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1962 Supreme(MP) 84
High Court Of Madhya Pradesh
P. V. Dixit, C. J. and K. L. Pandey, J.
SOLANKI WORKSHOP - Appellant
Versus
REGIONAL PROVIDENT FUND COMMISSIONER - Respondents
Misc. Petn. 12 Of 1962
Decided On : 07/10/1962
H.L.KHASKALAM, J.V.JAKATDAR, RAMA GUPTA
The employer is liable to pay the employees' contribution to the provident fund under the Employees' Provident Funds Act, 1952, and the Employees' Provident Funds Scheme, 1952, and paragraph 30 of the Scheme, which imposes such liability on the employer, is valid.
Headnote:
EMPLOYEES' PROVIDENT FUNDS ACT, 1952 - SECTIONS 5, 6(1), 6(2) AND SCHEDULE II ITEM 2 - EMPLOYEES' PROVIDENT FUNDS SCHEME, 1952 - PARAGRAPHS 29, 30, 31 AND 32 - LIABILITY OF EMPLOYER TO PAY EMPLOYEES' CONTRIBUTION - VALIDITY OF PARAGRAPH 30 OF THE SCHEME - INTERPRETATION OF SECTION 6(1) AND PARAGRAPH 30 OF THE SCHEME.
Fact of the Case:
The petitioner, a managing partner of a registered firm engaged in lathe and foundry works, challenged the validity of an order from the Regional Provident Fund Commissioner asking the firm to implement the provisions of the Employees' Provident Funds Act, 1952, and the Employees' Provident Funds Scheme, 1952, and to deposit the firm's contribution and that of the employees for a specified period. The petitioner argued that the Act did not make the employer liable for the payment of the employees' contribution and that paragraph 30 of the Scheme, which imposed such liability, was ultra vires the Act.
Finding of the Court:
The court held that the Act and the Scheme made it obligatory on the employees to pay their minimum prescribed contribution, which was equal to the employer's contribution of 6 1/4 percent of the basic wages and dearness allowance. Paragraph 30 of the Scheme, which required the employer to pay both the employer's and the employees' contribution in the first instance, was not inconsistent with the Act and was a valid exercise of the power granted to the government under Section 6(2) and Schedule II Item 2 of the Act.
Issues: 1. Whether the employer is liable to pay the employees' contribution under the Employees' Provident Funds Act, 1952, and the Employees' Provident Funds Scheme, 1952? 2. Whether paragraph 30 of the Scheme, which imposes such liability on the employer, is ultra vires the Act?
Ratio Decidendi: 1. Section 6(1) of the Act fixes the contribution payable by the employer and the employees to the provident fund. It makes it obligatory on the employees to pay their minimum prescribed contribution, which is equal to the employer's contribution of 6 1/4 percent of the basic wages and dearness allowance. 2. Paragraph 29 of the Scheme is in similar terms and does not give any option to the employees to opt out of the Scheme. 3. Paragraph 30 of the Scheme, which requires the employer to pay both the employer's and the employees' contribution in the first instance, is not inconsistent with Section 6(1) of the Act and is a valid exercise of the power granted to the government under Section 6(2) and Schedule II Item 2 of the Act.
Final Decision: The petition was dismissed with costs, and the petitioner was ordered to pay the employer's and employees' contribution for the specified period.
( 1 ) IN this case the petitioner, who is the managing partner of a registered firm engaged in lathe and foundry works and repairs of machinery, challenges the validity of an order of the Regional Provident Fund Commissioner, Indore, asking the firm to implement the provisions of the Employees' Provident Funds Act, 1952, and the Employees' Provident Funds Scheme, 1952, on the pain of penalties prescribed by the Act and the scheme, and of a direction to the petitioner to deposit the firm's contribution and that of the employees for the period, from 1st january 1961 to 30th November 1961. The petitioner prays that a writ of certiorari be issued for quashing these orders and a direction restraining the respondents from taking any action against the petitioner under the Act or the Scheme be made.
( 2 ) WHEN the employees' Provident Funds Act, 1952 (hereinafter referred to as the act) was amended by the Employees' Provident Funds (Amendment) Act, 1960, and the Act became applicable to the petitioner's workshop from 31st December 1960, the Regional Provident Fund Commissioner asked the petitioner to supply certain information concerning the number of employees, their emoluments etc. This information was supplied by the petitioner in due course. On 23rd September, 1961 the respondent No. 1 drew the attention of the petitioner to the provisions of the Act and to the necessity on the part of the petitioner of implementing the provisions of the Act and the Scheme. In reply, the petitioner forwarded a representation of the employees in the concern with regard to their inability to make contributions to the provident funds scheme. The respondent No. 1 again informed the petitioner on 2nd November, 1961 that the provisions of the Act and the Scheme were mandatory and that no employee could be allowed to go out of the ambit of the Act and the Scheme; and that the responsibility for the enforcement of the Act and the Scheme as well as for the payment of the contributions of the employer and the employees lay on the petitioner. Even after this intimation the petitioner took no steps for implementing the provisions of the act and the Scheme. Thereupon the respondent No. 1 deputed an Inspector for an inspection of the petitioner's workshop. The Inspector submitted a report and also called upon the applicant to deposit immediately the firm's contribution and that of the employees for the period from 1st January, 1961 to 30th November, 1961.
( 3 ) SHRI Jakatdar, learned counsel appearing for the petitioner, contended that the act nowhere made the employer liable for the payment of the employees' contribution; that Section 6 (1) of the Act only related to the liability of the employer for the payment of his own contribution; and that the provision in paragraph 30 of the Scheme laying down that the employer shall, in the first instance, pay the contribution payable by himself and also on behalf of the employees was ultra vires the provisions of the Act and particularly Sections 5 and 6 thereof. It was further argued that even under paragraph 30 of the Scheme the liability of the petitioner for the payment of contribution was limited to the "first instance" that is to say, for the payment of the contribution only for the month of January, 1961. Learned counsel for the petitioner suggested that item 2 of Schedule II to the Act read with paragraph 30 of the Scheme made an employer liable for the payment of the employees' contribution only if the employees so desired; and that as in the present case the employees were not willing to contribute to the fund, no liability for the payment of their contribution could be fastened upon the petitioner.
( 4 ) IN our judgment there is no substance in any of these contentions. Section 5 of the Act empowers the Central Government to frame a provident fund scheme in accordance with the Act for any employees or any class of employees in specified establishments or class of establishments. Section 6 (1)
