M/s Ariyakudi Private Limited, an appellant Company fails to deposit the PF contribution, upon financial crises going on in the business and Assistant Provident Commissioner levied damages for delay in contribution. Now

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is a welfare legislation which aims at providing social security and timely monetary assistance to Industrial employees and their families when they are in distress and/or unable to meet family and social obligations and to protect them in old age, disablement, early death of the bread winner and in some other contingencies. EPF or Employee Provident Fund is a retirement benefit under which both employer and employee contribute equally in the EPF account. The Act imposes a statutory obligation on employer covered under the Act to pay his own contribution along with employee's contribution within fifteen days of the close of every month to the Fund by separate Bank drafts or cheques on account of contributions and administrative charge. Section 14-B of the Act vests the Central Provident Fund Commissioner with the power to recover damages, where an employer makes default in the payment of any contribution to the Fund not exceeding the amount of arrears and after giving a reasonable opportunity of being heard to employer. The issue in the given question is "Whether financial crisis could be a tenable ground to be considered justifiable for failure to deposit PF contribution by employer and consequently challenge levy of damages for delay in contribution?" In M/S Hindustan Times Limited vs. Union of India & Others on 7 January, 1998 , Supreme Court held that the following principles can be summarised w.r.t. of the Employees Provident Fund & Miscellaneous Provisions Act, 1952: The Authority under Section 14-B has to apply his mind to the facts of the case and the reply to the show cause notice and pass a reasoned order after following principles of natural justice and giving a reasonable opportunity of being heard; the Regional Provident Fund Commissioner usually takes into consideration the number of defaults, the period of delay, the frequency of default and the amounts involved; default on the part of the employer based on pleas of power cut, financial problems relating to other indebtedness or the delay in realisations of amounts paid by the cheques or drafts, cannot be justifiable grounds for the employer to escape liability. Therefore, going by above judgement of Supreme Court, the levy of damages in case of M/s Ariyakudi Private Limited, for failure to deposit PF contribution, will be upheld and financial crisis as justification for delay in depositing the same cannot be accepted.