Calcutta High Court (Appellete Side)
Joydev Chandra Sinha vs Union Of India & Ors on 13 May, 2026
Author: Rajasekhar Mantha
Bench: Rajasekhar Mantha
13.05.2026.
Court No. 13
Item No. 4+5.
sp M.A.T. No. 1269 of 2025
With
CAN 1 of 2025
Joydev Chandra Sinha
Versus
Union of India & Ors.
With
M.A.T. No. 1271 of 2025
With
CAN 1 of 2025
G S and I S India Pvt. Ltd. & Anr.
Versus
Union of India & Ors.
Mr. Soumya Majumder, ld. Sr. Adv.
Mr. Uddipan Banerjee,
Mr. Shantanu Chakraborty.
..for the appellant.
Mr. Ujjwal Datta.
..for the respondent nos. 2, 3 and 4.
1. The subject appeals are directed against a judgment and order dated 13th May, 2025 passed by a Single Bench of this Court in WPA 10237 of 2025.
2. The writ petition has been filed by the employer engaged in the business of providing security guards to various establishments public as well as private. The writ petition was directed against an order dated 20.02.2025 passed by the Central Government Industrial Tribunal (CGIT) which dismissed E.P.F. Case No. 7 of 2021.
3. The said appeal was filed against orders of the EPFO authorities dated 7th July, 2020 under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. By the said order, 2 the EPFO directed the appellant to pay damages for a sum of Rs. 41,38,715/- for delaying deposit of EPF contributions. The period for which delay occurred was stated to be 1st August, 2017 till 31st May, 2019. It, however, appears to this Court that initially though the aforesaid period of delay was reckoned, the EPFO authority subsequently noticed delay from November, 2014 to May, 2019.
4. A three-fold ground was canvassed both before the authorities as well as the CGIT and before the Single Bench of this Court, by the appellant/employer.
5. Firstly, that the EPFO authority under Section 14B of the Act of 1952 is required to exercise discretionary power while imposing damages. Such damages go into the account of the Central Board of Trustees of PF. The other portion towards interest, under Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 goes to the PF account of the employees. In the instant case we are only concerned with the damages under Section 14B of the Act of 1952.
6. The EPFO authority, therefore, was required as per the dicta of the Supreme Court to record sufficient reasons for imposing damages which has not been done. Both CGIT and the Single Bench have failed to notice the same. The requirements of reasons were to address the grounds raised by the appellant/employer both before the statutory authorities as also the CGIT. 3 The grounds, inter alia, urged that the covid pandemic, and delay by the clients of the appellant in making payment of bills raised in time.
7. Further several grounds have been urged before the EPFO indicating the business requirements of providing margins for tender, requirement of pre- deposit with some clients like the railway and the appellant having to borrow such sums of money to meet the requirements. These admittedly have not been addressed by the statutory authorities much less the CGIT.
8. The penultimate ground urged by Mr. Majumder, learned Senior Counsel for the appellant that the EPFO authority ought not to have imposed the entire 14% towards damages as prescribed under the Act but ought to have considered the predicament and grounds urged and reduced the same.
9. The last ground urged was that several payments made from 2018 till 2019 morefully described in the appellant's letter dated 15th November, 2019 have not been taken into consideration by the authorities or the CGIT or the Single Bench.
10. This Court has carefully heard Mr. Majumder, learned counsel for the appellant as well as Mr. Ujjwal Datta, learned counsel for the respondents.
11. Indeed it is true that a discretionary order under Section 14B of the Act of 1952 is required to be informed with sufficient reasons. This Court, however, 4 notices that the grounds relied upon by the appellant before the EPFO authority are primarily matters of business dealings and commercial negotiations. It is part and parcel of the business of the appellant to meet the requirement of its clients. The same cannot, however, absolve the appellant of the liability to deposit PF dues of its employees in time.
12. Insofar as the covid pandemic is concerned, the same having second after the period mentioned in the orders of the EPFO authorities impugned before the CGIT, the same could not have been a ground for challenge of the order imposing damages.
13. It is now well-settled that the EPFO authorities and the employer have a liability to pay terminal dues of its employees within time. Delay in payment of terminal dues would automatically attract interest. The newly introduced EPS Scheme saddles an additional liability on the appropriate Government which has to for kout the pension/family pension for the post superannuation. The provisions for interest and damages factor in the aforesaid under the Act of 1952.
14. In addition thereto, Section 14B of the Act of 1952 and the provisions towards interest under Section 7Q of the Act of 1952 are also intended to act as a deterrent against adventurism by an employer in avoiding payment of PF dues to its employees. The 5 object and purpose of the provident fund is to secure the future of the employees concerned.
15. In the backdrop of the above, while it is true that orders under Section 7Q and 14B of the Act of 1952 are required to be informed with reasons, this Court does not find any material grounds raised by the employer in explaining the delay in payment of statutory dues under the Act of 1952.
16. In the backdrop of the aforesaid, this Court, therefore, does not find any serious omission on the part of the EPFO authorities, CGIT or the impugned order, in the facts and circumstances of the instant case.
17. The EPFO authorities, however, are hereby directed to be more cautious and record reasons in writing and not avoid the same merely because the employer has not provided or given sufficient acceptable and lawful grounds.
18. There is, however, some substance in the stand of the employer that the EPFO authorities have not taken into consideration the alleged payments made by the appellant as contained in letter dated 15 th November, 2019.
19. One cannot however ignore the fact that in the communication dated 15th November, 2019, the appellant itself had asked for recalculation of damages based on the ignored payments made by the appellant. 6
20. In the backdrop of the above, this Court directs the EPFO authorities to reconsider the claim of payments made in the aforesaid letter dated 15 th November, 2019 duly verifying any documentary evidence that may be provided by the appellant and the entries in their bank account and their business and recalculate the liability of the appellant towards damages.
21. Considering the business scenario in the State and the fact that no reasons have been given by the EPFO authorities to impose the entire permissible rate of 25% towards interest, this Court directs that the rate of interest towards damages must be reduced to 12% instead of 14%.
22. The aforesaid reduction is made primarily given the business scenario and economic condition of the services industry operating within the State of West Bengal and shall not be treated as a precedent.
23. Let the aforesaid recalculation at the aforesaid rate and factoring in the alleged payments made by the appellant, be made by the EPFO within a period of 2 months from the date of communication of a copy of this order.
24. For the aforesaid purpose, the appellant shall produce necessary documents and shall be entitled to make appropriate submission before the Tribunal.
25. With the aforesaid observations, both MAT 1269 of 2025 along with CAN 1 of 2025 and MAT 1271 of 7 2025 along with CAN 1 of 2025 shall stand disposed of.
26. There shall be no order as to costs.
27. All parties shall act on the server copy of this order duly downloaded from the official website of this Court.
(Rajasekhar Mantha, J.) (Rai Chattopadhyay, J.)