M/s Bandana Electricals vs APFC on 9 October 2026

1. Central Board of Trustees Through CPFC, New Delhi EPFO, 14, Bhikaji Cama Place, New Delhi- 110014

2. Assistant Provident Fund Commissioner, DSIIDC, Facility Centre, Flatted Factory Complex, Jhilmil, Delhi- 110092 ...Respondents Argued by: Sh. Sanjay Kumar, counsel for the appellant. Sh. Narender Kumar, counsel for the respondents.

1. The appellant has filed the present appeal under Section 7-1 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short “the Act”) challenging the orders dated 02.05.2024 passed by the respondent no. 2 under Section 14B and Section 7Q of the Act. Vide the above-said impugned orders of the respondent no.2, the appellant was directed to pay

the damages of Rs.4,65,957/- and the interest of Rs.2,78,283/- only for the delay in payment of provident fund contributions of the employees of the appellant.

2. Bre由y stated, the case of the appellant was to the following effect. The appellant is duly covered under the provisions of the Act. The previous sole proprietor of the appellant had died on December 19, 2018. Thereafter, his wife had taken over the business of the appellant firm. However, the respondent no.2 had passed the impugned orders dated 02.05.2024 under Section 14B and Section 7Q of the Act without recording the submissions of the appellant and without following the requisite procedure prescribed under the law. The appellant has challenged the impugned orders dated 02.05.2024 upon a number of grounds including, inter alia, the impugned orders passed by the respondent no.2 were not reasoned and speaking, respondent no.2 had imposed the maximum amount of damages under Section 14B of the Act without exercising his discretion and without recording any reasons, respondent no.2 was fimctioning as a prosecutor as well as a Judge while passing the impugned orders etc. Through the present appeal, the appellant has prayed that the impugned orders dated 02.05.2024 passed by the respondent no.2 under Section 14B and Section 7Q of the Act should be quashed.

3. Respondents have filed a written reply strongly contesting the above-said appeal of the appellant. Respondents have denied all the allegations made by the appellant against the respondents. Respondents have stated that the impugned orders dated 02.05.2024 under Section 14B and Section 7Q of the Act were

passed by the respondent no.2 after exercising his discretion in accordance with law. Respondents have stated that the appellant was given adequate opportunity of hearing by the respondent no. 2 during the enquiry-proceedings. Respondents have further stated that the appellant had failed to explain the delay in deposit of Provident Fund contributions of workers with the respondent during the enquiry-proceedings. Respondents have defended the impugned orders dated 02.05.2024 of the respondent no.2 under Section 14B and Section 7Q of the Act as being perfectly legal and valid. Respondents have prayed that the appeal of the appellant should be dismissed with heavy costs.

4. I have heard the learned counsel for the appellant and the learned counsel for the respondents.

5. Learned counsel for the appellant has argued that Ms. Bandana Roy had restarted the appellant firm in April, 2019 after the death of her husband. Learned counsel for appellant has further argued that respondent no.2 had passed non-speaking and unreasoned orders without recording the submissions made by the appellant before the respondent no.2. Learned counsel of the appellant has pleaded that the respondent no. 2 had acted both as a judge and a prosecutor while passing the impugned orders dated 02.05.2024 under Section 14B and Section 7Q of the Act. Learned counsel for the appellant has further pleaded that the respondent no. 2 had mechanically imposed the maximum amount of damages under Section 14B of the Act without recording any reasons. Learned counsel for the appellant has contended that the respondent no. 2 was bound to exercise his

discretion and pass a speaking order containing reasons for imposing the maximum amount of damages under section 14B of the Act. Learned counsel of the appellant has further contended that the respondent no.2 had illegally passed the impugned order under section 14B of the Act mechanically imposing the highest amount of damages under section 14B of the Act. Learned counsel fbr the appellant has contended that the respondent no.2 had passed both the impugned orders under Section 14B and Section 7-Q of the Act without containing any reasons and without recording the submissions made by appellant before the respondent no. 2 during enquiry proceedings. Learned counsel fbr the appellant has prayed that the impugned orders dated 02.05.2024 passed by the respondent no. 2 under section 14B and 7Q of the Act were absolutely wrong and illegal and should be quashed.

6. Learned counsel for the respondents has strongly contested the allegations made by the appellant against the respondent no. 2. Learned counsel for the respondents has argued that the appellant had intentionally delayed the payment of the requisite EPF dues of the workers employed in the establishment. Learned counsel for the respondents has further argued that the appellant had failed to make any submissions before the respondent no.2 during the enquiiy-proceedings under Section- 148 and Section 7-Q of the Act. Learned counsel for the respondents has pleaded that the appellant was given adequate opportunity of hearing during the enquiry proceedings but had failed to justify the delay in deposit of Provident Fund contributions of the workers with the respondent. Learned counsel for the respondents has pleaded that the respondent

no.2 had not acted as a prosecutor but had strictly acted as a judge while passing the impugned orders dated 02.05.2024 under Section 14B and Section 7Q of the Act. Learned counsel for the respondents has further pleaded that the respondent no.2 had passed reasoned and speaking orders after exercising his discretion while imposing the requisite penalties under Sections 14B & 7Q of the Act. Learned counsel fbr the respondents has defended the impugned orders dated 02.05.2024 of the respondent no.2 as being perfectly legal and valid. Learned counsel for the respondents has prayed that the appeal of the appellant has no merits and should be dismissed with heavy costs.

7. I have carefully gone through the impugned order dated 02.05.2024 under Section 14B of the Act passed by the respondent no. 2 against the appellant. It is important to notice that the impugned order dated 02.05.2024 passed by the respondent no. 2 under Section 14B of the Act is not a speaking order containing reasons fbr passing the abovesaid order.

8. Hon'ble Supreme Court of India has repeatedly emphasised that any order passed by any adjudicator must be a reasoned order containing reasons for passing such orders. It is necessary to refer to some rulings of Hon'ble Supreme Court of India in this behalf.

9. In Mahabir Prasad Santosh Kumar Vs. State of Uttar Pradesh (AIR 1970 SC 1302), Hon'ble Supreme Court of India had observed that any quasi-judicial order that adversely affects a citizen's rights must be supported by cogent reasons.

Where the order is subject to appeal, the necessity to record reasons is even greater.

10. In Siemens Engineering & Manufacturing Co. of India Vs. Union of India (1976) 2 SCC 981, AIR 1976 SC 1785, Hon'ble Supreme Court of India had observed that where an authority makes an order in exercise of a quasi-judicial flmction, it must record its reasons in support of the order. Every quasi-judicial order must be supported by reasons.

11. In Kranti Associates Pvt. Ltd. & Anothers Vs. Masood Ahmed Khan & Others (2010) 9 SCC 496, the Hon'ble Supreme Court of India had stated that a quasi-judicial authority must record reasons in support of its conclusion. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

12. Moreover, it is also apparent from the scrutiny of the impugned order dated 02.05.2024 under Section 14B of the Act that the respondent no.2 has not recorded any reasons for imposing the maximum amount of damages as per paragraph no. 32A of the Employees9 Provident Fund Scheme, 1952; paragraph no. 5 of Employees9 Pension Scheme, 1995 & paragraph no. 8A of the Employees9 Deposit Linked Insurance Scheme, 1976.

13. Law is well settled that power under Section 14B of the Act is quasi-judicial and the Commissioner does not possess an arbitrary and uncontrolled discretion. It is also settled that because of the punitive consequences of Section 14B, the order

under Section 14B of the Act must be a speaking order containing reasons. In this view, I am fortified by the ruling of Hon'ble Supreme Court of India in Organo Chemical Industries & Another Vs. Union of India and Other (1979) 4 SCC 573.

14. Hon'ble Supreme Court had also held in Hindustan Times Limited Vs. Union of India and Others (1998) 2 SCC 242 that the Authority under Section 14B of the Act has to apply its mind to the facts of the case, the reply to the show cause notice and pass a reasoned order by following principals of natural justice.

15. Hon'ble Delhi High Court had also held in Assistant Provident Fund Commissioner Vs. Hi-Tech Vocational Training Center (2015: DHC: 7887-DB) that Section 14B of the Act gives the Commissioner discretion both as to whether damages should be levied and as to their quantum. Commissioner has the discretion regarding the amount of damages.

16. Hon'ble Delhi High Court has also held in Assistant Provident Fund Commissioner Vs. M/s Compare Info Base Limited W.P.(C) 6190/2015 decided on August 17, 2026 that Section 14B of the Act gives discretion to the authorized officer. The mitigating circumstances can be considered and the punitive character of Section 14B requires a speaking order containing reasons.

17. In view of the clear law laid down by Hon'ble Supreme Court of India and Hon5ble Delhi High Court as discussed in the foregoing paragraphs, it was incumbent upon the respondent no. 2 to pass a well-reasoned order containing reasons fbr imposing the maximum amount of damages under Section 14B of the Act upon the appellant. However, in the present case, a perusal of the impugned order dated 02.05.2024 under Section 14B of the Act would show that the respondent no. 2 has mechanically imposed the maximum amount of damages at the rates prescribed by the relevant rules upon the appellant without recording any reasons. Thus, it is apparent that the impugned order dated 02.05.2024 under Section 14B of the Act was passed by the respondent no. 2 in clear violation of the basic law laid down by Hon'ble Supreme Court of India and Hon'ble Delhi High Court as discussed in the foregoing paragraphs. Accordingly, the impugned order dated 02.05.2024 under Section 14B of the Act passed by the respondent no. 2 cannot be sustained in law and is liable to be set aside.

18. In these premises, the impugned order dated 02.05.2024 under Section 14B of the Act passed by the respondent no. 2 is hereby set aside.

19. Hon'ble Supreme Court of India has clearly held in Arcot Textile Mills Limited Vs. Regional Provident Fund Commissioner (Civil Appeal no. 9488/2013 decided on October 18, 2013) that an appeal challenging an independent order under Section 7-Q of the Act which is not a part of a composite order under the Act is not maintainable. In the present case, the impugned order dated 02.05.2024 passed by

the respondent no. 2 under Section 7-Q of the Act was an independent order which was not part of any composite order. Accordingly, in view of the ruling of Hon5ble Supreme Court of India in Arcot Textile Mills Limited case (Supra.), the present appeal is not maintainable and stands dismissed in respect of Section 7-Q of the Act only.

20. Consequently, the present case is remanded to the respondent no. 2 with a direction to pass a fresh and reasoned order under section 14B of the Act in the light of the observations made in the foregoing paragraphs.

21. Hence, the appeal of the appellant stands disposed off in terms of the observations made in the foregoing paragraphs of this judgment. Any amount already deposited by the appellant with the respondents as per the orders of this tribunal fbr grant of stay shall be refunded to the appellant after expiry of the period of appeal.

22. Case file be consigned to the Record Room. (Ajay Kumar Jain) Presiding Officer Central Government Industrial Tribunal, Delhi-1 09.10.2026