ASSOCIATED CEMENT STAFF UNION Vs. REGIONAL PROVIDENT FUND COMMISSIONER
LAWS(BOM)-2017-8-29
HIGH COURT OF BOMBAY
Decided on August 14,2017

ASSOCIATED CEMENT STAFF UNION Appellant
VERSUS
REGIONAL PROVIDENT FUND COMMISSIONER Respondents

JUDGEMENT

M.S.KARNIK,J. - (1.) The petitioner, a Trade Union registered under the Trade Unions Act , 1926 seeks a direction to respondent no.2 Company to include a member who is a member of the petitioner's Union as the employees' representative on the Board of Trustees of the Provident Fund of the Associated Cement Companies Limited, respondent no.2 herein.
(2.) Respondent no.2 is the Associated Cement Company registered under the Companies Act , 1946 which has its own Trust for provident fund payable to the employees. Respondent nos.3 to 6 are the Trustees of the Trust. The Trust was created and established for deduction and accumulation of the provident fund amount of the employees of the 2nd respondent. This trust was established on 1 st August, 1936. The said trust is recognised under Income Tax Act , 1922. Rules of the trust were framed when the trust was established in the year 1936 and are known as the Rules of the Provident Fund of Associated Cement Companies (hereinafter referred to as 'the said Rules' for short). Rule 6 of the Rules vested the fund in three trustees of whom two are Directors of the company and one an officer of the company in their office in Bombay. These appointments of the trustees are to be made by the Board of the Directors of the 2 nd respondent.
(3.) It is the petitioner's case that 2 nd respondent in flagrant disregard to the law laid down under the Employees' Provident Fund and Miscellaneous Provisions Act , 1952 (hereinafter referred as 'the said Act' for short) and the Scheme framed thereunder continued with their old system of having three Directors all of whom are in the managerial cadre. Presently the Trust has four trustees, two of whom are full time Directors, one a Director of Finance and the fourth Vice- President (Personnel). Learned Counsel for the petitioner submits that the requirement of the said Act is that employees must be given adequate representation on the Trust by appointing an employee as a Trustee. He submitted that the petitioner is the only trade union functioning in the respondent no.2 at the Head Office and C.R.S., Thane, for the past several years and therefore entitled to have an employee as a representative on the Trust. The employees of the 2 nd respondent are in dark as to how the operations of the trust and funds are carried on. They have no knowledge whatsoever as to how the trustees invest the funds, sanction loans to the employees, including those to executives, Vice Chairman and Managing Director of the company as also other top officers of the 2 nd respondent company. Loans, which are available to members of the Trust, are sanctioned at the sole discretion of the Trustees all of whom belong to the managerial cadre and therefore, members of the petitioner Union are not represented adequately. It is averred that the loans are sanctioned in an arbitrary manner and on some occasions second loan has been sanctioned by the trustees even before earlier loan is repaid contrary to Rule 70 of said Rules. By a letter dated 25 th February, 1998, the petitioner had called upon respondent no.7 i.e. the Secretary of the trust, to give adequate representation to the employees. The petitioner brought it to the notice of the respondent no.1 Regional Provident Fund Commissioner that the 6 th respondent is styling himself as the employees' representative on the trust despite being in the managerial cadre. The petitioner called upon the 1 st respondent to rectify this anomaly and to direct the 2 nd respondent to give adequate representation to the employees on the Trust.;


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