- 1 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 59989 OF 2014 (L-PF) BETWEEN: CENTRAL BOARD OF TRUSTEES EPF THROUGH REGIONAL PROVIDENT FUND COMMISSIONER, OFFICE OF THE REGIONAL PF COMMISSIONER, REGIONAL OFFICE, S (1) F, 1ST STAGE, PEENYA, BENGALURU - 560058. …PETITIONER (BY SMT. M.R.SHALAMALA, ADVOCATE) AND: M/S. GARDEN VIEW IMPLEX PRIVATE LIMITED, NO.73/1B, BYREGOWDA INDUSTRIAL ESTATE, SRIGANDANAGAR, HEGGANAHALLI, BENGALURU - 560091. REPRESENTED BY ITS MANAGING DIRECTOR …RESPONDENT (BY SRI. J.PRADEEP KUMAR, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA. THIS WRIT PETITION IS LISTED FOR HEARING, THIS DAY, AN ORDER IS MADE AS UNDER: Digitally signed by THEJAS KUMAR N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 ORAL ORDER Smt.M.R.Shalamala., counsel for the petitioner and Sri.J.Pradeep Kumar., counsel for the respondent have appeared in person. 2. The petition averments are as under: The respondent M/s.Garden View Implex Private Limited was covered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 with effect from 01.05.1995. The petitioner issued a notice dated 02.12.2009 to the authorized officer of the respondent to show cause as to why he should not be arrested for failure to remit PF dues. The petitioner issued order dated 25.02.2010 attaching the moveable property of the respondent establishment. Pursuant to which, an auction notice was issued, auction was conducted on 20.10.2010 and an amount of Rs.43,00,000/- was collected in the process. The petitioner vide letter dated 28.12.2010 informed the respondent that on receipt of amount by auction, still a sum of Rs.3,14,039/- remained unpaid by the respondent. This was remitted by the respondent on much persuasion of the petitioner department. - 3 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 As things stood thus, the petitioner issued a notice dated 24.05.2011 under Section 14B of the Act for levy of damages, reflecting the details of belated payments. The respondent having received the notice, failed to attend the inquiry. The petitioner vide order dated 11.11.2011, concluded the proceedings ex-parte by levying damages of Rs.42,30,621/- for the period from March 2006 to October 2009 and interest of Rs.13,62,730/- under 7Q of the Act. Aggrieved by the said order, the respondent filed an appeal before the Employees Provident Fund Appellate Tribunal in ATA No.850(06)/2011. The Tribunal vide order dated 24.04.2014 allowed the appeal and set-aside the order passed under 14B and 7Q of the Act. Under these circumstances, the petitioner is before this Court. 3. Smt.M.R.Shalamala., submits that the order passed by the Tribunal is contrary to law and material facts on record. Next, she submits that the Tribunal failed to appreciate the fact that the respondent failed to pay the PF contributions and had no intention to pay the PF contributions. It is submitted that the department initiated recovery action against the respondent establishment and attached the moveable of - 4 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 the establishment and sold the same by public auction and recovered the PF dues. A further submission is made that the Tribunal failed to appreciate that the petitioner department is the Trustee of the workmen's money has to settle the PF of the workman after recovering the same from their respective employers and in case of delay in remittance, the petitioner is duty bound to levy the damages and interest under Section 14B and 7Q of the Act. Counsel vehemently contended that the Tribunal has erroneously applied the concept of mens rea or actus reus in the matter of levy of damages under Section 14B of the Act as the same is against the law laid down by the Apex Court in CIVIL APPEAL No.9523-9524/2003 in SEBI VS. SHRI RAM MUTUAL FUND AND ANOTHER. It is also submitted that the Tribunal has erroneously concluded that the petitioner has failed to establish willful default on the part of the respondent establishment. Counsel therefore, submits that the Writ Petition may be allowed. In support of her contentions, counsel placed reliance on the decision in Civil Appeal No.2136/2012 in HORTICULTURE - 5 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 EXPERIMENT STATION GONIKOPPAL, COORG Vs. THE REGIONAL PROVIDENT FUND ORGANIZATION. Counsel Sri.J.Pradeep Kumar., for the respondent justified the order of the Tribunal. Next, he submits that the respondent management was incurring loss, hence they were unable to remit the contributions well in time. A further submission is made that the principal amount and the interest have been paid and there is no willful default on the part of the respondent management. Lastly, he submits that the petitioner has not made any grounds to interfere with the order of Tribunal. Counsel therefore, submits that hat Writ Petition may be dismissed. In support of his contention counsel placed reliance on the following decisions: (1) CENTRAL BOARD OF TRUSTEES EPF VS. M/S.KONEGA INTERNATIONAL (P) LIMITED IN W.P.NO.59988/2014 DISPOSED OF ON 09.06.2025. - 6 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 (2) REGIONAL PROVIDENT FUND COMMISSIONER VS. M/S.HMT LIMITED IN W.A.NO.587/2016 DISPOSED OF 27.06.2023. (3) THE REGIONAL PROVIDENT FUND COMMISSIONER-II, KOLKATA VS. HOOGHLY MILLS COMPANY LIMITED AND ANOTHER - MAT NO.983/2011 WITH MAT NO.860/2009. (4) JSS INSTITUTE OF ECONOMIC RESEARCH AND POPULATION RESEARCH CENTRE VS. THE REGIONAL PROVIDENT FUND COMMISSIONER IN W.P.NO.67500/2010 DISPOSED OF ON 20.04.2017. 4. Heard the arguments and perused the Writ papers with care. 5. The short point that requires consideration is whether the order of the Tribunal requires interference. 6. The facts are sufficiently said and they do not require reiteration. The issue falls within a narrow compass and relates to waiver of damages. Suffice it to note that 14B and 7Q proceedings were initiated by the petitioner for non- - 7 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 remittance of the contribution well in time. The Tribunal extenso referred to the material on record and concluded that there is no willful default on the part of the respondent establishment and hence, it cannot be held liable for damages. It is pivotal to note that Section 14B is an enabling provision and it gives the power to recover damages in case of delayed remittance of PF contribution. The power is vested with the authority to award damages not exceeding the amount in arrears. The power to award damage is discretionary in nature. In the present case, the respondent establishment contended that it was incurring losses and hence, they were unable to remit the contribution well in time. However, they paid the principal amount and the interest. The respondent establishment had incurred loss as is evident from the initiation of action for auctioning of the moveable properties. Needless to say, levy of damages and interest for default in EPF dues is not justified when the employer suffered continuous losses. As already noted above, in the present case, the respondent establishment incurred losses and the petitioner department itself auctioned the moveable properties of the respondent establishment to recover the dues. Moreover, the respondent - 8 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 establishment had no intention to escape from the EPF contribution. Hence, there was no willful default on the part of the respondent establishment in delayed remittance. Lastly, counsel Smt.M.R.Shalamala., submits that the respondent establishment was placed ex-parte before the PF Commissioner, hence, waiver of damages by the Tribunal is unsustainable in law. The contention about the ex-parte is of no consequence as the respondent establishment assailed the order of the PF Commissioner before the Tribunal. The Tribunal extenso referred to the material on record and rightly waived of the damages. I find no grounds to interfere with the order of the Tribunal. The Writ Petition is liable to be dismissed. Counsel for the respective parties placed reliance on the decisions referred to supra, but I do not think the law is in doubt. Each decision turns on its own facts. The present case is also tested in the light of the aforesaid decisions. 7. Resultantly, the Writ Petition is dismissed. - 9 - HC-KAR NC: 2025:KHC:40573 WP No. 59989 of 2014 Because of dismissal of the Writ Petition, pending interlocutory applications if any are disposed of and interim direction if any stands discharged. Sd/- (JYOTI MULIMANI) JUDGE TKN List No.: 1 Sl No.: 51