Gujarat High Court
Vvf vs Asst.Provident on 30 August, 2011
Author: R Tripathi
Bench: Ravi R.Tripathi
Gujarat High Court Case Information System
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SCA/7898/2011 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 7898 of 2011
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VVF
LTD - Petitioner(s)
Versus
ASST.PROVIDENT
FUND COMMISSIONER & 1 - Respondent(s)
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Appearance :
MR
K M PATEL, LD SENIOR ADVOCATE WITH MR HARMESH D NANAVATY
for Petitioner
RULE NOT
RECD BACK for Respondent(s) : 1 - 2.
MS E.SHAILAJA for
Respondent(s) : 1 -
2.
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CORAM
:
HONOURABLE
MR.JUSTICE RAVI R.TRIPATHI
Date
: 30/08/2011
ORAL
ORDER
1. Present petition is filed by M/s. V V F Ltd., through its authorized signatory Shri Bhavin L Malaviya, challenging the order passed by the Assistant Provident Fund Commissioner, Rajkot dated 01/05/2007 whereby the present petitioner is directed to pay a sum of Rs.9,78,970/- and amount of Rs.4,21,001/- as interest within fifteen days from the receipt of the order under Section 7A and 7Q of Employees' Provident Funds & Miscellaneous Provisions Act, 1952.
1.1 The petitioner filed an appeal being ATA No.431(5) of 2007 before the Employees Provident Fund Appellate Tribunal, who decided the appeal by order dated 07/03/2011 and dismissed the same. Thereafter, the authorities passed a recovery order dated 05/04/2011, a copy of which is produced at Annexure - F.
2. Learned Senior Advocate, Mr.K M Patel appearing with Mr.H D Nanavati, for the petitioner submitted that the order under Section 7A is passed without issuing Notices to the concerned contractors though the case of the petitioner - establishment was that the amount which is alleged to have been shown as payment of overdue wages is in-fact the actual wages paid to the workman. Learned Senior Advocate for the petitioner submitted that the contractors did have their independent Provident Fund Code and even on that ground the Notices were required to be issued to those contractors. Learned Senior Advocate submitted that the issue which was involved in the matter - the allegations about the payment of amount under the guise of overtime payment which was alleged to be the actual wages paid to the workman could not have been decided in absence of hearing the concerned contractors and relevant record being produced by them.
3. On 05/07/2011, this Court issued Notice returnable on 25/07/2011 and granted ad-interim-relief. On 26/07/2011 the Court issued Rule and ad-interim-relief granted earlier was ordered to continue till then.
4. Today, when the matter is taken up for consideration learned Senior Advocate requested that if the matter could be heard finally to which learned Advocate, Ms. E Shailaja has no objection and therefore the matter is taken up for consideration and final disposal.
5. Having heard learned Senior Advocate for the petitioner and having noticed the relevant discussion in the order of the Assistant Provident Fund Commissioner, the Court is prima-facie of the opinion that the Assistant Provident Fund Commissioner has not given required attention to the contention raised by the petitioner - establishment. Relevant part of the order impugned reads as under:
"....Further, the issue to be decided is whether the PF contribution is payable on overtime paid by the three contractors M/s. Vandana Enterpreises, M/s. National Associates, M/s. National Corporate Services. In this regard, Section 2 (b) of the Act is relevant which clearly excludes overtime payment from the basic wages. Hence, the provisions of the Act is relevant which clearly excludes overtime payment from the basic wages. Hence, the provisions of the Act are quite clear that overtime is not basic wages accordingly it is not liable for PF deduction as per the provisions of the Act. However, the real issue here not not whether overtime is liable for PF deduction because the Act clearly excludes overtime payment from basic waged as defined in Section 2 (b). But whether overtime shown by contractors was actually overtime paid to employees or was merely an adjustment of actual wages to evade PF liability.
The establishment in this record has contended that breach of Factories Act can not convert overtime payment into basic wages. However, the close scrutiny of the salary / wages register of the contractor reveals that all employees are paid on daily basis and overtime paid to them is on hourly basis. Whereas the representative of the establishment themselves has submitted that these contractor employees are working on piece rate basis. Which makes it difficult to understand that how employees engaged on piece rate basis are paid overtime on hourly basis. Hence, the establishment's statements are contradictory. On the one hand, it is saying that contractor employees are working on piece rate basis on the other hand, it is saying that overtime is paid for extra hours of work done by contract employees...."
(emphasis supplied)
6. Learned Senior Advocate for the petitioner submitted that in absence of hearing the contractors and the material available with them, the Assistant Provident Fund Commissioner could not have passed the order impugned. Learned Senior Advocate submitted that to that extent the order is required to be quashed and set aside as without hearing the contractors and taking into consideration the material available with them, no adjudication / order could have been passed. Learned Senior Advocate submitted that the appellate authority has also erred in not taking into consideration the aforesaid contention raised by the petitioner - establishment.
6.1 Learned Senior Advocate for the petitioner submitted that the case of the petitioner-establishment is not appreciated in its true perspective. Learned Senior Advocate submitted that case of the petitioner was that concerned contractors were paid on piece rate basis.
7. The Court is of the opinion that submission made by learned Senior Advocate requires to be accepted and the same are accordingly accepted. The order passed by the Assistant Provident Fund Commissioner is quashed and consequently the order passed by the appellate Tribunal is also quashed and set aside.
8. At the request of learned Advocate, Ms.E Shailaja, it is clarified that quashing of the order does not take away the authority against three concerned contractors of the Assistant Provident Fund Commissioner of taking up the matter de novo in accordance with law and calling upon the contractors for explaining the controversy about the overtime paid to the workman.
9. Rule is made absolute to the aforesaid extent with no order as to costs.
(RAVI R TRIPATHI, J.) sompura Top