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2011 Supreme(Mad) 3987
High Court of Judicature at Madras
K. CHANDRU
M/s Siwalik Matriculation and Higher Secondary School rep. By its Correspondent M. Selvanayagam
Versus
The Assistant Provident Fund Commissioner & Another
W.P.No.19523 of 2005
Decided On : 20-09-2011
Advocate Appeared:
For the Petitioner:A. Arulmozhi, Advocate.
For the Respondents:K. Ramu, Advocate.
The authorities have the power to go beyond the terms provided to find out the contribution in terms of Section 2b of the Wages Act.
Headnote:
Employees' Provident Funds - Matriculation School - The court dismissed the writ petition challenging the order passed by the Assistant Provident Fund Commissioner, which rejected the petitioner's request for reviewing the order passed under Section 7A of the EPF Act. The court held that the authorities have the power to go beyond the terms provided to find out the contribution in terms of Section 2b of the Wages Act.
Fact of the Case:
The petitioner, a Matriculation School, challenged the order passed by the Assistant Provident Fund Commissioner, which rejected the petitioner's request for reviewing the order passed under Section 7A of the EPF Act.
Finding of the Court:
The court dismissed the writ petition, stating that the authorities have the power to go beyond the terms provided to find out the contribution in terms of Section 2b of the Wages Act.
Issues: The main issue was whether the authorities had the power to include allowances, excepting House Rent Allowance, as basic wages for the purpose of calculating Provident Fund.
Ratio Decidendi: The court held that the authorities have the power to go beyond the terms provided to find out the contribution in terms of Section 2b of the Wages Act.
Final Decision: The writ petition was dismissed, and the court directed the respondent to take note of the fact that the petitioner had already paid some amount as ordered by the court, and only the payment of the balance of the said amount is required.
1. The petitioner is a Matriculation School and in this writ petition, they have come forward to challenge an order passed by the first respondent viz., the Assistant Provident Fund Commissioner, Coimbatore dated 24.05.2005. The said order came to be passed under Section 7B of the Employees' Provident Funds and Miscellaneous Provisions Act(hereinafter referred to as the Act.
2. By the impugned order, the petitioner's request for reviewing the order passed under Section 7A of the EPF Act dated 25.11.2005 was rejected. Aggrieved by the order passed by the respondents, the writ petition came to be filed.
3. The writ petition was admitted on 17.06.2005. Pending the writ petition, this Court granted interim stay on condition that the petitioner pays a sum of Rs.1 lakh within a period of four weeks. It is admitted by the both sides that the said condition imposed by this Court has been complied with.
4. On notice from this Court the respondents have filed a counter affidavit dated 29.08.2011.
5. The facts leading to the filing of the writ petition are as follows:
It is an admitted case that the petitioner's School is covered by the provisions of EPF Act from 1996-1997 when they had employed more than 20 employees. But, while making deduction from the employees, the School management did not take into account the entire wages for the purpose of deduction and they only deducted a sum of Rs.120/- towards dues to the department. This was on the basis that the teachers were paid Basic Pay Rs.600 + D.A. Rs.400/-, the total amount which comes to Rs.1000/-.
6. The authorities disputed the stand of the management. The stand of the management is that in the case of one K.Shanmugasundaram, M.Sc, B.Ed., he was paid with a total salary of Rs.4000/-, but whereas the School Management wanted to show that the salary was subdivided into various items, wherein and by which, it was indicated that Basic pay Rs.600. D.A. Rs.400/- House Rent Allowance Rs.1000, City Compensatory Allowance Rs.450, Evening Tuition Honorarium Rs.900/- Washing and Medical Rs.650/-and it is only from the basic salary, the Provident fund has been deducted. The authorities, on getting instruction from the Enforcement Officer from District Educational Officer, Pollachi found that even a secondary Grade Teacher's basic pay is Rs.4500/-, B.T.Graduate Assistant is Rs.5,500/-, and Post Graduate Assistant is Rs.6,500/- and therefore, in respect of those schools, out of the basic pay, 61% is paid as DA. Therefore, they refused to accept the stand of the management that only Rs.1000/- is eligible for calculation for Provident Fund. It is in that view of the matter, an order under Section 7A was passed directing the management to pay the dues towards balance amount, but in that process, they have excluded House Rent Allowance of Rs.1000/-from being collected for the deduction.
7. Aggrieved by the order passed under Section 7A of the Act, by order dated 25.11.2004, the petitioner preferred review under Section 7B of the Act and after giving opportunity to the petitioner School, the Provident Fund Authorities refused to agree the statement that only Rs.1000/- was eligible for deduction under "basic wages" within the meaning of 2(b) of the Wages Act.
8. The contention raised by the petitioner was that the jurisdiction exercised by the authorities was exceeded and they have no right to include the 'basic wages", is not agreed by the authorities.
9. In the counter affidavit filed by the respondent, it was contended that the authority under Section 7A of the Act is competent to go beyond the claim made by the management and even the allowance excepting HRA was considered to be as the basic wages. The question whether a particular statement furnished by the management with reference to the quantum of wage alone should be calculated or whether the authorities are entitled to go beyond the term of appointment and reached the proper calculation for the purpose of claiming wages came to b
