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Section 140: Power of officers to impose penalty

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 139 All 163 Sections of Code on Social Security, 2020 Section 141

Legal Commentary & Landmark Judgments: Section 140

Section 140 of the Code establishes an in-house administrative adjudication framework, empowering an officer not below the rank of Under Secretary to the Government to impose monetary penalties for minor administrative non-compliances.

  • Administrative Monetary Penalty Mechanism: Decouples minor regulatory defaults from the criminal justice system, empowering administrative adjudicators to levy statutory fines.
  • Principles of Natural Justice Mandatory: Requires the adjudicating officer to issue a written show-cause notice, disclose all adverse inspection records, and grant a personal hearing before imposing penalties.
  • Objective Discretionary Criteria: Directs the adjudicating officer to consider the size of the establishment, duration of default, and repeat nature of non-compliance while determining penalty amounts.
Key Landmark Precedents:
  • SEBI v. Shriram Mutual Fund (2006) 5 SCC 361: Supreme Court affirmed that civil administrative penalties are strictly non-penal; once a statutory breach is proved, penalty follows as a matter of course without requiring proof of mens rea.
  • Union of India v. CERC (2010) 4 SCC 603: Affirmed that administrative adjudicators must act quasi-judicially and pass reasoned orders supported by tangible evidence.
  • Siemens Engineering & Manufacturing Co. v. Union of India (1976) 2 SCC 981: Affirmed that administrative penalty orders must record speaking reasons to withstand judicial scrutiny.
Courtroom Practice & Strategic Litigation Guidance:

During administrative penalty hearings under Section 140, submit proof of prompt voluntary rectification and demonstrate zero economic gain from the procedural default to argue for minimal penalty imposition.

Section 139 All 163 Sections of Code on Social Security, 2020 Section 141