Section 128: Power to recover damages
Reviewed by Finin2min Editorial Desk · Last reviewed 30 August 2026
Section 128 — Defines the statutory power concerning recover damages and the conditions attached to its exercise. Key operative text: Where an employer makes default in the payment of any contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the case may be, or any scheme framed thereunder or in the…
The Code was commenced in stages: section 142 had earlier commencement, S.O. 5319(E) brought the specified provisions into force from 21 November 2025, and later commencement instruments must be read with the current India Code footnotes for the remaining clauses.
Provision / India Code ↗ · Official Act PDF ↗ · 2026 Central Rules ↗
Finin2min analysis — what the section actually does
Operative clauses
- Where an employer makes default in the payment of any contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the case may be, or any scheme framed thereunder or in the transfer of accumulations under Chapter III, or in the payment of any charges payable under any other provision of this Code, the Central Provident Fund Commissioner or the Director General of the…
- Provided that before levying and recovering such damages, the employer shall be given an opportunity of being heard:
- Provided further that the Central Board or the Corporation, as the case may be, may reduce or waive the damages levied under this section in relation to an establishment for which a resolution plan or repayment plan recommending such waiver has been approved by the adjudicating authority established under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) subject to the terms and conditions as may be specified…
Provisos, explanations & qualifications
- Provided that before levying and recovering such damages, the employer shall be given an opportunity of being heard:
Thresholds and timelines in the text
- No explicit day/month/year/hour/percentage/rupee expression was detected in this section text.
Actors expressly appearing in the text
Employer, Appropriate Government, Central Government, Authority / officer, Corporation / EPFO / Board
Full statutory text — Section 128
128. Power to recover damages.—Where an employer makes default in the payment of any
contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the
case may be, or any scheme framed thereunder or in the transfer of accumulations under Chapter III, or in
the payment of any charges payable under any other provision of this Code, the Central Provident Fund
Commissioner or the Director General of the Corporation, as the case may be, or such other officer as may
be authorised, by notification, by the appropriate Government, may levy on, and recover from, the employer
by way of damages, an amount not exceeding the amount of arrears, in such manner as may be specified in
the regulations for the purposes of Chapter IV and in respect of Provident Fund Scheme, Pension Scheme
and Insurance Scheme, such levy and recovery shall be in the manner as may be specified in the respective
schemes framed by the Central Government:
Provided that before levying and recovering such damages, the employer shall be given an opportunity
of being heard:
Provided further that the Central Board or the Corporation, as the case may be, may reduce or waive
the damages levied under this section in relation to an establishment for which a resolution plan or
repayment plan recommending such waiver has been approved by the adjudicating authority established
under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) subject to the terms and conditions as may
be specified by notification, by the Central Government.How to apply this provision
- Primary statutory test — Where an employer makes default in the payment of any contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the case may be, or any scheme framed thereunder or in the transfer of accumulations under Chapter III, or in the payment of any charges payable under any other provision of this Code, the Central Provident Fund Commissioner or the Director General of the…
- Additional operative limb — Provided that before levying and recovering such damages, the employer shall be given an opportunity of being heard:
- Qualification / exception to test — Provided that before levying and recovering such damages, the employer shall be given an opportunity of being heard:
- Evidence file — retain facts and records proving the role/status of: Employer, Appropriate Government, Central Government, Authority / officer, Corporation / EPFO / Board.
Rules, forms and cross-references
Direct 2026 Central Rule mapping
Forms mapped
No prescribed form is directly mapped in the current concordance.
Other sections cited in this text
Related Labour Hub resources
A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.
Worked example
For a worker/member seeking a benefit connected with power to recover damages, the file should show coverage, service/contribution facts, the rule/scheme and prescribed form, and the calculation/payment. One statutory point to test is: “Where an employer makes default in the payment of any contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the case may be, or any scheme framed thereunder or in the transfer of accumulations under Chapter III, or in the paymen” Also test the express qualification/proviso before concluding the result.
Illustration only; it is not statutory text or a substitute for applying the actual facts, jurisdiction, current rule/scheme and official instrument.
Q&A — Section 128
What does Section 128 of the Social Security Code cover?
Section 128 — Defines the statutory power concerning recover damages and the conditions attached to its exercise. Key operative text: Where an employer makes default in the payment of any contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the case may be, or any scheme framed thereunder or in the…
What is the main legal requirement or power in Section 128?
The first operative clause identified from the official text is: “Where an employer makes default in the payment of any contribution which he is liable to pay in accordance with the provisions of Chapter III or Chapter IV, as the case may be, or any scheme framed thereunder or in the transfer of accumulations under Chapter III, or in the payment of any charges payable under any other provision of this Code, the Central Provident Fund Commissioner or the Director General of the…” Read it with the remaining subsections and any proviso below.
Does Section 128 contain a proviso or explanation?
Yes. A qualification extracted from the official text is: “Provided that before levying and recovering such damages, the employer shall be given an opportunity of being heard:”
What time limit, percentage or amount appears in Section 128?
No explicit day/month/year/hour/percentage/rupee expression was detected in the official section text.
Which 2026 Central Rules are linked to Section 128?
No direct Central Rule is recorded in the current concordance. That does not exclude a relevant scheme, notification, State rule or enabling provision.
Is Section 128 currently operative?
The Code was commenced in stages: section 142 had earlier commencement, S.O. 5319(E) brought the specified provisions into force from 21 November 2025, and later commencement instruments must be read with the current India Code footnotes for the remaining clauses.
Source & verification trail
Act: Code on Social Security, 2020 — official India Code PDF ↗
Central Rules: Social Security (Central) Rules, 2026 — G.S.R. 344(E), 8 May 2026 ↗
Official library: Ministry of Labour & Employment — Labour Codes ↗
Source check: 20 August 2026. Individual professional interpretation should be re-reviewed when the section, rules, notification, scheme, State overlay or controlling judgment changes.