MCLEOD RUSSEL INDIA LIMITED versus REG. PROVIDENT FUND COMMISSIONER, JALPAIGURI

Citation: [2014] 9 S.C.R. 162 · Decided: 02-07-2014 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2014] 9 S.C.R. 162 
MCLEOD RUSSEL INDIA LIMITED 
v. 
REG. PROVIDENT FUND COMMISSIONER, JALPAIGURI 
& ORS. 
(Civil Appeal No. 5927 of 2014) 
JULY 02, 2014. 
[T.S. THAKUR AND VIKRAMAJIT SEN, JJ.] 
EMPLOYEES' 
PROVIDENT 
FUND 
AND 
C MISCELLANEOUS PROVISIONS ACT, 1952: 
ss. 14-8, 178 rlw ss. 7 A and 2(e) - Default by employer 
in payment of contribution - Damages - Liability in case of 
transfer of establishment - Held: The Act is a beneficent 
D legislation and any interpretation facilitating the evasion of its 
provisions should be abjured -
Imposition of punitive 
damages can be resorted to even in civil proceedings to deter 
wilful wrongdoing by making an admonished example of the 
wrongdoer - This is the essential purpose of s. 148, and an 
E imposition within its confines does not assume criminal 
prosecution so as to stand proscribed insofar as transfer of 
establishment from one management/employer to its 
successor is concerned. 
ss.14-8, 17-8, 7-A(2}, 7-Q - Default by employer in 
F payment of contribution - Damages - Liability of transferee 
establishment - Held: Where the Authority is of the opinion 
that damages u/s 148 need to be imposed, the computations 
would come within the purview of s. 148 and it would be 
recoverable jointly and severally from the erstwhile as well as 
G the current management - Further, once damages have been 
levied, the same could be recovered from the party which has 
assumed the management of the establishment - s. 7 A(2) 
would also be available to proceedings uls 148 -
The 
applicability of Civil Procedure Code to proceedings u/s 148 
H 
162 
MCLEOD RUSSEL INDIA LTD. v. REG. P. F. 
163 
COMMISSIONER, JALPAIGURI 
has not specifically been barred by the statute - s.148 is 
A 
complete in itself so far as the computation of damages is 
concerned -
It is conceivable that money due from an 
employer would have to be calculated uls 7 A, and in the event 
the default or neglect of employer is contumacious and 
contains requisite mens rea and actus reus yet another 
B 
exercise of computation has to be undertaken u/s 148 - Order 
of RPF Commisioner that failure on part of employers to 
make remittances of accumulations and contributions 
undermines the objectives and purposes of the statute is also 
approved - It is to be emphasised that the liability of the Fund · c 
to pay. interest to subscribers regardless of whether employers 
have paid their dues, runs relentlessly -Appel/ant-petitioner 
has, in the circumstances of the case, been also rightly 
burdened with the payment of interest u/s 70. · 
Notices were issued to a tea company, namely M/S 
D 
'MTE' to show cause against the imposition of 'damages' 
u/s 148 of the Employees' Provident Fund and 
Miscellaneous Provisions Act, 1952 (the EPF Act), as it 
had defaulted in remitting the contributions and 
accumulations payable under the EPF Act. Meanwhile the 
E 
management of M/S 'MTE' was taken over by the 
appellant Company which discharged the liability of the 
entire principal sum of Provident Fund dues to the tune 
of Rs.75,76,000/- pertaining to the period prior to the 
takeover. The appellant contended before the RPF 
F 
Commissioner that proceedings u/s 148 9f the EPF Act 
against it were unjustified as it was not the "employer" 
defined u/s 2(e) of the EPF Act, which defaulted in paying 
the contributions. The RPF Commissioner held that on a 
conjoint reading of ss. 148 and 178 of the EPF Act it was 
G 
clear that damages u/s 148, which were assessed at 
Rs.70,37,950/- were recoverable jointly and severally from 
the transferor as well as the transferee. He further 
directed that failure to deposit penal damages within the 
stipulated period would attract the provisions of s. 7Q of H 
164 
SUPREME COURT REPORTS 
[2014] 9 S.C.R. 
A the EPF Act, thereby enhancing the liability to include 
simple interest at the rate of 12% per annum on the 
damages. The single Judge of the High Court, -relying 
upon the decision in the Karnataka Forest Plantations 
Corporation Ltd1• set aside the Commissioner's orders 
B. and directed the said Authority to reconsider the issues. 
c 
However, the Division Bench of the High Court, relying 
on Dalgaon Agro Industries Ltd.2, reversed the judgment 
of the single Judge. 
Dismissing the appeal, the Court 
HELD: 1.1. In Sayaji Mills Ltd.*, this Court has 
observed that the Employees' Provident Fund and 
Miscellaneous Provisions Act, 1952 is a beneficent 
legislation and any interpretation fac

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