S.C.GUPTE,J. - (1.) Heard learned Counsel for the parties.
(2.) This petition, filed by Central Board of Trustees of Employees Provident Fund, challenges an appellate order passed by the Employees' Provident Fund Appellate Tribunal. By the impugned order, the Tribunal set aside the order of recovery of damages passed by the Assistant Provident Fund Commissioner under Section 14B of the Employees' Provident Fund and Miscellaneous Provisions Act ("Act").
(3.) It is not a matter of dispute that the establishment concerned, who is the Respondent to the petition, was a sick industrial company. In a scheme sanctioned by BIFR under the Sick Industrial Companies Act, P.F., ESI and income tax authorities were to make a concession by accepting payment of arrears of P.F. and ESI dues along with normal interest and not to impose penalty or liquidated damages for default in payment of PF, ESI and income tax dues, as the case may be. It was submitted by the establishment before the Assistant Provident Fund Commissioner in the proceedings under Section 14B that the entire capital and net worth of the Respondent Company had been wiped out due to prolonging textile strike and closure of unit coupled with the restrictions under the Industrial Disputes Act for reduction in work force. The establishment also brought the sanctioned scheme to the notice of the Assistant Provident Fund Commissioner. In spite of this material, the Commissioner mechanically proceeded to pass an order for levy of damages simply on the ground that there was a delay. As far as the BIFR scheme is concerned, the Commissioner relied on the power of the Central Board to reduce or waive damages under the second proviso to Section 14B of the Act. The Commissioner, in the premises, ordered recovery of damages stating that "the provision of Section 14B is automatically applicable as soon as the default is committed by the establishment". The Appellate Tribunal was right in observing that Section 14B is an enabling provision and does not envisage mandatory levy of damages. The Tribunal relied on the observations of the Supreme Court in the case of Assistant Commercial Taxes Officer v. Bajaj Electricals Ltd., (2009) 17 KTR 120(SC) concerning the requirement of mens rea as well as the case of Employees' State Insurance Corporation v. HMT Ltd., (2008) 3 SCC 35 under Section 85B of that Act, where the Court held that the provision was merely an enabling provision and did not envisage mandatory levy of damages. The Tribunal held that there was no actus reus on the part of the establishment in the present case for contravening a statutory provision.;