A non-speaking EPF penalty order warrants remand to the Commissioner for fresh determination.

The respondent establishment, covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, was allotted Code No. 21384.

Following a hearing concerning delayed contributions for November 2001, September 2014, March 2015 and July 2015, the Assistant Provident Fund Commissioner imposed penal damages of ₹1,98,012 under Section 14B, along with interest, by order dated 17 November 2015.

The respondent appealed. The Central Government Industrial Tribunal-cum-Labour Court allowed the appeal and set aside the Commissioner’s order on 2 March 2020, finding it unreasoned.

The Commissioner challenged the Tribunal’s order in this writ petition.

1. Whether the Tribunal erred by setting aside the Commissioner’s order, rather than remanding the matter for reconsideration, after finding that the order was not reasoned.

2. Whether the Commissioner’s order, lacking reasons and amounting to a non-speaking order, required reconsideration after a personal hearing.

Sections 14B and 7Q of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, govern penal damages and interest in relation to delayed provident-fund contributions.

An order imposing such liability must be reasoned; an order made without reasons or application of mind cannot stand. Relying on McLeod Russel India Ltd. v. Regional Provident Fund Commissioner, Jalpaiguri, (2014) 15 SCC 263, the Court treated an order passed without application of mind as defective and concluded that the matter should be reconsidered by the Commissioner.

The Court agreed with the Tribunal’s finding that the Commissioner had not assigned reasons and that the order was not a speaking order.

However, because that defect called for a fresh, reasoned determination rather than final disposal of the respondent’s appeal, the Tribunal erred in setting aside the Commissioner’s order without remanding the matter. The High Court therefore remanded the matter directly to the Commissioner, rather than to the Tribunal, for reconsideration after a personal hearing.

The matter was remanded to the Assistant Provident Fund Commissioner, Raichur, who was directed to provide the respondent an opportunity of personal hearing and then pass a detailed order in accordance with law. The Court made no adjudication on the merits and kept the respondent’s contentions open.