RAJENDRA CINEMA Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The petitioner had challenged the amendment by which the provisions of Employees' Provident Funds and Miscellaneous Provisions Act, 1952 was made applicable in a factory or establishment where five employees are employed. This petition was affirmed on May 10, 1988 praying for stay of operation of the amendment. A blanket interim order was granted on May 18, 1988 staying the operation of the amendment. The amendment was given retrospective effect, which was challenged. Subsequently the amendment having been upheld the employers became liable for payment of the contribution. Admittedly the employees' contribution was not deducted in terms of paragraphs 30 of this scheme. In paragraph 32 of the scheme recovery is permitted by way of deduction from the wages of the member. But in this case no recovery was made by reason of the interim order granted. The workmen are also not agreeable for past deduction. The natural consequence is that it is to be paid by the employer. This question cropped up before the Apex Court in District Exhibitors Association, Muzaffarnagarv. Union of India, AIR 1991 SC 1381 : 1991 (3) SCC 119 where it was held that deduction under para 32 is confined to the deductions contemplated in the said paragraph and the proviso appended thereto. The Apex Court had held as follows:

(2.) Paragraph 32 neither fixes the liability of the employees contribution on the employer i. e. to be paid by the employer nor to deduct arrears from the current or future wages, except in case of accidental error or mistake and that too with permission of the Commissioner. There is nothing in the scheme under which the employer can be made liable for employees' contribution, in respect of a period prior to the application of the Act or the scheme in the establishment or order of stay granted by the Court is operative. In cases where stay is granted by the Court it is for the Court to pass appropriate order for such payment even to the extent of burdening the employer to shoulder the liability and pay out of its own fund without deducting it from member's wages, since such a situation was invited by the employer itself, or the Court, while granting interim order may have secured the deduction etc. subject to result of the case.

(3.) Be that as it may, this question is to be looked into from the point of view of the order of stay granted by this Court by reason whereof the employer did not deduct the contribution. By reason of the operation of stay the employer could not be made liable for default in making the deductions in terms of paragraph 30. Therefore, what should be the extent of the liability of the employer in such a case, where stay is granted, had cropped up in the case of Union of India v. Murugan Talkies, 1996 (1) SCC 504 : 1996-I-LLJ-1154, where the Apex Court had observed that the grant of stay by the Court was wholly unjustified. But still then the Apex Court had directed deposit of the employers contribution only from the date of filling the writ petition and such order was made to be an order under Article 142 of the Constitution of India.