Gujarat High Court
Satishkumar Induprasad Chaturvedi vs Svm Institute Of Technology on 27 September, 2024
Author: A. S. Supehia
Bench: A.S. Supehia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO.1028 of 2019
In R/SPECIAL CIVIL APPLICATION NO. 12638 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MRS. JUSTICE MAUNA M. BHATT
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
================================================================
SATISHKUMAR INDUPRASAD CHATURVEDI & ORS.
Versus
SVM INSTITUTE OF TECHNOLOGY & ANR.
================================================================
Appearance:
MEET M THAKKAR(7766) for the Appellant(s) No. 1,2,3,4,5,6,7
MR PA JADEJA(3726) for the Appellant(s) No. 1,2,3,4,5,6,7
MR AK CLERK(235) for the Respondent(s) No. 1
MS E.SHAILAJA(2671) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MRS. JUSTICE MAUNA M. BHATT
Date : 27/09/2024
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. The present appeal emanates from the judgment and order
dated 29.06.2017 passed by the learned Single Judge in the
captioned writ petition filed by the respondent - SVM Institute of
Technology assailing the order dated 30.06.2013 passed by the
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Assistant Provident Fund Commissioner directing the Respondent-
Institute to pay the amount towards provident fund quantified by
the said authority.
BRIEF FACTS :
2. The appellant No.1 is presently serving under the
respondent - Institute, whereas appellant Nos. 2 to 7 have left
the Institute. It is the case of the appellants that the Institute
paid the contribution towards the provident fund in accordance
with the Employees' Provident Fund and Miscellaneous Provisions
Act, 1952 read with the Employees Provident Funds Scheme,
1952 from 22.09.1997 to 31.12.2002, i.e as per the statutory
ceiling limit.
3. From 01.01.2003, the Institute voluntarily increased the
contribution and started paying contribution of 12% of basic
salary at par with the contribution of the employees. Thereafter,
from February, 2011 the Institute reduced the said amount and
again started contributing as per the ceiling limit provided under
the Act. i.e. 12% contribution of Rs.15,000/-. Thus, the
appellants were contributing Rs.9863/- of their basic salary of
Rs.82,000/- as per 12% of basic pay, whereas the Institute was
contributing Rs.1800/- of Rs.15,000/- of the ceiling limit provided
under the scheme.
4. Since, such dispute arose, the appellants approached the
Assistant Provident Fund Commissioner for claiming/seeking
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directions against the respondent - Institute to contribute 12% of
basic pay. The respondent - Provident Fund Authority accepted
their demand and directed the Institute to contribute the
provident fund at par with the appellants' contribution.
5. The Institute challenged the aforesaid order of the Assistant
Provident Fund Commissioner before this Court by filing the
captioned writ petition, which has been allowed. It appears that
since the appellants were not made party to the writ petition,
they filed an application seeking leave to appeal, which has been
allowed vide order dated 22.04.2019 passed by the Co ordinate
Bench and the captioned Letters Patent Appeal has been
registered.
SUBMISSIONS ON BEHALF OF THE APPELLANTS-EMPLOYEES:
6. Learned advocate Mr.P.A.Jadeja appearing for the
appellants has submitted that the impugned judgment and order
passed by the learned Single Judge setting aside the order dated
30.06.2013 passed by the respondent - Assistant Provident Fund
Commissioner is required to be quashed and set aside since the
learned Single Judge fell in error in placing reliance on the
judgment of the Supreme Court in the case of Marathwada
Gramin Bank karamchari Sanghatana and Anr vs. Management of
Marathwada Gramin Bank and Ors. (2011) 9 S.C.C. 620. It is
submitted that the judgment delivered by the Supreme Court in
the said case and relied upon by the learned Single Judge does
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not apply in the present case in view of the specific provisions of
Ordinance 69(a) of the Institute. He has referred to the Clause
17 of the Ordinance and has submitted that the said Clause
regulates the provident fund of the employee's and the
employer's contribution. It is submitted that as per the sub-clause
(b) of Clause 17 of the Ordinance, the Management is required to
contribute to the provident fund which shall be equal to the
contribution of the employees. It is submitted that in the case of
Marathwada Gramin Bank karamchari Sanghatana (supra), there
was no such provision which fell for consideration by the
Supreme Court. It is contended that since by this Clause, the
Management has to contribute equally to the subscription of the
employees, the Management cannot reduce the contribution
which was being contributed prior to January, 2011.
7. Learned advocate Mr.Jadeja, while placing reliance on the
provisions of Section 12 of the Employees' Provident Fund and
Miscellaneous Provisions Act, 1952 ('the EPF Act' for short) has
submitted that the employer cannot reduce wages to which an
employee is entitled for under the terms of his employment. It is
contended that as per the terms of employment read with the
Ordinance 69(a)-(17)(b), the Institute has unilaterally reduced its
contribution which is impermissible and is in violation of the
provisions of Section 12 of the EPF Act. It is submitted that the
Management continued to pay 12% of basic salary willingly till
February, 2011 and they were required to maintain such
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contribution in view of the All India Council for Technical
Education (AICTE) Notification dated 22.01.2010. He has placed
reliance on the regulation governing the provident fund, which
directs that the policy in regard to the contribution of provident
fund which has been adopted by the respective Institutes such as
the respondent, the status quo was required to be maintained. It
is submitted that in the year 2011, all the Institutes including the
respondent-Institute merged with the Gujarat Technical University
and thereafter, they started contributing as per the ceiling limit.
8. In support of his submissions, learned advocate Mr. Jadeja
for the appellants has placed reliance on the judgment of the
Himachal Pradesh High Court dated 06.12.2016 rendered in Civil
Writ Petition No. 1803 of 2014 and submitted that as per the
decision of the Himachal Pradesh High Court, the employer is
under an obligation to contribute as per the scheme which is
beneficial to the employees and adopted by the
employer/institute. It is submitted that in the present case, since
the Institute has accepted the Ordinance 69(a), they are under an
obligation to equally contribute the amount of provident fund at
par with the contribution of the appellants. It is thus, urged that
since the learned Single Judge has failed to appreciate this vital
aspect, the judgment and order impugned in the Letters Patent
Appeal may be quashed and set aside.
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SUBMISSIONS ON BEHALF OF THE RESPONDENT-INSTITUTE:
9. In response to the aforesaid submissions, learned advocate
Mr.A.K.Clerk has submitted that the impugned order and
judgment passed by the learned Single Judge may not be
interfered with as the issue is squarely covered by the decision of
the Supreme Court in the case of Marathwada Gramin Bank
karamchari Sanghatana (supra). He has referred to Paragraph No.
29 of the Employees' Provident Funds Scheme, 1952 ('the EPF
scheme' for short), more particularly proviso attached thereto and
has submitted that as per the said proviso, the Institute is
already contributing 12% of the maximum ceiling limit of
Rs.15,000/- and the employer i.e. the Institute is not obliged to
pay any contribution over and above its contribution payable
under the Act. It is submitted that the appellants are covered
under the definition of Paragraph No. 2(f)(ii) and since they fall
within the definition of excluded employees, they cannot claim
the enhanced contribution over and above the ceiling limit.
Learned advocate Mr.Clerk has also referred to Paragraph No.
26(a) of the EPF Scheme, which refers to the contribution
payable by the employee or members and the contribution
payable by the employer which is limited to the amount payable
on pay of Rs.15,000/-.
10. While referring to the provisions of Section 12 of the EPF
Act, learned advocate Mr. Clerk has submitted that the appellants
cannot take benefit under the provisions of this Section since the
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contribution of the Institute is paying as per the ceiling limit
provided by the Act and the Scheme and the same would not
amount to reduction of the wages or the amount of provident
fund as per the terms of employment.
11. While referring to the provisions of Ordinance 69(b), it is
submitted by learned advocate Mr. Clerk that Clause 17 which
regulates the provident fund itself refers to the EPF Act and the
Management was required to frame a scheme which provides for
minimum requirement as prescribed under the EPF Act. It is
further submitted that the Management instead of framing any
scheme has adopted the EPF Scheme, and accordingly has paid
the contribution of provident fund initially on the basis of the
scheme. He has submitted that the respondent - Institute
voluntarily paid its contribution on enhanced rate at 12% of basic
pay + dearness allowance from 2003 to 2011 and since there was
heavy financial burden on the Institute upon the revision of pay
of its employees, it again started paying the contribution as per
the ceiling limit of the Act. It is submitted that from the year
1997 to 31.12.2002, the appellants paid the contribution towards
the provident fund in accordance with the Act and EPF Scheme
and such contribution was paid till 31.12.2002. Thus, it is
submitted that if the contention of the appellants is accepted,
then it will lead to uncertainty as the Institute would be
compelled to contribute more even if the Institute is not under
an obligation to do so. It is submitted that the employees who
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can contribute more than the ceiling limit i.e. over and above
the 12% can always withdraw their contribution and the Institute
cannot be compelled to contribute equal to such amount as it
would be perilous for the survival of the Institute.
12. Learned advocate Mr.A.K.Clerk has placed reliance on the
judgment of the Division Bench of this Court in the case of
Jamnagar Rajkot Gramin Bank Officers Association and Anr. vs.
Saurashtra Gramin Bank and Anr. 2013 Vol II CLR 867, whereby
the Division Bench has confirmed the judgment and order passed
by the learned Single Judge dated 09.01.2013 passed in Special
Civil Application No.3191 of 1995. While referring to the decision
of this Court, both of the Division Bench and the learned Single
Judge, he has submitted that this Court has categorically held
that the employer cannot be compelled to contribute more than
the statutory limit at par with the employees. It is submitted that
this Court has held that the contribution @ 10% or 12% as the
case may be of the salary of the employees is subject to ceiling
prescribed under the Act and the Scheme. It is submitted that
even if an employer has voluntarily agreed to contribute large
amount over and above the statutory limit, the same cannot be
considered as a factor to compel the employer to further
contribute its amount on enhanced at par with the contribution
of the employees.
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13. Learned advocate Mr.A.K.Clerk has finally submitted that
since there was no Scheme framed by the Institute as per the
Ordinance 69(a) and the Institute has adopted the EPF Scheme,
the special Act will prevail over the Ordinance and the same
cannot override the Ordinance norms. It is submitted that over
and above 12% contribution on the statutory ceiling limit of
Rs.15,000/-, the Institute is also paying 1% administrative charge
to the organization under the EPF Scheme. Thus, it is urged that
the present appeal may be dismissed.
14. Learned advocate Ms.E.Shailaja appearing for the
respondent No. 2 has also placed reliance on the provisions of
the EPF Act and the EPF Scheme and has apprised this Court
with regard to the same more particularly, Paragraph No. 29 and
has submitted that as per the provisions of Paragraph No. 29(2),
the contribution payable by the employee under the Scheme shall
be equal to the contribution payable by the employer in respect
of such employee subject to condition that the employer shall not
be under an obligation to pay any contribution over and above
its contribution payable under the Act. She has submitted that
the maximum ceiling limit as provided under the Act is 12% of
Rs.15,000/-.
ANALYSIS AND CONCLUSION :
15. The kernel of the issue raised before us is that as to
whether the Institute can be compelled to pay its contribution
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towards the provident fund over and above the statutory ceiling
limit at par with the contribution of the appellant-employees or
not.
16. The learned Single Judge has primarily placed reliance on
the judgment of the Supreme Court in the case of Marathwada
Gramin Bank karamchari Sanghatana (supra) while allowing the
writ petition challenging the order dated 30.06.2013 passed by
the Assistant Provident Fund Commissioner directing the
respondent - Institute (original petitioner) to pay the amount of
enhanced contribution towards the provident fund at par with the
contribution of the appellants.
17. The facts, which are established from the pleadings are that
the appellants who are / were employees of the Institute were
depositing the contribution towards the provident fund by the
Institute as per the provisions of the Act and the Scheme from
22.09.1997 to 31.12.2002. From 01.01.2003 to January, 2011, the
Institute voluntarily increased the contribution and contributed
their share of provident fund @ 12% of basic salary + dearness
allowance regardless of statutory limit of salary. From February,
2011, the Institute reduced their contribution towards the
provident fund and started paying as per the statutory limit @ 12
of Rs.15,000/- ceiling limit. Thus, it contributed Rs. 1800/-,
whereas the employees - appellants contributed Rs.9863/- i.e.
12% of basic pay of Rs.82,000/-. After the demand was accepted
by the Assistant Provident Fund Commissioner, which culminated
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in passing of the order dated 30.06.2013, the captioned writ
petition came to be filed by the Institute challenging such order,
which had been allowed by the learned Single Judge.
18. The entire case of the appellants hinges on the Ordinance
69(a) (Clause 17), which regulates the provident fund of the
employees of the Institute. The same is as under: -
"(17) PROVIDENT FUND
Members of the teaching staff in an Institution who have been in
service should receive the benefit of a scheme for contributory Provident
Fund or GPF. The Management frame a scheme which shall provide for
the minimum requirement laid down in the Provident Fund Act, 1952 as
amended from time to time. The Management shall get such scheme
directly from the Government, and convey the approval of the
government to the University.
(a) Every teacher shall become subscriber to the provident fund. The
subscription shall be at the uniform rate of the one twelfth of the basic
pay for the month.
(For a part - time teacher, who is exclusively engaged in teaching, the
basic pay for the purpose of Provident Fund shall be one half of the
basic pay that the teacher would be entitled to draw had he been a full-
time teacher on the same post continuously from the date of his/her
appointment as a part-time teacher)
(b) The Management's contribution to the Fund shall be equal to the
subscriber's contribution every month and it shall be credited to the
subscriber's account at the end of each month.
(c) Whenever a teacher ceases to be in service of the Management he/she
shall be paid the amount standing to his/her credit in the fund; provided
that he/she shall not be entitled to the employer's contribution to his/her
account and interest thereon if:
(i) he/she has not served the Management for a continuous period of at
least five years as a teacher, or
(ii) he/she has been removed from service under clause (9) of this
ordinance."
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19. The appellants have asserted their claim of enhanced
contribution more particularly, on sub-clause(b) of Clause 17. It
is the case of the appellants that the Management has to equally
contribute the fund at par to that of the appellants in view of
the said clause. It is contended that the decision of the Supreme
Court in the case of Marathwada Gramin Bank karamchari
Sanghatana (supra) will not apply in the present case since the
Institute is already having the scheme in the form of Ordinance
69(a)-(17) regulating the provident fund. In order to buttress such
submissions, reliance is placed by the appellants on the decision
of the Himachal Pradesh High Court in the case of Ajay Kumar
Sud (supra). We may at this stage refer to the provisions of
Paragraph No. 29 of the EPF Scheme, more particularly
Paragraph No. 29(1) and (2), which is as under:-
"29. CONTRIBUTION:-
(1) The contributions payable by the employer under the Scheme shall be
at the rate of [ten per cent] of the [basic wages, dearness allowance
(including the cash value of any food concession) and retaining allowance
(if any)] payable to each employee to whom the Scheme applies:
Provided that the above rate of contribution shall be [twelve] per cent in
respect of any establishment or class of establishments which the Central
Government may specify in the Official Gazette from time to time under
the first proviso to sub-section (1) of section 6 of the Act.
(2) The contribution payable by the employee under the Scheme, shall be
equal to the contribution payable by the employer in respect of such
employee:
Provided that in respect of any employee to whom the Scheme applies,
the contribution payable by him may, if he so desires, be an amount
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exceeding [ten per cent] or [twelve per cent], as the case may be, of his
basic wages, dearness allowance and retaining allowance (if any) subject
to the condition that the employer shall not be under an obligation to
pay any contribution over and above his contribution payable under the
Act;"
20. A fair reading of the provisions of Section 29(1) mandates
that the contribution payable by the employer under the Scheme
shall be @ 10%, in the present case 12% of basic wages which is
being paid by the Institute. Sub-paragraph No. 2 of Paragraph
No. 29 mandates that the contribution payable by the employee
under the Scheme shall be equal to the contribution payable by
the employer in respect of such employee. The proviso to sub-
Paragraph No. 2 gives a discretion to an employee to pay
enhanced contribution exceeding 10% or 12% of his basic wages,
with a rider that the employer shall not be under an obligation
to pay any contribution over and above his contribution payable
under the Act. Thus, the language of the statute is very specific
and it does not direct the employer to pay any contribution over
and above his contribution payable under the Act i.e. 10% or
12% of the basic wages even if the employee pays more
contribution than the ceiling limit.
21. Similar intention has been found under Paragraph No. 26(a)
of the EPF Scheme which regulates the intention of membership.
Proviso to Sub-Paragraph No. 2 of Paragraph No. 26(a) also
refers that the contribution payable by the employer and the
employee would be in accordance with the rates specified in
Paragraph No. 29. We may at this stage refer to the observations
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made by the Single Judge in the case of Jamnagar Rajkot Gramin
Bank Officers Association and Anr. vs. Saurashtra Gramin Bank
and Anr., 2013 (4) G.L.R. 3248:
"10. On conjoint reading of above Sections of the Act and Paragraphs of
the Scheme, the following four categories can be carved out of the
employees to appreciate the arguments of learned counsel for the
respective parties.
(i) Employees whose emoluments are upto Rs.6500 (as per the limit in
force at present) and whose contribution is as per requirement i.e. ten
per cent or twelve per cent, as the case may be. In case of this category,
the employer's contribution would be ten per cent or twelve per cent, as
the case may be, of the emoluments, which is not more than Rs.6500.
(ii) The second category of the employees is that where the employees
get emoluments upto Rs.6500/- but he intends to contribute more
percentage than statutory requirement. In such cases though he may
contribute more percentage but the liability of the employer is limited to
ten per cent or twelve per cent, as the case may be.
(iii) The third category is where the emoluments of an employee is
beyond Rs.6500, which would have rendered him ineligible to be
continued in the Scheme, but he, as per the rules, is permitted to be
retained in the scheme and continues to contribute as per rules which
would be ten per cent or twelve per cent of the amount of his
emoluments which is more than Rs.6500, but in that case, the liability of
the employer would be limited to stipulated percentage of Rs.6500.
(iv) The fourth category is of such employees who were drawing
emoluments exceeding Rs.6500 and thereby who were excluded
employees, but, who is permitted to join the scheme and start
contributing to the fund. Such employees cannot contribute less than the
prescribed percentage, creating an eventuality, where, say for example,
an employee with emoluments of Rs.7,000 contributes ten per cent or
twelve per cent, as the case may be, and second eventuality of this
category is that such employee, by his volition, contributes more than
ten per cent or twelve per cent of his emoluments. Whether such type of
employees can claim that the contribution of the employer in provident
fund in their case should be on the basis of Rs.7000, i.e. over and above
the statutory ceiling of Rs.6500, and further that, if the said employee
contributes, say fifteen percentage, whether the employer should also be
expected to contribute fifteen percentage. The controversy raised is with
regard to this category. To be more precise, the first eventuality of this
last category i.e. an employee in whose case the emoluments are more
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than Rs.6500, in his case, whether the employer can be directed to
contribute ten per cent or twelve per cent of an amount exceeding
Rs.6500, which is statutory requirement."
11. At this juncture, reference may be made to the decision of Hon'ble
the Supreme Court of India in case of Marathwada Gramin Bank
Karamchari Sanghatana and Another (supra), where the observations of
Hon'ble the Supreme Court are as under :
"28. The Respondent Bank is under an obligation to pay provident
fund to its employees in accordance with the provisions of the
statutory scheme. The respondent Bank cannot be compelled to pay
the amount in excess of its statutory liability for all times to come
just because the respondent Bank formed its own trust and started
paying provident fund in excess of its statutory liability for some
time. The appellants are certainly entitled to provident fund
according to statutory liability of the respondent Bank. The
respondent Bank never discontinued its contribution towards
provident fund according to the provisions of the statutory scheme."
12 The conjoint reading of sections 6 and 12 of the Employees' Provident
Funds and Miscellaneous Provisions Act, 1952, paragraphs 26 {with
specific reference to paragraph 26(6)}, 26A, 27, 27A and 29 of the
Employees' Provident Funds Scheme, 1952 and the observations of the
Supreme Court of India as referred above, leaves no room, in my view,
but to hold that the employer can not be directed to contribute in the
provident fund of the employee, more than ten per cent or twelve per
cent, or on the monthly emoluments exceeding Rs.6500, the ceiling now
prevailing. The liability of the employer, under this Act, under all these
cases is limited to Rs.6500 and limited to ten per cent or twelve per
cent, as the case may be. The argument of learned counsel for the
employees that section 12 of the Act would prohibit reduction of
contribution by the employer from the amount exceeding to Rs.6500 to
the mandatory stipulation of Rs.6500, is not well-founded and is rejected.
Reference in this regard may also be made to the decision of Hon'ble the
Supreme Court of India in the case of Committee for Protection of Rights
of ONGC Employees & others V/s. Oil and Natural Gas Commission,
Dehradun & Others reported in 1990 (2) SCC 472. The reliance placed by
learned counsel for the employers on the decision of the Kerala High
Court in the case of North Malabar Gramin Bank Officers' Association
and Another (supra), though is well-founded, the same may not be
required to be gone into in detail, in view of the decision of Hon'ble the
Supreme Court of India in the case of Committee for Protection of Rights
of ONGC Employees (supra). The judgments relied upon by the
employees which are referred above, will not have application in this
fact situation and will not hold the field on the face of the judgments of
Hon'ble the Supreme Court, relied upon by the employers, which are
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referred above. Thus on this bone contention, the case of the employees
is rejected and that of the employers is accepted."
22. The learned Single Judge after threadbare examination of
the provisions of the EPF Act including Section 12 and the
Scheme has categorized the employees in four categories. The
issue deliberated upon by the learned Single Judge was akin to
the one raised before us. The learned Single Judge after placing
reliance on the judgement of the Supreme Court in the case of
Marathwada Gramin Bank karamchari Sanghatana (supra) has
held that the employer cannot be compelled to contribute over
and above the statutory limit in case of those employees whose
emoluments are more than the statutory limit and their
contribution is made on such emoluments. The Division Bench
has confirmed the view expressed by the learned Single Judge
vide judgement dated 18.03.2013, (2013 (II) CLR 867) by holding
thus:
"8 If the aforesaid observations, and the view taken by the learned
Single Judge are further examined in fight of the submission made by
the learned Counsel for the appellants, it appears that as per paragraph
26(6), upon joint request in writing of any employee and employer, any
employee may be allowed to become a member of the Scheme and he
may also be allowed to contribute more than Rs. 6,500 of his pay per
month if he is already member of the fund. Upon such request made by
the employer and the employee, the employee would be entitled to the
benefits and shall be subject to the conditions of the fund, but so far as
the employer is concerned, the only requirement is that the employer has
to give an undertaking in writing that he shall pay administrative
charges and shall comply with all statutory provisions in respect of such
employees. Therefore, one aspect is apparently clear that it does not
speak for any counter obligation to be created upon the employer for his
contribution more than provided by the statute. The only obligation
created is as provided by the statute and additional liability to pay
administrative charges. If any employer has voluntarily agreed to
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contribute large amount than provided by the statutory obligation, it may
be termed as a liability created by volition and not on account of
discharge of the statutory obligation. Once we proceed on that basis, the
right, if any, by employee cannot be enforced as if the statutory
obligation so created and there is abdication therefrom."
23. After threadbare examination of Section 12 of the Act and
Paragraph No. 26(6) and other provisions of the Scheme read
with Paragraph No. 26(a), the Division Bench has held that the
employer cannot be compelled to contribute more than which is
provided by the statute. It is further clarified that if any
employer has voluntarily to contribute large amount than
provided by the statutory obligation, it may be termed as a
liability created by volition and not on account of discharge of
statutory obligation. It is further held that the employee cannot
enforce the voluntary contribution of large amount as a statutory
obligation.
24. Thus, the contention raised before us by the appellant that
once the Institute has voluntarily enhanced the contribution, they
are statutorily obliged to contribute the same continuously does
not merit acceptance. If such contention is accepted then the
same would lead to an absurd situation since the employer would
be enforced to contribute the enhanced rate over and above the
statutory ceiling limit even though the same may have
deleterious effect on its financial health. The statute does not
compel the employer to contribute over and above the statutory
ceiling limit and at par with the contribution of the employee
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over and above the statutory limit prescribed under the Act or
Scheme merely because the respondent - institute was paying its
contribution @ 12% of basic salary between 01.01.2003 to
January, 2011, they cannot be compelled to pay the same at
enhanced rate. The appellants have very conveniently ignored the
fact that prior to that from 1997 to 2002, the Institute was
paying the benefit to the appellants in accordance with the Act
and Scheme and only after February, 2011 on account of revision
of pay, and looking to the financial restrain, the Institute
reverted to the statutory provisions and started paying the
provident fund contribution as per the ceiling limit instead of
paying @ 12% of basic salary + dearness allowance.
25. We may now at this stage refer to the observations made
by the Supreme Court in the case of Marathwada Gramin Bank
karamchari Sanghatana (supra). The learned Single Judge has
referred to the said decision and the relevant paragraph, on
which the reliance is placed, which is as under:-
"28. The respondent bank is under an obligation to pay provident fund
to its employees in accordance with the provisions of statutory Scheme.
The respondent bank cannot be compelled to pay the amount in excess
of its statutory liability for all times to come just because the respondent
bank formed its own trust and started paying provident fund in excess of
its statutory liability for some time. The appellants are certainly entitled
to provident fund according to statutory liability of the respondent bank.
The respondent bank never discontinued its contribution towards
provident fund according to the provisions of the statutory Scheme."
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26. In the said case, despite the cancellation of the exemption
granted to the Bank, the Bank continued to pay excess provident
fund to its employees in accordance with the earlier Scheme till
31.08.1993. Since, there was huge losses to the respondent -
Bank, the Bank paid the contribution as per the provisions of
statutory EPF Scheme and discontinued the payment of provident
fund in excess of its statutory liability. The Supreme Court in
context of the provisions of Section 12 of the EPF Act has held
that the employer (Bank) is under obligation to pay provident
fund to its employees in accordance with the provisions of the
statutory scheme and it cannot be compelled to pay the amount
in excess of its statutory liability in all times to come. It is not
the case of the appellants that the Institute has discontinued its
contribution, but they have restricted it to the statutory liability
and they are also paying the administrative charges, hence we do
not find any infirmity in the observations recorded by the
learned Single Judge while allowing the writ petition. Hence, the
contribution paid by the respondent as per the statutory ceiling
limit since February, 2011 will not attract the rigors of Section
12 of the EPF Act.
27. The appellants in support of their submissions have placed
reliance on the judgment of the Himachal Pradesh High Court in
the case of Ajay Kumar Sud (supra) and has tried to draw
similarity to their case however, on perusing the aforesaid
judgment we find that the same would not apply to the
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appellants. In the case before the Himachal Pradesh High Court
the concerned College had already framed a Scheme known as
"Non-Government Affiliated College Teachers Contribution
Provident Fund Rules" and their provident fund was regulated
under such Rules. In such circumstances, the Himachal Pradesh
High Court has held that once the respondents or the College
have implemented such Scheme, they cannot now turn around
and question the Scheme or deny the benefits available to the
employees. It is also recorded by the Himachal Pradesh High
Court after perusing the Scheme that the same nowhere bars or
prevents the applicability of any other Scheme which obliges the
employer to contribute a larger amount than the one envisaged
and prescribed under the Act, Rules and Scheme framed under
the Central Act. Thus, the entire judgment is premised on the
provisions of the Non-Government Affiliated College Teachers
Contribution Provident Fund Rules which was applicable to the
institute and its employees.
28. In the present case, the appellants have tried to equate the
said Scheme which was considered by the Himachal Pradesh
High Court with the Ordinance 69(a) and an attempt has been
made to establish their case on sub-clause (b) of Clause 17 of the
Ordinance. It is contended that the Management has to equally
contribute to the fund at par with the employee's contribution.
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29. We may at this stage, assert that no Scheme has been
framed under Clause 17 of the Ordinance 69(a), but the Institute
have adopted the EPF Scheme which is statutory for regulating
the provident fund which includes their contribution as well as
the contribution of the appellants. In absence of any Scheme
framed under Clause 17 of Ordinance 69(a) and in wake of the
fact that the respondent has adopted the statutory EPF Scheme,
the contribution towards provident fund would be governed and
regulated by the EPF Scheme and the EPF Act. In such
circumstances the provisions of EPF Act and EPF Scheme will
override the provision of sub-clause (b) of Clause 17 of Ordinance
69(a) and as held by the Supreme Court as well as Division
Bench of this Court, an employer cannot be compelled to pay
contribution over and above the statutory limit at par with the
employees' contribution in case an employee on its own volition
and discretion pay their contribution above the statutory ceiling
limit in view of their increased basic wages.
30. In view of above, we do not find any infirmity or illegality
in the judgment and order passed by the learned Singe Judge.
Hence, the present appeal fails. The same is hereby dismissed.
(A. S. SUPEHIA, J)
(MAUNA M. BHATT,J)
SHRIJIT PILLAI
