HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG versus THE REGIONAL PROVIDENT FUND ORGANIZATION

Citation: [2022] 16 S.C.R. 485 · Decided: 23-02-2022 · Supreme Court of India · Bench: AJAY RASTOGI · Disposal: Dismissed
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Judgment (excerpt)

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HORTICULTURE EXPERIMENT STATION GONIKOPPAL,
COORG
v.
THE REGIONAL PROVIDENT FUND ORGANIZATION
(Civil Appeal No(s). 2136 of 2012)
FEBRUARY 23, 2022
[AJAY RASTOGI AND ABHAY S. OKA, JJ.]
Employees Provident Fund & Miscellaneous Provisions Act,
1952: ss. 7A, 14B – Power to recover damages – Mens rea and
actus reus, if essential element for imposition of damages –
Appellant’s establishment failed to comply with the provisions of
the Act – There was delay in payment of employees provident fund-
EPF amount – Levy of damages for the period – Challenge to –
High Court held that once default in payment of contribution is
admitted, damages u/s. 14B are consequential, and employer is
under obligation to pay damages for delayed in payment of
contribution of EPF u/s. 14B – Held: Any default or delay in the
payment of EPF contribution by the employer under the Act is sine
qua non for imposition of levy of damages u/s. 14B – Mens rea or
actus reus not an essential element for imposing penalty/damages
for breach of civil obligation
Dismissing the appeals, the Court
HELD: It is well- settled that mens rea or actus reus is not
an essential element for imposing penalty or damages for breach
of civil obligations and liabilities. Any default or delay in the
payment of EPF contribution by the employer under the act is a
sine qua non for imposition of levy of damages under Section
14B of the Act 1952 and mens rea or actus reus is not an essential
element for imposing penalty/damages for breach of civil
obligations/liabilities. [Para 13, 17][496-D; 497-C]
Organo Chemical Industries and Another v. Union of India
and Others (1979) 4 SCC 573 : [1980] 1 SCR 61; Mcleod
Russell India Ltd. v. Regional Provident Fund Commissioner
(2014) 15 SCC 263 : [2014] 9 SCR 162; Jalpaiguri and
[2022] 16 S.C.R. 485
485
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SUPREME COURT REPORTS
[2022] 16 S.C.R.
Others and Assistant Provident Fund Commissioner, EPFO
and Another v. The Management of RSL Textiles India Private
Limited through its Director (2017) 3 SCC 110; Chairman,
SEBI v. Shriram Mutual Fund and Another (2006) 5 SCC
361 : [2006] 2 Suppl. SCR 833; Dilip N. Shroff v. Joint
Commissioner of Income Tax, Mumbai and Another (2007) 6
SCC 329 : [2007] 7 SCR 499 – referred to.
Union of India and Others v. Dharmendra Textile Processors
and Others (2008) 13 SCC 369 : [2008] 14 SCR 13 – relied
on.
Employees State Insurance Corporation v. HMT Ltd. and
Another (2008) 3 SCC 35 : [2008] 1 SCR 646 – held not a
binding precedent.
Case Law Reference
[1980] 1 SCR 61
referred to
Para 6
[2008] 1 SCR 646
held not a binding
Para 15
precedent
[2014] 9 SCR 162
referred to
Para 7
(2017) 3 SCC 110
referred to
Para 7
[2006] 2 Suppl. SCR 833
referred to
Para 8
[2007] 7 SCR 499
referred to
Para 12
[2008] 14 SCR 13
relied on
Para 17
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2136
of 2012.
From the Judgment and Order dated 26.10.2009 of the High Court
of Karnataka at Bangalore in Writ Appeal No. 822 of 2009.
With
Civil Appeal Nos. 2121, 2135 and 2141 of 2012.
Praveen Swarup, R. K. Singh, Ms. Payal Swarup, Ms. Archana
Sharma, K. P. Singh, Syed Jafar Husain, Satish Kumar, Advs. for the
Appellant.
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487
Ms. Aishwarya Bhati, SG, Ms. Archana Pathak Dave, Ms. Vanya
Gupta, Avnish Dave, Ms. Manisha Chava, Advs. for the Respondent.
The Judgment of the Court was delivered by
RASTOGI, J.
1. The instant appeals are directed against the common judgment
and order dated 26th October, 2009 passed by the Division Bench of the
High Court of Karnataka at Bangalore.
2. That while setting aside the judgment of the learned Single
Judge dated 3rd February, 2009, it was observed that once the employer
has failed to deposit the contribution of EPF or committed default as
mandated under the provisions of the Employees Provident Fund &
Miscellaneous Provisions Act, 1952 (hereinafter referred to as the “Act
1952”), having failed to do so after determination under Section 7A by
the competent authority, levy of damages is a sine qua non and upheld
the order for recovery of damages in the proceedings initiated under
Section 14B of the Act 1952.
3. The undisputed facts culled out from the record are that the
establishment of the appellant(s) is covered under the provisions of the
Act 1952. On 31st December, 1974, under Code no.KN/8573 under
scheduled head “Fruit Orchards”, the appellant(s) failed to comply with
the provisions of Act 1952 from 1st January, 1975 to 31st October, 1988.
For non-compliance of the
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