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2019 Supreme(SC) 361
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, DINESH MAHESHWARI, JJ.
MODERN TRANSPORTATION CONSULTATION SERVICES PVT LTD & ANR – Appellants
Versus
CENTRAL PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION & ORS – Respondent
CIVIL APPEAL NO.7698 OF 2009
Decided on : 26-03-2019
For Appellant(s) : Mr. Ghanshyam, Adv. Mr. Abani Kumar Sahu, Adv. Mr. P. K. Manohar, AOR
For Respondent(s): Mr. Vishnu Sharma, AOR Ms. Anupama Sharma,Adv. Mr. Nishant Kumar, Adv. Mr. Ashutosh Kumar, Adv. Mr. Chandra Prakash, AOR
IMPORTANT POINT
If a person is member of the Fund created thereunder i.e., under the Scheme of 1952 and withdraws all his accumulations therein, he may not be obliged to be a member of the same Fund under the Scheme of 1952 over again and could be treated as an “excluded employees”. However, such is not the relaxation granted in relation to an employee who was earlier a member of any other Fund but later on joins such an establishment where he would be entitled to membership of the Fund created under the Scheme of 1952.
Headnote:(a) Employees' Provident Funds and Miscellaneous Provisions Act, 1952 – Section 17 – Exemption of an establishment from the Scheme – Only on availability of equivalent or more favourable benefits in an establishment – All other establishments covered by the Scheme under sections 1 or 3 of the Act – As per Paragraph 26 of Scheme of 1952, every employee of such covered establishments entitled to and obliged to become member of the Fund. (Para 12, 13)
(1991) 2 SCC 495 – Distinguished
(b) Employees' Provident Funds Scheme, 1952 – Paragraph 2(f)(i) and 69(1)(a) – Excluded employee – applicable to only those employees who withdrew the entire amount at credit in the Fund – Fund means Fund under the Scheme – Instantly, appellants members of GPF under railways – Withdrawing total amount at their credit – Held not excluded employees. (Para 14)
(c) Employees' Provident Funds and Miscellaneous Provisions Act, 1952 – Section 17 r/w Paragraph 26 of the Scheme of 1952 – Stipulations of the Scheme mandatory in character – Normally cannot be averted by an employee. (Para 15)
(d) Employees' Provident Funds Scheme, 1952 – Paragraph 2(f)(i) – Appellants reemployed after retirement from Railways and withdrawing total amount at their credit in GPF – Seeking exemption from ‘Fund’ – Single judge allowing petition observing that if not exempted, appellants will keep on successively deriving benefits – Observation held unwarranted in view of the principle of the scheme to provide financial security to employees. (Para 16)
(e) Employees' Provident Funds Scheme, 1952 – Paragraph 2(f)(ii) – Single Judge of High Court observing that when serving employees drawing more salary than the retired appellants are exempted, appellants should al;so be exempted – Observation flawed as appellants form a different class that the serving employees. (Para 16)
Facts of the case:
Appellants filed a writ petition contending that the employees of Railways, who had withdrawn full amount of provident fund while retiring and who were engaged by them on lump sum honorarium basis, should be treated as “excluded employees" for the purpose of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Employees' Provident Funds Scheme, 1952. The petition was allowed by the single Judge.
The Division Bench of High Court totally disagreed with the learned Single Judge; and dismissed the writ petition while holding that the said employees, who retired after serving an exempted employer, would not fall within the category of excluded employees on re-employment and would be covered by the Act and the Scheme of 1952.
Finding of the Court;
Appellants are not ‘excluded employees’.
Result: Appeal dismissed.
JUDGMENT :
DINESH MAHESHWARI, J.
1. In this appeal by special leave, the appellants (writ petitioners) have called in question the judgment and order dated 07.05.2008 in FMA No. 537 of 2007 whereby, the Division Bench of High Court at Calcutta has reversed the order dated 07.04.2006, as passed by the learned Single Judge in W.P. No. 2982(W) of 2005.
1.1. By the aforesaid order dated 07.04.2006, the learned Single Judge of High Court allowed the writ petition filed by the appellants while upholding their contentions that the employees of Railways, who had withdrawn full amount of provident fund while retiring and who were engaged by them on lump sum honorarium basis, should be treated as “excluded employees" for the purpose of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act'/'the Act of 1952') and the Employees' Provident Funds Scheme, 1952 (hereinafter referred to as 'the Scheme of 1952'). However, in the Letters Patent appeal preferred by the Central Provident Fund Commissioner and the Regional Provident Fund Commissioner, the Division Bench of High Court totally disagreed with the learned Single Judge; and dismissed the writ petition while holding that the said employees, who retired after serving an exempted employer, would not fall within the category of excluded employees on re-employment and would be covered by the Act and the Scheme of 1952.
2. The basic question arising for determination in this appeal is as to whether the retired employees of Railways, who had withdrawn all the superannuation benefits, including full amount of accumulations in their provident fund accounts, are to be treated as "excluded employees" in terms of Paragraph 2(f) of the Scheme of 1952? If to be treated as "excluded employees", the said retired employees of Railways, on being re-employed by the appellants, may not be required to join the Fund created under the said Scheme of 1952 and consequently, the appellants may not be obliged to make any contribution in that regard.
3. The relevant factual aspects leading to the question aforesaid are not of much controversy and could be briefly summarised as follows:
3.1. The appellant No. 1, a Private Limited Company, had been engaged in manning the Captive Railway System of the respondent No. 4-Damodar Valley Corporation ('DVC'). The appellant No. 2 is said to be a Director of the appellant No. 1-company. The appellants would submit that their only connection with DVC had been a contract to supply the personnel for manning the cabins and gates on the railway-road; and they were receiving the remuneration for supplying the aforesaid personnel, who were retired employees of the Indian Railways and were engaged on a lump sum honorarium basis.
3.2. By his letter dated 18.02.2002, the Assistant Provident Fund Commissioner Circle-IV, Calcutta informed the appellant-company that the number of employees of its establishment being twenty-eight in the month of May, 1999, the establishment came within the purview of the Act of 1952 with effect from 01.05.1999. In reply, the Director of the appellant-company stated in his letter dated 05.03.2002 that all the persons engaged by the company, except two of them, were the retired Railway employees above 58 years of age; that all of them were working only on retainer basis; and that they were not covered under the Employees' Provident Fund Scheme. The said Assistant Provident Fund Commissioner, in his letter dated 03.05.2002, refuted the contentions of the appellants while referring to Paragraph 26 of the Scheme of 1952 and while asserting, inter alia, that on and from 01.11.1990, an employee is eligible for enrolment as a member of the Scheme of 1952 from the date of joining an establishment covered under the Act of 1952; that there was no age bar for an employee to become a member of the Scheme of 1952; and that the employees in question were not excluded employees in terms of the Scheme of 1952.
3.3. It appears t
