Section 14B Damages Set Aside For Lack Of Calculation | HC

Case Details: Central Board of Trustees vs. Registrar Central Government Industrial Tribunal - [2025] 181 taxmann.com 313 (HC - Calcutta)

Judiciary and Counsel Details

• Shampa Dutt (Paul), J.
• Shiv Chandra Prasad for the Petitioner.
• Arnab Dutt for the Respondent.

Facts of the Case

In the instant case, the Assistant Provident Fund Commissioner (Damage Cell) in proceedings under section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, held that the establishment was liable to pay damages for the delayed remittance of EPF contribution for the period from March 2005 to April 2011 and from April 2011 to March 2014. The total dues were assessed at Rs. 9,17,552.

On appeal, the Tribunal held that the order challenged before it did not contain any details as to how and why the damages were awarded. No proper calculation had been shown in the order. Thus, the damages assessed under section 14B of the EPF Act, along with interest, were clearly arbitrary, were passed by the authority without proper reasons, and were thus not in accordance with law; the Tribunal set aside the said order. Thereafter, an appeal was made before the High Court.

It was noted that under the Employees’ Provident Fund Act, Section 14B allows the Central Provident Fund Commissioner to recover “damages” from employers who fail to make timely payments of mandatory contributions to the Employees’ Provident Fund (EPF), essentially acting as a penalty to incentivize compliance and ensure employees receive their full benefits by punishing employers for delayed payments; this includes contributions to the Pension Fund and Insurance Fund as well.

In the present case, the Tribunal rightly held that the order challenged before it did not contain any details as to how and why the damages were awarded. No proper calculation has been shown in the order.

High Court Held

The High Court held that the order passed by the authority does not speak as to how the delay was assessed. Sufficient explanation has been placed by the representative of the school, but no proper order has been passed by the authority.

Thus, the damages as assessed under Section 14B of the EPF Act, along with interest, are clearly arbitrary and have been passed by the authority (APFC (damage cell)) without proper reasons and were thus not in accordance with law. Therefore, the Tribunal was right to set aside the said order of the authority.

List of Cases Referred to

• Cable Corpn. of India Ltd. v. Union of India 2006 SCC OnLine Bom 765 (para 6)
• Employees’ State Insurance Corporation v. HMT Ltd. (2008) 3 SCC 35 (para 6)
• Prestolite (India) Ltd. v. Regional Director 1994 Supp (3) SCC 690 (para 6)
• Hindustan Times Ltd. v. Union of India 1998 taxmann.com 2214 (SC) (para 6)
• Sun Pressings (P) Ltd. v. Presiding Officer 2024 (1) Writ L.R. 801 (para 6)
• Organo Chemicals Industries v. Union of India (1979) 4 SCC 573 (para 7)
• Horticulture Experiment Station Gonikoppal, Coorg v. Regional Provident
• Fund Organisation (2022) 4 SCC 516 (para 8)