THANDAVA CO OPERATIVE SUGARS LIMITED Vs. REGIONAL PROVIDENT FUND COMMISSIONER ANDHRA PRADESH HYDERABAD
LAWS(APH)-1992-2-64
HIGH COURT OF ANDHRA PRADESH
Decided on February 20,1992

THANDAVA CO-OPERATIVE SUGARS LIMITED Appellant
VERSUS
REGIONAL PROVIDENT FUND COMMISSIONER, ANDHRA PRADESH, HYDERABAD Respondents


Referred Judgements :-

M/S.VISWABHARATHI WELFARE PRINTING PRESS VS. REGIONAL PROVIDENT FUND COMMISSIONER,HYDERABAD [REFERRED TO]
A.V.B. [REFERRED TO]
ARVIND MILLS LTD. VS. R.M. GANDHI [REFERRED TO]
COMMISSIONER OF COAL MINES PROVIDENT FUND DHANBAD VS. J P LALLA AND SONS [REFERRED TO]
ORGANO CHEMICAL INDUSTRIES VS. UNION OF INDIA [REFERRED TO]
FERNANDES R VS. STATE OF MYSORE [REFERRED TO]
REGIONAL PROVIDENT FUND COMMISSIONER VS. SOUTH INDIA FLOUR MILLS PVT LTD [REFERRED TO]



Cited Judgements :-

HI TECH VOCATIONAL TRAINING CENTRE VS. ASSISTANT PROVIDENT FUND COMMISSIONER [LAWS(DLH)-2011-1-344] [REFERRED TO]


JUDGEMENT

- (1.)The petitioner herein i.e., the Thandava Cooperative Sugars Ltd., Payakaraopeta, Tuni R.S. questions in this Writ Petition the order of the Regional Provident Fund Commissioner, Andhra Pradesh (the respondent herein) in his proceedings No.AP/1773/PD/EG/87/3914 dated 31-7-1987 levying a total sum of Rs.72,439-25 Ps. as damages for bela ted remittances under Para 30 read with Para 38 of the Employees' Provident Funds Scheme, 1952 and with Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act') on the ground that the said damages were fixed in an arbitrary manner without any rationale or reasonableness.
(2.)In the affidavit in support of the Writ Petition, on behalf of the petitioner it is stated that during the period when default was committed in making the various remittances as required by the Act and the Employees' Provident Funds Scheme, 1952 (hereinafter referred to as 'the Scheme') i.e., March, 1979 to December, 1979, January 1980 to August 1980 and January 1981 to May 1981 the petitioner "had to struggle very hard for arranging finances at various stages" and "the factory had to pass through a very critical financial position for meeting its normal commitments in its functioning with the then existing capacity unit besides meeting from time to time the project cost for the new higher capacity unit taken up for erection" and therefore was not even in a position to pay the salaries of its employees and was forced to pay some advances only to the extent its meagre resources permitted, as an alternative to avoid lay-off. On this basis, it is firstly contended on behalf of the petitioner that there was no default committed because the question of payment of contribution would arise only when salaries were paid to the employees and deductions were made towards their provident fund contribution from the salaries actually paid to them. The second contention advanced is that even assuming that contributions were to be remitted whether salaries were paid to the employees or not, the respondent ought to have taken into consideration the difficult financial position of the petitioner and ought not to have imposed any damages on the petitioner in view of the peculiar circumstances disabling the petitioner from even paying the salaries to its employees. The third contention advanced on behalf of the petitioner is that fixation of damages was done arbitrarily without any rational basis and therefore are liable to be set aside.
(3.)In support of his first contention, the learned counsel for the petitioner relied on Para 38 of the Scheme. Sub-para (1) of the said Para 38 provides that
"the employer shall, before paying the member his wages in respect of any period or part of period for which contributions are payable, deduct the employee's contribution from his wages which together with his own contribution.......he shall within fifteen days of the close of every month pay the same to the Fund by separate bank drafts or cheques......". From this, the learned counsel for the petitioner contends that only when wages are paid to the employees, contributions from the wages are to be deducted and the said deductions together with the employer's contribution and other sums specified in the said sub-para (1) are to be remitted. Sub-para (1) of Para 30 of the Scheme dealing with payment of contribution provides as follows:- " (1) The employer shall, in the first instance,pay both the contribution payable by himself (in this Scheme referred to as the employer's contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the Scheme referred to as the member's contribution.)"
Sub-para (1) of para32 dealing with recovery of a member's share or contribution provides, inter alia, as follows:- " (1) The amount of a member's contribution paid by the employer or a contractor shall, notwithstanding the provisions in mis Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and otherwise: Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable." When confronted with the above provisions in Paras 30 and 32 of the Scheme, the learned counsel for the petitioner did not press his first contention further and in my view rightly so, in view of the categorical obligation imposed on the employer under the said provisions that irrespective of whether wages are paid or not, me employer will have to pay both his as well as the employees' contribution and if such payment in respect of the employees' contribution is made before the wages are paid to the employee, he is entitled to recover the same from the said respective wages. A Division Bench of the Kerala High Court in Calicut Modern Spinning & WeavingMills Ltd. vs. Regional Provident Fund Commissioner, 1982 Labour and Industrial Cases 1422 considered the said Paras 30 and 38 of the Scheme and held as follows:- " We read para 30 as casting an obligation on the part of the employer to make the contributions payable by himself and on behalf of the member to the Fund in the first instance on every due date as contemplated in para 38. We do not subscribe to the view that in the first instance would mean only for the first time. According to us, "in the first instance" means payment of contribution voluntarily by the employer for every month irrespective of the fact whether wages have been paid or not" and also observed that the decision of the Supreme Court in Organo Chemical Industries vs. Union of India, AIR 1979 SC 1803 made clear that the initial responsibility for making payment of the contribution of the employer as well as of the employee, lay on the employer.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.