The judgment established the principle that special allowances linked to specific work constitute basic wages and attract provident fund liability. It also emphasized the nullity of agreements contrary to statutory provisions and the importance of prompt compliance with welfare legislation.

Y. VENKATACHALAM, J.

Invoking Article 226 of the Constitution of India, the petitioner herein has filed the present writ petition seeking for a writ of certiorari to call for the records in proceedings No. C4/TN/2622/Regl/91 on the file of the respondent, viz., the Regional Commissioner, Employees' Provident Fund, Tamil Nadu and Pondicherry, Madras - 600 014, and to quash the impugned order dated August 9, 1991, made by the respondent.

In support of the writ petition, the petitioner herein has filed an affidavit wherein they have narrated all the facts and circumstances that forced them to file the present writ petition and requested this Court to allow the writ petition as prayed for. Per contra, in the counter-affidavit filed by the respondent, they have rebutted all the material allegations levelled against them one after the other and ultimately they have requested this Court to dismiss the writ petition for want of merit.

Heard the arguments advanced by learned counsel appearing for the respective parties. I have perused the contents of the affidavit and the counter-affidavit together with all other relevant material documents available on record in the form of typed set of papers. I have also taken into consideration the various contentions raised by learned counsel appearing for the respective parties during the course of their arguments.

In the above facts and circumstances of the case, the only point that arises or consideration in this case is, as to whether there are any valid grounds to allow this writ petition or not. The brief facts of the case of the petitioner as seen from the affidavit are as follows : the petitioner-company is carrying on business at various places and has its registered office at Madras. It also owns a factory at Pallavaram. Altogether about 230 employees are employed in the petitioner-company and out of the same about 122 are employed as permanent workers. Three are employed as temporary workers, three are employed as sweepers and three others are employed as bearers in the head office. Apart from this about 69 employees are employed as executives and 30 other employees who are working in the various other branches of the company situated at Vizag, Ernakulam, Hyderabad, Bombay, Bangalore, Delhi and Calcutta. The petitioner-company is an "employer" as defined under Section 2(a) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Under Section 17(1)(a) of the said Act, the petitioner-company has been exempted from the operation of the Employees' Provident Funds Scheme, 1952. As such the contribution under the Act is being regularly remitted to the trustees who manage the Provident Fund Scheme as per the said exemption under Section 17(1)(a). According to them, prior to January 1, 1976, the working days in the company were 5 days a week, i.e., totally 35 hours a week with Saturday and Sunday as holidays. However, under a settlement dated September 15, 1976, entered into between the company and its union under Section 12(3) of the Industrial Disputes Act, 1947, it was, inter alia, agreed in Clause (4) of the settlement that the management would pay a Saturday allowance of Rs. 20 p.m. to all permanent employees. The reason behind this concession, although it does not ex facie appear in the settlement was that the management originally had five days a week, by Section 9-A of the Industrial Disputes Act notice dated March 5, 1976, the management and the union agreed to work for half a day on Saturday also, although the total number of working hours per week were actually reduced from 35 hours to 34.25 hours. For reintroducing the above system no increase in the wages payable to the employees were made because they worked for a lesser number of working hours per week as mentioned above. The petitioner-company considering the fact that the employees will incur further expenses such as transport for attending to work and other incidental special expenses on Saturdays agr