HARIHAR POLYFIBERS Vs. REGIONAL PROVIDENT FUND COMMISSIONER BANGALORE

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India is directed against an order made under section 7-A of the Employees' Provident Funds & Miscellancous Provisions Act, 1952 (hereinafter referred to as the Act). The subject matter in dispute is in relation to 33 employees. Petitioner-establishment is covered by the provisions of the Act with effect from 1-1- 1975 when it voluntarily made an application to the respondent that the provisions of the Act be made applicable to it although it was covered by Section 16(1 )(b) of the Act and notification in that regard had also been issued under section 1(4) of the Act. Subsequently, the petitioner sought for exemption u/s 17(1) of the Act in respect of certain class of employees. The respondent by his letter dated 12/19th November 1975 stated that such an exemption cannot be granted in respect of a class of employees u/s 17 of the Act and that they were to make their contributions at the rale of 10% in respect of such employees if the employer and the employee desire. However, it is the case of the petitioner that the employees in respect of whom such an exemption was sought for were all excluded employees as provided in the seheme inasmuch as their salary was below Rs. 1,000/- during the relevant period. Inasmuch as they were not exempted under the Act and the petitioner having opted to be governed by the Act agreeing to pay at 8% of the salary in respect of each of the employees and as there was failure by the petitioner to pay at the rate of 10% the respondent initiated action u/s 7A of the Act stating that the petitioner is bound to pay at the old rate at which it was paying namely at 10 per cent as it was not entitle to reduce the percentage of contribution in view of Section 12 of the Act. To that a detailed replay was filed by the petitioner pursuant to which an enquiry was also conducted by the respondent. Not being satisfied with the objections filed by the petitioner the respondent made an order directing the petitioner to make contributions totalling to Rs. 1,40,483/- being the difference of provident fund contribution calculated at the rate of 10 per cent. Being aggrieved by this order the petitioner has approached this Court.

(2.) The learned counsel for the petitioner contended that the respondent is not justified in demanding more than 8 per cent which is the statutory requirement under the Act, and that Section 12 of the Act is not at all applicable in this case. It was also contended that inasmuch as employees' rights would also be affected by reason of this approach of the respondent they ought to have been afforded an opportunity in view of the decision of this Court in S.P. Kamath v Regional Provident Fund Commissioner (1985(1) Kar.LJ., 27).

(3.) Countering these contentions the learned counsel for the respondent submitted that once having come under the coverage of the Act voluntarily or otherwise the parties cannot opt-out of the same and contribution ought to be paid at the same rate at which it was paying earlier and in view of section 12 of the Act such a course of action is perfectly justified. He strongly relied upon the provisions of Section 12 of the Act as well a decision of the Bombay High Court in Consolidated Crop Protection Pvt. Ltd. v V. Hema Chandra Rao, (1977(1) LLJ 114).