Employee's Provident Funds Miscellaneous Provisions Act, 1952
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 Insurance Scheme] or under any of the conditions specified under
section 17, [the Central Provident Fund Commissioner or such other officer as
may be authorized 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 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 the damages levied under this section in relation to an
establishment which is a sick industrial company and in respect of which 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 the Scheme.]
Comment: "Nor can it be accepted that there
are no guidelines provided for fixing the quantum of damages. The power of the
Regional Provident Fund Commissioner to impose damages under Section 14-B is a
quasi-judicial function. It must be exercised after notice to the defaulter and
after giving him a reasonable opportunity of being heard. The discretion to
award damages could be exercised within the limits fixed by the Statute. Having
regard to the punitive nature of the power exercisable under Section 14-B and
the consequences that ensue there from, an order under Section 14-B must be a
'speaking order' containing the reasons in support of it." AIR 1979
SUPREME COURT 1803, Organo Chemical Industries v. Union of India