WP/4579/2021 of THE REGIONAL PROVIDENT FUND COMMISSIONER-I Vs M/S. BOMBAY RAYON FASHIONS LIMITED on 4 June 2026

ORAL ORDER

(PER: HON'BLE MR. JUSTICE T.M.NADAF) This Writ Petition is filed by the Regional Provident Fund Commissioner,-I, Employees' Provident Fund Organization, Bengaluru invoking extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India, assailing the order dated 27.07.2020 passed by the Central Government Industrial Tribunal- Cum-Labour Court1 in EPF No.155/2017 (Annexure-E).

2. The CGIT vide the impugned order allowed the appeal filed by the establishment/ employer, whereby reducing the quantum of damages levied instead of 1 the CGIT, for short

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Rs.2,99,555/- to Rs.2,39,600/-, however keeping intact the other terms stipulated in the impugned order.

3. Facts germane to file this Writ Petition are as under: The respondent was issued with an order by the petitioner herein dated 14.05.2015 imposing damages of Rs.2,99,555/- under Section 14-B of the Employees Provident Fund & Miscellaneous Provisions Act, 19522 on belated payment of contribution in respect of the period November 2004 to November 2012.

4. The respondent is engaged in manufacturing and exporting of readymade garments with workforce of 8,000 employees on its rolls. Due to Worldwide Economic recession and collapse of Major European and US Bankers/ Financial Institutions and also due to depreciation in the value of the Indian Rupee, the Company suffered Forex Loss (Cash Loss) in the year 2010-11 and 2011-12.

2 the Act of 1952, for short

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Considering the subsistence of its employees, the respondent Company running with all difficulties, approached the Corporate Debt Restructuring Cell (CDR) vide letter dated 27.09.2013 which was considered favorably admitting under restructuring scheme.

5. On 05.08.2013, the petitioner herein claimed damages in respect of late remittance of contribution from 11/2004 to 11/2012, despite the objections of the respondent Company that it was running through recession and other difficulties existing Worldwide, the Commissioner levied damages of Rs.2,99,555/- in a mechanical manner without exercising the discretion vested with him under Section 14-B of the Act of 1952. An order of interest also came to be passed under Section 7- Q of the Act of 1952 for a sum of Rs.3,79,203/- which the respondent Company has accepted. The respondent Company aggrieved by the order of payment of damages, approached the CGIT.

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6. In response to notice, the petitioner herein appeared before the CGIT and submitted reply justifying the order impugned, contending that there is admitted delay in remitting the PF contributions; deposit of the dues after the date specified in law does not absolve the employer of the liability to pay the damages. Section 14-B does not speak or differentiate between the intentional and unintentional default, every default attracts levy of damages and interest upon the belated payment.

7. The CGIT having found at paragraph No.9 of the Judgment that the petitioner herein passed the order without recording the existence of mens rea/ actus reus and in gross inadvertence to the circumstances which actuated the delay; further held that, it is a non-speaking order thus violative of the principles of natural justice. However, holding that the interest imposed under Section 7-Q of the Act of 1952, which the respondent has admitted is binding on the Company, but exercising discretion under Section 14-B of the Act of 1952, instead of remanding the

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matter, reduced the damages by 20% i.e., from Rs.2,99,555/- to Rs.2,39,600/-, marginally reducing the same to Rs.60,000/-. It is this order passed by the CGIT is called in question in this Writ Petition.

8. Heard, Smt.Nandita D.Haldipur, learned counsel appearing for the petitioner.

9. Learned counsel submits that the order passed by the CGIT reducing the damages by 20% clearly shows that the CGIT is in confirmation of the order, however only on the point that there is no mens rea/ actus reus and in gross inadvertence to the circumstances which actuated the delay, reduced 20% of damages. Learned counsel further submits that, Section 14-B does not speak or differentiate between the intentional and unintentional default, every default attracts levy of damages and interest upon the belated payment and sought to allow the Writ Petition, set-aside the order passed by the CGIT and dismiss the appeal.

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10. We having considered the submission of learned counsel for the petitioner, are of the view that though the CGIT affirmed the order passed by the petitioner, it exercised its discretion under Section 14-B of the Act of 1952 on the point that there is no intentional delay in payment of contribution, the same in conformity with settled position of law which does not call for any interference of this Court. Accordingly, the Writ Petition stands dismissed.

11. In view of dismissal of Writ Petition, pending interlocutory applications, if any, stand disposed of.

Sd/- (D K SINGH) JUDGE

Sd/- (T.M.NADAF) JUDGE

TKN List No.: 2 Sl No.: 3