THE REGIONAL PROVIDENT COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION, SUB REGIONAL OFFICE, P.B. NO. 1895, COCHIN Vs. FEDERAL BANK LTD P.B. NO. 103, ALUVA

JUDGEMENT

(1.) The first respondent/EPF organization in O.P. No. 8586 of 1993 is the appellant. Grievance is against the verdict passed by the learned single Judge in the Original Petition filed by the respondent Bank, whereby a sum of Rs.43,35,74,751.00, which represents the total claim including interest on contribution/remittances made towards Family Pension Fund, Employees Deposit Linked Insurance, Administrative Charges and EDLI Administrative charges along with Provident Fund has been directed to be refunded within two months; also ordering payment of interest at current rate fixed by the Central Government for similar amounts, from the date of judgment, till the payment. The appellant has also been directed to furnish all particulars and details of contributions, loans as well as withdrawal benefits granted in the account of each of the employees/retired employees of the Bank, along with the fund directed to be transferred.

(2.) The respondent Bank is a Banking Company governed by the provisions of the Banking Regulations Act. Earlier, the Bank was having activities only in the State of Kerala and was governed by the relevant provisions of the Employees Provident Fund and Miscellaneous Provisions Act 1952 ['Act' in short]. The coverage was extended by virtue of the relevant notification issued in the year 1965, in exercise of the powers of the Central Government conferred under Sec. 1 (3) (b) of the Act. By virtue of the Scheme of the Statute, it was initially to have application only in respect of such establishments as listed in the schedule mentioned under Sec. 1 (3) (a), though it was also to be made applicable in the case of such other establishments notified by the Central Government in terms of Sec. 1 (3) (b). Since the notification issued by the Government under Sec. 1 (3) (b) of the Act covered the Banks having operation only within a State and further since the respondent Bank was having activities only within the State of Kerala at that point of time, it came to be covered as aforesaid and was remitting the contributions in respect of the employees and on their behalf.

(3.) By the passage of time, somewhere in the year 1973, the Bank widened its activities crossing the borders of the State, by virtue of which, it was to be taken outside the purview of the Act. A question had come up for consideration before a Division Bench of the Mumbai High Court in United Western Bank Ltd. Vs. Central Provident Fund Commissioner [1984 Lab. I.C. 1504] as to the course of action under such circumstances. The Bench declared that a Bank which is already covered under the Act having confined its activities within the State would stand 'de-covered', going outside the purview of the Act, once it widens its activities to a place outside the State. Based on the said verdict, it is said, that Circulars/intimations were sent by the authorities of the Employees Provident Fund from the Central Office to the Regional Offices for taking appropriate steps in this regard. However, the respondent Bank continued to effect the contributions and no claim was raised in this regard to opt out. As such, the benefits were being extended by the EPF organization to the employees/beneficiaries.