Himachal Pradesh High Court
M/S G4S Security Services (India) Pvt. ... vs Assistant Provident Fund Commissioner ... on 30 June, 2025
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
CWP No. 9994 of 2011
Decided on 30th June 2025
M/s G4S Security Services (India) Pvt. Ltd.
...Petitioner
.
Versus
Assistant Provident Fund Commissioner and another
...Respondents
Coram
Hon'ble Mr. Justice Ajay Mohan Goel, Judge
1
Whether approved for reporting?
For the petitioner: M/s Amitabh Chaturvedi and Jyotirmay
Bhatt, Advocates.
For the respondents: Mr. Rahul Mahajan, Advocate, for
respondent No.1.
r Mr. Avinash Jaryal, Senior Panel Counsel,
for respondent No.2.
Ajay Mohan Goel, Judge (Oral)
By way of this writ petition, the petitioner has prayed for the following reliefs:-
"(a) An order, direction or writ in the nature of certiorari may kindly be issued, quashed and setting aside the impugned order dated 04.07.2011, passed by the Employees Provident Fund Appellate Tribunal, New Delhi as well as the order dated 07.11.2006 under Section 7A of the Act, passed by the Assistant Provident Fund Commissioner (C), Shimla and it may be held that the petitioner is not liable to deposit any provident fund contribution on the conveyance allowance and washing allowance.
(b) The records of the appeal filed by the petitioner, ATA No.710(1&)2006, decided by the Employees Provident Fund Appellate Tribunal, New Delhi vide its impugned order dated 04.07.2011, may kindly be summoned."::: Downloaded on - 02/07/2025 21:17:14 :::CIS 2
2. When this case was taken up for consideration, learned counsel for the petitioner apprised the Court that on 04.07.2011, the Employees Provident Fund Appellate Tribunal, New Delhi had .
passed two orders in the case of two Establishments of the petitioner i.e. one pertaining to its Unit in the State of Himachal Pradesh and the other in the State of Haryana. Orders were same and similar. Whereas, the petitioner filed present writ petition against the order relating to its Unit in the State of Himachal Pradesh, it preferred CWP No.17716 of 2011 in the Hon'ble High Court of Punjab and Haryana at Chandigarh against the order passed against its Establishment in the State of Haryana.
3. Learned counsel further submitted that in this case as well as in the matter, which was pending before the Hon'ble High Court of Punjab and Haryana, the factum of the pendency of Civil Appeal No.9284 of 2013, titled Assistant Provident Fund Commissioner versus M/s G4S Security Services (India) Limited and another was brought to the notice of the Hon'ble Courts and it was submitted that as the issue involved in the said matter before the Hon'ble Supreme Court was same and similar as to one involved in this writ petition, therefore, outcome thereof be awaited. Learned counsel further submitted that Hon'ble Supreme Court was pleased to dismiss the Civil Appeal filed by Assistant Provident Fund ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 3 Commissioner i.e. Civil Appeal No.9284 of 2013 on 17.08.2023.
Copy of the order passed by the Hon'ble Supreme Court was made available for the perusal of this Court. He, thereafter, submitted that .
after this adjudication by the Hon'ble Supreme Court, the Hon'ble High Court of Punjab and Haryana has disposed of CWP No.17716 of 2011 (supra) vide judgment dated 21.11.2024 and this writ petition be disposed of in the terms of the judgment passed by the Hon'ble High Court of Punjab and Haryana.
4. Learned counsel for the respondents, on the other hand, submitted that the case be decided in terms of the judgment passed by the Hon'ble Supreme Court in Civil Appeal No.9284 of 2013, titled Assistant Provident Fund Commissioner versus M/s G4S Security Services (India) Limited and another, but the issue decided by the Hon'ble Supreme Court in Vivekanand Vidya Mandir case, reference whereof is given in the judgment passed by the Hon'ble High Court of Punjab and Haryana dated 21.11.2024, has no bearing as far as the issue involved in this petition is concerned.
5. I have heard learned counsel for the parties and have also gone through the pleadings as well the judgment of the Hon'ble Supreme Court of India as well as the judgment passed by Hon'ble Punjab and Haryana High Court, referred to hereinabove.
::: Downloaded on - 02/07/2025 21:17:14 :::CIS 46. It is not in dispute that Employees Provident Fund Appellate Tribunal, New Delhi passed two similar orders on 04.07.2011 relating to two Establishments of the petitioner, one of .
which was in the State of Himachal Pradesh and other in the State of Haryana.
7. Court record demonstrates that when the case was listed in this Court on 10.08.2017, the following order was passed:-
"Heard further. At this stage, learned counsel for the parties have apprised this Court that the issue subject matter of present writ petition is also pending adjudication before the Hon'ble Supreme Court by way of SLP bearing No. SLP(C) 32744 of 2011 and it will be in the interest of justice in case this case is heard after the decision of the Hon'ble Supreme Court. Ms. Jyotsna Rewal Dua learned Senior Counsel appearing for the petitioner has informed that appeal pending before the Hon'ble Supreme Court stands filed by present respondents against a decision given in similar case in favour of the present petitioner by Hon'ble Punjab and Haryana High Court. She further submits that in the interest of justice, till the adjudication of the case, respondents be directed not to hold any inquiries against the petitioners on the issue which is subject matter of the present writ petition. Mr. Mahajan submits that he may be granted some time to have instructions in this regard. For the said purpose, list the case on 6.9.2017, as prayed for."
8. Thereafter, when the matter was again listed on 06.09.2017, the following order was passed:-
"Mr. Rahul Mahajan, learned Counsel for respondent No. 1 has placed on record communication dated 04.09.2017, vide which ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 5 instructions stand imparted to him by Assistant P.F. Commissioner (Legal) to the effect that presently no inquiry under Section 7A of the EPF&MP Act, 1952 is initiated against the establishment, i.e. the petitioner and the inquiry which was initiated has been kept in abeyance.
.
Be that as it may, on the joint request of learned Counsel for the parties, list after the decision of the SLP pending before the Hon'ble Supreme Court against the judgment passed in a similar case by Hon'ble Punjab and Haryana High Court, note of which has been taken by this Court in its order dated 10.08.2017. Parties are at liberty to make a mention in this regard after the SLP is so decided by the Hon'ble Supreme Court."
9. A perusal of the judgment passed by Hon'ble High Court of Punjab and Haryana at Chandigarh dated 21.11.2024 demonstrates that it relied upon and referred to the order of the Hon'ble Supreme Court in Civil Appeal No.9284 of 2013, titled Assistant Provident Fund Commissioner versus M/s G4S Security Services (India) Limited and another and thereafter decided the writ petition in the following terms:-
"I have heard the arguments of both sides and with the able assistance of learned counsel perused the record.
The respondent vide order dated 13.04.2006 ordered to include Allowances in Basic Pay for the purpose of Provident Fund Contribution. The Authority was well aware of the fact that petitioner has bifurcated wages of workman into four heads i.e. Basic, HRA, Conveyance and Washing Allowances. This is evident from following paragraphs of the aforesaid order:-
"12. In their submission particularly on split-up of wages they have commented:-
That the department earlier also initiated &A proceedings on the similar issue vide show cause notice ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 6 dated 19.07.1999 which was decided in favour of Group 4 vide order No.EB/HR/9693/993 dated 23.05.2002 whereby it has been ordered by the APFC, Gurgaon that the employer is not liable to pay PF contribution on HRA, fixed conveyance and washing allowance under minimum wages.
.
xxx xxx xxx That the employer and the employee have admittedly contracted to split the total emoluments in to component parts and it has been agreed that HRA conveyance allowance and washing allowance shall be treated as separate from basic wages payable to the employees and these allowances are specifically excluded from the Basic Wages by the definition clause contained in EPF&MP Act and the eAPFc has no power to treat these allowances as part of basic wages.
xxx xxx xxx After having considered the facts of the case, the Enforcement Officer's report dated 26.09.2005 and the written and oral submissions made by M/s Group 4 Securitas Pvt. Limited, I am of the considered opinion that the EPF&MP Act being special welfare legislation, requires liberal interpretation. In construing the provision of the Act, it is borne in mind that it is a beneficent piece of social legislation aimed, promoting and security the well-being of employees and that splitting of minimum wages in Basic Wage, HRA and other allowances was clearly a subterfuge in order to avoid statutory liability of P.F. on the same analogy as decided by the Hon'ble EPF Appellate Tribunal in the ATA in the matter of JMA Industries Vs. Assistant P.F. Commissioner, Faridabad (ATA No.599)(16)2000 dated 17th February, 2005.) xxx xxx xxx Therefore, in the light of the judgment made by the Hon'ble EPF Appellate Tribunal in the matter of M/s JMA Industries Vs. Assistant P.F Commissioner, Faridabad and the judgment of Hon'ble High Court of Karnatka in the matter of RPFC, Karnatka Vs. M/s Group 4 Securitas Guarding Pvt. Limited, there is no scope to differ from the views of the Enforcement Officer as mentioned supra and I hold that splitting of minimum wages into basic, HR and other allowance was clearly a subterfuge in order to avoid statutory liability of Provident Fund. I further order that the Provident Fund is to be paid on the entire minimum wages disclosed by the establishment and the splitting of minimum wages ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 7 should not be allowed."
The Appellate Tribunal vide order dated 15.06.2009 held that allowances which are part of pay structure, are not part of Basic Wage as per the definition of Basic Wages under Section 2(b) of 1952 Act and appellant is not liable to make contribution on the .
same. The Tribunal as well as Authorities were well aware of colour and contour of bifurcation of wages made by respondent which is evident from below reproduced para no. 2 of the said order:
"2. The facts of the case are that the appellant company a covered establishment, was remitting the salary to its employees, as per the contract of employment. The salary package is state to include the basis wages + HRA and other allowances consisting of conveyance and washing allowance, as specified in the contract of employment. Shri Khushi Ram President of the All India Trade Union Congress, Gurgaon made a complaint that the appellant is bifurcating the minimum wages with a view to avoid PF liability on minimum wages. The respondent initiated an enquiry under Section 7A of the Act. The appellant contested the enquiry by contending that this issue had already been decided by the Tribunal and hence cannot be raised again for adjudication."
The Tribunal specifically set-aside decision of respondent to include Allowances in the Basic Wage for the purpose of PF Contribution. The operative portion of order dated 15.06.2009 is reproduced as below:-
"6. On the basis of the above discussions, the wages payable by the appellant to its employees is in accordance with minimum wages and the pay structure of the appellant is as per law and the PF contribution shall be payable on the basic wages paid to the employees. In nutshell, the appellant is liable to pay its share of PF contribution on the basic wages payable + other allowances permissible under the Act and not on entire minimum wages which the employer is paying to its employees. The HRA and other allowances, which is part of Appellant's wage structure, are not a part of Basic Wage as per the definition of the basic wages defined under Section 2(b) of the Act and the Appellant is not liable to pay PF contribution on the same. In view of the above, the appeal is allowed and the impugned order dated 13.04.2006 passed by the Respondent is quashed being illegal. Appeal file be consigned to the record ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 8 room. Copy of the order be sent to both the parties."
A Co-ordinate Bench of this Court vide order dated 01.02.2011 dismissed petition of the respondent. In the order dated 10.02.2011, it was specifically held that Allowances cannot be included in the Basic Wages for the purpose of PF Contribution. The relevant extracts .
of order dated 01.02.2011 are reproduced as below:-
"The petitioner's grievance is that the respondents were splitting the wage structure of the employees as a subterfuge so as to dilute its liability and that this was contrary to the wage structure which is to be taken into consideration for the contributions to be made to the Fund under the Act. The precise grievance is that rates of minimum wages which ought to have been taken into consideration are not being done so by the respondents and by splitting up the wage structure there is an evasion of its liability.
The Tribunal considered the matter and held that the respondents were right in taking into consideration the basic wage of the employee for determining the contribution to the Fund. The plea of the petitioner was negated which has prompted him to file the instant writ petition.
It has been contended by the learned counsel for the petitioner that it is the minimum wage, the definition of which is provided under the Minimum Wages Act which is to be taken into consideration for determining the contribution and that the Tribunal was wrong in interpreting the provisions of law and determining the liability of the respondents on the basis of the basic wage which was being given by the respondents to its employees for the purposes of determining the contribution to the fund. It is his case that the respondents have deliberately, by not including the allowances in the basic wage have sought to deflate the share of the employees contribution. Reliance has been placed on cases titled as DCM Limited versus Regional Provident Fund Commissioner 1998 (1) LLJ,979 High Court Rajasthan and Airfreight Ltd. versus State of Karnatka and others AIR 1999 SC 2459.
On the other hand, learned counsel for the respondents has stated that the definition of basic wage as given in the Act clearly provide for an exclusion clause and they have gone strictly by definition of basic wage to determine the liability of the contribution to the fund. It has further been contended that definition of ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 9 wages under the Minimum Wages Act is distinct from that of the basic wage under the Employees Provident Fund & Misc. Provisions Act and the provisions of one Act cannot be read into the other when the Legislative intent is clear since the Provident Fund Act was enacted subsequent to the enactment of the Minimum Wages Act .
and if the Legislature so intended , it would have certainly read the definition of wage as provided under the Minimum Wages Act into the provisions of the Employees Provident Fund Act but instead it chose to provide a separate definition as it was conscious of the needs of the Legislation.
xxx xxx xxx Having regard to the aforesaid, there is little hesitation to hold that the contention of the learned counsel for the petitioner is mis-placed and that the respondents have rightly excluded certain allowances such as House Rent Allowance, washing allowance and conveyance allowance while determining their liability towards the fund."
xxx xxx xxx
r The respondent herein preferred Intra Court
Appeal which was dismissed vide order dated 20.07.2011.
The matter travelled to Supreme Court which vide order dated 17.08.2023 has dismissed Civil Appeal No. 9284 of 2013 filed by Authorities. The order dated 17.08.2023 passed by Supreme Court is reproduced as below:- "2. Before the learned Single Judge, the appellant had impugned the order dated 15th June, 2009, passed by the Appellate Tribunal under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, while determining the issue raised by the respondents regarding the liability of the Management under the provisions of Section 7A of the EPF Act. The stand of the appellant is that for the purposes of determining its contribution towards provident fund, the respondent no.1 was wrongly splitting the wage structure of the employees and treating the reduced wage as the basic wage to the detriment of the employees, thereby evading its liability to contribute the correct amount towards provident fund. The aforesaid stand taken by the appellant has been turned down by the Appellate Tribunal as also by the learned Single Judge and the Division Bench of the High Court.::: Downloaded on - 02/07/2025 21:17:14 :::CIS 10
3. Mr. Vikramjeet Banerjee, learned Additional Solicitor General submits that for the purposes of determining the basic wage under the EPF Act, reference must be made to the definition of the expression 'minimum rate of wages' under Section 4 of the Minimum Wages Act, 1948. This aspect has been .
considered in paragraph 6 of the impugned judgment and turned down holding that there was no compulsion to hold the definition of 'basic wage' to be equated with the definition of 'minimum wage' under the Minimum Wages Act, 1948.
4. In our opinion, once the EPF Act contains a specific provision defining the words 'basic wage' (under Section 2b), then there was no occasion for the appellant to expect the Court to have travelled to the Minimum Wages Act, 1948, to give it a different connotation or an expansive one, as sought to be urged. Clearly, that was not the intention of the legislature.
5. It is also pertinent to note that a similar issue had come up for consideration in the order dated 23rd May, 2002, passed by the APFC under Section 7A of the EPF Act, that was duly accepted by the appellant department as the said order was not taken in appeal.
6. In view of the aforesaid observations, the present appeal is dismissed as meritless. There shall be no orders as to costs."
The respondent on the basis of judgment of Supreme Court in Vivekanand Vidya Mandir (Supra) is claiming that entire issue should be reexamined. As per respondent, the question of payment of conveyance and washing allowances to all the employees was not considered, thus, matter should be examined from the said angle.
The judgment in Vivekanand Vidya Mandir (Supra) was delivered on 28.02.2019 whereas Supreme Court in the case of petitioner itself has dismissed appeal of the Authorities on 17.08.2023. The Supreme Court has also considered that similar issue for the previous period has already been settled.
In view of finality of demand raised for last more than 10 years by way of multiple orders and judgment of Supreme Court in the case of petitioner itself, this Court in view of principles of uniformity, consistency and resjudicata cannot form any opinion other than opinion formed by Co-ordinate Bench, Division Bench of this Court as well as Supreme Court.
::: Downloaded on - 02/07/2025 21:17:14 :::CIS 11In this backdrop, the instant petition deserves to be allowed and accordingly allowed. Impugned order dated 04.07.2011 (Annexure P-1) is hereby set-aside."
10. The order passed by the Hon'ble Supreme Court in .
Civil Appeal No.9284 of 2013, titled Assistant Provident Fund Commissioner versus M/s G4S Security Services (India) limited and another decided on 17.08.2023 is quoted hereinbelow:-
"The appellant-Assistant Provident Fund Commissioner is aggrieved by the judgment dated 20th July, 2011, passed by the High Court of Punjab and Haryana at Chandigarh, in an intra-Court Appeal (1), which was directed against the order dated 01st February, 2011, passed by the learned Single Judge, dismissing the Writ Petition (2) filed by the appellant.
Before the learned Single Judge, the appellant had impugned the order dated 15th June, 2009, passed by the Appellate Tribunal under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (3), while determining the issue raised by the respondents regarding the liability of the Management under the provisions of Section 7A of the EPF Act. The stand of the appellant is that for the purposes of determining its contribution towards provident fund, the respondent no.1 was wrongly splitting the wage structure of the employees and treating the reduced wage as the basic wage to the detriment of the employees, thereby evading its liability to contribute the correct amount towards provident fund. The aforesaid stand taken by the appellant has been turned down by the Appellate Tribunal as also by the learned Single Judge and the Division Bench of the High Court.
Mr. Vikramjeet Banerjee, learned Additional Solicitor General submits that for the purposes of determining the basic wage under the EPF Act, reference must be made to the definition of the expression 'minimum rate of wages' under section 4 of the Minimum Wages Act, 1948. This aspect has been considered in paragraph 6 of the impugned judgment and turned down holding that there was no compulsion to hold the definition of 'basic wage' to be equated with ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 12 the definition of 'minimum wage' under the Minimum Wages Act, 1948.
In our opinion, once the EPF Act contains a specific provision defining the words 'basic wage' (under Section 2b), then there was no occasion for the appellant to expect the Court to have travelled to the .
Minimum Wages Act, 1948, to give it a different connotation or an expansive one, as sought to be urged. Clearly, that was not the intention of the legislature.
It is also pertinent to note that a similar issue had come up for consideration in the order dated 23rd May, 2002, passed by the APFC under Section 7A of the EPF Act, that was duly accepted by the appellant department as the said order was not taken in appeal.
In view of the aforesaid observations, the present appeal is dismissed as meritless. There shall be no orders as to costs."
11. As it is the common case of the parties that the issue involved before the Hon'ble Supreme Court in Civil Appeal No.9284 of 2013 was the same as is the subject matter of this writ petition as also the matter before the Hon'ble Punjab and Haryana and High Court in CWP No.17716 of 2011, this writ petition is disposed of by observing that as the issue now stands decided by the Hon'ble Supreme Court in terms of the order passed in Civil Appeal No.9284 of 2013, the same is binding upon the parties even for the purpose of the adjudication of this writ petition. Besides this, this Court is of the considered view that as the judgment passed by the Hon'ble High Court of Punjab and Haryana is not only on same subject matter, but also between the same parties, the same is also binding between the parties, more so, as the same till ::: Downloaded on - 02/07/2025 21:17:14 :::CIS 13 date has not been challenged by the respondents herein in terms of the submissions made by learned counsel for the petitioner.
12. Therefore, this Court holds that as Hon'ble High Court .
of Punjab and Haryana has been pleased to set aside the order passed by the Appellate Authority dated 04.07.2011, which was pari-materia the same as is the impugned order herein, the same is binding, more so in the light of the adjudication of the Hon'ble Supreme Court in Civil Appeal No.9284 of 2013 and Hon'ble High Court of Punjab and Haryana in CWP No.17716 of 2011.
Accordingly, this writ is allowed. Annexure P-1 is quashed and set aside. No order as to cost. Pending miscellaneous applications, if any, also stand disposed of.
(Ajay Mohan Goel) Judge June 30, 2025 (Vinod) ::: Downloaded on - 02/07/2025 21:17:14 :::CIS