Relief to establishments and factories covered under EPF and MP Act, 1952 from levy of penal damages for delay in deposit of dues during Lockdown to prevent COVID 19
In
view of the prolong lockdown announced by the Government to control the spread
of COVID-19 pandemic and other disruptions due to Pandemic situation, the
establishments covered under EPF & MP Act, 1952 are distressed and not able
to function normally.
The Hon'ble Apex Court of India in
McLeod Russel India Limited Vs RPFC (2014)15 SCC 263 has underlined the broad
contours and essential elements of section 14B of the Act and held that mens
rea, or culpable state of mind of the employer, is a sine-quanon for inviting
damages under section 148. In other words, the provisions of section 14B would
get attracted only when there is a positive evidence of mens rea on the part of
the employer while committing default in timely remittances. This legal
position has later been reaffirmed in Assistant Provident Fund Commissioner vs.
Management of RSL Textiles (CA 96-97 of 2017)
Considering the
difficulty faced by the establishments in timely deposit of contributions
during the period of lockdown due to operational and economic reasons, it is
evident that such delays are without mens rea of the employer. Thus, the delay
in deposit of contributions during the period of lockdown announced in terms of
the Disasters Management Act, 2005 cannot be attributed to any culpable state
of mind of the employer and will not, therefore, attract the provisions of
section 14B of the EPF Act.
Therefore, for any delay in payment of any
contributions or administrative charges due for any period during the lockdown,
no proceeding should be initiated for levy of penal damages in such cases.
0 Comments