The main legal point established in the judgment is that the canteen allowance paid by the employer constitutes 'basic wages' under Section 2(b) of the E.P.F. Act and is subject to Provident Fund contribution.

JUDGMENT

Gaurang Kanth, J.

1. The present petition is filed under Articles 226 and 227 of the Constitution of India impugning the order dated 17.12.1999 (hereinafter referred to as the "Impugned Order") passed by the Employees Provident Fund Appellate Tribunal, New Delhi (Respondent No.3) in Appeal No. ATA-16(8)1999 titled as `M/s Whirlpool of India Ltd. v. Regional Provident Fund Commissioner, Faridabad (Haryana)'. Vide the aforesaid Impugned Order, the Respondent No.3 dismissed the appeal and confirmed the order dated 28.07.1999 passed by Regional Provident Fund Commissioner, Faridabad (Respondent No.1) under Section 7-A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "E.P.F. Act").

FACTS RELEVANT FOR ADJUDICATION OF THE PRESENT WRIT PETITION

2. On 13.10.1995, the Petitioner Company, during the course of conciliation proceedings under Section 12(3) of the Industrial Disputes Act, 1947 ("I.D. Act"), entered a long-term settlement with its workmen union under the provisions of the I.D. Act. A Memorandum of Settlement (Annexure P-7) was signed between the Petitioner and the workmen of the Petitioner Company, whereby the Petitioner extended several benefits to the employees including upward revision of basic wages, revision of house rent allowance, variable productivity allowance, attendance allowance, night shift allowance, canteen allowance etc. Vide the said settlement, the canteen services were reorganized. The Petitioner discontinued the subsidized canteen facility and started paying Rs.300/- per month as canteen allowance to the workmen w.e.f. 01.11.1995. Relevant extract of the settlement is reproduced herein below:

"b) CANTEEN ALLOWANCE The workman will be paid Rs. 300/- (Rupees three hundred only) per month as Canteen allowance with effect from 1st January, 1996 in lieu of prevailing subsidized canteen facilities and will be proportional to the physical presence during the month. Even the half day availed by the workmen will be taken into account while calculating the canteen allowance..."

3. In the year 1995-96, the Enforcement Officer inspected the Petitioner's records on several occasions and on 18.09.1997 determined that the Provident Fund Contribution is payable on canteen allowance which is being paid by the Petitioner to its employees. The Enforcement Officer noted that the canteen allowance at the rate of Rs.300/- per month has been paid in lieu of the subsidized canteen facilities earlier available, therefore, it is nothing but `cash value of food concession' which is subject to the contribution towards the Provident Fund.

4. Raising its objection with respect to the aforesaid assessment of the Enforcement Officer, the Petitioner made a representation on 23.10.1997 to the Regional Provident Fund Commissioner, stating that Rs.300/- per month has been provided as `food allowance' to its employees, not as `value of food concession'. By virtue of that, such allowance falls under exception of Section 2(b)(ii) of the E.P.F. Act, and not under Section 6 of the E.P.F. Act.

5. Vide the letter dated 16.03.1998, the Regional Provident Fund Commissioner (RPFC)/Respondent No.1 replied to the representation made by the Petitioner, wherein it was stated that undoubtedly the canteen allowance which is being paid by the Petitioner cannot be treated as `basic wages' in terms of Section 2(b)(ii) of the E.P.F. Act. It was further replied by the Respondent No.1 that since prior to the introduction of canteen allowance, the Petitioner was rendering canteen service on subsidized basis to the employees which was substituted by canteen allowance, and therefore, it acquires the nature of cash value of food concession which attracts the provisions of Section 6 of the E.P.F. Act for computing the Provident Fund contribution.

6. Another representation was made by the Petitioner on 01.04.1998, wherein the Petitioner reiterated its position that the canteen allowance paid by them is not