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2014 Supreme(Del) 2798
DELHI HIGH COURT
V. Kameswar Rao, J.
Regional P.F. Commissioner - Appellant
Versus
SIEL Foods and Fertilizer Industries & Anr. - Resopndent
W.P.(C) 4034/2000 & W.P.(C) 4035 of 2000
Decided On : 14-07-2014
For the Petitioner:Mr. Rajesh Manchanda, Advocate.
For the Respondent No. 1:Mr. Sandeep Prabhakar and Mr. Vikas Mehta, Advocates.
Headnote:
Employees’ Provident Fund - Challenge to Tribunal's Order - Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 - Summary: The court considered whether transporters’ workers are covered within the definition of ‘employees’ under Section 2 (f) of the Act and whether the dues should be paid on the productivity/incentive link bonus. The court found that the transporters’ workers were not covered as employees under the Act and that the bonus paid by the respondent cannot be included in the definition of ‘basic wages’ as defined under the Act.
Fact of the Case:
The petitioner alleged that the respondent No. 1-establishment failed to extend Provident Fund benefits to transport contractors’ workers and failed to pay Provident Fund contributions on special allowance and arrears of Provident Fund dues on salaries. The Tribunal ultimately passed an order determining the liability of the respondent No. 1 to be of Rs. 13,97,742/- payable to the petitioner within a period of 15 days.
Finding of the Court:
The court found that the transporters’ workers were not covered as employees under the Act and that the bonus paid by the respondent cannot be included in the definition of ‘basic wages’ as defined under the Act.
Issues: The issues were whether transporters’ workers are covered within the definition of ‘employees’ under Section 2 (f) of the Act and whether the dues should be paid on the productivity/incentive link bonus.
Ratio Decidendi: The court held that the transporters’ workers were not covered as employees under the Act and that the bonus paid by the respondent cannot be included in the definition of ‘basic wages’ as defined under the Act.
Final Decision: The writ petitions filed by the petitioner were dismissed.
1. Since these two writ petitions involves challenge to a common order dated January 07, 2000 passed by the Employees’ Provident Fund Appellate Tribunal (Tribunal, in short) in two appeals i.e. ATA 4/(7) 1999 and ATA/4(10) 1998 between the parties herein, with the consent of the learned counsel for the parties, are being disposed of by this common order. The parties shall be referred as petitioner and respondent No. 1, as per their status in W.P.(C) No. 4035/2000.
2. Vide the impugned order, the aforesaid appeals filed by the respondent No. 1 herein have been allowed and the orders dated December 02/06, 1994 and July 17, 1998 have been set aside. The brief facts, as culled out from the record are, the petitioner alleged that a team of Enforcement Officers visited the respondent No. 1-establishment and found that the respondent No. 1-establishment failed to extend Provident Fund benefits to transport contractors’ workers; failed to pay Provident Fund contributions on special allowance and also failed to pay arrears of Provident Fund dues on salaries upto to the limit of Rs. 3500/- with respect to 19 employees w.e.f. November 01, 1990. On October 15, 1991, summons were issued for determination of Provident Fund dues payable by the respondent No. 1-establishment. On December 02, 1994, the competent authority under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (Act, in short) held that the respondent No. 1-establishment was liable to pay dues with respect to the transport contractors’ employees for the period effective from November 01, 1990 till that date and further, was directed to produce records for determination of dues.
3. The respondent No. 1-establishment filed writ petition being W.P.(C.) No. 559/1995 before this Court, challenging the order dated December 02/06, 1994. On July 17, 1998, the Tribunal ultimately passed an order under Section 7A of the Act, determining the liability of the respondent No. 1 to be of Rs. 13,97,742/- payable to the petitioner within a period of 15 days. The Writ Petition (C) No. 559/1995 was dismissed, giving the respondent No. 1 liberty to file appropriate proceedings before the Tribunal within two weeks. It is noted that two appeals came to be filed against order dated July 17, 1998. The number being ATA/4/(7) 1999 & ATA/4(10) 1999. On completion of pleadings, the appeals against the order dated July 17, 1998 were heard together and which culminated in the impugned order.
4. It is the submission of Mr. Rajesh Manchanda, learned counsel appearing for the petitioner that the Tribunal has erred in allowing the appeals inasmuch as in terms of the definition of the ‘employees’ under Section 2 (f) of the Act, the liability of the contractors’ employees is on the respondent No. 1 herein. The employees through contractors were performing regular/essential work of the respondent No. 1 and the work is a recurring and regular feature. It was also his submission that any bonus paid to an employee or a worker shall be basic wages. According to him, incentive bonus being paid to its employees by the respondent No. 1, would be termed as basic wages, on which, the Provident Fund dues need to be paid. He would rely upon the following judgments in support of his case:
1. Orient Paper Mills v. Regional Provident Fund Commissioner and Anr., (2006) I LLJ 1136 MP.
2. M.M.T.C. Ltd., New Delhi v. Regional Provident Fund Commr., New Delhi, 193 (2012) DLT 229, (2013) I LLJ 192 Del.
3. P.M. Patel and Sons and Ors. v. Union of India (UOI) and Ors., AIR 1987 SC 447
5. On the other hand, Mr. Sandeep Prabhakar, learned counsel appearing for the respondent No. 1 would support the judgment of the Tribunal and states that the transport workers are the workers of the transporters and are not employed by the respondent No. 1 directly or indirectly. According to him, the respondent No. 1 has entered into contracts with transporters for transportation of the m
