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2020 Supreme(MP) 111
MADHYA PRADESH HIGH COURT BENCH AT INDORE
S.C. Sharma, Shailendra Shukla, JJ.
Carewell Security Services Private Limited - Appellant
Versus
Employees Provident Fund Organization - Respondent
Writ Petition No. 14287 of 2010, 14332 of 2010, 14406 of 2010, 14407 of 2010, 14410 of 2010, 14415 of 2010, 14418 of 2010, 14478 of 2010, 14479 of 2010, 14480 of 2010, 14481 of 2010, 14594 of 2010, 138 of 2011, 341 of 2011, 343 of 2011, 344 of 2011, 491 of 2011, 492 of 2011, 685 of 2011, 813 of 2011, 1431 of 2011, 1767 of 2011, 2500 of 2011, 6107 of 2011, 6749 of 2015, 900 of 2016, 3482 of 2016, 3486 of 2016, 3620 of 2016, 3626 of 2016, 5831 of 2016
Decided On : 18-03-2020
G.S. Patwardhan, Advocate, Sanjay Sharma, Advocate
The judgment establishes the interpretation of basic wages and the employer's obligation to deduct and deposit Provident Fund contributions under the Act of 1952.
Headnote:
Employees Provident Fund - Dispute on Provident Fund dues - Employees Provident Fund and Miscellaneous Provisions Act, 1952 - Section 2(b), Section 6, Section 7A, Section 7Q, Section 14B - The judgment discusses the controversy over the definition of basic wages and the calculation of Provident Fund contributions. It highlights the exclusion of dearness allowance and other similar allowances from basic wages, and the obligation of the employer to deduct and deposit the contributions. The court's decision is influenced by the interpretation of basic wages and the employer's attempt to avoid deduction and contribution.
Fact of the Case:
The petitioner, a company providing security guards, contested a notice from the Regional Provident Fund Commissioner to deduct Provident Fund dues from wages paid to the workmen. The petitioner argued that the wages were compliant with the Act of 1952 and objected to the order to pay Provident Fund contributions on minimum wages. The petitioner also cited previous tribunal judgments and argued that the impugned orders were bad in law.
Finding of the Court:
The court found that the establishment had bifurcated payments to reduce Provident Fund liability and had failed to demonstrate that the allowances were variable or linked to production incentives. The court upheld the orders of the Provident Fund Commissioner and the Appellate Tribunal, dismissing the writ petition and allowing the petitions filed by the Central Board of Trustees Employees Provident Fund Organization.
Issues: Controversy over the definition of basic wages, calculation of Provident Fund contributions, and employer's attempt to avoid deduction and contribution.
Ratio Decidendi: The Act of 1952 provides for compulsory deduction on basic wages excluding dearness allowances and other similar allowances. The court relied on the interpretation of basic wages and the employer's attempt to avoid deduction and contribution to uphold the orders of the Provident Fund Commissioner and the Appellate Tribunal.
Final Decision: The writ petition was dismissed, allowing the Provident Fund Commissioner to proceed against the establishment for levy of damages and interest. The connected writ petitions filed by the Central Board of Trustees Employees Provident Fund Organization were allowed, quashing the impugned order passed by the Presiding Officer, Employee Provident Fund Appellate Tribunal.
JUDGMENT
S.C. Sharma, J. - Regard being had to the similitude in the controversy involved in the present cases, these writ petitions were analogously heard and by a common order, they are being disposed of by this Court. Facts of the Writ Petition No.14287/2010 are narrated hereunder.
The petitioner before this Court has filed this present petition being aggrieved by the order dated 30.11.2010 passed by the Employee Provident Fund Appellate Tribunal in ATA No.372 (8)/10.
2. The facts of the case reveal that the petitioner is company incorporated under the provisions of the Companies Act and is engaged in the business of providing security guards to various establishment. A notice was issued by the Regional Provident Fund Commissioner, Indore under the provision of Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred as the Act of 1952) directing the employer to deduct Provident Fund dues from the wages paid to the workman. In the notice, it was also observed that the wages shown by the employer are negligible and are even lesser to the wages prescribed under Minimum Wages Act. The notice was issued to ensure proper payment of Provident Fund dues payable to the workers. The petitioner did submit a reply to the aforesaid notice dated 29.01.2008 and stated that they are complying with the provisions of the Act of 1952 and they are deducting Provident Fund on the wages paid to the workman and the wages fixed under the Minimum Wages Act cannot be made the basis for deducting Provident Fund dues.
3. The Regional Provident Fund Commissioner, Indore by an order dated 02.06.2009 rejected the objection of the petitioner and has held that the petitioner has to pay Provident Fund contributions on the minimum wages. The petitioner's contention is that without taking into account the objection raised by the petitioner and the arguments canvassed on behalf of the petitioner, the order dated 02.06.2009 has been passed. Thereafter, the petitioner has preferred an appeal before the Employee Provident Fund Appellate Tribunal and the appeal was dismissed by an order dated 30.11.2010. The petitioner is aggrieved by the order passed by the Employee Provident Fund Commissioner dated 02.06.2009 and the order passed by the Employee Provident Fund Appellate Tribunal dated 30.11.2010.
4. The petitioner's contention is that the impugned orders are bad in law as earlier in the past, the Employee Provident Fund Appellate Tribunal has delivered a judgment in Case No.ATA/04 (17)/1999 dated 01.05.2000 and has taken a view that the allowances / perks given to the employees cannot be included within the definition of wages. It has also been argued that in similar case i.e. V.M. Salgaocar & Bros Private Limited v/s APFC, Panaji decided on 26.11.2007 in ATA No.96 (9)/2005, the Tribunal has taken a similar view that allowances / perks are not included within the meaning of wages. It has been stated that the Tribunal is taking a different view in different cases and the action of the Tribunal by taking a contrary view is bad in law. The Tribunal ought to have assigned special reason from deviating from the view already taken earlier.
5. It has also been argued by Shri Patwardhan that no contribution can be claimed on allowances. Section 2B of the EPF Act does not cover any allowances payable to the employees. He has also argued that by no stretch of imagination, Dearness Allowance can be included within the meaning the basic wages, and therefore, the Tribunal has erred in law and facts in dismissing the appeal preferred by the petitioner.
6. It has also been argued that by no stretch of imagination deduction cannot be done by including allowances, and therefore, the Regional Provident Fund Commissioner as well as the Employee Provident Fund Appellate Tribunal have erred in law and facts and have passed the impugned orders contrary to the provisions as contained under the Act of 1952. It has been argued that word expressions is not de
