Provident Fund Authority Cannot Claim Damages for Unintentional Delay in Paying Contributions

The appellant filed an appeal challenging the order passed under Section 14-B of the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 before the EPF Appellate Tribunal at New Delhi. In the said appeal, the labour law advocates appearing on behalf of the appellant challenged the EPF authority regarding the claim of damages and interest for the delayed payment of contributions.

The Hon’ble Judge, EPF Appellate Tribunal observed that the appellant was covered under the EPF & MP Act, 1952 retrospectively. Contributions were being deposited on the regular basis. In spite of that, the EPF authority arbitrarily imposed damages and interest for the pre-discovery period. The labour law advocates for the appellant argued that the delay was unintentional and not due to the fault of the appellant, but only because the EPF authority covered them retrospectively. There was hardly any deliberate attempt by the appellant to avoid the coverage under the EPF authority. Even the EPF authority while passing the order did not find any intentional and deliberate delay on the part of the appellant to deposit the contributions.

The Employees’ Provident Fund Appellate Tribunal finally held that there was no intentional delay in depositing the contributions. Delay, if any, was only because the appellant was covered with a retrospective effect and it was not in the hands of the appellant. Under these circumstances, the Hon’ble Judge, EPF Appellate Tribunal held that the appellant is not liable to pay any damage and/ or interest for delay in payment of contributions when the delay is due to covering the appellant in a retrospective manner.


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