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2024 Supreme(All) 1026
IN THE HIGH COURT OF ALLAHABAD
Hon'ble Manish Mathur,J.
Ram Kumar And Another – Petitioner
Versus
State Of Uttar Pradesh Thru. Addl. Chief Secy. Deptt. Agriculture Marketing/Foreign Trade Lko. And Others – Respondents
WRIT - A No. - 5019 of 2024
Decided On : 08-07-2024
Advocate Appeared:
For the Petitioner: Jitendra Singh, Abhinav Singh
For the Respondent: C.S.C.,Naresh Chandra Mehrotra
IMPORTANT POINT
The court established that the provisions of the Provident Funds Act, 1925 impose a mandatory duty on authorities to pay interest on Provident Fund contributions without arbitrary restrictions based on internal regulations.
Headnote:
PROVIDENT FUND - INTEREST PAYMENT - Provident Funds Act, 1925 - Section 4; Uttar Pradesh Rajya Krishi Utpadan Mandi Parishad Contributory Provident Fund Regulations, 1978 - Regulations 6(4), 17 - The court interpreted Section 4 of the Provident Funds Act, 1925, which mandates the payment of sums due to subscribers upon superannuation, and found that the restriction of interest payment to one year as per Regulation 6(4) of the 1978 Regulations was contrary to the Act. The court emphasized that the statutory provisions of the Act prevail over the Regulations, leading to the conclusion that the petitioners were entitled to interest from the date of superannuation until actual payment. The court quashed the impugned orders and directed the payment of due interest.
Fact of the Case:
The petitioners challenged orders restricting interest payment on their Provident Fund contributions to one year post-superannuation, arguing that such restriction was contrary to Section 4 of the Provident Funds Act, 1925.
Finding of the Court:
The court found that the restriction imposed by Regulation 6(4) of the 1978 Regulations was inconsistent with Section 4 of the Act of 1925, which mandates timely payment of dues without imposing application requirements on the subscribers.
Issues: Whether the restriction of interest payment to one year post-superannuation is valid under the Provident Funds Act, 1925 and the relevant Regulations.
Ratio Decidendi: The court held that the statutory provisions of the Provident Funds Act, 1925 take precedence over the Regulations, and that there is no legal basis for limiting interest payments to one year post-superannuation.
Final Decision: The court quashed the impugned orders and directed the payment of interest on the Provident Fund contributions from the date of superannuation until actual payment, to be completed within six weeks.
JUDGMENT :
Hon'ble Manish Mathur, J.
1. Heard learned counsel for petitioners, learned State Counsel for opposite party no.1 and Mr. N. C. Mehrotra, learned counsel for opposite parties 2 to 4.
2. Petition has been filed challenging orders dated 14.09.2021 and 18.12.2021 whereby payment of interest due upon petitioners' contribution to Provident Fund has been restricted to a period of one year only from the date of superannuation.
3. Learned counsel for petitioners has submitted that petitioners superannuated from service on 31.12.2015 and 30.09.2016 respectively whereafter in terms of Section 4 of Provident Funds Act, 1925(hereinafter referred to as the Act of 1925), it was incumbent upon the authorities concerned to have made payment along with due interest on the contribution under Provident Fund Scheme. It is submitted that impugned orders have placed reliance on Regulation 6(4) of Uttar Pradesh Rajya Krishi Utpadan Mandi Parishad Contributory Provident Fund Regulations, 1978 (hereinafter referred to as the Regulations of 1978) to restrict payment of interest on the aforesaid Scheme only for a period of one year. Learned counsel for petitioners has thereafter adverted to the fact that Regulation 6(4) of the Regulations of 1978 itself places reliance on Regulation 17 of the Regulations of 1978, which in turn places reliance on Section 4 of the Act of 1925.
4. He has also placed reliance on judgment and order dated 01.10.2021 rendered by a coordinate Bench of this Court in Writ Petition no.14528(S/S) of 2021, Raghuvir Sharma v. State of Uttar Pradesh and others to submit that aforesaid judgment clearly indicates that it is unjustified and inequitable to keep the earned interest on the deposits by the Mandi Parishad. It is submitted that the aforesaid judgment was challenged in Special Appeal No. 359 of 2022 which was dismissed vide judgment and order dated 16.12.2023, which has attained finality. It is therefore submitted that restriction of payment of interest to only one year is contrary to Section 4 of the Act of 1925 read with Regulation 17 of the Regulations of 1978.
5. Learned counsel appearing for opposite parties 2 to 4 has refuted the submissions advanced by learned counsel for petitioners with the submission that in terms of the specific provisions of Regulation 6(4) of the Regulations of 1978, opposite parties were entitled to restrict payment of interest for a period of one year from the date of petitioners' retirement as delay in payment occasioned on their account since they made applications for payment of Provident Fund only on 06.04.2017 and 15.01.2019 respectively although they had superannuated on 31.12.2015 and 28.09.2016 respectively. It is therefore submitted that it is in view of specific provisions in the Regulations of 1978 that the impugned order has been passed.
6. Upon consideration of submissions advanced by learned counsel for the parties and perusal of material on record particularly the impugned order, it is evident that payment of interest to petitioners has been restricted for the period of one year only from the date of superannuation placing reliance on Regulation 6(4) of the Regulations of 1978 while holding that delay in payment was only on account of the petitioners.
7. It is quite evident that Regulation 6(4) of the Regulations of 1978 is subject to Regulation 17 of the said Regulations, which in turn is subject to Section 4 of the Act of 1925. It is therefore the statutory provisions of the Act of 1925 which would prevail in such circumstances.
8. The provisions of Section 4 of the Act of 1925 pertains to repayments and mandates that when the sum standing to the credit of any subscriber or depositor, or balance thereof after making authorised deduction, has become payable, the officer whose duty it is to make the payment shall pay the sum or balance to the subscriber or depositor.
9. Relevant provisions of Section 4 of the Act of 1925 reads as follows:-
"4. Provisions regarding repayments. -(1)
