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Section 134: Enhanced penalty in certain cases

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter XII: Offences and Penalties
Competent Labour Forum
Act No. 36 of 2020
Section 133 All 163 Sections of Code on Social Security, 2020 Section 135

Legal Commentary & Landmark Judgments: Section 134

Section 134 of the Code provides enhanced penalties for certain offenses, prescribing imprisonment of up to one year and fines of up to one lakh rupees for making false statements, obstructing inspectors, or unlawfully deducting employer contributions from wages.

  • Criminalization of Unlawful Wage Deductions: Punishes any employer who deducts or attempts to deduct the employer's statutory social security contribution from employee wages with severe penal sanctions.
  • Sanctions for False Statements & Forged Returns: Penalizes anyone who knowingly makes false statements or files fabricated payroll returns to evade statutory coverage or reduce contribution liabilities.
  • Obstruction of Social Security Officers: Imposes imprisonment of up to six months or fine of up to fifty thousand rupees for physically obstructing or failing to produce documents demanded by inspecting authorities.
Key Landmark Precedents:
  • Regional Provident Fund Commissioner v. Hooghly Mills Co. Ltd. (2012) 2 SCC 489: Supreme Court held that shifting employer statutory contribution burdens onto employees violates public policy and constitutes an aggravated statutory offense.
  • Organo Chemical Industries v. Union of India (1979) 4 SCC 573: Affirmed that false reporting of employee rosters to evade social security thresholds warrants exemplary criminal punishment.
  • State of Bihar v. Kirly Mines AIR 1961 SC 171: Supreme Court affirmed that obstructing statutory labor inspectors undermines sovereign welfare administration.
Courtroom Practice & Strategic Litigation Guidance:

Audit contractor payroll invoices: if a contractor bills the principal employer for PF/ESI contributions while simultaneously deducting those same employer shares from contract workers' net pay, immediately terminate the vendor and report the Section 134 violation.

Section 133 All 163 Sections of Code on Social Security, 2020 Section 135