Kerala High Court
The Academy Of Medical Sciences vs Regional Provident Fund Commissioner on 27 September, 2018
Author: P.V.Asha
Bench: P.V.Asha
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE SMT. JUSTICE P.V.ASHA
THURSDAY ,THE 27TH DAY OF SEPTEMBER 2018 / 5TH ASWINA, 1940
WP(C).No. 23305 of 2013-K
PETITIONER/S:
THE ACADEMY OF MEDICAL SCIENCES
DIRECTOR, PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA
TALUK, KANNUR DISTRICT, PIN - 670 503.
BY ADVS.
SRI.P.NARAYANAN
SRI.NICHOLAS JOSEPH
RESPONDENT/S:
1 REGIONAL PROVIDENT FUND COMMISSIONER
EMPLOYEES' PROVIDENT FUND ORGANIZATION, SUB REGIONAL
OFFICE, V.K.COMPLEX, FORT ROAD, KANNUR TALUK, KANNUR
DISTRICT - 670 501.
2 THE ASST. PROVIDENT FUND COMMISSIONER, EMPLOYEES'
PROVIDENT FUND ORGANIZATION,SUB REGIONAL OFFICE,
V.K.COMPLEX, FORT ROAD, KANNUR TALUK, KANNUR DISTRICT -
670 501.
3 SHEEBA M.M. JR.CLERK ACADEMY OF MEDICAL SCIENCES
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
4 NIMI A.V. JR.CLERK ACADEMY OF MEDICAL SCIENCES
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
5 SREELATHA T.V. JR.CLERK ACADEMY OF MEDICAL SCIENCES,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
6 PREJITH M., JR.CLERK ACADEMY OF MEDICAL SCIENCES
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
WP(C).No. 23305 of 2013-K
2
KANNUR DISTRICT, PIN - 670 503.
7 SREEKANTH K.M. JR.CLERK, ACADEMY OF MEDICAL SCIENCES,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
8 PRASEETHA K.P., JR.CLERK, ACADEMY OF MEDICAL SCIENCES
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
9 RESHMI M., JR.CLERK, ACADEMY OF MEDICAL SCIENCES,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
10 JAYAN THOPRATH, JR.CLERK, ACADEMY OF MEDICAL SCIENCES,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
11 NISHA N., JR.CLERK, ACADEMY OF MEDICAL
SCIENCES,PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA
TALUK, KANNUR DISTRICT, PIN - 670 503.
12 JIJESH P.R., JR.CLERK, ACADEMY OF MEDICAL
SCIENCES,PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA
TALUK, KANNUR DISTRICT, PIN - 670 503.
13 RANJITH KUMAR P.V., JR.CLERK, ACADEMY OF MEDICAL
SCIENCES, PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA
TALUK, KANNUR DISTRICT, PIN - 670 503.
14 CEEBA BALAN, JR.CLERK, ACADEMY OF MEDICAL SCIENCES,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
15 SMITHA M., CHAIRSIDE ASSISTANT, DENTAL COLLEGE,
PARIYARAM MEDICAL COLLEGE .P.O, TALIPARAMBA TALUK,
KANNUR DT., PIN 670503
16 SAJITHA V., CHAIRSIDE ASSISTANT, DENTAL COLLEGE,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
17 SOUMYA PREMAN, CHAIRSIDE ASSISTANT, DENTAL COLLEGE,
PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
18 MAYA V.V. CHAIRSIDE ASSISTANT, DENTAL COLLEGE,
WP(C).No. 23305 of 2013-K
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PARIYARAM MEDICAL COLLEGE P.O., TALIPARAMBA TALUK,
KANNUR DISTRICT, PIN - 670 503.
BY ADVS.
SRI.K.C.SANTHOSH KUMAR, SC, EMPLOYEES PROVIDENT FUND
ORGANISATION
SRI.BINNY THOMAS
SRI.P.A.JACOB
SRI.TITUS MANI, R3 TO R14
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27.09.2018,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 23305 of 2013-K
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JUDGMENT
The Academy of Medical Science, Pariyaram is challenging Exts.P3 and P6 orders issued under paragraph 26B of the Employees' Provident Fund Scheme, 1952 (the Scheme for short) and section 7A of the Employees' Provident Fund and Miscellaneous Provision Act, 1952 (the Act for short) respectively.
2. The case of the petitioner is that respondents 3 to 18 were enrolled as members of the EPF Account at the time of their appointment as Junior Clerks. Contribution was being paid for certain period. Subsequently payment was stopped. Employees submitted a complaint before the Assistant Provident Fund Commissioner. As per Ext.P2 notice issued on 21.03.2013 the petitioner was directed to appear before the Regional Provident Fund Commissioner along with attendance registers and payment register. An enquiry was conducted in which the employer as well as employees were heard. The Regional Provident Fund Commissioner thereafter issued Ext.P3 order directing remittance of EPF contribution along with arrears. It was ordered that the employer cannot be allowed to reduce the total quantum of benefits given to the employees directly or indirectly, expressly or impliedly, provident fund benefits WP(C).No. 23305 of 2013-K 5 once given cannot be discontinued. It was ordered that the complainants and others would be continued to be enrolled under the EPF and their contributions shall be remitted to the Employees' Provident Fund Accounts and returns filed as per statutory provisions, failing which appropriate action would be taken. In the enquiry the party respondents stated that they were appointed in the year 2009 in the scale of pay of Rs.5100- 8590 and their total salary which was being paid to them was Rs.7,423/- which was more than the prescribed wage limit of Rs.6500/-. It was stated that they were exempted employees. Thereafter the executive committee had taken a decision that 15 junior clerks including the complainants would be included under the EPF Scheme and contributions were remitted for the period from April 2010 to October 2010 on a salary up to Rs.6,500/-. Provident fund deduction was thereafter made for that period and remitted in their account. At the same time on behalf of the petitioner it was stated that the decision to start and stop provident fund deduction was taken by the management under its discretionary powers. It was also stated that the Data Entry Operators were granted basic pay of Rs.5510/-. 3. After taking note of section 12 of the Employees' Provident Fund and Miscellaneous Provisions Act, WP(C).No. 23305 of 2013-K 6 1952, the Regional Provident Fund Commissioner found that employer cannot be allowed to deduct wages and once the employees were enrolled under the EPF scheme, they cannot be discontinued. Even after Ext.P3 order was passed the petitioner did not take any action and thereupon notice was issued under section 7A. Ext.P6 order was passed thereafter, directing the petitioner to remit a sum of Rs.7,46,494/-, towards EPF contribution, failing which appropriate action would be taken. It was also informed that belated remittances would attract levy of damages under section 14B of the Act. This writ petition was filed under the above circumstances.
4. The contention of the petitioner is that payment was made towards provident fund only on misconception and from Ext.P1 details of salary paid to the party respondents, it can be seen that they were drawing pay above Rs.6,500/- and that they are exempted employees as defined under the provisions of the Act. Learned counsel also submitted that going by the provisions contained in section 12 of the Act as well as section 26A, case of the petitioner does not come under the purview of the Act and the Scheme. It is pointed out that under paragraph 26(6) of the Employees Provident Fund Scheme (Scheme), the excluded employees can be enrolled as a member WP(C).No. 23305 of 2013-K 7 only if there is a joint request in writing of the employee and employer. In a case where the salary drawn by the employee is more than Rs.6,500/- it shall also be subject to the condition that the employer gives an undertaking in writing that he will pay administrative charges payable and comply with all statutory provisions in respect of such employees. It is pointed out that in the present case respondents 1 and 2 do not have any case that any such consent was given or joint request was made before the respondents, in order to enroll the party respondents under the Scheme and therefore the decision of the petitioner is illegal. Pointing out the definition of exempted employees under the Act it is argued that any employee who is drawing pay in excess of Rs.6,500/- at the relevant time do not come under the purview of the Act and when it was found that contribution was made for a certain period contrary to law, it was open to the petitioner to stop the payment. The learned counsel for the petitioner relied on the judgment of this Court in Vijayan vs. Secretary to Government : 2004 KHC 114, Vijayan vs. Secretary to Government : 2006 (3) KLT 291 the judgment of the apex court in Marathwada Gramin Bank Karamchari Sanghatana and another vs. Management of Marathwada Gramin Bank and others : (2011) 9 SCC 620, the judgment in Union Territory, Chandigarh WP(C).No. 23305 of 2013-K 8 and others vs. Gurcharan Singh and another : (2014) 13 SCC 598, etc in support of the contention that the employer cannot be compelled to continue to make the contribution once it is found that contribution is not legally warranted.
5. The learned counsel for the respondents pointed out that enquiry was conducted with notice to both sides. It was pointed out that it was on the basis of the resolution passed by the petitioner Hospital that the employer started making contribution. Party respondents as well as official respondents produced Ext.R1(a) as well as Ext.R3(b) decision of the petitioner to make contribution towards the employees provident fund and when appointment order was issued it was stated that party respondents would be included in the Employees Provident Fund Scheme requesting the concerned authorities to make arrangement to remit the EPF contribution with effect from 01.04.2010. Ext.R3(b) proceedings dated 27.05.2010 refers to the executive committee decision dated 13.04.2010 by which 15 junior clerks were appointed and they were requested to be included under the EPF Scheme. Party respondents have produced Ext.R3(a) decision of the executive committee which was convened on 13.04.2010 to enroll the newly appointed junior clerks under the EPF Scheme.
WP(C).No. 23305 of 2013-K 9
6. According to respondents 1 and 2, petitioner did not invoke the statutory remedies available under section 7I of the Act and approached this Court for delaying the payment. It is pointed out that once the petitioner is included under the Scheme they cannot withdraw the employees from the Scheme except as provided under clause 26A of the Scheme which provides that the member of the Fund shall continue to be member until he withdraws under paragraph 69, the amount standing to his credit in the Fund or is covered by a notification of exemption under Section 17 of the Act or an order of exemption under paragraph 27 or paragraph 27A.
7. Paragraph 26B of the Scheme provides for resolution of doubts as to the entitlement or otherwise of an employee who enrolled to continue with effect from the date on which he is entitled to or become a member, shall be recommended to the Regional Provident Fund Commissioner who shall decide the same, provided that both the employer and the employee shall be heard before passing any order in the matter.
8. The learned counsel for the petitioner points out that since Ext.P3 decision under para 26B of the Scheme is issued by the Regional Provident Fund Commissioner and Ext.P6 order under section 7A of the Act is issued by the Assistant Provident Fund WP(C).No. 23305 of 2013-K 10 Commissioner, no purpose would be served by approaching the statutory authorities with statutory remedies.
9. However, the time limit provided for filing appeal or review under section 7A or 7B of the Act is already over and this Court had entertained the writ petition.
10. Considering the contentions advanced by either side, it is seen that the petitioner got the employees enrolled in implementation of a resolution of the Managing Committee after elaborate discussion on the issue, as evident from Ext.R3(a) and R3(b). Though it was not necessary for the respondents to enroll the party respondents under the Scheme, they consciously chose to make contributions in respect of the party respondents with due knowledge that the salary drawn by them was above the limit fixed for coming under the scheme; therefore they cannot, on their own, stop the payment of contribution, all of a sudden, at their will and pleasure. There is no provision under the Scheme to stop the payment, once the employees are included under the Scheme and the employees started making contributions. Though it is true that there is no joint request from the employer and employees or any undertaking that the administration charges would be paid as provided under clause 26(6) of the Scheme, when the petitioner themselves in their WP(C).No. 23305 of 2013-K 11 executive meeting chose to resolve to enroll the newly appointed junior Clerks/employees under it with effect from 01.04.2010 with a request to the authorities under the Act to enroll them that can only mean that they were willing to meet the administrative expenses. It is also seen that it is on the basis of the request made by the employees that a decision was taken in the meeting. Therefore the mere fact that there is no joint request made before the authorities cannot enable the respondents to stop the payment. Atleast the petitioner ought to have made a request before the respondents before taking a decision to stop payment. At any rate no decision is seen taken to stop the payment though it is stated that it is at their discretion to start or stop payment.
11. In Vijayan's case the issue which arose for consideration was whether Government had authority to direct the employer to limit the contribution when the employer had been contributing to the Scheme in excess of the prescribed limit. When audit objection was raised, the employer had sought clarification from the Government, regarding the future course of action to be taken in the matter and Government directed to comply with the provisions in the Scheme and the employer had stopped the payment of excess amount. It was observed that when WP(C).No. 23305 of 2013-K 12 the terms of the employment did not provide for any remittance of contribution or any such benefit in excess of the limits prescribed under the statute,such contribution can only be by a mistake without noticing the proviso of sub clause 2 of clause 29(A). In the judgment in Vijayan vs. Secretary to Government :
2006 (3) KLT 291 the Division Bench held that when the wages of a member exceeds prescribed wage limit, the provident fund authorities can permit the employees to make contributions to the fund in excess of the wage limit under the proviso to sub paragraph 6 of paragraph 26 of the Scheme in case there is a joint application by the employer and employee and an undertaking by the employer that he shall meet the administrative charges. It was held that even if there was any agreement between the employer and employee regarding payment of contribution in excess of the statutory limit it was not covered by sub paragraph 6 of paragraph 26 of the Scheme. It was held that employer is not obliged to make payment of contribution in excess of the wage limit. In both these cases the question whether the contribution itself can be stopped, did not come up for consideration. In the judgment in Marathwada Gramin Bank Karamchari Sanghatana and another vs. Management of Marathwada Gramin Bank and others : (2011) 9 SCC WP(C).No. 23305 of 2013-K 13 620, also the discontinuance of payment of contribution in excess of the statutory limit alone was held permissible. It was observed therein that the bank had not discontinued its contribution as per the statutory scheme. In the judgment in Union Territory, Chandigarh and others vs. Gurcharan Singh and another : (2014) 13 SCC 598 the question which arose for consideration was regarding rectification of mistake in refixation of pay, by the employer. None of those judgments relied on by the learned Counsel for the petitioner relates to a case where the employer stopped remitting contribution after enrolling its employees, with the knowledge that their wages were in excess of Rs.6500/-. The judgments relied on by the learned counsel are rendered under different circumstances and hence cannot be applied in the factual circumstances of this case.
12. In the present case the contribution made, was not on account of any misconception of facts or law, as argued by the learned counsel for the petitioner, but it was being made in implementation of a conscious decision, with open eyes to the factual and legal position. It was not by way of any mistake, which required any rectification.
In the above circumstances of the case, the contentions WP(C).No. 23305 of 2013-K 14 raised against the impugned orders Exts.P3 or P6 are unsustainable. I do not find any reason to interfere with the orders.
The writ petition fails and is accordingly, dismissed.
Sd/-
P.V.ASHA JUDGE rkc WP(C).No. 23305 of 2013-K 15 APPENDIX PETITIONER'S/S EXHIBITS:
EXHIBIT P1 EXHIBIT P1 STATEMENT SHOWING THE PAY (SALARY) OF THE RESPONDENT NOS.3 TO 18 EXHIBIT P2 EXHIBIT P2 COPY OF THE NOTICE NO.KR/KNR/17075/ENF/CIRCLE-1/2012-13/1663 DATED 21/3/2013 ISSUED BY THE IST RESPONDENT EXHIBIT P3 EXHIBIT P3 COPY OF THE ORDER NO.KR/KNR/17075/ENF.1(1)/CIRCLE -1/26-B/2012-
13/50 DATED 12/4/2013 PASSED BY THE IST
RESPONDENT
EXHIBIT P4 EXHIBIT P4 COPY OF THE NOTICE
NO.KR/KNR/KNR/17075/CIRCLE-1/773/2012-13/272 DATED 5/7/2013 PASSED BY THE 2ND RESPONDENT EXHIBIT P5 EXHIBIT P5 COPY OF THE OBJECTION SUBMITTED IN RESPONSE TO EXT.P4 NOTICE EXHIBIT P6 EXHIBIT P6 COPY OF THE ORDER NO.KR/KNR/17075/ENF./CIRCLE-1/7-A/2012-13/457 DATED 12/8/2013 PASSED BY THE 2ND RESPONDENT RESPONDENTS' EXHIBITS EXHIBIT R3A TRUE COPY OF THE DECISION NUMBER 5 DT.13.4.10 EXHIBIT R3B TRUE COPY OF THE PROCEEDINGS ISSUED ON 27.5.10 EXHIBIT R1A TRUE COPY OF THE COMMUNICATION BEARING NO.A2- 4857/2008/DIR/ACME DT.27.5.10