Karnataka High Court
Central Board Of Trustees Epf vs Svenpa Systems (Stiven Systems) on 25 January, 2023
Bench: Alok Aradhe, S Vishwajith Shetty
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WA No.5732 of 2012
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF JANUARY 2023
PRESENT
THE HON'BLE MR JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE S. VISHWAJITH SHETTY
WRIT APPEAL NO.5732 OF 2012 (L-PF)
BETWEEN:
1. CENTRAL BOARD OF TRUSTEES EPF
THROUGH THE ASST. PROVIDENT FUND
COMMISSIONER
BHAVISHYA NIDHI BHAVAN
NO. 13 RAJARAM MOHAN ROY ROAD
BANGALORE-560025.
Digitally signed ...APPELLANT
by RUPA V
Location: High (BY SRI. VENKATARAMANA K S, ADV.,)
Court of
Karnataka
AND:
1. SVENPA SYSTEMS (STIVEN SYSTEMS)
NO. 2/3, 2ND FLOOR
HOSPITAL ROAD, SHIVAJIANGAR
BANGALORE-560001
REPRESENTED BY ITS PARTNER.
2. SRI. MOHAN V. MANKANI
MANAGING PARTNER
M/S SVENPA SYSTEMS
NO. G 15, E BLOCK, GOLDEN ORCHID
BANGALORE-560001.
3. THE DIRECTOR
EDUCOMP DATAMATICS LTD
100 FEET, RING ROAD
BANASHANKARI 3RD STAGE
BANGALORE-560085.
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WA No.5732 of 2012
4. M/S APTECH LTD
ELITE AUTO HOUSE
A-65 MIDC MAROL
ANDHRI (E), MUMBAI 400 093.
5. STATE OF KARNATAKA
DEPT OF EDUCATION
REP. BY ITS SECRETARY
M.S. BUILDING
DR. AMBEDKAR ROAD
BANGALORE-560001.
...RESPONDENTS
(BY SRI. B.C. PRABHAKAR, ADV., FOR R1 & R2
SRI. B. RAJENDRA PRASAD, HCGP ON IA 3/14
V/O DTD:03.03.2014 NOTICE TO R3 IS
HELD SUFFICIENT THROUGH PAPER PUBLICATION
R3, R4 SERVED)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER
PASSED IN THE WRIT PETITION NO.8808/2012 DATED
16/07/2012.
THIS APPEAL COMING ON FOR FINAL HEARING, THIS
DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
This intra court appeal arises out of order dated 16.07.2012 passed by learned Single Judge by which writ petition preferred b y the appellant has been dismissed. -3- WA No.5732 of 2012
2. Facts giving rise to filing of this appeal briefly stated are that M/s Svenpa Systems is an establishment covered under the provisions of Employees Provident Fund and Miscellaneous Provision Act, 1952 (hereinafter referred to as 'the Act' for short). The respondent No.1 viz., M/s Svenpa Systems entered into a contract with M/s Aptech, Mumbai for imparting training in computer under Mahiti Sindhu Scheme of Government of Karnataka. Under the contract, respondent No.1 employed faculty members on consolidated salary of Rs.2,550/- to impart education in computers in Government school in the State of Karnataka.
3. The M/s Svenpa Systems was deducting the share of provident fund contributions on the consolidated salary of Rs.1,000/- instead of Rs.2,550/- which was actually paid to the faculty members. Therefore, a proceeding under Section 7 of the Act was initiated against the M/s Svenpa Systems and an enquiry was conducted. M/s Svenpa Systems by an order dated 03.07.2006 passed by Assistant Provident Fund Commissioner was held -4- WA No.5732 of 2012 responsible to pay a sum of Rs.72,70,262/- for a period of 2001 till 2006.
4. The said order was challenged in a writ petition viz., W.P.No.9322/2006 which was disposed of by a learned single Judge of this court by an order dated 17.10.2006. The learned single Judge quashed the order dated 03.07.2006 and remitted the matter to the Assistant Provident Fund Commissioner to conduct a fresh enquiry after affording an opportunity of hearing to M/s Svenpa Systems.
5. The Assistant Provident Fund Commissioner by an order dated 23.01.2007 held M/s Svenpa Systems liable to pay contribution on consolidated salary of Rs.2,550/- and determined a sum of Rs.52,35,621/-. Against the aforesaid order, M/s Svenpa Systems preferred an appeal. The appellate tribunal by an order dated 20.08.2009 inter alia held that out of Rs.2,550/- is consolidated salary. Out of the aforesaid amount, only Rs.1,000/- is paid as basic wages and remaining amount is paid on account of House Rent Allowance, Dearness Allowance and other allowances. It was -5- WA No.5732 of 2012 further held that aforesaid allowances are not part of basic pay for the purposes of computing provident fund.
6. The order passed by the Employees Provident Fund Appellate Tribunal dated 20.08.2009 was challenged in a writ petition, which has been dismissed by learned Single Judge. In the aforesaid factual background, this appeal has been filed.
7. Learned counsel for the appellant submitted that the order passed by the learned single Judge is cryptic and suffers from the vice of non application of mind. It is further submitted that learned single Judge erred in upholding the order passed by Employees Provident Fund Appellate Tribunal. On the other hand, learned ocunesl for the respondent has supported the order passed by learned single Judge.
8. We have considered the submissions made on both sides and have perused the record. Section 2B of the Act defines the expression 'basic wages', which is extracted below for the facility of reference:
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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 of employment and which are paid or payable in cash to him, but doe 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; -7- WA No.5732 of 2012
Thus, it is evident that basic wages does not include any dearness allowance, house rent allowance, over time allowance or any other similar allowance.
9. The employer under he Act is under a statutory obligation to deduct specified amount of contribution from the employee's salary and to make matching contribution in terms of Section 6 of the Act. In the instant case, Employees Provident Fund Appellate Tribunal on the basis of material available on record has concluded that out of consolidated salary of RS.2,550- only a sum of Rs.1,000/- was paid as basic wages and remaining amount was paid as house rent allowance, dearness allowance and other allowances. The aforesaid finding has been affirmed by learned single Judge. It is not the case of the appellant that aforesaid finding recorded by the Employees Provident Fund Appellate Tribunal or the learned single Judge is perverse.
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10. The matter stands concluded against the appellant by concurrent finding of fact, which do not call for any interference in this intra court appeal.
In the result, the appeal fails and is hereby dismissed.
Sd/-
JUDGE Sd/-
JUDGE SS