✦ High Court of India · 19 Aug 2025

High Court · 2025

Case Details High Court of India · 19 Aug 2025

Court

High Court of India

Decided

19 Aug 2025

Bench

Not available

Length

1,872 words

Acts & Sections

Constitution of India

Cited in this judgment

W.P. No.25598 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 19.08.2025CORAMTHE HONOURABLE Mr. JUSTICE P.DHANABALW.P. No.25598 of 2022The Assistant Provident Fund Commissioner-II,Employees Provident Fund Organization,Regional Office, Steel Plant Road, Salem - 636 302.…PetitionerVs.M/s. Sivamani Spinning Mills,Bysuhalli,Dharmapuri District - 635 205.…RespondentPRAYER: The Writ petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for records relating to the proceedings of the Appellate Tribunal dated 21.11.2014 in A.T.A. No.464(13) 2013 and to quash the order passed therein.For petitioner:Mr. R. MeenakshiFor Respondent:Mr. P. ThangarajORDERThis Writ petition has been filed as against the order passed by the Appellate Authority under the Employees Provident Funds and Miscellaneous Provisions Act dated 21.11.2014 in A.T.A. No.464(13) 2013, wherein the respondent herein has preferred an appeal as against the order passed by the Regional Provident Fund Commissioner, Salem dated 04.07.2013 by 1/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022quantifying the damages under Section 14-B of the Act and Para 32-A of the Scheme to the tune of Rs.55,89,822/-. The Appellate Authority allowed the appeal through an order dated 21.11.2014. 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/SL/17503. The respondent is a chronic defaulter in payment of Provident Fund contributions and other dues from 03/1996 to 01/2003. The belated remittance of EPF dues by the respondent attracted the provision of Section 14B of the EPF & MP Act. Thereby, the Authorities quantified the damages to the tune of Rs.55,89,822/- and a Show Cause Notice was issued on 25.04.2013 and personal hearing was also afforded on 09.05.2013 and subsequently adjourned to 30.05.2013 and 26.06.2013 as no representation on the side of the respondent and thereafter, on behalf of the respondent, one M. Madheswaran, the Office Manager of the establishment attended the personal hearing on 26.06.2013 and thereafter only, the Authority passed the order by quantifying the amount of damages to the tune of Rs.55,89,822/- and interest to the tune of Rs.51,00,865/-. Thereafter, the respondent preferred an appeal 2/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022as against the order before the Appellate Authority and the Appellate Authority erroneously allowed the appeal by holding that Section 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 Section 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.2.1. The learned counsel appearing for the petitioner has relied upon the following judgments, in support of her contention:(1) Organo Chemical Industries and another vs. Union of India and 3/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022others (SCC) reported in 1979 AIR 1803.(2) The Chairman SEBI vs. Shriram Mutual Fund and Another (SCC) in Appeal (Civil) No.9523-9524/2003.(3) Sakthi Aishwarya Spinning Mills vs. EPF (High Court of Madras) in W.P. No.4903 of 2001 and batch.(4) M/s. Streetline Electric vs. Regional Provident Fund Commissioner in Appeal (Civil) No.6498 of 1998 (SCC).(5) N.E.P.C. Tea Garden vs. The Regional Provident Fund Commissioner in W.P. No.4879 & 4880 of 2016.(6) Assistant Provident Fund Commissioner vs. Employees Provident Fund Appellate Tribunal and another in W.P. No.4633 of 2012.(7) The Regional Provident Fund Commissioner vs. Employees Provident Fund Appellate Tribunal and another in W.P. No.6643 of 2014.(8) M/s. PGC Textiles Corporation vs. EPF in W.A. No.101 of 2020.(9) M/s. PGC Textiles Corporation vs. EPF in SLP No.10547 of 2020.(10) Horticulture Experiment Station, Gonikoppal, Coorg vs. The Regional Provident Fund Organization in Civil Appeal Nos.2136 of 2012 – Hon’ble Supreme Court of India.(11) Sri Ramalinga Choodambikai Mills vs. Employees Provident Fund Appellate Tribunal and another in W.P. No.2435 of 2012.(12) The Assistant Provident Fund Commissioner vs. M/s. Lakshmi 4/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022Machine Works in Civil Appeal No.6100 of 2023.(13) Guru Nanak College vs. Employees Provident Fund Appellate Tribunal and others in W.A. No.2855 of 2023 – Madras High Court.(14) The Assistant Provident Fund Commissioner vs. Employees Provident Fund Appellate Tribunal and another in W.P. (MD) No.8808 of 2016.3. 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 21.11.2014, but without explaining any reason for such an huge delay, the present Writ petition has been filed only on 19.09.2022, after 8 years. Therefore, the Writ petition is liable to be dismissed on the sole ground of 5/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022'delay and laches'. Even on merits, the Writ petition deserves to be dismissed, since the Appellate Authority has passed a reasoned order after applying his mind. The Hon'ble Full Bench of this Court also in Sun Pressings (P) Ltd., vs. The Presiding Officer, EPF Appellate Tribunal and another in W.P. (MD) Nos.7339 of 2013 and batch cases, stated that the Authority while exercising power under Section 14-B of the Act, has to apply its mind and in appropriate cases, the Authority can waive and reduce the damages. Therefore, the order passed by the Appellate Authority by setting aside the order of the Regional Provident Fund Commissioner dated 04.07.2013 is within the powers of the Appellate Authority. Moreover, the respondent establishment was under the proceedings of BIFR from 1988 to 2011 and therefore, the respondent establishment may be granted exemption. Moreover, the respondent mill was closed in the year 2015. There is no perversity or any illegality found in the order passed by the Appellate Authority and the present Writ petition is liable to be dismissed.3.1. In support of his contention, the learned counsel appearing for the respondent has relied upon the following judgments:1.The Central Board of Trustees, Employees Provident Fund Commissioner and others vs. Teknoturf Info Services Pvt. Ltd., and others reported in MANU/TN/1061/2025.6/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 20222.Assistant Provident Fund Commissioner vs. M/s. Lakshmi Machine Works Ltd., and another in Civil Appeal No.6100 of 2023 – Hon’ble Supreme Court of India.3.The Central Board of Trustees, Employees Provident Fund Commissioner and others vs. Teknoturf Info Services Pvt. Ltd., and others reported in MANU/TN/0899/2025.4.Office of the Chief Post Master General and others vs. Living Media India Ltd., and others reported in AIR 2012 SC 1506.5. This Court heard both sides and perused the records.6. In this case, there is no dispute about the coverage of the Act to the respondent establishment and they have made contributions with delay, thereby, the Authority has passed an order under Section 7Q of the Employees Provident Fund Act by quantifying the interest and under Section 14-B of the Act by quantifying the damages. There is no dispute about the quantum of the amount quantified by the Authority and before the Authority, during the time of enquiry under Section 14-B proceedings, the respondent requested to waive the damages on the ground that the respondent establishment was unable to pay the amount due to the financial crisis and it was under the proceedings of BIFR. In spite of that, the Authority has quantified the amount without any 7/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022reduction. Therefore, the respondent preferred an appeal before the Appellate Authority under the Employees Provident Fund Act and the Appellate Authority after considering the rival submissions, modified the order by directing the appellant to remit the outstanding determined interest amount in 36 instalments be payable by the 7th January and the subsequent installments be payable by the 7th day of every calendar month.7. This Writ petition has been filed as against the order passed by the Appellate Authority under EPF and MP Act. The Regional Provident Fund Commissioner, Salem computed the damages under Section 14-B of the Act on 04.07.2013 by quantifying the amount as Rs.55,89,822/- after hearing the employer i.e., the respondent herein. However, the respondent preferred an appeal before the Appellate Tribunal under the Employees Provident Funds and Miscellaneous Provisions Act and the Appellate Tribunal after discussing about the provisions of Section 14-B of the Act and after referring the judgments of Hon'ble Supreme Court, came to a conclusion that there was no wilful default committed by the appellant in remitting the Provident Fund dues and the penal damages should be more or less compensatory in nature. The appeal preferred by the appellant to this extent is succeeded and came to a conclusion that the respondent has failed to prove on record that the appellant establishment has willfully defaulted in remitting the provident fund 8/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022contributions and the delay in remittance of PF Contributions cannot be held as deliberate. Thereby, allowed the appeal by setting aside the order of the Assistant Provident Fund Commissioner, Salem. Aggrieved by the said order, the Assistant Provident Fund Commissioner, has filed the present Writ petition with delay of around 8 years. 8. In fact, the Appellate Authority passed the order on 21.11.2014, the petitioner has filed this Writ petition on 19.09.2022. There is no any explanation for the above said inordinate delay of 9 years. The Writ petitioner ought to have challenged the order of the Appellate Authority within a reasonable time and after lapse of 9 years, this Writ petition has been filed without any explanation for the delay. Therefore, as rightly contended by the learned counsel appearing for the respondent that this Writ petition is to be dismissed on the grounds of 'delay and laches'. Therefore, this Court, without going into the merits of the case, is inclined to dismiss the Writ petition on the ground of delay and laches.9/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 20229. Accordingly, the Writ petition is dismissed. There shall be no order as to costs. 19.08.2025[4/4]Index: Yes/NoSpeaking order/non-speaking ordermjsToThe Employees Provident FundAppellate Tribunal,New Delhi.P.DHANABAL , J., 10/11 https://www.mhc.tn.gov.in/judis W.P. No.25598 of 2022mjsW.P. No.25598 of 202219.08.2025[4/4]11/11

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