Kerala High Court
M/S.Southern Refineries Limited vs Epf Appellate Tribunal And Another on 5 June, 2024
Author: Dinesh Kumar Singh
Bench: Dinesh Kumar Singh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
WEDNESDAY, THE 5TH DAY OF JUNE 2024 / 15TH JYAISHTA, 1946
WP(C) NO. 13177 OF 2007
PETITIONER:
M/S. SOUTHERN REFINERIES LIMITED,
P. B. NO.1203, 1ST FLOOR, KESAVADASAPURAM,
PATTOM P. O., TRIVANDRUM- 695 004,
REPRESENTED BY ITS MANAGER (FINANCE), MR. SREEKUMAR.
BY ADVS.
SRI. A. M. SHAFFIQUE (SR.)
SRI. ANIL D. NAIR
SRI. A. K. JAYASANKAR NAMBIAR
SRI. E. K. NANDAKUMAR
SMT. POOJA MENON
RESPONDENTS:
1 ASSISTANT PROVIDENT FUND COMMISSIONER,
EMPLOYEES PROVIDENT FUND ORGANISATION,
REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN,
PATTOM P. O., THIRUVANANTHAPURAM - 695 004.
2 THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL,
7TH FLOOR, SKYLARK BUILDING, 60 NEHRU PALACE,
NEW DELHI - 110 019.
BY ADVS.
SMT. NITA N. S.
SRI. N. N. SUGUNAPALAN - SC - PF
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR HEARING ON
05.06.2024, ALONG WITH WP(C).5562/2011, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
WEDNESDAY, THE 5TH DAY OF JUNE 2024 / 15TH JYAISHTA, 1946
WP(C) NO. 5562 OF 2011
PETITIONER:
M/S.SOUTHERN REFINERIES LIMITED
KUZHINJANVILA, PARASALA, REP.BY ITS, MANAGER
(FINANCE) MR.SREEKUMAR.
BY ADVS.
SRI.E.K.NANDAKUMAR
SRI.P.BENNY THOMAS
SRI.P.GOPINATH
SRI.A.K.JAYASANKAR NAMBIAR
SRI.K.JOHN MATHAI
RESPONDENTS:
1 EPF APPELLATE TRIBUNAL AND ANOTHER
TRIBUNAL, SCOPE MINAR, CARE II, 4TH FLOOR,,
LAXMI NAGAR DISTRIT CENTRE, LAXMI NAGAR,, NEW
DELHI-110 092.
2 ASSISTANT PROVIDENT FUND COMMISSIONER
EMPLOYEES PROVIDENT FUND ORGANISATION, REGIONAL
OFFICE, BHAVISHYANIDHI BHAVAN,, PATTOM P.O.,
THIRUVANANTHAPURAM-695 004.
BY ADVS.
NITA N.S
N.N. SUGUNAPALAN, SC, P.F.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 05.06.2024, ALONG WITH WP(C).13177/2007,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
3
DINESH KUMAR SINGH, J.
--------------------------
W.P.(C) Nos. 13177 of 2007 & 5562 of 2011
-------------------------
Dated this the 5th day of June, 2024
JUDGMENT
1. These writ petitions have been filed impugning the orders
passed by the controlling authority as well as the appellate
authority under the provisions of the Employees Provident Fund
and Miscellaneous Provisions Act, 1952 (hereinafter referred to
as the 'EPF Act' for short).
2. The petitioner establishment was paying three allowances
to its employees which are multi-craft-allowances, food
allowances and meal allowances. It appears that the petitioner
establishment was not paying its contribution on the amount of
these three allowances being paid to its employees. An enquiry
was conducted by the Enforcement Officer and, thereafter the
Assistant Provident Fund Commissioner determined the amount
due from the employer under Section 7-4 of the EPF Act. The
establishment took the plea before the Assistant Provident
Fund Commissioner that the food allowance and multi-craft
allowance fall outside the provisions of the EPF Act in view of
the exemption under Section 2(b) and, therefore, the employer
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
establishment was not required to pay the contribution on the
three allowances. Both the authorities have categorically held
on examination of the record that, all the three allowances were
paid to the employees across the Board and these allowances
form part of the basic wages as defined under Section 2(b) of
the EPF Act.
3. The learned Counsel for the petitioner establishment has
submitted that the meal allowances is specifically exempted
from the definition of basic wages under Section 2(b) of the EPF
Act and, therefore, the two authorities have committed the
error of law on fact while including the meals allowance as part
of the basic wages for computing the PF contribution of the
establishment of the employer.
4. On the other hand, the learned Counsel for the
respondent workman has submitted that the meal allowance is
not one and the same as the value of any food concession.
Admittedly, there was no canteen run by the establishment for
its employees. Therefore, there is no question of any cash value
given for food concession. The meal allowance was part of the
basic wage which was given to all the employees working in the
establishment of the petitioner and, therefore, it could not
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
come within the exemptions as provided in the definition of
basic wages. She further submits that multi-craft allowances
was also given to all the employees who were employed at that
time for performing the work as available in the establishment.
It is not excluded from the definition of basic wages. She
further submits that if the test has laid down in the Judgment
of the Supreme Court in the case of Bridge and Roofs Company
Ltd. v. Union of India and Others [1962 SCC online SC 164] and
The Regional Provident Fund Commissioner (II) West Bengal v.
Vivekananda Vidyamandir and Others [AIR 2019 Supreme
Court 1240] is applied, both the allowances would be part of
the basic wages and two authorities have concurrently held so.
Therefore, this Court may not interfere with the concurrent
finding of fact that the two allowances i.e. the meal allowances
and multi-craft allowances are part of the basic wages for the
purposes of the EPF Act.
5. I have considered the submissions. Section 2(b) of the EPF
Act reads as under;
"2(b) "basic wages" means all
emoluments which are earned by an
employee while on duty or [ on leave or
on holidays with wages in either case] in
accordance with the terms of the contract
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
of employment and which are paid or
payable in cash to him, but does not
include--
(i) the cash value of any food concession;
(ii) any dearness allowance (that is to say,
all cash payments by whatever name
called paid to an employee on account of
a rise in the cost of living), house-rent
allowance, overtime allowance, bonus
commission or any other similar
allowance payable to the employee in
respect of his employment or of work
done in such employment;
(iii) any presents made by the employer;"
6. The exemptions are to be construed strictly so as not to
take away the intent and object of the main Section.
Exemptions cannot be given liberal interpretation. What is not
provided in the basic wage is the cash value of any food
concession and not the food allowances. Therefore, I do not
find much substance in the submissions of Ms. Pooja Menon,
learned Counsel for the petitioners that the meal allowance is
like the cash value for food concession and, therefore, would
exempted under Section 2(b) of the EPF Act which defines basic
wages. So far as the question of multi-craft allowance is
concerned, on examination of the records and facts, two
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
authorities have held that it was given to all the employees
across the Board, and it was not based on some performance
etc., which was part of the basic wages. This Court therefore
does not find that the two authorities have committed any error
of law or facts. Further the Supreme Court has explained in its
Judgment in the case of Vivekananda Vidyamandir (supra) in
paragraphs 14 the importance of exemptions and meaning of
basic wages which on reproduction reads as under;
"14.Applying the aforesaid tests to the facts
of the present appeals, no materials has been
placed by the establishments to demonstrate
that the allowances in question being paid to
its employees were either variable or were
linked to any incentive for production resulting
in greater output by an employee and that the
allowances in question were not paid across
the board to all employees in a particular
category or were being paid especially to those
who avail the opportunity. In order that the
amount goes beyond the basic wages, it has to
be shown that the workman concerned had
become eligible to get this extra amount
beyond the normal work which he was
otherwise required to put in. There is no data
available on record to show what were the
norms of work prescribed for those working
during the relevant period. It is therefore not
possible to ascertain whether extra amounts
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
paid to the workmen were in fact paid for the
extra work which had exceeded the normal
output prescribed for the workmen. The wage
structure and the components of salary have
been examined on facts, both by the authority
and the appellate authority under the Act, who
have arrived at a financial conclusion that the
allowances in question were essentially a part
of the basis wage camouflaged as part of an
allowance so as to avoid deduction and
contribution accordingly to the provident fund
account of the employees. There is no
occasion for us to interfere with the concurrent
conclusions of facts. The appeals by the
establishments therefore merit no interference.
Conversely, for the same reason the appeal
preferred by the Regional Provident Fund
Commissioner deserves to be allowed."
7. Considering the aforesaid Judgment of the Supreme Court
this Court would not like to interfere with the two orders
passed by the two authorities under the EPF Act, and therefore,
these writ petitions are hereby dismissed.
Sd/-
DINESH KUMAR SINGH
JUDGE
Svn
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
APPENDIX OF WP(C) 5562/2011
PETITIONER'S EXHIBITS
EXHIBIT P1 TRUE COPY OF THE LETTER DATED 06.05.1998
ISSUED BY THE ENFORCEMENT OFFICER OF THE
PROVIDENT FUND DEPARTMENT.
EXHIBIT P2 TRUE COPY OF THE LETTER DATED 21.05.1998
ISSUED BY THE PETITIONER TO THE
ENFORCEMENT OFFICE OF THE PROVIDENT FUND
DEPARTMENT.
EXHIBIT P3 TRUE COPY OF THE LETTER DATED 09.03.2006
ISSUED BY THE PETITIONER TO THE
ENFORCEMENT OFFICER OF THE PROVIDENT FUND
DEPARTMENT.
EXHIBIT P3 (a) TRUE COPY OF THE ORDER DATED 25.10.2007
ISSUED BY THE 2ND RESPONDENT.
EXHIBIT P4 TRUE COPY OF THE ORDER DATED 18.03.2008
ISSUED BY THE 2ND RESPONDENT.
EXHIBIT P5 TRUE COPY OF THE APPEAL PETITION (WITHOUT
ITS ANNEXURES) ATA.NO. 411 (7) 2008 DATED
03.06.2008 FILED BY THE PETITIONER BEFORE
THE FIRST RESPONDENT.
EXHIBIT P6 TRUE COPY OF THE ORDER DATED 14.01.2011
IN A.T.A NO.411(7) 2008 PASSED BY THE 1ST
RESPONDENT.
WP(C) NOS. 13177 OF 2007 & 5562 OF 2011
APPENDIX OF WP(C) 13177/2007
PETITIONER'S EXHIBITS
EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 06.05.1998
ISSUED BY THE 1ST RESPONDENT,
NO.KR/2927/EO-1/98.
EXHIBIT P2 TRUE COPY OF THE REPLY DATED 21.05.1998
PETITIONER TO THE 1ST RESPONDENT,
REF.A/41/98/015.
EXHIBIT P3 TRUE COPY OF THE LETTER DATED 09.03.2006
FROM THE PETITIONER TO THE ENFORCEMENT
OFFICER OF THE 1ST RESPONDENT
ORGANISATION.
EXHIBIT P4 TRUE COPY OF THE ORDER DATED 18.05.2006,
NO.KR/12927/2006 ENF.1 (3)/2006/700 of
the 1st respondent.
EXHIBIT P5 TRUE COPY OF THE APPEAL PETITION NO.372
(7)/2006, DATED 09.06.2006, WITHOUT ITS
ANNEXURES, FILED BEFORE THE 2ND
RESPONDENT.
EXHIBIT P6 TRUE COPY OF THE CIRCULAR DATED
28.03.1994 ISSUED BY THE MANAGING
DIRECTOR OF THE COMPANY.
EXHIBIT P7 TRUE COPY OF THE ORDER DATED 27.02.2007
PASSED BY THE 2ND RESPONDENT IN ATA
NO.372(7)/2006.
