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2015 Supreme(Del) 2694

IN THE HIGH COURT OF DELHI
PRADEEP NANDRAJOG, MUKTA GUPTA, JJ.
M/s SDB Infrastructure Pvt. Ltd. (Formerly Somdatt Builders Pvt. Ltd.) & Ors. - Appellants
Versus
Union of India & Ors. - Respondents
LPA 727, 728, 729 & 730/2014
Decided on : 16-10-2015

Advocates:
Advocate Appeared:
Mr. Rakesh Tiku, Mr. Jeevesh Nagrath, Mr. Rajeshwar K. Gupta, for appellants
Mr. Jasmeet Singh, Ms. Ashta Sharma, for R-1
Mr. R.C. Chawla, for Central PF Commissioner

Headnote:

Employees Provident Fund - Amendment to Scheme - Para 26(2) - Summary of Acts and Sections: The court discussed the amendment to the Provident Fund Scheme, specifically Para 26(2), and the challenges related to the workability of the scheme, portability of workmen, and withdrawal of funds. The vires of the amendment to the scheme was upheld by the Supreme Court in a related case. The court also considered the definition of 'employee' under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The Division Bench did not issue a mandamus requiring compliance with the modified scheme, and the issue of portability of workmen was separate from the employer's liability to make deductions and deposits as per the amended scheme.

JUDGMENT :

Pradeep Nandrajog, J.

1. By a notification dated September 17, 1964 establishments of Engineers, Engineering Contractor which were not exclusively engaged in building and construction activity were brought within the purview of the Employees Provident Fund and (Miscellaneous) Provisions Act, 1952. By a subsequent notification dated September 23, 1980, the building and construction establishments were also brought within the purview of the Act with effect from October 31, 1980. By a notification dated November 01, 1990, Para 26(2) of the Provident Fund (Miscellaneous) Provisions Scheme, 1952 was amended. The amendment reads as under:-

“After this paragraph come into force, in a factory or other establishment, every employee employed in or in connection with the work of that factory or establishment other than excluded employee who has not become a member already shall be entitled and required to become a member of the fund from the date of joining the factory or establishment.”

2. A writ petition was filed in this Court which was registered as W.P.(C) No.792/1991 : Pyare Lal Hari Singh vs. Union of India & Ors. Vires of para 26(2) of the Scheme was challenged and amongst others, one ground of challenge was that the scheme as amended by para 26(2) was unworkable. The unworkability of the scheme was predicated on the ground that in the construction activity many workers work for one or two months with an employer and then move on to another. The query was posed : how would portability of the workman be accounted for when the benefit of the amount deposited by the employer in the fund would be required to be paid to the workman? An ancillary issue concerning Scheme 2(f) of the Employees Provident Fund and (Miscellaneous) Provisions Act, 1952 was also raised.

3. The Division Bench of this Court before which the writ petition was listed took note of the fact that the scheme as amended would not entail any benefit to the workman who would work for a few days at one place under one employer and then move on to another and thereafter another followed by another and so on, because there was no mechanism to track the workman and additionally the workman would have no logistics to withdraw the money lying in the fund in his name. On November 27, 1991 an order was passed which brings out an attempt made to resolve the issue with reference to the suggestion by the Employees Provident Fund Commissioner that a pass-book could be issued in the name of the employee in which the amount credit in his name in the fund by the employer could be entered by the employer and withdrawal could be permitted from any place. The order reads:-

“27/11/1991

Present:-Counsel for the Petitioner.

C.W.P. No.792/91

Additional affidavit has been filed but in our opinion the problem is not resolved. Merely having a pass-book will not serve any useful purpose because in the very nature of things a migrant labourer goes from the place to the other and there is no solution as to how and from where the migrant labourer would be able to withdraw the money due to him. These and other related problems should be considered and a more detailed and an effective proposal for a scheme should be presented to the Court on the next date of hearing.

Adjourned to 20th January, 1992. Interim orders to continue.

A copy of the order be given dasti to counsel for the respondents.”

4. Another affidavit was filed thereafter by the Provident Fund Commissioner setting forth the proposals by the authorities to put in place a working mechanism for the employee to avail the benefit of the amount credited in his name in the fund by different employers under whom the workman worked from time to time. Reflecting thereon, on May 19, 1992, the Division Bench passed another order which reads as under:-

“19-5-1992

Present:- Mr. Rajiv Nayar, Advocate,

Mr. R.K. Kapur, Advocate,

Mr. Kuldip Pabley, counsel in items 24, 25, 43, 84.

Mr. M.R. Chawla, Advocate for the Petitioners

Mr. S. Mukherjee, Advocate

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