CGIT1 Delhi Order dated 17.08.2026 in EPF Appeal No. 1105(4)2015 M/s Systra Consulting India Pvt. Ltd vs APFC on 17 August 2026

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 EPF Act”)challenging the order dated 02.07.2015 passed by the respondent under section 14B and section 7-Q of the EPF Act. Vide the above-said impugned order of the respondent, the appellant was directed to pay the damages of Rs.32,00,431/- and the interest of Rs. 16,23,253/- only.

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 EPF Act. The appellant had been, inter alia, employing international workers also in its establishment. There was no clarity about the provident fund contributions of the international workers. However, the appellant had duly deposited the EPF contributions in respect of the international workers with the respondent without passing of any order under section 7-A of the EPF Act. The appellant had duly participated in the enquiry proceedings conducted by the respondent under section 7-A of the EPF Act. However, the respondent had passed the impugned order

dated 02.07.2015 under section 14B and section 7-Q of the EPF Act without considering the submissions of the appellant and without following the requisite procedure prescribed under the law. The appellant has challenged the impugned order dated 02.07.2015 upon a number of grounds including, inter alia, that the appellant was not given reasonable opportunity of hearing, respondent was functioning as prosecutor as well as Judge, respondent misused his powers, there was no willful default on the part of appellant, the impugned order was passed without considering the submissions of the appellant, the impugned order was not a reasoned order, the absence of mens rea of the appellant was not considered, non­ exercise of discretion by the respondent, the impugned order was non-speaking etc. Thi*ough the present appeal, the appellant has prayed that the impugned order dated 02.07.2015 of the respondent should be quashed.

3. Respondent has filed a written reply strongly contesting the above-said appeal of the appellant. Respondent has denied all the allegations made by the appellant against the respondent. Respondent has stated that the impugned order dated 02.07.2015 under section 14B and section 7-Q of the EPF Act was passed by the respondent after duly considering all the submissions of the appellant. Respondent has defended the impugned order dated 02.07.2015 of the respondent as being perfectly legal and valid. Respondent has 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 respondent.

5. Learned counsel for the appellant has challenged the impugned order dated 02.07.2015 upon a number of grounds. Learned counsel for the appellant has, inter alia, argued that the appellant was not given reasonable opportunity of hearing, respondent was functioning as prosecutor as well as Judge, respondent misused his powers, there was no willful default on the part of appellant, the impugned order was passed without considering the submissions of the appellant, the impugned order was not a reasoned order, the absence of mens rea of the appellant was not considered, non-exercise of discretion by the respondent, the impugned order was non-speaking etc. Learned counsel fbr the appellant has further argued that the appellant had paid the requisite provident fund contributions of international workers without passing of any order under section 7-A of the EPF Act by the respondent. Learned counsel for the appellant has pleaded that there was no intentional delay in the payment of requisite provident fund contributions of international workers by the appellant. Learned counsel for the appellant has prayed that the impugned order dated 02.07.2015 passed by the respondent was absolutely wrong and illegal and should be quashed. Reliance in this behalf was, inter alia, placed upon the rulings cited as M/s Woolcombers of India Ltd. V. Woolcombers Workers Union and Another, AIR 1973 SC 2758, Harinagar Sugar Mills Ltd. V. Shyam Sunder Jhunjhunwala and Others, AIR 1961 SC 1669, Bhagat Raja V. Union of India and Others, AIR 1967 SC 1606, M/s Mahabir Prasad Santosh Kumar V. State of U.P. and Others, AIR 1970 SC 1302, M/s Prestolite of India Ltd. Vs. The Regional Director and Other, AIR 1994 Supreme Court, 521 etc.

6.

Learned counsel for the respondent has strongly contested the allegations made by the appellant against the respondent. Learned counsel for the respondent has argued that the existence of mens rea of the appellant for the delay in the payment of EPF dues was not a condition precedent for imposition of the penalty under section 14B & 7-Q of the EPF Act. Learned counsel for the respondent has further argued that the appellant had intentionally delayed the payment of the requisite EPF dues of the international workers. Learned counsel for the respondent has pleaded that the respondent had passed a reasoned and speaking order while imposing the requisite penalties under section 14B & 7-Q of the EPF Act. Leaned counsel for the respondent has further pleaded that the respondent had passed the impugned order after duly considering all the submissions of the appellant while following the principles of natural justice. Learned counsel for the respondent has contended that the present appeal of the appellant was not maintainable in law. Learned counsel fbr the respondent has prayed that the appeal of the appellant has no merits and should be dismissed. Learned counsel fbr the respondent had, inter alia, relied upon the rulings cites as Chairman, SEBI Vs. Slii'iram Mutual Fund & another (Civil Appeal no. 9523-9524/2003 decided on May 23, 2006 by Hon'ble Supreme Court of India), Organo Chemical Industries and another Vs. Union of India and others (1979) 4 SCC 573, Horticulture Experiment Station, Gonikoppal, Coorg Vs. The Regional Provident Fund Organization (2022) 4 SCC 516 etc. in support of the case of respondent.

7. As per the latest law laid down by Hon'ble Supreme Court of India, Mens Rea or Actus Reus is not an essential element for imposing damages under section 14B of EPF Act for delayed

payment of provident fund dues by the employer. It is equally settled that default in timely payment of provident fund dues is a civil liability and damages are automatically attracted regardless of the intention of the employer. In this view, I am fortified by the ruling of Hon'ble Supreme Court of India in Horticulture Experiment Station, Gonikoppal, Coorg Vs. The Regional Provident Fund Organization (2022) 4 SCC 516.

8. I have carefully gone through the impugned order dated 02.07.2015 passed by the respondent against the appellant. It is apparent from the scrutiny of the impugned order that the respondent had given adequate opportunity of hearing to the appellant before passing of the impugned order dated 02.07.2015.

9. A perusal of the impugned order would show that all the representations made by the appellant had been duly considered by the respondent while passing the above-said impugned order. In fact, the respondent had duly sought the reply/response of the department to the averments made by the appellant in its representations. Thus, the representations/submissions of the appellant were duly considered by the respondent while passing the impugned order.

10. It is also apparent that the respondent had duly taken into account the entire record of payment of provident fund contributions by the appellant and other material available on record while imposing damages and interest under section 14B and section 7-Q of the EPF Act, The mere imposition of damages at the rates as envisaged in Para 32-A of the Employees Provident Fund Scheme, 1952, Para-5 of Employees Pension Scheme, 1995 and

Para 8A of the Employees, Deposit Linked Insurance Scheme, 1976 does not mean that the respondent did not exercise his discretion properly. The respondent was fully within his rights to impose damages at the rates envisaged in Para 32-A of the Employees Provident Fund Scheme, 1952, Para-5 of Employees Pension Scheme, 1995 and Para 8A of the Employees, Deposit Linked Insurance Scheme, 1976.

11. The impugned order of the respondent is a speaking order. I am also satisfied that the impugned order of the respondent is a well-reasoned order containing the relevant reasons for reaching the final conclusions regarding the damages imposed by the respondent. A perusal of the above-said impugned order would also confirm that while passing the impugned order the respondent had not acted as a prosecutor but had acted strictly as an independent quasi judicial authority only.

12. Under these circumstances, the appellant has miserably failed to show as to how the impugned order dated 02.07.2015 passed by the respondent was wrong and illegal and is liable to be quashed.

13. Hence, the present appeal of the appellant has no merits and is hereby dismissed. Parties are left to bear their own costs.

14. Case file be consigned to the Record Room. (Ajay Kumar Jain) Presiding Officer CGIT-cum-Labour Court, Delhi-1 17.08.2026