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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
R. Gururajan, J.
R.V. Shanbhag —Appellant
Vs.
The Federation of Karnataka Chamber of Commerce and Industries and others —Respondent
Writ Petition No. 8456 of 2001
Decided on : 18-10-2001
Employees Provident Fund - Settlement of PF Dues - Employees Provident Funds and Miscellaneous Provisions Act, 1952, Section 2(b) - The court discussed the settlement between the parties, the definition of 'basic wages' under the Act, and relevant case law. The court held that the settlement did not pertain to the settlement of PF dues and that PF is a statutory payment that cannot be settled de hors of the Act. The court also emphasized that the payment made to the petitioner was considered as 'basic wages' under the Act, and referred to a judgment of the Supreme Court to support its decision.
Fact of the Case:
The petitioner, an erstwhile Assistant Secretary, challenged the order passed by the Employees Provident Fund Appellate Tribunal, seeking payment of provident fund legally payable to him. The settlement between the parties did not include the provident fund, leading to a dispute over the payment of PF dues.
Finding of the Court:
The court found that the settlement did not cover the payment of PF dues and emphasized that PF is a statutory payment that cannot be settled de hors of the Act. The court also held that the payment made to the petitioner was considered as 'basic wages' under the Act, and referred to a judgment of the Supreme Court to support its decision.
Issues: The main issue was whether the settlement between the parties covered the payment of provident fund (PF) dues to the petitioner.
Ratio Decidendi: The court's decision was based on the interpretation of the settlement terms, the definition of 'basic wages' under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, and relevant case law, which led to the conclusion that the settlement did not cover the payment of PF dues and that the petitioner was entitled to his contribution under the Act.
Final Decision: The petition was accepted, the order of the Appellate Authority was set aside, and the order of the original authority was confirmed only in so far as the contribution of employers is concerned. The Federation was directed to settle the same within 8 weeks from the date of receipt of a copy of this order, and in the event of failure to settle, the petitioner was entitled to interest in terms of the provisions of the Act. Each party was directed to bear their respective costs.
R. Gururajan, J.—Petitioner an erstwhile Assistant Secretary of the Federation of Karnataka Chamber of Commerce and Industry (Federation for short) is before this Court challenging the order dated 18.12.2000 passed by the Employees Provident Fund Appellate Tribunal, New Delhi, in appeal No. ATA 176 (6) 2000.
2. The facts in brief are as under:
3. Petitioner was appointed on 24.7.1986 as an Assistant Secretary by the Federation. His services came to be terminated illegally on 23.6.1992 without any enquiry. Aggrieved by this termination the Petitioner approached the Labour Court in ID No. 90 of 1992. During the pendency of the proceedings before the Labour Court the Respondent-1 appointed a three men committee to consider the case of Petitioner and one Ms. Kumuda Kashi. The said Committee considered the matter in detail and submitted its conclusion to the Respondent 1.
4. In the report submitted by the committee it was recommended for reinstatement of the Petitioner and other benefits to be given in terms of Annexure-A. To continue the narration of the legal proceedings before the Labour Court, the Federation filed its statement of objection and contested the matter. Matter was pending for more than seven years. Finally a settlement was arrived at between the Petitioner and the Federation. A joint memorandum of settlement was presented before the Labour Court on 22.9.1999 and the same was accepted by the Labour Court by passing an award. In terms of the said compromise Petitioner was paid a total sum of Rs. 5,00,000/-. But however, the said payment did not include the provident fund legally payable to the Petitioner. Petitioner admittedly is covered by the Act and the scheme framed thereunder. In those circumstances the Petitioner moved the authorities under the Act. The Respondent 2 after hearing the parties passed an order in favour of the Petitioner in terms of Annexure-C. A writ petition was filed by the Federation against the said order. But however, in view of the subsequent appeal filed by the Federation against the same order, the writ Court directed the disposal of the appeal at an early date. The appeal filed by the Federation was allowed by the impugned order. The said order is questioned in this case.
5. The Respondents have entered appearance and filed their objections. They justified the non-payment of provident fund. According to them settlement is full and conclusive settlement. No further amount is payable under any circumstances to the Petitioner. They want the petition to be dismissed by accepting the Appellate order.
6. Heard Sri Mohan Bhat, learned Counsel appearing for the Petitioner. He took me through the pleadings and contends that what is settled is only backwages and other benefits but not certainly PF. He says that PF being a statutory benefit, has to be settled in favour of the Petitioner. Non-settlement of the PF according to the Petitioner is a matter that require consideration by this Court. He says that the Commissioner in a well considered order accepted the case of the Petitioner which has been turned down by the Appellate Authority. He finds fault with the order of Appellate Authority. He strongly relies on the definition of "basic wages" in terms of Section 2b and relies on a judgment of Apex Court in AIR 2000 March 557.
7. Per contra Sri Somashekar, learned Counsel for Respondent contends that the facts of the case would show that the Petitioner himself volunteered and got the matter settled. Based on his request matter was referred to a Chartered Accountant and on the basis of the opinion given by him the matter got settled. The award has been passed in terms of the settlement. According to the Counsel, the Appellate Authority is right in rejecting the request of PF in the case on hand. He relies on the judgment of Apex Court in The District Exhibitors Association, Muzaffarnagar and others Vs. Union of India and others, AIR 1991 SC 1381 .
8. After hearing the Counsel on either side it is my d
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