Kerala High Court
Kerala State Co-Operative Coir ... vs The Assistant Provident Fund ... on 19 November, 2025
2025:KER:89424
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 19TH DAY OF NOVEMBER 2025 / 28TH KARTHIKA, 1947
WP(C) NO. 42207 OF 2023
PETITIONER:
KERALA STATE CO-OPERATIVE COIR MARKETING FEDERATION,
HAVING ITS REGISTERED OFFICE AT COIRFED H.O., NEAR
NORTH POLICE STATION, ALAPPUZHA REPRESENTED BY
GANGADHARAN T.O., MANAGING DIRECTOR, COIRFED, NEAR
NORTH POLICE STATION, ALAPPUZHA, PIN - 688 012.
BY ADVS.
SRI.S.PRASANTH (AYYAPPANKAVU)
SMT.VARSHA BHASKAR
SMT.ANUPAMA SIBI
SMT.N.KRISHNA OZHAKKANAT
SMT.MALAVIKA K.
RESPONDENTS:
1 THE ASSISTANT PROVIDENT FUND COMMISSIONER,
REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, KALOOR,
KOCHI, KERALA, PIN - 682017.
2 CENTRAL BANK OF INDIA,
REPRESENTED BY ITS MANAGER, COIRFED BRANCH, ALAPPUZHA,
PIN - 688012.
BY ADV SHRI.V.JOHN MANI
SRI. K M ANEESH (SC CBI)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
19.11.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 42207 OF 2023
2
2025:KER:89424
JUDGMENT
The short issue that arises for consideration in this writ petition is whether interest under Section 7Q of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (in short 'the Act') is payable on contributions made on account of pay revision effected from a retrospective date. In the facts of the present case, the pay revision was effected in the case of the employees of the petitioner Federation on 11.10.2018 through G.O. (Ms)No.81/2018/ID with effect from 01.07.2010. It is the case of the petitioner that the pay revision benefits were disbursed to the employees not in lumpsum, but by making separate payments from time to time. It is submitted that by now all the pay revision benefits have been disbursed to the employees. The petitioner has also remitted contribution towards the Employees Provident Fund on the basis of the revised pay sanctioned to its employees. However, it is now faced with a demand for interest under Section 7Q of the Act on the ground that such interest was payable on the revised amount of salary from the date from which such revised salary was payable though the sanctioning of the pay revision was only on 11.10.2018. The petitioner has also been mulcted with damages under Section 14B of the Act. However, the question of WP(C) NO. 42207 OF 2023 3 2025:KER:89424 damages is now pending consideration before the Central Government Industrial Tribunal at the instance of the petitioner.
2. The learned counsel appearing for the petitioner submits that the question as to whether interest is payable as now demanded by the Provident Fund Department on account of pay revision was considered by a Division Bench of this Court in W.A.No.1902 of 2017 (M/s. Kerala Minerals & Metals Ltd. v. Regional Provident Commissioner), where the Division Bench has taken the view that the interest under Section 7Q of the Act shall not be payable for the entire period and it shall be payable only for the period when there was a delay in making the provident fund contribution after the pay revision was sanctioned. It is submitted that the Provident Fund Department filed a Special Leave Petition against the judgment of this Court in W.A.No.1902/2017 and by order dated 10.12.2024, the Special Leave Petition was dismissed. It is submitted that in such circumstances, the impugned Ext.P11 order and the consequential recovery notices Exts.P13 and P14 are liable to be set aside.
3. The learned Standing Counsel appearing for the Provident Fund Organization submits that interest is payable to the Provident Fund Organization on the amount remaining to WP(C) NO. 42207 OF 2023 4 2025:KER:89424 paid for the period after the period for which the remittance relates. It is submitted that if for example, in the year 2025, a remittance is made in respect of an amount payable for the year 2020, even if such remittance was on account of pay revision sanctioned in the year 2025, the Provident Fund Scheme contemplates payment of interest from the year 2020. It is submitted that the amounts collected as interest under Section 7Q of the Act will be remitted to the account of the employees and does not accrue to the benefit of the Provident Fund Organization. The learned counsel referrred to paragrah 60 of the Employees Provident Fund Scheme, 1952 in support of his contention. It is submitted that, at any rate, any delay in the remittance after the pay revision order will attract interest under Section 7Q of the Act.
4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the Provident Fund Organization and having perused the judgment of this Court in W.A.No.1902 of 2017 and the order of the Supreme Court in SLP (C) No.29721-29725/2024 dated 10.12.2024, I am of the view that the matter requires reconsideration at the hands of the competent authority. The contention of the learned counsel appearing for the Provident Fund Organization that interest will WP(C) NO. 42207 OF 2023 5 2025:KER:89424 have to be paid by the Provident Fund Organization to the employee / subscriber from an anterior date even when the pay revision was effected later does not appear to be correct. Paragraph 60(2)(a) of the Employees Provident Scheme, 1952 reads thus:-
"60. Interest.- (1) XXXXXXXXXXXXXXXX (2)(a) Interest shall be credited to the member's account on monthly running balance basis with effect from the last day in each year in the following manner:-
(i) on the amount at the credit of a member on the last day of the preceding year, less any sums withdrawn during the current year-interest for twelve months;
(ii) on sums withdrawn during the current year-
interest from the beginning of the current year up to the last day of the month preceding the month of withdrawal;
(iii) on all the sums credited to the member's account after the last day of the preceding year-interest from the first day of the month succeeding the month credit to the end of the current year;
(iv) the total amount of interest shall be rounded to the nearest whole rupee (fifty paise counting as the next higher rupee)."
In my view, a reading of paragraph 60(2)(a) of the Employees Provident Scheme, 1952 suggests that interest shall be credited to the members account only on monthly running balance basis. In WP(C) NO. 42207 OF 2023 6 2025:KER:89424 other words, interest on the amounts paid in respect of an employee who has been granted revision of pay with retrospective effect will be payable on such additional sum in the manner contemplated by paragraph 60(2)(a) of the Employees Provident Scheme, 1952 only from the month of remittance.
5. Therefore, I set aside Exts.P11 and P14 and direct the 1st respondent to re-consider the matter taking note of the judgment of this Court in W.A.No.1902 of 2017, the order of the Supreme Court in SLP (C) No.29721-29725/2024 dated 10.12.2024 as also the observations contained in this judgment, after affording an opportunity of hearing to the petitioner, within a period of three months from the date of receipt of a certified copy of this judgment.
The writ petition is ordered accordingly.
Sd/-
GOPINATH P. JUDGE DK WP(C) NO. 42207 OF 2023 7 2025:KER:89424 APPENDIX OF WP(C) 42207/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE G.O (MS) NO.81/2018/ID DATED 11.10.2018 ISSUED BY THE INDUSTRIES (E) DEPARTMENT Exhibit P2 TRUE COPY OF THE RESOLUTION TO ITEM NO 514 OF THE BOARD MEETING DATED 16.05.2019 Exhibit P3 TRUE COPY OF THE G.O (P) NO 44/2109/FIN DATED 04.04.2019 ISSUED BY THE ADDITIONAL CHIEF SECRETARY TO GOVERNMENT (FINANCE), FINANCE (PAY RESEARCH UNIT) DEPARTMENT Exhibit P4 TRUE COPY OF THE RESOLUTION TO ITEM NO 652 OF THE BOARD MEETING DATED 06.11.2019 Exhibit P5 TRUE COPY OF THE CHALLAN DATED 13.08.2020 AGAINST THE REMITTANCE OF PF AFTER DISBURSEMENT OF REVISED PAY TO THE EMPLOYEES Exhibit P5(a) TRUE COPY OF THE CHALLAN DATED 11.08.2020 AGAINST THE REMITTANCE OF PF AFTER DISBURSEMENT OF REVISED PAY TO THE EMPLOYEES Exhibit P6 TRUE COPY OF THE RESOLUTION TO ITEM NO 653 OF THE BOARD MEETING DATED 06.11.2019 Exhibit P7 TRUE COPY OF THE CHALLAN DATED 19.06.2020 AGAINST THE REMITTANCE OF PF AFTER DISBURSEMENT OF DA TO THE EMPLOYEES Exhibit P7(a) TRUE COPY OF THE CHALLAN DATED 19.06.2020 AGAINST THE REMITTANCE OF PF AFTER DISBURSEMENT OF DA TO THE EMPLOYEES Exhibit P8 TRUE COPY OF THE SUMMONS U/S 14B WITH NO KR/KCH/0001813/000/ENF502/DAMAGES DATED 03.05.2023 BY THE 1ST RESPONDENT Exhibit P9 TRUE COPY OF THE REPLY DATED 16.05.2023 SUBMITTED BY THE PETITIONER Exhibit P10 TRUE COPY OF THE ORDER NO KR/KCH/1813/PENAL DAMAGES/2023 DATED 15.09.2023 ISSUED BY THE 1ST RESPONDENT WP(C) NO. 42207 OF 2023 8 2025:KER:89424 Exhibit P11 TRUE COPY OF THE ORDER NO KR/KCH/1813/PENAL INTEREST/2023 DATED 15.09.2023 ISSUED BY THE 1ST RESPONDENT Exhibit P12 TRUE COPY OF THE APPEAL NUMBERED AS APPEAL NO 118 OF 2023 WITHOUT EXHIBITS Exhibit P13 TRUE COPY OF THE LETTER DATED 11.12.2023 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P14 TRUE COPY OF THE LETTER NUMBER KR/KCH/1813/DAMAGES/8F/2023-2024/108 DATED 30.11.2023 ISSUED BY THE 1ST RESPONDENT TO THE 2ND RESPONDENT RESPONDENT EXHIBITS Exhibit R1 A TRUE COPY OF THE MEMBER LEDGER IN RESPECT OF TWO EMPLOYEES OF PETITIONER