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2012 Supreme(Bom) 920
High Court of Judicature at Bombay
P.B. MAJMUDAR & ANOOP V. MOHTA, JJ.
The Tata Co.'s Employees Union
Versus
The Tata Power Co. Ltd.
APPEAL NO. 33 OF 2009 IN WRIT PETITION NO. 2500 OF 2005
Decided on : 03-05-2012
For the Appellants:A.D. Shetty with Rita K. Joshi, Advocate.
For the Respondent:K.M. Naik, Sr. Adv. i/b S.P. Salkar & R1 - Sahil Mullick, R2 -Suresh Kumar, Advocates.
Headnote:
Employees' Provident Funds and Miscellaneous Provisions Act 1952 - Food Allowance - Section 6(1), Explanation I - Section 2(b) - The court considered whether the amount of Rs.1200/- paid as food allowance to all workmen by the Company could be considered as cash value for food concession or part of basic wages as per section 2(b) of the Act. The court concluded that the amount paid as food allowance could not be considered as cash value for food concession as the Management did not provide food and the amount was paid irrespective of the cost of food. The court remanded the matter to the learned Single Judge to decide whether the allowance could be treated as part of basic wages under section 2(b) of the Act.
Fact of the Case:
The respondent Company paid Rs.1200/- per month as food allowance to all workmen, leading to a dispute over whether this amount should be considered as part of the basic wages or as cash value for food concession under the Employees' Provident Funds and Miscellaneous Provisions Act 1952.
Finding of the Court:
The court concluded that the amount paid as food allowance could not be considered as cash value for food concession as the Management did not provide food and the amount was paid irrespective of the cost of food. The court remanded the matter to the learned Single Judge to decide whether the allowance could be treated as part of basic wages under section 2(b) of the Act.
Issues: The main issue was whether the amount of Rs.1200/- paid as food allowance to all workmen by the Company could be considered as cash value for food concession or part of basic wages as per section 2(b) of the Employees' Provident Funds and Miscellaneous Provisions Act 1952.
Ratio Decidendi: The court held that if a particular allowance or amount is payable uniformly to all employees, such payment or emolument can be treated as part of basic wages under section 2(b) of the Act. The court remanded the matter to the learned Single Judge to decide whether the allowance could be treated as part of basic wages under section 2(b) of the Act.
Final Decision: The court partly allowed the petition by setting aside the order of the learned Single Judge and remitting the matter back to decide whether the amount would be falling within the definition of basic wages under section 2(b) of the Act. The court requested the learned Single Judge to decide the matter within three months from the date of the judgment.
P.B. MAJMUDAR J.
1. This appeal is directed against the judgment and order of the learned Single Judge dated 16th July 2008 in writ petition No.2500 of 2005. By the impugned order, the learned Single Judge has allowed the writ petition filed by the respondent Company and set aside the orders which were impugned before the learned Single Judge viz. The orders dated 28th July 2000 and 6th July 2005. The learned Single Judge has held that the respondent Company is not liable to contribute any amount towards provident fund contribution on the basis of agreement dated 10th May 1995. A memorandum of settlement was entered into between the appellants and respondents on 10th May 1995 by which the Company has agreed to pay Rs.1200/-p.m. towards food allowance. As per the said agreement, it is agreed by both the parties that with effect from 1st June 1995 food allowance of Rs.900/-per month (through salary) is to be paid in a division where canteen exists. In addition, coupons worth Rs.310/-would be issued every month for which a deduction of monthly contribution of Rs.10/-will be made from the salary of each employee. It is also provided in the agreement that in the divisions where there are no canteen facilities, employees would be paid food allowance of Rs.1200/- (through salary). It is pointed out by both the learned counsel that 'through salary' would mean over and above salary, Rs.1200/- will be paid per month meaning thereby Rs.1200/-will be added in the salary component. The appellant Union thereafter wrote a letter to the Chairman of the respondent Company on 10th August 1995 pointing out that as per the memorandum of settlement dated 10th May 1995, Rs.1200/-p.m. is being paid towards food allowance and on the said allowance, provident fund contribution should be deducted at source. It was therefore requested that such deduction should be made from the food allowance towards the provident fund. Since the respondent Company did not respond to the said request, the appellants approached the Regional Provident Fund Commissioner who in turn conducted enquiry under section 7(A) of the Employees' Provident Funds and Miscellaneous Provisions Act 1952. The Regional Provident Fund Commissioner came to the conclusion that the food allowance paid to the employees of the establishment in terms of memorandum of settlement entered into between the Management and the Union is attracted by provisions of Explanation I of section 6 of the Act and therefore, the respondent Company is required to contribute the provident fund. The Regional Provident Fund Commissioner thereafter directed to hold enquiry regarding amount due and payable by the employer in relation to its establishment. The respondent Company being aggrieved by the said order, preferred an appeal before the Employees' Provident Fund Appellate Tribunal being Appeal (ATA) No.463(9) of 2003. The Tribunal by its order dated 6th July 2005 came to the conclusion that the cash value for food concession would fall within the ambit of Explanation I to section 6 of the Act. It is also held by the Tribunal that even otherwise, food allowance paid to each and every employee would otherwise form part of the wages as defined under section 6 of the Act and would attract the provident fund contribution even if this allowance for the sake of argument does not fall within the ambit of Explanation I to section 6 of the Act. The respondent Company being aggrieved by the aforesaid order of the Appellate Tribunal as well as the order of the Regional Provident Fund Commissioner preferred writ petition before the learned Single being writ petition No.2500 of 2005. The learned Single Judge came to the conclusion that the cash value for food concession cannot be said to have been covered by Explanation I to section 6 of the Act and it could not have been treated as dearness allowance. The learned Single Judge accordingly set aside the orders passed by the Regional Provident Fund Commissioner as well
