Case: Mcleod Russel India Limited Vs. Reg.Prov.Fund Comm.,Jalpaiguri

from differing decisions of different High Courts by clarifying that the word ‘damages’ has been employed in this dispensation to mean penalty on recalcitrant employers as well as reparation for loss caused to the Fund. The Court stoutly repelled the contention that damages were merely compensatory in nature and, therefore, should not exceed the interest that would have accrued in favour of the Funds had the contributions been diligently dispatched to the Funds. Organo has been favourably followed in Babubhai & Co. vs. State of Gujarat (1985) 2 SCC 732. 10. There is no gainsaying that criminal liability remains steadfastly fastened to the actual perpetrator and cannot be transferred by any compact between persons or even by statute. But this incontrovertible legal principle does not support or validate the contention of Mr. Jayant Bhushan, Learned Senior Advocate for the Appellants, that damages levied in terms of Section 14B of the EPF Act cannot be foisted onto his clients. Sections 14, 14A, 14AA, 14AB and 14AC of the EPF Act are the provisions postulating prosecution; in contradistinction Section 14B contemplates the power to “recover from the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in the Scheme”. It is true that it is not a river but a mere rivulet that segregates and distinguishes the legal concepts of damages or compensatory damages or exemplary damages or deterrent damages or punitive damages or retributory damages. We shall abjure from writing a dissertation on this compelling legal nodus; save to clarify that modern jurisprudence recognizes that the imposition of punitive damages, quintessentially quasi-criminal in character, can be resorted to even in civil proceedings to deter willful wrongdoing by making an admonished example of the wrongdoer. This is the essential purpose, it seems to us, of Section 14B of the EPF Act, and an 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.11. It has also been argued that damages as postulated in Section 14B would not be transferable under Section 17B. This argument has to be stated only to be rejected for the reason that Section 17B specifically speaks of “the contributions and other sums due from the employer under any provision of this Act or the Scheme” (emphasis added). The proviso to Section 17B indeed clarifies the position inasmuch as it restricts and/or limits the liability of the transferee up to the date of the transfer to the value of the assets obtained by him through such transfer. 12. We are also not impressed by the argument addressed by Mr. Bhushan to the effect that damages under Section 14B are not jointly and separately recoverable from the erstwhile and the present managements under Section 17B as Section 14B moves in its own and independent orbit. Several amendments have been made to the EPF Act so far as the fasciculous of Sections 7A to Section 7Q is concerned. This is also true of the pandect containing Sections 14A, 14AA, 14AB, 14AC, 14B and 14C; and for that matter Sections 17A, 17AA and 17B. Where such widespread amendments and changes are incorporated in a statute, it is always salutary and advisable to reposition the provisions and number them sequentially and logically. The argument that the phrase “determination of amounts due from any employer” is found in Section 7A as well as in Section 17B is not factually correct. Section 17B speaks of “contributions and other sums dues from the employer under any provision of this Act …….”; the latter Section is, therefore, wider in ambit than the previous one. In our opinion, Section 14B is complete in itself so far as the computation of damages is concerned. It is conceivable that the money due from an employer would have to be calculated under Section 7A, and in the event the default or neglect of the employer is contumacious and contains the requisite mens rea and actus reus yet another exercise of computation has to be undertaken under Section 14B. Where the Authority is of the opinion that damages under Section 14B need to be imposed, the computations would come within the purview of Section 14B and it would be recoverable jointly and severally from the erstwhile as well as the current managements. A perusal of the Appeals Section, namely, 7I is illustrative of the fact that these exercises are distinct from each other as per the enumerations found in the first sub-Section of Section 7I. It also appears logical to us, in the wake of the numerous and different dates of amendments, that Section 7A(2) would also be available to proceedings under Section 14B of the Act. The applicability of Civil Procedure Code, 1908 to proceedings under Section 14B has not specifically been barred by the statute. 13. It is necessary to clarify that Eveready Industries (India) Ltd. had in the interregnum of this litigation changed its name to Mcleod Russel India Ltd. In view of our above analysis, it is our considered opinion that the impugned Judgment deserves to be upheld. It contains a detailed and logical exposition of facts as well as the law pertaining to the present dispute. We also approve the pithy observations of the RPF Commissioner, Jalpaiguri in the subject Order that failure on the part of the employers to make remittances of accumulations and contributions, undermines the objectives and purposes of the statute. We underscore that the liability of the Fund to pay interest to subscribers regardless of whether employers have paid their dues, runs relentlessly. The Commissioner has specifically recorded that he has taken a lenient view in the matter and has eschewed imposition of damages to the extent of 100 per cent of the arrears even though this is envisaged by the EPF Act. The Appellant-Petitioner has, in the circumstances of the case, been also rightly burdened with the payment of interest under Section 7Q of the EPF Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. There is no gainsaying that criminal liability remains steadfastly fastened to the actual perpetrator and cannot be transferred by any compact between persons or even by statute. But this incontrovertible legal principle does not support or validate the contention of Mr. Jayant Bhushan, Learned Senior Advocate for the Appellants, that damages levied in terms of Section 14B of the EPF Act cannot be foisted onto his clients. Sections 14, 14A, 14AA, 14AB and 14AC of the EPF Act are the provisions postulating prosecution; in contradistinction Section 14B contemplates the power tofrom the employer by way of penalty such damages, not exceeding the amount of arrears, as may be specified in theIt is true that it is not a river but a mere rivulet that segregates and distinguishes the legal concepts of damages or compensatory damages or exemplary damages or deterrent damages or punitive damages or retributory damages. We shall abjure from writing a dissertation on this compelling legal nodus; save to clarify that modern jurisprudence recognizes that the imposition of punitive damages, quintessentially quasi-criminal in character, can be resorted to even in civil proceedings to deter willful wrongdoing by making an admonished example of the wrongdoer. This is the essential purpose, it seems to us, of Section 14B of the EPF Act, and an 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.