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2012(2) SCC 489
SUPREME COURT OF INDIA
ASOK KUMAR GANGULY & T.S. THAKUR, JJ.
REGIONAL PROVIDENT FUND COMMISSIONER - Appellant(s)
VERSUS
THE HOOGHLY MILLS CO. LTD. & ORS. - Respondent(s)
Civil Appeal No 655 of 2012 (Arising out of SLP(C) No.17298/2009)
Decided on 18-01-2012.
(b) Interpretation of statute – Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – A beneficial social welfare legislation to ensure benefits to the employees. (Para 22)
(1997) 1 SCC 241 – Relied upon
(c) Interpretation of statute – Remedial and Penal statute – Remedial statute receives liberal construction whereas a penal statute calls for strict construction – Doubts in case of Remedial statutes should be resolved in favour of beneficiaries whereas in case of penal laws doubt id resolved in favour of the accused. (Para 24)
(d) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Section 17 and 14 – The Act has to be interpreted in a purposive and holistic manner – So construed, second part of section 17(1A)(a) makes provision of section 14B applicable to exempted establishment also in case of default. (Para 44, 45)
(1993) 4 SCC 441; 245 US 418; AIR 1963 SC 1241; (1948) 2 All ER 995; (1980) AC 74; (1991) 2 SCC 495; (1949) 2 All E.R. 155 (CA) – Relied upon
(e) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Section 14B – Default in payment to the scheme – Scheme includes a private scheme created by the exempted establishment – Default amounts to contravention of section 14B – Damages can be levied. (Para 48)
(1940) 2 All E.R. 401 (Ch.D); (1972) 2 SCC 1 – Relied upon
(f) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Section 17 – Words "so far as may be" – Interpretation – Social legislation should be construed applying principles of social justice – The words should be construed as meaning that "if a deviation becomes necessary to carry out the purposes of the Act, it would be permissible" – The deviation of course should be justified. (Para 50, 51)
(1991) 2 SCC 495; (1980) 4 SCC 3 443; (1957) 2 LLJ 490 – Relied upon
AIR 1985 SC 989 – Referred
AIR 1995 SC 605 – Distinguished
(g) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Section 17 – Words "so far as may be" – Used by legislature by abundant caution – Putting its meaning in straight jacket would defeat the purpose of the Act. (Para 56)
(1952) 1 All E.R. 531 – Relied upon
Facts of the case:
The respondent company was granted exemption under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. After the grant of exemption the respondent Company framed a scheme and created a Trust and appointed a Board of Trustees from the Management of the said Trust fund and was thus enjoying the exemption under Section 17(1A) (a) of the Act.
However there were defaults on the part of the respondent company in making timely payment of dues towards provident fund for the period between October 1999 to October 2000 and then again from November 2000 to July 2002. In view of such admitted defaults, proceedings were initiated against the respondent company.
The Regional Provident Fund Commissioner directed the respondent company to remit an amount of Rs.32,62,153/- by way of damages to the respective accounts, failing which, it was stated that further action as provided under the Act and the Schemes framed thereunder shall be initiated.
Without filing any appeal the respondent company filed a writ petition before the learned Single Judge of the High Court which ultimately upheld the contention of the respondent company. This was confirmed by the Division Bench.
Finding of the Court:
In a case of default by the employer by an exempted establishment, in making its contribution to the Provident Fund Section 14B of the Act will be applicable.
Result: Appeal allowed.
JUDGMENT
Ganguly, J.-Leave granted.
2. The question which falls for consideration before this Court in this case is whether the employer of an establishment which is an `exempted establishment' under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter, `the Act') is subject to the provisions of Section 14B of the said Act whereby in cases of default in the payment of contribution to the provident fund, proceedings for recovery of damages can be initiated against the employer of such an `exempted establishment'.
3. The question was raised by the respondent before the High Court and both the Single Bench and the Division Bench of the High Court have recorded a finding in favour of the respondent and held that the respondent being an `exempted establishment' cannot be subjected to the provisions of Section 14(B) of the Act.
4. The material facts of case are not much in dispute.
5. By notification dated 23.11.1967, the Central Government in exercise of its power under Section 17(1) (a) of the Act granted exemption to the respondent, which is a company registered under the Companies Act subject to the provisions specified in Schedule II annexed to the said notification. The material part of the said notification is as follows:
"S.O. Whereas, in the opinion of the Central Government:
(1) The Rules of the provident fund of the establishment mentioned in Schedule I (hereto annexed and (hereinafter referred to as the said establishments), with the respect to the employees therein then those specified in section 6 of the employees' Provident Fund Act, 1952 (10 of 1952); and
(2) The Employees in the said establishments are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under the Employees' Provident Funds Scheme 1952 (hereinafter referred to as the said School) in relation to the employees in any other establishment of a similar character. Now, thereafter, in exercise of the powers conferred by clause (a) of sub-section (i) of section 17 of the Employees' Provident Fund Act 1952 (19 of 1952), the Central Government, hereby exempt the said establishments with effect from dates mentioned against each of them, respectively from the operation of all the provisions of the said scheme, subject to the conditions specified in scheme hereto annexed, which are in addition to the conditions mentioned in the explanation to sub- section (1) of the said section 17."
6. The respondent company comes under Item No. 5 of the notification. Initially the case of the respondent company is that after the grant of exemption it framed a scheme and created a Trust and appointed a Board of Trustees from the Management of the said Trust fund and was thus enjoying exemption under Section 17(1A) (a) of the Act. It is also common ground that there were defaults on the part of the respondent company in making timely payment of dues towards provident fund for the period between October 1999 to October 2000 and then again from November 2000 to July 2002. In view of such admitted defaults, proceedings were initiated against the respondent company and by notices dated 10.9.2003 and 11.10.2003 enclosing therewith the detailed statement of delayed remittance of provident fund and allied dues. As contemplated under Section 14(B) of the Act, respondent was offered an opportunity to represent their case on several dates by the authorities under the Act and their case was listed for hearing but nobody appeared on their behalf on several dates. Thereafter, on the basis of some representation on their behalf the matter was heard and the Regional Provident Fund Commissioner II, Sikkim and Andaman & Nicobar Islands by a detailed order directed the respondent company to remit an amount of Rs.32,62,153/- by way of damages to the respective accounts, failing which, it was stated that further action as provided under the Act and the Schemes framed thereunder sha
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