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According to the Supreme Court, the employer’s failure or delay in paying EPF payments is a prerequisite to the imposition of damages under Section 14B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
According to the section 14B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952
Where an employer makes default in the payment of any contribution to the Fund 3[, the 2[Pension] Fund or the Insurance Fund] or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 3[or sub-section (5) of of section 17] or in the payment of any charges payable under any other provision of this Act or of 5[any Scheme or Insurance Scheme] or under any of the conditions specified under section 17, may recover
In the case of, the Karnataka High Court stated that levying damages is a sine qua non after the employer fails to deposit the EPF contribution or commits a default as required by the requirements of the after being determined under Section 7A by the competent body. In the proceedings brought under Section 14B of the Act 1952, the High Court maintained the decision for damages recovery..
The appellant argued before the Supreme Court that the factor of mens rea, or actus reus, is one of the necessary aspects that the authority failed to consider while imposing damages under Section 14B of the Act 1952. The respondents, argued that mens rea is not required for the imposition of a punishment for the breach of civil responsibilities or liabilities.
So the question was whether the employer’s breach of civil obligations or liabilities is a sine qua non for imposition of penalty/damages, or whether the element of mens rea or actus reus plays a role, and the authority is required to examine the justification, if any, being offered while passing the order imposing damages under the provisions of the Act 1952.
Legal News by Aditi Shakya.