Andhra Pradesh High Court - Amravati

Y Saraswathi vs The Chief Executive Officer on 7 September, 2021

         THE HON'BLE SRI JUSTICE A.V.SESHA SAI

             WRIT PETITION No.19607 OF 2021

ORDER:

In the present Writ Petition, challenge is to the action of

the respondent-Employees' Provident Fund Organisation, in

rejecting the application of the petitioner for sanction of

Assurance Benefit Amount under the Employees Deposit Linked

Insurance (EDLI) of her husband, late Sri Y.Chandrasekhar

Reddy.

2. Heard Sri Thandava Yogesh, learned counsel for the

petitioner, and Sri T.Balaji, learned Standing Counsel for the

Provident Fund, apart from perusing the entire material

available on record.

3. Petitioner herein is the wife of one late

Sri Y.Chandrasekhar Reddy, who worked as contract worker

under M/s Damodar Reddy & Company in Zuari Cement,

Krishna Nagara, Yerraguntla Town & Mandal, Kadapa District.

Petitioner's husband-Sri Y.Chandrasekhar Reddy joined as a

member of the Provident Fund vide No.AP/54641/261. It is

further stated that the petitioner's husband died on 18.10.2018,

while undergoing treatment in a hospital and the petitioner's

husband attended his duties till 13.10.2018. When the

petitioner herein submitted an application, claiming the amount

under the Employees Deposit Linked Insurance Claim, 1976, on

the ground that he was not working as on the date of death, the

claim of the petitioner herein came to be rejected by the third AVSS,J W.P.No.19607 of 2021

respondent vide proceedings No.AP/RO/KDP/NAN/

Y.Saraswathi/ 2020, dated 10.02.2020.

4. According to the learned counsel for the petitioner, though

the petitioner herein got issued a legal notice on 11.02.2021,

respondent authorities once again, by way of an order

bearing No.AP/RO/GR/CDP/AG/III-4/54641/203&261/2021,

dated 26.02.2021, reiterated their earlier stand and rejected the

claim on the ground that the deceased member was not

continuing in the contracting company as on the date of the

death. It is submitted by the learned counsel for the petitioner

that the questioned action is highly arbitrary, unreasonable and

violative of Articles 14, 21 and 300-A of the Constitution of

India and also opposed to the very spirit and object of the

Employees Deposit Linked Insurance Scheme, 1976. In

elaboration, it is further contended by the learned counsel that

the respondent authorities failed to take into consideration sub-

Clause (b) of Clause (2) of the Employees Deposit Linked

Insurance Scheme, 1976, which reads as under:

"Assurance benefit" means a payment linked to the average balance in Provident Fund Account of an employee, payable to a person belonging to his family or otherwise entitled to it in the event of death of the employee while being a member of the Fund"

5. While referring to the above sub-Clause of Clause (2) of

the Scheme, it is submitted by the learned counsel for the

petitioner that the only condition which entitles the claimant to

have the benefit of the scheme is that the deceased employee, as AVSS,J W.P.No.19607 of 2021

on the date of death, should have been a member of the fund

and the respondent herein lost sight of the said aspect. It is also

brought to the notice of this Court by the learned counsel that,

after receipt of the reply, dated 20.02.2021, petitioner herein

submitted a detailed representation stating that the difficulty

cropped up because of wrong entry made by the employer in

Form-10-D and that instead of entering 18.10.2018 as the date

of leaving from service, the employer mistakenly entered

13.10.2018 as the date of his last working day in Form-10-D.

Petitioner herein also brought to the notice of the respondents

about the letter, dated 16.10.2019, addressed by the

contracting company to the third respondent, clarifying about

the mistake occurred in Form-10-D.

6. Learned counsel for the petitioner, in order to substantiate

his contentions, placed reliance on the judgment of a Division

Bench of the High Court of Judicature, Gujarat in TEXTILE

LABOUR ASSOCIATION, AHMEDABAD v. REGIONAL

PROVIDENT FUND COMMISSIONER, GUJARAY STATE,

AHMEDABAD (Special Leave Application No.5663 of 1984, dated

29th January, 1985). In the said judgment, the Division Bench

of Gujarat High Court, at paragraph Nos.6 and 12, held as

under:

"6. Any person employed continues to be employed until the services are validly terminated by the employer or by mutual agreement the services come to be terminated of the employee resigns from such service. The cessation of work by an employer by closing his mill may not by itself terminate the services of the employees. An employer may close AVSS,J W.P.No.19607 of 2021

his mill for many reasons, such as non-availability of raw material, non-availability of requisite power, temporary financial difficulties or such other situations. Merely because he stops working the factory, it need not be that the services of the employees stand automatically terminated; they continue in service. The requirement of a valid closure which alone will put as end to the services of the employees are to be found within the provisions of the Industrial Disputes Act. We are referring to this because the learned counsel for the respondent submitted that this is a matter of contract. It is certainly not so. The provision in S.25FFA of the Industrial Disputes Act, 1947, prescribes 60 days' notice to be given of intention to close down any undertaking and the notice is required to state clearly the reasons for the intended closure of the undertaking. The proviso is admittedly not relevant to the present case and, therefore, that is not referred to. Section 25FF (1) stipulates the need for a notice and payment of compensation in accordance with the provisions of S.25F as if the workmen are retrenched when the undertaking is closed. These provisions make it clear that closure which may be for any reason and which only amounts to the employer drawing the shutters need not necessarily result in termination of the services of the workmen. It is one thing to say that a man has closed his business, another to say that he was retrenched his employees. He may close his business and may not choose to sent away his employees as actually has been done in regard to some mills before us or he may not advert to it at all nor apply the mind to it. It is only when closure in accordance with the enactment is effected that there would be termination of service.

12. For the reasons stated above, the 129 persons whose cases are sponsored by the Textile Labour Association are to be found to have been members of the fund on the date of their death which would mean that they are entitled to the insurance benefit claimed".

AVSS,J W.P.No.19607 of 2021

7. Eventually, it is submitted by the learned counsel for the

petitioner that, without taking into consideration the above said

aspects and the Clauses in the scheme, third respondent herein

rejected the claim of the petitioner herein.

8. On the contrary, learned Standing Counsel, while

strenuously opposing the Writ Petition, contends that there is

absolutely no illegality nor there exists any infirmity in the

impugned action, warranting interference of this Court under

Article 226 of the Constitution of India. It is further submitted

by the learned Standing Counsel that, unless the employer

complies with all the mandatory requirements of law, the