Karnataka High Court
Pragathi Gramin Bank vs The Regional Provident Commissioner on 16 October, 2025
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WP No. 60798 of 2011
HC-KAR
IN THE HIGH COURT OF KARNATAKA, AT DHARWAD
DATED THIS THE 16TH DAY OF OCTOBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
WRIT PETITION NO. 60798 OF 2011 (L-PF)
BETWEEN:
PRAGATHI GRAMIN BANK,
A REGISTERED RURAL BANK CONSTITUTED
UNDER THE REGIONAL RURAL BANKS ACT, 1976,
HAVING ITS HEAD-OFFICE AT PO.55,
GANDHINAGAR, BALLARI,
REP/BY ITS GENERAL MANAGER,
M.S. RAJASHEKAR.
... PETITIONER
(BY SRI. HARSH DESAI, ADVOCATE)
Digitally signed by
CHANDRASHEKAR
LAXMAN
KATTIMANI
CHANDRASHEKAR
LAXMAN Location: HIGH
AND:
KATTIMANI COURT OF
KARNATAKA
DHARWAD BENCH
Date: 2025.10.18
07:57:18 +0100
1. THE REGIONAL PROVIDENT COMMISSIONER,
REGIONAL OFFICE,
4TH FLOOR, SRINATH COMPLEX,
NEW COTTON MARKET,
HUBLI-580 029.
2. THE ASSISTANT PROVIDENT COMMISSIONER,
SUB-REGIONAL OFFICE, 4TH FLOOR,
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SRINATH COMPLEX,
NEW COTTON MARKET,
HUBLI-580 029.
3. THE ENFORCEMENT OFFICER,
EMPLOYEES PROVIDENT FUNDS,
DISTRICT OFFICE, 2ND FLOOR,
K.S. ENGINEERING WORKS BUILDING,
1ST CROSS, GARDEN AREA,
SHIMOGA-577 201.
... RESPONDENTS
(BY SRI. P.V. GUNJAL, ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A
WRIT OF CERTIORAIRI QUASHING THE ORDER DATED: 31-03-
2005/29-04-2005 BEARING NO.KN/PF/11439/ENF.335/7A/2005,
PASSED BY THE ASSISTANT PROVIDENT COMMISSIONER, SUB-
REGIONAL OFFICE, HUBLI/RESPONDENT-2 AS PER ANNEXURE-C
AND THE ORDER DATED: 01/10/2010 IN ATA NO.467(6) OF
2005 PASSED BY THE EMPLOYEES PROVIDENT FUND APPELLATE
TRIBUNAL, NEW DELHI AS PER ANNEXURE-D.
THIS PETITION COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
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HC-KAR
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE)
Heard the learned counsel appearing for petitioner and
learned counsel appearing for respondents.
2. The petitioner is assailing the order dated
31.03.2005 / 29.04.2005 passed by Assistant Provident
Fund Commissioner/second respondent. Said order is
marked at Annexure-C.
3. The petitioner has also assailed the order dated
01.10.2010 marked at Annexure-D passed by the Appellate
Authority under the Employees' Provident Funds
Miscellaneous Provisions Act, 1952.
4. The authorities in terms of the impugned orders
have concluded that the pygmy agents who were allegedly
working under the petitioner-Bank (Sahyadri Gramin Bank
before its merger with the petitioner). The original authority
as well as the Appellate Authority rejected the petitioner's
contention that the pygmy collectors are not the employees
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of the petitioner-Bank as such they are not entitled to any
benefit under the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952.
5. Learned counsel appearing for the petitioner
referring to the provisions of the Act of 1952, more
particularly, the definition of 'employee' and 'basic wages'
would urge that the pygmy collectors were not the
employees of the petitioner-Bank. They were not paid
regular wages. They were entitled to only the commission
based on the performance as pygmy collectors, as such,
there is no liability on the petitioner-Bank to provide benefit
under the Provisions of Act of 1952. In support of his
contention, learned counsel for the petitioner has relied on
the following judgments:
1) Indian Banks Association vs. Workmen of
Syndicate Bank and others1
2) Assistant General Manager, Syndicate Bank vs.
K.P. Haridas2
(2001) 3 SCC 36
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3) The Assistant Provident Fund Commissioner
vs. The South Kanara Govt. Officer's Co-op.
Bank Ltd. and another3
4) Regional Provident Fund Commissioner (II)
West Bengal vs. Vivekananda Vidyamandir and
others4
6. Learned counsel for the respondents would urge
that the Hon'ble Apex Court in the case of The Pachora
People's Co-operative Bank Ltd. Vs. The Employees'
Provident Fund Organization would urge that even the
pygmy collector can be the employee of the Bank (in a
appropriate cases) and the commission paid to the pygmy
collector can also be considered as wages if a case made
out. Thus, it is urged that the petitioner was required to
produce the details relating to the nature of
employment/contract with the pygmy agents and petitioner
has not produced the records and the adverse inference has
to be drawn against the petitioner for having not producing
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the records and the authorities are justified in passing the
impugned orders.
7. This Court has considered the contentions raised
at the Bar and perused the records.
8. It is indeed true that the Division Bench of this
Court in The Assistant Provident Fund Commissioner vs.
The South Kanara Govt. Officer's Co-op. Bank Ltd. and
another (Writ Appeal No.6081/2001) has concluded that
the commission cannot be construed as 'wages'. If the ratio
in the said judgment is applied, the petitioner's contention
is to be accepted provided what is paid to the pygmy agents
was the 'commission'.
9. However, it is required to be noticed that the
Hon'ble Apex Court in The Pachora People's Co-operative
Bank Ltd. (supra) has held that whether the 'commission'
paid to the pygmy agents is really a 'commission' or basic
wage which is camouflaged as 'commission' is a matter
which requires finding on fact.
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10. It is noticed from the impugned orders that the
enquiry was initiated based on the complaints said to have
been filed by two pygmy agents. The authorities have not
disclosed as to who are the pygmy agents who lodged the
complaint. Without disclosing anything, the petitioner-Bank
was called upon to produce the records relating to those
pygmy agents.
11. It is also noticed that in the impugned orders,
the said pygmy agents are not made parties. Likewise, in
the present petition also, the pygmy agents are not made
parties. If the petitioner's contention is accepted and
impugned orders are set aside, as a consequence, the
pygmy agents in whose favour the orders are passed will be
deprived of the benefit which was available in terms of the
impugned order. Thus, the pygmy agents are also
necessary parties to the proceeding as the nature of
contract/employment between the petitioner-Bank and the
pygmy agents is required to be adjudicated in the presence
of those pygmy agents.
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12. For the aforementioned reasons, the matter
requires to be remanded to the authority/respondent No.2.
13. Hence the following:
ORDER
(i) Writ Petition is allowed in part.
(ii) The orders dated 09.03.2005 at Annexure-C
and order dated 01.10.2010 marked at
Annexure-D are set aside.
(iii) The matter is limited to the second
respondent.
(iv) The second respondent shall issue notice to
the pygmy collectors/agents who are
employed by the Sahyadri Gramina Bank,
before it merge with petitioner bank.
(v) It is made clear that nothing is expressed on
the merits of the matter.
(vi) All contentions are kept open.
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(vii) Considering the fact that the dispute is
pending since 2005, the parties shall
cooperate for early disposal of the case.
Sd/-
(ANANT RAMANATH HEGDE)
JUDGE
NAA
CT:BCK
