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IN THE HIGH COURT OF BOMBAY
K.K. TATED, J.
The Regional Provident Fund Commissioner, Mumbai - Appellant
Versus
M/s. Syndicate Overseas Pvt. Ltd. - Respondent
CAJ W.P. No. 1984 of 2011
Decided On : 06-07-2011
For the Appellant : Deepak Rai instructed by Mr. Suresh Kumar.
For the Respondent:S.C. Naidu with Mr. N.P. Dalvi instructed by M/s. C.R. Naidu and Co. Advocates.
The main legal point established is the need for evidence and investigation before concluding on the liability for provident fund contribution, as well as the legal duty of the commissioner to collect all evidence.
Headnote:
Provident Fund - Challenge to order under Employees Provident Fund and Misc. Provisions Act, 1952 - 7A, 7B - The court discussed the definition of 'basic wages' and the relationship of employer and employee, and held that the karigar charges paid to outside agencies did not attract payment of provident fund. The court emphasized the need for evidence and investigation before coming to a proper conclusion.
Fact of the Case:
The petitioner challenges the order directing them to deposit provident fund dues on karigar charges. The respondent contended that the charges were paid to specialized contractors and agencies, not employees, and provided documents to justify their case.
Finding of the Court:
The court found that the authority failed to issue summons to verify the genuineness of the transactions and evidence provided by the respondent. It emphasized the legal duty of the commissioner to collect all evidence before reaching a conclusion.
Issues: The issues revolved around the definition of 'basic wages' and the relationship of employer and employee, as well as the failure of the authority to conduct a proper investigation.
Ratio Decidendi: The court emphasized the need for evidence and investigation before concluding on the liability for provident fund contribution. It also highlighted the legal duty of the commissioner to collect all evidence.
Final Decision: The petition was rejected, and the court upheld the order of the Appellate Tribunal, finding no reason to interfere with it.
K.K. Tated, J.
1. Heard the learned counsel for the parties.
2. Rule.
3. By consent rule is made returnable forthwith. Matter is taken up for final hearing at the stage of admission.
4. By this petition under articles 226 and 227 of the Constitution of India, petitioner Regional Provident Fund Commissioner challenges the order dated 20.10.2010 passed by the learned Presiding Officer, Provident Fund Appellate Tribunal in Appeal ATA No. 697(9) of 2008 allowing respondent original appellant's appeal against the order passed by Provident Fund Appellate Authority u/s 7A of the Employees Provident Fund and Misc. Provisions Act, 1952 directing the respondent to deposit the dues towards the contribution of Provident Fund on the wages paid to the Karigar.
A few facts of the matter are as under:
5. The Assistant Provident Fund Commissioner issued summons dated 6-10-2006 to the respondent Company Galling upon them to remit the provident fund pension fund and insurance fund contribution and administrative charges towards provident fund and insurance fund due for the period from May 2003 to August 2006 in accordance with the provisions of Employees' Provident Fund and Misc. Provisions Act, 1952.
6. Pursuant to the said summons, the respondent appeared before the Authority and filed their say. The respondent contended before the Authority that Provident Fund Authority is not liable to pay on Karigar charges as the same are paid to the Contractor who are specialized in a particular work. Not agreeing with the submissions made by respondent company, the learned Assistant Provident Fund Commissioner Sub-Regional Office, Kandivali (West) by its order dated 31.1.2007 passed an order u/s 7A of the said Act, 1952 holding that the respondent company is liable to pay provident fund, family pension fund and insurance fund contribution and administrative charges towards Provident Fund and Insurance Fund for the period March 2003 to August 2006 on karigar charges. He calculated the total amount due and payable by the respondent to the tune of Rs. 6,83,255
7. Being aggrieved by the said order u/s 7A of the said Act, 1952, respondent original company preferred review petition u/s 7B of the said Act. The said review petition was rejected by the learned Assistant Provident Fund Commissioner, Kandivali (West) by its order dt. 18.5.2007 on the ground that the respondent filed the same after a period of limitation i.e., 45 days from the date of making of the order u/s 7A of the said Act. The said order in review petition was challenged by the respondent company before this court in Writ Petition No. 1349 of 2007. In the said writ petition, this court directed Authority to decide the review petition on own merits. After remand, the Asstt. Provident Fund Commissioner decided review application on 30.6.2006 and held that the respondent company was liable to pay the sum of Rs. 10,87,5407 towards the contribution of Provident Fund. The provident fund authority rejected the respondent's contention that provident fund is not payable on karigar charges.
8. Being aggrieved by the order dt. 30.6.2008, the petitioner preferred appeal before the Appellate Tribunal. The Appellate Tribunal held that the karigar charges cannot be treated as a basic wages as defined u/s 2(b) of the said Act, and therefore, respondent was not liable to pay Provident Fund contribution on the amount paid towards karigar charges. The appellate authority held that the karigar charges were generally paid to the person who had done finishing work. Therefore, the same could not be treated as basic wages.
9. Feeling aggrieved, the petitioner preferred present Writ Petition against the impugned order dated 20.10.2010.
10. The learned counsel for the petitioner submitted that the order passed by the Appellate Tribunal was against justice, equity and good conscience and the same was liable to be set aside. He submits that the Hon'ble Tribunal failed to appreciate that the respondent establishment was ent
