Section 14B EPF Act 1952 - Power to Recover Damages
Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 dealt with damages for specified defaults by an employer. The current law is now principally contained in Section 128 of the Code on Social Security, 2020, while savings and transitional provisions preserve relevant past actions, liabilities and schemes to the extent provided by law.
Meaning and scope of Section 14B
Section 14B empowered the provident fund authority to recover damages from an employer for defaults such as delayed payment of provident fund, pension fund or insurance fund contributions, failure to transfer specified accumulations, and non-payment of charges payable under the Act, the schemes or applicable exemption conditions. The damages were penal in character and were subject to the statutory ceiling and the applicable scheme.
The provision also required that the employer be given a reasonable opportunity of being heard before damages were levied and recovered.
Section 14B - legacy provision under the EPF Act, 1952
Power to recover damages
Under Section 14B, where an employer made default in payment of a contribution to the Fund, Pension Fund or Insurance Fund, in transfer of accumulations required under the Act, or in payment of specified charges, the competent provident fund authority could recover from the employer, by way of penalty, damages not exceeding the amount of arrears, as specified in the applicable scheme.
Before levy and recovery, the employer had to be given a reasonable opportunity of being heard. The section also contained a mechanism for reduction or waiver in specified rehabilitation cases under the law then in force.
The wording above is an explanatory restatement for readability. For a matter governed by the former Act, the statutory text and the law applicable to the relevant default period should be checked.
Current law: Section 128 of the Code on Social Security, 2020
Section 128 applies where an employer defaults in payment of contributions due under Chapter III or Chapter IV of the Code or a scheme framed under them, in transfer of accumulations under Chapter III, or in payment of charges payable under the Code. The competent authority may levy and recover damages, subject to a maximum equal to the arrears. For provident fund, pension and insurance schemes, levy and recovery are to be made in the manner specified in the respective schemes framed by the Central Government.
Section 128 preserves the requirement of an opportunity of hearing. It also permits reduction or waiver in relation to an establishment for which an Insolvency and Bankruptcy Code, 2016 resolution plan or repayment plan recommending such waiver has been approved by the adjudicating authority, subject to notified terms and conditions.
Opportunity of hearing before damages
An order imposing damages is not intended to be made mechanically. The statutory framework expressly provides an opportunity of hearing before levy and recovery. An employer facing proceedings should examine the notice, period of default, contribution records, payment dates, computation of arrears and damages, and any legally relevant circumstances before filing a response.
Rates of damages and transition
Historically, paragraph 32A of the Employees' Provident Funds Scheme, 1952 prescribed graded annual rates of damages according to the period of default. The Code on Social Security contains savings provisions for prior actions and subordinate legislation. Because the applicable rate can depend on the period of default, the governing scheme and any transitional or special notification, the rate should be verified for the specific period involved rather than assumed from an older table.
Interest for delayed statutory dues is separate from damages. Under the current Code, Section 127 deals with interest on amounts due, while Section 128 deals with damages.
VISHWAS 2026 - settlement of EPF damages
EPFO launched VISHWAS 2026 as a one-time dispute-resolution measure for eligible damages or penalty disputes under former Section 14B and current Section 128. The scheme was notified with effect from 29 June 2026 for six months. It covers specified pending litigation, unpaid or partly paid damages orders, pending notices and certain defaults for which notices have not yet been issued.
| Default period covered by VISHWAS 2026 | Concessional damages rate |
|---|---|
| Up to 2 months | 0.25% per month |
| 2 months to less than 4 months | 0.50% per month |
| More than 4 months | 1.00% per month |
The notified scheme contains eligibility and procedural conditions. In particular, the applicable interest under former Section 7Q or current Section 127, as the case may be, must be dealt with in accordance with the scheme before claiming its benefit.
Related EPF provisions
For historical EPF Act matters, Section 14B should be read with the provisions governing determination and recovery of dues, interest, appeals and the applicable provident fund, pension and insurance schemes. For current matters, the corresponding provisions of the Code on Social Security, 2020 and the schemes or regulations made under it should be consulted.
Practical checklist for an employer
- Identify the exact contribution period and date of actual payment.
- Check whether the proceeding arises under former Section 14B or current Section 128 and apply the relevant savings provisions.
- Verify the damages computation under the scheme applicable to the default period.
- Reconcile separate interest liability under former Section 7Q or current Section 127.
- Use the statutory opportunity of hearing to place payment records and legally relevant facts on record.
- For eligible legacy disputes, check the time-limited VISHWAS 2026 mechanism before its notified window closes.
Disclaimer: This article is for general legal information. Statutory provisions, notifications, schemes and case-specific facts should be verified before acting on a particular EPF damages matter.