BPL India Ltd. v. Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, and Central Government Industrial Tribunal, Ernakulam

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE AMIT RAWAL`** ``` THURSDAY, THE 10[TH] DAY OF NOVEMBER 2022 / 19TH KARTHIKA, 1944 ``` ## **`WP(C) NO. 15709 OF 2022`** ## **`PETITIONER:`** ``` BPL INDIA LTD., KOOTHUPATHA, COIMBATORE MAIN ROAD, PALAKKAD -678 007, REPRESENTED BY ITS AUTHORISED SIGNATORY BY ADVS. E.K.NANDAKUMAR (SR.) M.GOPIKRISHNAN NAMBIAR K.JOHN MATHAI JOSON MANAVALAN KURYAN THOMAS PAULOSE C. ABRAHAM RAJA KANNAN SHILPI.M.LAL ``` ## **`RESPONDENTS:`** ``` 1THE ASSISTANT PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION, SUB REGIONAL OFFICE, ERAHNIPALAM, KOZHIKODE-673 006. 2CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, CUM LABOUR COURT, 8TH FLOOR, KERALA STATE HOUSING BOARD BUILDING, PANAMPILLY NAGAR, ERNAKULAM- 682016. BY ADV ABRAHAM P.MEACHINKARA ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WPC. No. 15709 OF 2022 2 ## **JUDGMENT** Dated this the 10[th] day of November, 2022 Orders dated 02.12.2019, Ext.P6 and 28.10.2021 Ext.P9 of the assessing authority and the appellate authority, assessing the damages and reduction thereof to the extent of 70% under the Employees Provident Fund and Miscellaneous Act, 1952 (hereinafter the Act for short) are under challenge on behalf of the petitioner company, covered under the aforesaid Act. On account of the non payment of the contributions to the tune of Rs.1,00,00,000/- and odd amount, despite having paid salaries to the employees, proceedings under Section 7A of the Act were initiated against the petitioner. In respect of the delayed contributions statue provides the consequential action under Section 7Q and 14 B of the Act. The present writ petition confines only to the damages assessed under Section 14 B of the Act. A notice was received by the petitioner calling upon by the assessing authority to pay the damages which was duly replied on 27.11.2019, wherein it was categorically stated that the company WPC. No. 15709 OF 2022 3 had suffered loss of almost 10 Crores for the financial year 20122013. Dissatisfied by the reply, the Assessing Authority assessed the damages to be Rs.36,80,520/-. In appeal the Appellate Authority reduced it to 70% confining to Rs.25,76,364/- . 2. Learned counsel appearing on behalf of the petitioner submitted that what weighed with the Appellate Authority in reducing the amount was the balance sheet of the 2010-2011 and 2011-2012. The aforementioned balance sheet reflected increase in the capital on account of sale of immovable assets. But, those balance-sheets could not have been read in isolation as the subsequent balance-sheet of 2012-2013 reflected loss of Rs. 10 Crores. 3. In support of the contention relied upon the judgment of this Court in ( **2013 (3) KLT 790) Regional Provident Fund Commissioner V. Harrisons Malayalam Ltd. wherein it** has been held that the authority under section 14B is not denuded from examining the aspects or prevented to re-assess the damages as provided in the statute. WPC. No. 15709 OF 2022 4 4. On the contrary, the counsel appearing on behalf of respondent opposed the aforesaid prayers by supporting the order of the appellate authority reducing the damages from 100% to 75% on the ground that the petitioner had though paid the salaries of the employees and also assessed the contributions under the PF, but did not deposit in time, the said act is intentional, thus cannot be pardoned or overlooked on the ground of financial loss. It was further contended that all the balance-sheets were not part of the record of the Assessing authority but were placed for the first time before the Appellate authority. Also that it is a case of a mens rea and therefore, no concession is required in view of the law laid down by the Supreme Court in **Horticulture Experiment Station Gonikoppal, Coorg v. The Regional Provident Fund Organization** [2022 LiveLaw SC 202]. 5. I have heard the counsel for the parties and appraised the paperbook. No doubt the expression 'mens rea' would not be a ground for giving some benefits to the establishment under the WPC. No. 15709 OF 2022 5 ## various Acts for warding off the liabilities as the provisions of the statute do not leave any scope for such concession. ## 6. Section 14 B of the Act reads as under: “14B. Power to recover damages.—Where an employer makes default in the payment of any contribution to the Fund 46, 47 [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 4 [or sub-section (5) 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, 6[the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf] may recover 7[from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme:] 8[Provided that before levying and recovering such damages, the employer shall be given a reasonable opportunity of being heard:] 9[Provided further that the Central Board may reduce or waive the damages levied under this section in relation to an establishment which is a sick industrial company and in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), subject to such terms and conditions as may be specified in the Scheme.” 7. The expression may though has also been taken into consideration in the judgment cited, but authorities cannot WPC. No. 15709 OF 2022 6 overlook the financial loss being suffered by the establishment, though weighed in the mind of the appellate authority in reducing the damages from 100% to 70%. If the balance sheet of the year 2012-2013 had also been looked into, the reduction could have been 50%, to be equitable and justitiable. By upholding the order under challenge regarding the liability of the petitioner, I modify the award of the appellate authority by reducing the damages from 70% to 50%. 8. At this stage, the counsel for the petitioner submitted that they may be given some reasonable time to pay the amount. Counsel for the respondent opposed and submitted that once the amount is considerably reduced particularly when the petitioner has not be able to place on record the remaining balance sheets preventing this Court to form an opinion with regard to loss or otherwise, the amount may be directed to be paid forthwith. 9. Though there is some force in the argument of the respondent, considering the circumstances which have accrued in the past regard the covid pandemic, I permit the petitioner to WPC. No. 15709 OF 2022 7 deposit the balance amount in 12 equal monthly installments commencing from 01.12.2022. In case of default of two installments, the respondent shall be at liberty to take action in accordance with law as confined under Section 8 F in another proceedings in accordance with law. . Writ petition is disposed off Sd/- **AMIT RAWAL** **JUDGE** mtk WPC. No. 15709 OF 2022 8 ## **`APPENDIX OF WP(C) 15709/2022`** ## `PETITIONER EXHIBITS` ``` Exhibit P1 ``` ``` TRUE COPY OF THE ANNUAL REPORTS FOR THE YEAR 2010-2011. ``` ``` Exhibit P2 ``` ``` TRUE COPY OF THE ANNUAL REPORT FOR THE YEAR 2011-12. ``` ``` Exhibit P3TRUE COPY OF THE ANNUAL REPORT FOR THE YEAR 2012-13. Exhibit P4TRUE COPY OF THE ANNUAL REPORT FOR THE YEAR 2013-14. ``` - `Exhibit P5 TRUE COPY OF THE WRITTEN STATEMENT OF THE PETITIONER TO THE 1ST RESPONDENT DATED 27TH NOVEMBER 2019. (WITHOUT ENCLOSURE)` - `Exhibit P6 TRUE COPY OF THE ORDER OF THE 1ST RESPONDENT DATED 2.12.2019.` - `Exhibit P7 TRUE COPY OF THE APPEAL PREFERRED BY THE PETITIONER BEING APPEAL NO. 789/2019 WITHOUT ENCLOSURES DATED 18.12.2019 BEFORE THE 2ND RESPONDENT.` - `Exhibit P8 TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE 1ST RESPONDENT BEFORE THE 2ND RESPONDENT DATED 07.02.2020.` - `Exhibit P9 TRUE COPY OF THE ORDER DATED 28.10.2021 IN APPEAL NO. 789/2019 PASSED BY THE 2ND RESPONDENT TRIBUNAL.` ``` Exhibit P10TRUE COPY OF THE DEMAND NOTICE DATED 20.04.2022 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. ```