Judgment :-

Dalveer Bhandari, J.

1. Leave granted in both the matters.

2. We propose to dispose of these appeals by a common judgment. These appeals emanate from the judgment and final order dated 14.11.2008 passed by the High Court of Judicature at Bombay, Nagpur Bench, Nagpur in Letters Patent Appeal Nos.347 and 348 of 2008.

3. Marathwada Gramin Bank (for short, respondent bank) was established in 1976. The provisions of the Employees Provident Fund Scheme, 1952 became applicable to the respondent bank from 1.9.1979. According to the respondent bank, it meticulously complied with the provisions of the Scheme till 31.8.1981. Thereafter, the respondent bank formed its own trust and framed its own Scheme for payment of provident fund to its employees. According to that Scheme of the bank the employees were getting provident fund in excess of what was envisaged under the Employees Provident Fund Scheme, 1952.

4. The Regional Provident Fund Commissioner vide order dated 29.8.1981 exempted the respondent bank from complying with the statutory provisions of the Scheme with effect from 1.9.1981 and permitted the respondent bank to pay provident fund to its employees according to its own Scheme. The respondent bank contributed provident fund to its employees as per its own Scheme for the period from 1.9.1981 to 31.8.1993.

5. On 14.10.1991, the said exemption/relaxation granted to the respondent bank was withdrawn and cancelled and the respondent bank was directed to implement the provisions of the statutory Scheme. Despite cancellation of exemption, the respondent bank continued to make payment of provident fund in accordance with the earlier Scheme till 31.8.1993. In the said Scheme, the respondent bank was contributing provident fund for the employees in excess of the statutory obligation.

6. According to the respondent bank, owing to huge accumulated losses, it issued a notice of change under section 9A of the Industrial Disputes Act, 1947 expressing its intention to discontinue payment of provident fund in excess of its statutory liability with effect from 1.11.1998, but would continue to contribute towards Employees Provident Fund according to the statutory liability.

7. The Regional Provident Fund Commissioner-II issued a letter dated 13.5.1999 informing the respondent bank that it cannot withdraw the benefit of paying matching employer's share without any limit to wage ceiling and directed it to continue extending the same benefit as was granted prior to 01.11.1998.

8. Thereafter, the Central Government made a reference of the dispute to the Central Government Industrial Tribunal, Nagpur (for short, the Tribunal). The said Tribunal relied on Section 12 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short, 1952 Act) and held that the management cannot reduce, directly or indirectly, the wages of any employee to whom the Scheme applies or the total quantum of benefits in the nature of old age pension gratuity (provident fund) or life insurance to which the employee is entitled under the terms of his employment, express or implied. Section 12 of the 1952 Act reads as under:-

"No employer in relation to [an establishment] to which any [Scheme or the Insurance Scheme] applies shall, by reason only of his liability for the payment of any contribution to [the Fund or the Insurance Fund] or any charges under this Act or the [Scheme or the Insurance Scheme] reduce, whether directly or indirectly, the wages of any employee to whom the [Scheme or the Insurance Scheme] applies or the total quantum of benefits in the nature of old age pension, gratuity [provident fund or life insurance] to which the employee is entitled under the terms of his employment, express or implied.]"

9. The Tribunal directed that the employees of the respondent bank shall continue to draw equal amount of contribution from the bank towards provident fund without any ceiling on their wages. According to the Tribunal, the action of the resp