The main legal point established is that the cash value of any food concession allowed to the employee presupposes the provision of the supply of an amenity such as food grain, and in the absence of such supply, the payment of food allowance cannot be treated as the cash value of food concession allowed to the employee.

By this writ petition the petitioner company has questioned the legality and propriety of the order passed by the Regional Provident Fund Commissioner in an enquiry under Section 7 A of The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ("the Act" for short) confirmed by the Employees Provident Fund Appellate Tribunal at New Delhi.

2. The only question is whether the Food Allowance agreed to be paid by the petitioner to its employees under a settlement is "cash value of any food concession" allowed to the employee and therefore liable to be included for the purpose of calculating the employers contribution to the provident fund.

3. In the course of a settlement, the petitioner and the respondent NO.2 Union agreed to as follows:

"Food Allowance:

It is agreed between the parties that with effect from 1st June, 1995 the food allowance will be as under:

A) In divisions where canteen exists, employees would be paid a food allowance of Rs.900/- per month (through Salary). In addition, Coupons worth Rs.31 0/- would be issued every month for which a deduction of monthly contribution of Rs.10/- will be made from the salary of each employee. Such coupons would be non-encashable and non-refundable. Such canteens henceforth would be run by the Contractor purely on a Cafeteria Basis.

A canteen committee comprising representatives of the management, and the union will be constituted to monitor the running of the respective canteens as cafeterias.

B) In divisions where there are no canteen facilities, employees would be paid food allowance of Rs.1200/- (through Salary).

4. The respondent Union claimed before the Provident Fund Commissioner that the food allowance should be included for the purpose of employees contribution to the provident fund under Section 6 of the Act, the relevant part of which reads as follows:-

"6. Contributions and matters which may be provided for in Schemes. The contribution which shall be paid by the employer to the Fund shall be (ten per cent) of the basic wages [dearness allowance and retaining allowance (if any)] for the time being payable to each of the employees [(whether employed by him directly or by or through a contractor)], and the employees' contribution shall be equal to the contribution payable by the employer in respect of him and may, [if any employee so desires, be an amount exceeding [ten per cent] of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this Section.

[Provided that]

Provided that.

[Explanation 1]. For the purpose of this [section], dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee."

5. The Provident Fund Commissioner initiated an enquiry under the Act. The Commissioner held that the food allowance is merely a compensation to meet the expenses of food and said payments are cash value of the food allowance and form part of the dearness allowance. He therefore directed the inclusion of the amount of the food allowance as part of the dearness allowance under Explanation 1.

6. The petitioner preferred an Appeal before the Provident Fund Appellate Tribunal at New Delhi. That Tribunal dismissed the Appeal holding that the term "cash value of food concession" used in Explanation I would even include cash paid to the workers in lieu of such food concession i.e. even if food is not provided by the employer at all. Against this order, the petitioner has preferred this writ petition.

7. Before one adverts to the contentions, it is necessary to briefly note the nature of the allowance. The petitioner admittedly does not provide any food to its employees. In any case the parties are not at issue in this matter in regard to any subsidised food allegedly provided by the petitioner. In fact it appears that the petitioner discontinued some canteen faciliti