which was having an account with the State Bank of India, where the amount of contribution was regularly being deposited. It is submitted that some of the workmen had withdrawn the provident fund contribution and/or it was transferred to the Establishment to where the employees were transferred and this was subject to the approval of the Provident Fund Authorities. It is submitted that all these aspects have not been properly considered by the Commissioner and the Tribunal. It is submitted that the judgment of the Tribunal is cryptic and without any reasoning and it needs to be set aside.

(3.) On the contrary, it is submitted by Shri Ferreira, the learned Counsel for the respondent that mens rea would only be relevant while deciding the quantum of damages. It is submitted that once there is a default, Section 14B of the Act steps in, as held by the Hon'ble Supreme Court in the case of Arcot Textile Mills Limited Vs. Regional Provident Fund Commissioner & Others, 2013 16 SCC 1. The learned Counsel however, in all fairness, does not dispute that there is no finding as to the existence or otherwise of mens rea on the part of the petitioner, in the order passed by the Commissioner or the Tribunal.