Section 14(1) of the Provident Fund Act provides for imprisonment which may extend to one year or with fine of Rupees five thousand or with both. Section 14(1)(A) provides for punishment for contravention or making default with the provisions of Section 6 i.e. in respect of contributions, matters provided in the scheme, employees pension scheme, employees deposit linked insurance scheme or clause (a) of sub section 3 of Section 17, the Act provides for imprisonment for a term which may extend to but shall not be less than one year and a fine of Rupees ten thousand in case of default in payment of the employees contribution which has been deducted by the employer from the wages of the employees and imprisonment of six months and fine of Rupees five thousand in any other case.
Proviso to Section 14 of the Provident Fund Act in India provides for lesser imprisonment for adequate and special reasons to be recorded in the judgement by the court.
Section 14(AA) of the Provident Fund Act provides for enhanced punishment in certain cases after previous conviction. Whoever having been convicted by a court of an offence punishable under Provident Fund Act commits the same offence, the Act provides for imprisonment up to five years but shall not be less than two years for a subsequent offence.
Hon’ble Delhi High Court in the matter of Union of India V/s Mohammed Ahmed reported in, 1978 has held that defaulting employer is old and infirm would not be an adequate reason for awarding less than minimum prescribed punishment.
Subsequent payments are also considered as a ground for lesser punishment.