Holding

A breach of the civil obligation of paying EPF contributions is sufficient for imposing damages under Section 14B, and mens rea or actus reus is not required for such civil penalties.

Summary

The appellant, Horticulture Experiment Station Gonikoppal, failed to deposit EPF contributions for the period 1975‑1988 and was assessed damages under Section 14B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952. The appellant argued that mens rea or actus reus should be required before imposing such damages, while the respondent contended that the breach of the statutory civil obligation itself suffices. The Supreme Court examined precedents on civil penalties and held that a default in EPF contribution is a sine qua non for levying damages under Section 14B and that mens rea or actus reus is not an essential element for civil penalties. The Court affirmed the constitutional validity of Section 14B and dismissed the appeals, leaving the damages order intact.

Issues considered

Whether mens rea or actus reus is an essential element for imposing damages under Section 14B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
Whether a default or delay in payment of EPF contributions is a sine qua non for the levy of damages under Section 14B.
Whether the authority must consider any justification offered by the employer before imposing damages.

Legislation cited

Employees Provident Fund & Miscellaneous Provisions Act, 1952s. 14B, s. 7A
Employees' State Insurance Act, 1948s. 85B
Income Tax Act, 1961s. 271(1)(c)
SEBI Act

Subjects

Employees Provident FundSection 14BDamagesMens reaCivil penaltyStrict liabilityDefault in contributionSocial security legislationPenalty for breach of civil obligation

Judgment

[2022] 16 S.C.R. 485 485

HORTICULTURE EXPERIMENT STATION GONIKOPPAL, A
COORG
v.
THE REGIONAL PROVIDENT FUND ORGANIZATION
(Civil Appeal No(s). 2136 of 2012) B
FEBRUARY 23, 2022
[AJAY RASTOGI AND ABHAY S. OKA, JJ.]
Employees Provident Fund & Miscellaneous Provisions Act,
1952: ss. 7A, 14B – Power to recover damages – Mens rea and
C
actus reus, if essential element for imposition of damages –
Appellant’s establishment failed to comply with the provisions of
the Act – There was delay in payment of employees provident fund-
EPF amount – Levy of damages for the period – Challenge to –
High Court held that once default in payment of contribution is
admitted, damages u/s. 14B are consequential, and employer is D
under obligation to pay damages for delayed in payment of
contribution of EPF u/s. 14B – Held: Any default or delay in the
payment of EPF contribution by the employer under the Act is sine
qua non for imposition of levy of damages u/s. 14B – Mens rea or
actus reus not an essential element for imposing penalty/damages
E
for breach of civil obligation
Dismissing the appeals, the Court
HELD: It is well- settled that mens rea or actus reus is not
an essential element for imposing penalty or damages for breach
of civil obligations and liabilities. Any default or delay in the F
payment of EPF contribution by the employer under the act is a
sine qua non for imposition of levy of damages under Section
14B of the Act 1952 and mens rea or actus reus is not an essential
element for imposing penalty/damages for breach of civil
obligations/liabilities. [Para 13, 17][496-D; 497-C]
G
Organo Chemical Industries and Another v. Union of India
and Others (1979) 4 SCC 573 : [1980] 1 SCR 61; Mcleod
Russell India Ltd. v. Regional Provident Fund Commissioner
(2014) 15 SCC 263 : [2014] 9 SCR 162; Jalpaiguri and

H
485
486 SUPREME COURT REPORTS [2022] 16 S.C.R.

A Others and Assistant Provident Fund Commissioner, EPFO
and Another v. The Management of RSL Textiles India Private
Limited through its Director (2017) 3 SCC 110; Chairman,
SEBI v. Shriram Mutual Fund and Another (2006) 5 SCC
361 : [2006] 2 Suppl. SCR 833; Dilip N. Shroff v. Joint
Commissioner of Income Tax, Mumbai and Another (2007) 6
B
SCC 329 : [2007] 7 SCR 499 – referred to.
Union of India and Others v. Dharmendra Textile Processors
and Others (2008) 13 SCC 369 : [2008] 14 SCR 13 – relied
on.
C Employees State Insurance Corporation v. HMT Ltd. and
Another (2008) 3 SCC 35 : [2008] 1 SCR 646 – held not a
binding precedent.
Case Law Reference
[1980] 1 SCR 61 referred to Para 6
D
[2008] 1 SCR 646 held not a binding Para 15
precedent
[2014] 9 SCR 162 referred to Para 7
(2017) 3 SCC 110 referred to Para 7
E
[2006] 2 Suppl. SCR 833 referred to Para 8
[2007] 7 SCR 499 referred to Para 12
[2008] 14 SCR 13 relied on Para 17

F CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2136
of 2012.
From the Judgment and Order dated 26.10.2009 of the High Court
of Karnataka at Bangalore in Writ Appeal No. 822 of 2009.
With
G Civil Appeal Nos. 2121, 2135 and 2141 of 2012.
Praveen Swarup, R. K. Singh, Ms. Payal Swarup, Ms. Archana
Sharma, K. P. Singh, Syed Jafar Husain, Satish Kumar, Advs. for the
Appellant.

H
HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG v. THE 487
REGIONAL PROVIDENT FUND ORGANIZATION

Ms. Aishwarya Bhati, SG, Ms. Archana Pathak Dave, Ms. Vanya A
Gupta, Avnish Dave, Ms. Manisha Chava, Advs. for the Respondent.
The Judgment of the Court was delivered by
RASTOGI, J.
1. The instant appeals are directed against the common judgment B
and order dated 26th October, 2009 passed by the Division Bench of the
High Court of Karnataka at Bangalore.
2. That while setting aside the judgment of the learned Single
Judge dated 3rd February, 2009, it was observed that once the employer
has failed to deposit the contribution of EPF or committed default as C
mandated under the provisions of the Employees Provident Fund &
Miscellaneous Provisions Act, 1952 (hereinafter referred to as the “Act
1952”), having failed to do so after determination under Section 7A by
the competent authority, levy of damages is a sine qua non and upheld
the order for recovery of damages in the proceedings initiated under
Section 14B of the Act 1952. D
3. The undisputed facts culled out from the record are that the
establishment of the appellant(s) is covered under the provisions of the
Act 1952. On 31st December, 1974, under Code no.KN/8573 under
scheduled head “Fruit Orchards”, the appellant(s) failed to comply with
the provisions of Act 1952 from 1st January, 1975 to 31st October, 1988. E
For non-compliance of the mandate of Act 1952, proceedings were initiated
under Section 7A and dues towards contribution of EPF for the intervening
period of 1st January, 1975 to 31st October, 1988 amounting to Rs.74,288/
- were assessed by the competent authority and after adjudication, that
was paid by the appellant to the office of EPF. Thereafter, the authorities F
issued a notice under Section 14B of the Act 1952 to charge damages
for the delayed payment of provident fund amount which was levied for
the period January 1978 to September, 1988 and called upon the
appellant(s) to pay damages of Rs.85,548/-. The High Court under the
impugned judgment held that once the default in payment of contribution
is admitted, the damages as being envisaged under Section 14B of the G
Act 1952 are consequential and the employer is under an obligation to
pay the damages for delay in payment of contribution of EPF under
Section 14B of the Act 1952, which is the subject matter of challenge in
the present appeals.
H
488 SUPREME COURT REPORTS [2022] 16 S.C.R.

A 4. The Act 1952 is a legislation for providing social security to the
employees working in any establishment and engaging 20 or more persons
on any day and casts an obligation upon the employer to make compulsory
deduction for provident fund and to deposit in the workers account in the
EPF office. Similar is the provision which is pari materia to recover
damages under Section 85B of the Employees State Insurance Act,
B
1948(hereinafter being referred to as the “Act 1948”) providing insurance
and pensionary benefits to the employees.
5. Section 14B of the Act 1952 which is pari materia to Section
85B of the Act, 1948 is reproduced hereunder:

C “14B. Power to recover damages.-Where an employer makes
default in the payment of any contribution to the Fund , the Pension
Fund or the Insurance Fund or in the transfer of accumulations
required to be transferred by him under sub-section (2) of section
15 or sub-section (5) of section 17 or in the payment of any charges
payable under any other provision of this Act or of any Scheme or
D Insurance Scheme or under any of the conditions specified under
section 17, the Central Provident Fund Commissioner or such other
officer as may be authorised by the Central Government, by
notification in the Official Gazette, in this behalf may recover from
the employer by way of penalty such damages, not exceeding the
E amount of arrears, as may be specified in the Scheme:
Provided that before levying and recovering such damages,
the employer shall be given a reasonable opportunity of being
heard:
Provided further that the Central Board may reduce or waive
F the damages levied under this section in relation to an establishment
which is a sick industrial company and in respect of which a scheme
for rehabilitation has been sanctioned by the Board for Industrial
and Financial Reconstruction established under section 4 of the
Sick Industrial Companies (Special Provisions) Act, 1985 (1 of
1986), subject to such terms and conditions as may be specified in
G the Scheme.”
6. So far as the constitutional validity of Section 14B of the Act
1952 is concerned, the same has been upheld by the judgment of this
Court in Organo Chemical Industries and another v. Union of India
and others1.
H 1
(1979) 4 SCC 573
HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG v. THE 489
REGIONAL PROVIDENT FUND ORGANIZATION [AJAY RASTOGI, J.]

7. Learned counsel for the appellant(s) submits that the justification A
tendered by the appellant(s) for which the contribution of EPF could not
have been deposited has not been looked into by the authority and the
element of mens rea or actus reus is one of the essential elements which
has not been taken note of by the authority while imposing damages
under Section 14B of the Act 1952. In support of his submissions, counsel
B
for the appellant(s) has placed reliance on the judgments of this Court in
Employees State Insurance Corporation v. HMT Ltd. and another2,
Mcleod Russell India Ltd. v. Regional Provident Fund
Commissioner, Jalpaiguri and others3 and Assistant Provident Fund
Commissioner, EPFO and another v. The Management of RSL
Textiles India Private Limited through its Director4. C
8. Per contra, learned counsel for the respondent(s) in support of
submissions, submitted that mens rea is not an essential element for
imposing penalty for breach of civil obligations or liabilities and mere
contravention of the provisions of the Act or default in making compliance
of the mandate of law as regards the civil liabilities are concerned, mens D
rea or actus reus is not the requirement of law to be considered, while
imposing damages like, in the instant case, under Section 14B of the Act
1952. In support of submissions, learned counsel has placed reliance on
a two-Judge Bench judgment in Chairman, SEBI v. Shriram Mutual
Fund and Another5 which has been relied upon by a three-Judge Bench
judgment of this Court in Union of India and Others v. Dharmendra E
Textile Processors and others6.
9. The question that emerges for our consideration in the instant
appeals is that what will be the effect and implementation of Section
14B of the Act 1952 and as to whether the breach of civil obligations or
liabilities committed by the employer is a sine qua non for imposition of F
penalty/damages or the element of mens rea or actus reus is one of the
essential elements has a role to play and the authority is under an obligation
to examine the justification, if any, being tendered while passing the order
imposing damages under the provisions of the Act 1952.
G

2
(2008) 3 SCC 35
3
(2014) 15 SCC 263
4
(2017) 3 SCC 110
5
(2006) 5 SCC 361
6
(2008) 13 SCC 369 H
490 SUPREME COURT REPORTS [2022] 16 S.C.R.

A 10. Undisputedly, the establishment of the appellant(s) was covered
under the provisions of the Act 1952, but still failed to comply with the
same and for such non-compliance of the mandate of the Act 1952,
initially the proceedings were initiated under section 7A and after
adjudication was made in reference to contribution of the EPF which
the appellant was under an obligation to pay and for the contravention of
B
the provisions of the Act 1952, the appellant(s) indeed committed a breach
of civil obligations/liabilities and after compliance of the procedure
prescribed under the Act 1952 and for the delayed payment of EPF
contribution for the period January 1975 to October 1988, after affording
due opportunity of hearing as contemplated, order was passed by the
C competent authority directing the appellant(s) to pay damages as assessed
in accordance with Section 14B of the Act 1952.
11. A two-Judge Bench of this Court in Chairman, SEBI (supra),
while examining the scope and ambit of Section 15-D of SEBI (Mutual
Funds) Regulations, 1996 regarding imposition of penalty for certain
D defaults in case of mutual funds, examined the question as to whether
mens rea is an essential element for imposing penalty for breach of civil
obligations and taking note of the binding precedent of this Court held
that mens rea is not an essential element for imposing penalty for breach
of civil obligations or liabilities. Relevant paras 33 and 35 of the judgment
are reproduced as under:
E
“33. This Court in a catena of decisions has held that mens rea is
not an essential element for imposing penalty for breach of civil
obligations:
(a) Director of Enforcement v. MCTM Corpn. (P) Ltd. [(1996)
F 2 SCC 471
“8. It is thus the breach of a ‘civil obligation’ which attracts
‘penalty’ under Section 23(1)(a), FERA, 1947 and a finding that
the delinquent has contravened the provisions of Section 10, FERA,
1947 that would immediately attract the levy of ‘penalty’ under
G Section 23, irrespective of the fact whether the contravention was
made by the defaulter with any ‘guilty intention’ or not. Therefore,
unlike in a criminal case, where it is essential for the ‘prosecution’
to establish that the ‘accused’ had the necessary guilty
intention or in other words the requisite ‘mens rea’ to commit
the alleged offence with which he is charged before recording his
H
HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG v. THE 491
REGIONAL PROVIDENT FUND ORGANIZATION [AJAY RASTOGI, J.]

conviction, the obligation on the part of the Directorate of A
Enforcement, in cases of contravention of the provisions of Section
10 of FERA, would be discharged where it is shown that the
‘blameworthy conduct’ of the delinquent had been established by
wilful contravention by him of the provisions of Section 10, FERA,
1947. It is the delinquency of the defaulter itself which establishes
B
his ‘blameworthy’ conduct, attracting the provisions of Section
23(1)(a) of FERA, 1947 without any further proof of the existence
of ‘mens rea’. Even after an adjudication by the authorities and
levy of penalty under Section 23(1)(a) of FERA, 1947, the
defaulter can still be tried and punished for the commission of an
offence under the penal law,…. C
***
12. In Corpus Juris Secundum, Vol. 85, at p. 580, para 1023,
it is stated thus:
‘A penalty imposed for a tax delinquency is a civil obligation, D
remedial and coercive in its nature, and is far different from
the penalty for a crime or a fine or forfeiture provided as
punishment for the violation of criminal or penal laws.’
13. We are in agreement with the aforesaid view and in our opinion,
what applies to ‘tax delinquency’ equally holds good for the E
‘blameworthy’ conduct for contravention of the provisions of
FERA, 1947. We, therefore, hold that mens rea (as is understood
in criminal law) is not an essential ingredient for holding a delinquent
liable to pay penalty under Section 23(1)(a) of FERA, 1947 for
contravention of the provisions of Section 10 of FERA, 1947 and
that penalty is attracted under Section 23(1)(a) as soon as F
contravention of the statutory obligation contemplated by Section
10(1)(a) is established. The High Court apparently fell in error in
treating the ‘blameworthy conduct’ under the Act as equivalent
to the commission of a ‘criminal offence’, overlooking the position
that the ‘blameworthy conduct’ in the adjudicatory proceedings is G
established by proof only of the breach of a civil obligation under
the Act, for which the defaulter is obliged to make amends by
payment of the penalty imposed under Section 23(1)(a) of the
Act irrespective of the fact whether he committed the breach
with or without any guilty intention.”
H
(emphasis in original)
492 SUPREME COURT REPORTS [2022] 16 S.C.R.

A (b) J.K. Industries Ltd. v. Chief Inspector of Factories and
Boilers (1996) 6 SCC 665
“42. The offences under the Act are not a part of general penal
law but arise from the breach of a duty provided in a special
beneficial social defence legislation, which creates absolute or
B strict liability without proof of any mens rea. The offences are
strict statutory offences for which establishment of mens rea is
not an essential ingredient. The omission or commission of the
statutory breach is itself the offence. Similar type of offences
based on the principle of strict liability, which means liability without
fault or mens rea, exist in many statutes relating to economic
C crimes as well as in laws concerning the industry, food adulteration,
prevention of pollution, etc. in India and abroad. ‘Absolute
offences’ are not criminal offences in any real sense but acts
which are prohibited in the interest of welfare of the public and
the prohibition is backed by sanction of penalty.”
D (c) R.S. Joshi v. Ajit Mills Ltd. (1977) 4 SCC 98
“Even here we may reject the notion that a penalty or a punishment
cannot be cast in the form of an absolute or no-fault liability but
must be preceded by mens rea. The classical view that ‘no mens
rea, no crime’ has long ago been eroded and several laws in India
E and abroad, especially regarding economic crimes and
departmental penalties, have created severe punishments even
where the offences have been defined to exclude mens rea.
Therefore, the contention that Section 37(1) fastens a heavy liability
regardless of fault has no force in depriving the forfeiture of the
F character of penalty.”
(d) Gujarat Travancore Agency v. CIT (1989) 3 SCC 52
“It is sufficient for us to refer to Section 271(1)(a), which provides
that a penalty may be imposed if the Income Tax Officer is satisfied
that any person has without reasonable cause failed to furnish the
G return of total income, and to Section 276-C which provides that
if a person wilfully fails to furnish in due time the return of income
required under Section 139(1), he shall be punishable with rigorous
imprisonment for a term which may extend to one year or with
fine. It is clear that in the former case what is intended is a civil
obligation while in the latter what is imposed is a criminal sentence.
H
HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG v. THE 493
REGIONAL PROVIDENT FUND ORGANIZATION [AJAY RASTOGI, J.]

There can be no dispute that having regard to the provisions of A
Section 276-C, which speaks of wilful failure on the part of the
defaulter and taking into consideration the nature of the penalty,
which is punitive, no sentence can be imposed under that provision
unless the element of mens rea is established. In most cases of
criminal liability, the intention of the legislature is that the penalty
B
should serve as a deterrent. The creation of an offence by statute
proceeds on the assumption that society suffers injury by the act
or omission of the defaulter and that a deterrent must be imposed
to discourage the repetition of the offence. In the case of a
proceeding under Section 271(1)(a), however, it seems that the
intention of the legislature is to emphasise the fact of loss of revenue C
and to provide a remedy for such loss, although no doubt an element
of coercion is present in the penalty. In this connection the terms
in which the penalty falls to be measured is significant. Unless
there is something in the language of the statute indicating the
need to establish the element of mens rea it is generally sufficient
D
to prove that a default in complying with the statute has occurred.
In our opinion, there is nothing in Section 271(1)(a) which requires
that mens rea must be proved before penalty can be levied under
that provision.”
(e) Swedish Match AB v. SEBI (2004) 11 SCC 641
E
“The provisions of Section 15-H of the Act mandate that a penalty
of rupees twenty-five crores may be imposed. The Board does
not have any discretion in the matter and, thus, the adjudication
proceeding is a mere formality. Imposition of penalty upon the
appellant would, thus, be a forgone conclusion. Only in the criminal
proceedings initiated against the appellants, existence of mens F
rea on the part of the appellants will come up for consideration.”
(f) SEBI v. Cabot International Capital Corpn. (2005) 123
Comp Cas 841 (Bom)
“47. Thus, the following extracted principles are summarised: G
(A) Mens rea is an essential or sine qua non for criminal
offence.
(B) A straitjacket formula of mens rea cannot be blindly followed
in each and every case. The scheme of a particular statute
may be diluted in a given case. H
494 SUPREME COURT REPORTS [2022] 16 S.C.R.

A (C) If, from the scheme, object and words used in the statute,
it appears that the proceedings for imposition of the penalty
are adjudicatory in nature, in contradistinction to criminal or
quasi-criminal proceedings, the determination is of the breach
of the civil obligation by the offender. The word ‘penalty’ by
itself will not be determinative to conclude the nature of
B
proceedings being criminal or quasi-criminal. The relevant
considerations being the nature of the functions being discharged
by the authority and the determination of the liability of the
contravenor and the delinquency.
(D) Mens rea is not essential element for imposing penalty for
C breach of civil obligations or liabilities.
(E) There can be two distinct liabilities, civil and criminal, under
the same Act.
***
D 52. The SEBI Act and the Regulations, are intended to regulate
the securities market and the related aspects, the imposition of
penalty, in the given facts and circumstances of the case, cannot
be tested on the ground of ‘no mens rea, no penalty’. For breaches
of provisions of the SEBI Act and Regulations, according to us,
E which are civil in nature, mens rea is not essential. On particular
facts and circumstances of the case, proper exercise of judicial
discretion is a must, but not on foundation that mens rea is essential
to impose penalty in each and every breach of provisions of the
SEBI Act.

F ***
54. However, we are not in agreement with the Appellate Authority
in respect of the reasoning given in regard to the necessity of
mens rea being essential for imposing the penalty. According to
us, mens rea is not essential for imposing civil penalties under the
SEBI Act and Regulations.”
G
(emphasis in original)
35. In our considered opinion, penalty is attracted as soon as the
contravention of the statutory obligation as contemplated by the
Act and the Regulations is established and hence the intention of
H the parties committing such violation becomes wholly irrelevant.
HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG v. THE 495
REGIONAL PROVIDENT FUND ORGANIZATION [AJAY RASTOGI, J.]

A breach of civil obligation which attracts penalty in the nature of A
fine under the provisions of the Act and the Regulations would
immediately attract the levy of penalty irrespective of the fact
whether contravention must be made by the defaulter with guilty
intention or not. We also further held that unless the language of
the statute indicates the need to establish the presence of mens
B
rea, it is wholly unnecessary to ascertain whether such a violation
was intentional or not. On a careful perusal of Section 15-D(b)
and Section 15-E of the Act, there is nothing which requires
that mens rea must be proved before penalty can be imposed under
these provisions. Hence once the contravention is established then
the penalty is to follow.” C
[Emphasis Supplied]
12. The three-Judge Bench of this Court in Union of India v.
Dharmendra Textile Processors and others (supra) while examining
the scope and ambit of Section 271(1)(c) of the Income Tax Act, 1961
held that as far as the penalty inflicted under the provisions is a civil D
liability is concerned, mens rea or actus reus is not an essential element
for imposing civil penalties and overruled the two-Judge Bench judgment
in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai
and Another7 and approved the view expressed by a two-Judge Bench
of this Court in Chairman, SEBI (supra) and held in paras 18 and 20 as E
under:
“18. The Explanations appended to Section 271(1)(c) of the IT
Act entirely indicates the element of strict liability on the assessee
for concealment or for giving inaccurate particulars while filing
return. The judgment in Dilip N. Shroff case [(2007) 6 SCC 329] F
has not considered the effect and relevance of Section 276-C of
the IT Act. Object behind enactment of Section 271(1)(c) read
with Explanations indicate that the said section has been enacted
to provide for a remedy for loss of revenue. The penalty under
that provision is a civil liability. Wilful concealment is not an essential
ingredient for attracting civil liability as is the case in the matter of G
prosecution under Section 276-C of the IT Act.
20. Above being the position, the plea that Rules 96-ZQ and 96-
ZO have a concept of discretion inbuilt cannot be sustained. Dilip
7
(2007) 6 SCC 329 H
496 SUPREME COURT REPORTS [2022] 16 S.C.R.

A Shroff case [(2007) 6 SCC 329] was not correctly decided
but SEBI case [(2006) 5 SCC 361] has analysed the legal position
in the correct perspectives. The reference is answered. The matter
shall now be placed before the Division Bench to deal with the
matter in the light of what has been stated above, only so far as
the cases where challenge to vires of Rule 967-Q(5) are
B
concerned. In all other cases the orders of the High Court or the
Tribunal, as the case may be, are quashed and the matter remitted
to it for disposal in the light of present judgments. Appeals except
Civil Appeals Nos. 3397 & 3398-99 of 2003, 4096 of 2004, 3388
& 5277 of 2006, 4316, 4317, 675 and 1420 of 2007 and appeal
C relating to SLP (C) No. 21751 of 2007 are allowed and the
excepted appeals shall now be placed before the Division Bench
for disposal.”
13. Taking note of the exposition of law on the subject, it is well-
settled that mens rea or actus reus is not an essential element for
D imposing penalty or damages for breach of civil obligations and liabilities.
14. The judgment on which the learned counsel for the appellant(s)
has placed reliance i.e. Employees State Insurance Corporation(supra),
the Division Bench in ignorance of the settled judicial binding precedent
of which a detailed reference has been made, while examining the scope
E and ambit of Section 85B of the Employees State Insurance Corporation
Act, 1948 which is pari materia to Section 14B of the Act 1952 placing
reliance on the judgment of Division Bench of this Court in Dilip N.
Shroff (supra) held that for the breach of civil obligations/liabilities,
existence of mens rea or actus reus to be a necessary ingredient for
levy of damages and/or the quantum thereof.
F
15. It may be noticed that Dilip N. Shroff(supra) on which reliance
was placed has been overruled by this Court in Union of India and
Others v. Dharmendra Textile Processors and others (supra). For
the aforesaid reasons, the view expressed by this Court in Employees
State Insurance Corporation (supra) may not be of binding precedent
G on the subject and of no assistance to the appellant(s).
16. Learned counsel for the appellant(s) further placed reliance
on the judgment of this Court in Mcleod Russell India Ltd. (supra),
wherein the question emerged for consideration was as to whether the
damages which has been charged under Section 14B of the Act 1952
H
HORTICULTURE EXPERIMENT STATION GONIKOPPAL, COORG v. THE 497
REGIONAL PROVIDENT FUND ORGANIZATION [AJAY RASTOGI, J.]

would be recoverable jointly or severally from the erstwhile as well as A
the current managements. At the same time, the judgment relied upon in
Assistant Provident Fund Commissioner, EPFO and Another (supra)
was decided placing reliance on the judgment of this Court in Mcleod
Russell India Ltd. (supra), which may not be of any assistance to the
appellant(s).
B
17. Taking note of three-Judge Bench judgment of this Court in
Union of India and Others v. Dharmendra Textile Processors and
others (supra), which is indeed binding on us, we are of the considered
view that any default or delay in the payment of EPF contribution by the
employer under the Act is a sine qua non for imposition of levy of
damages under Section 14B of the Act 1952 and mens rea or actus reus C
is not an essential element for imposing penalty/damages for breach of
civil obligations/liabilities.
18. We find no substance in the appeals and the same are
accordingly dismissed.
D
19. Pending application(s), if any, stand disposed of.

Nidhi Jain and Amarendra Kumar Appeals dismissed.
(Assisted by : Pooja Mishra, LCRA)

E

F

G

H