RAJENDRA CINEMA v. REGIONAL PROVIDENT FUND COMMISSIONER
2001-09-18
D.K.SETH
body2001
DigiLaw.ai
D. K. SETH, J. ( 1 ) THE petitioner had challenged the amendment by which the provisions of employees' Provident Funds and miscellaneous Provisions Act, 1952 was made applicable in a factory or establishment where five employees are employed. This petition was affirmed on May 10, 1988 praying for stay of operation of the amendment. A blanket interim order was granted on May 18, 1988 staying the operation of the amendment. The amendment was given retrospective effect, which was challenged. Subsequently the amendment having been upheld the employers became liable for payment of the contribution. Admittedly the employees' contribution was not deducted in terms of paragraphs 30 of this scheme. In paragraph 32 of the scheme recovery is permitted by way of deduction from the wages of the member. But in this case no recovery was made by reason of the interim order granted. The workmen are also not agreeable for past deduction. The natural consequence is that it is to be paid by the employer. This question cropped up before the apex Court in District Exhibitors Association, muzaffarnagarv. Union of India, AIR 1991 SC 1381 : 1991 (3) SCC 119 where it was held that deduction under para 32 is confined to the deductions contemplated in the said paragraph and the proviso appended thereto. The Apex court had held as follows:"2i. MR. Vikram Mahajan, learned counsel for the Central Government submitted that it may be possible for the employers to make deduction from subsequent wages of the workmen with the consent in writing of the inspector as required under the third proviso to para 32 (1) of the scheme. This submission cannot be accepted since the third proviso could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the Scheme is operative. Such deduction which has not been made by accidental mistake or clerical error could be made from the subsequent wages with the consent in writing of the Inspector concerned. The case with which we are concerned is not covered by the third proviso. It is not the case of anybody that the employer could not make deduction from the wages of the employees by accidental mistake or clerical error.
The case with which we are concerned is not covered by the third proviso. It is not the case of anybody that the employer could not make deduction from the wages of the employees by accidental mistake or clerical error. The employer indeed could not have made the deduction prior to the impugned notification dated April 30, 1986 since the scheme was not then applicable. The scheme has been given retrospective effect w. e. f. October 1, 1984. The employer, therefore, cannot take the benefit of the third proviso to para 32 (1) for deducting the employees contribution in their wages payable in future. " ( 2 ) PARAGRAPH 32 neither fixes the liability of the employees contribution on the employer i. e. to be paid by the employer nor to deduct arrears from the current or future wages, except in case of accidental error or mistake and that too with permission of the commissioner. There is nothing in the scheme under which the employer can be made liable for employees' contribution, in respect of a period prior to the application of the Act or the scheme in the establishment or order of stay granted by the Court is operative. In cases where stay is granted by the Court it is for the court to pass appropriate order for such payment even to the extent of burdening the employer to shoulder the liability and pay out of its own fund without deducting it from member's wages, since such a situation was invited by the employer itself, or the Court, while granting interim order may have secured the deduction etc. subject to result of the case. ( 3 ) BE that as it may, this question is to be looked into from the point of view of the order of stay granted by this Court by reason whereof the employer did not deduct the contribution. By reason of the operation of stay the employer could not be made liable for default in making the deductions in terms of paragraph 30. Therefore, what should be the extent of the liability of the employer in such a case, where stay is granted, had cropped up in the case of union of India v. Murugan Talkies, 1996 (1) scc 504 : 1996-I-LLJ-1154, where the Apex court had observed that the grant of stay by the court was wholly unjustified.
Therefore, what should be the extent of the liability of the employer in such a case, where stay is granted, had cropped up in the case of union of India v. Murugan Talkies, 1996 (1) scc 504 : 1996-I-LLJ-1154, where the Apex court had observed that the grant of stay by the court was wholly unjustified. But still then the apex Court had directed deposit of the employers contribution only from the date of filling the writ petition and such order was made to be an order under Article 142 of the constitution of India. ( 4 ) IN fact grant of interim order has created a situation, by reason whereof within the scope of the Act and the scheme the deductions of the employee's contribution which has not been made cannot be recovered by the employer from current or future wages or otherwise. The Act and the scheme do not permit deduction of employees past or arrears contribution from the current or future wages. Paragraph 32 of the scheme in the first proviso permits deduction of the employees contributions payable for the period or part of the period for which the wages is paid. The proviso has been couched in a prohibitory form. It prohibits deduction of any contribution of the employee other than that which is payable in respect of the wage period for which the wage is paid. However, such prohibition is excepted in two situations provided for in the second and third proviso, respectively. Those are; (1) where the employee had given in writing a false statement that he was not a member of the Fund : (2) where by mistake or clerical error such deduction is not made. But in the second case deduction can be made with the consent of the Inspector in writing. ( 5 ) THE present case does not fall within the exception of either or any of the second and third proviso to paragraph 32. By reason of paragraph 30 primary liability to pay both the contribution is that of the employer. Therefore, if the employer's contribution is not made, still then the employer will be liable for both the contribution. But the difficulty arise when the court passes an interim order by reason whereof the contributions are not deducted.
By reason of paragraph 30 primary liability to pay both the contribution is that of the employer. Therefore, if the employer's contribution is not made, still then the employer will be liable for both the contribution. But the difficulty arise when the court passes an interim order by reason whereof the contributions are not deducted. In such a case it is for the Court to provide for while deciding the case finally, if ultimately the employer is unsuccessful. But such a situation does not arise in this case since it was so decided by the Apex Court declaring the decision one under Article 142. ( 6 ) THIS question became common because of the interim order passed by the High Courts. Therefore, the Apex Court in order to do complete justice, in its wisdom had made the order under Article 142. An order under article 142 is enforceable throughout the territory of India. ( 7 ) BY reason of the provision of Article 142 such order is binding on this Court, and is applicable in such a case which fulfils the conditions contemplated in Murugan Talkies (supra ). Therefore, in this case the liability of the employer could be fixed only in respect of the employer's share of the contribution in terms of the decision in Murugan Talkies (supra) for the period during which the stay of operation was operating viz. , from May, 1988 till the writ petition was dismissed. However, the employers shall be responsible for payment of both the shares for the period which is outside the period during which the stay was operative unless the court had directed otherwise while dismissing or disposed of the respective writ petition. ( 8 ) IN the present case no such specific order having been passed what shall be the extent of the liability of the employers. It is submitted on behalf of the petitioner that since February, 2000 the petitioner is depositing both the contributions. The writ petition was dismissed on july 21, 1999. But no specific order was passed regarding thereto by this Court while dismissing the writ petition. Therefore, in view of the decisions in Murugan Talkies (supra) the employer shall be liable for the employer's contribution only for the period between the date of the interim order and the date of dismissal of the writ petition.
But no specific order was passed regarding thereto by this Court while dismissing the writ petition. Therefore, in view of the decisions in Murugan Talkies (supra) the employer shall be liable for the employer's contribution only for the period between the date of the interim order and the date of dismissal of the writ petition. The employer shall not be liable for the employees' contribution for this period. Neither any such arrear employees' contribution can be deducted from the wages of the employees. The employer shall be liable for both the contributions from the date of the Act was applicable till the date of the interim order and period subsequent to the date of dismissal of the writ petition. In this case therefore, the employer is liable for both the shares for the month of July, 1999 onwards till January, 2000 which the employer shall deposit within one month from the date of furnishing the calculation of the dues for the said period by the authority concerned. Pending such furnishing of calculation the employer shall deposit, both the contributions for the said period according to its own calculation within november 30, 2001. However, the employer shall not be entitled to adjust any of the said amount from the wages of the employees. ( 9 ) THE other writ petition and the application for appropriate order is disposed of with the same direction. ( 10 ) CERTIFIED Xerox copy of this order be made available on urgent basis.