M/S.TRAYI v. Assistant Provident Fund Commissioner, Employees Provident Fund Organization and Central Government Industrial Tribunal cum Labour Court

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE AMIT RAWAL`** ## **`WEDNESDAY, THE 23[RD] DAY OF MARCH 2022 / 2ND CHAITHRA, 1944`** ## **`WP(C) NO. 8476 OF 2022`** ## **`PETITIONER:`** **==> picture [81 x 129] intentionally omitted <==** ``` M/S.TRAYI 11/32-A., EAST DESAM, DESAM P O, ALUVA, KOCHI-683 101, REPRESENTED BY ITS GENERAL MANAGER (HR AND ADMN) MR.ANIL KRISHNA PILLAI. ``` ``` BY ADVS. P.BENNY THOMAS D.PREM KAMATH ``` ## **`RESPONDENTS:`** ``` 1ASSISTANT PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, 36/685 A, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI-682017. ``` ``` 2CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL CUM LABOUR COURT, 38/377 A-2, KARITHALA LANE, KARSHAK ROAD, COCHIN-682016, REPRESENTED BY ITS PRESIDENT OFFICER, ``` ``` BY ADV SRI.THOMAS MATHEW NELLIMOOTTIL,SC, P.F. ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 8476 OF 2022 ``` ``` 2 ``` ## **JUDGMENT** Petitioner, a company registered under the Companies Act and covered under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter, ‘1952 Act’) with Code No.KR/KC/27366 has, for the reasons best known assailed the order of the Appellate Tribunal allowing the appeal bearing No.596/2019 by remanding the matter to the Commissioner for re-adjudication of proceedings under Section 7A of the 1952 Act. On the basis of an inspection conducted by the Enforcement Officer and submission of the report, a notice under Section 7 of 1952 Act was served upon the petitioner on the payment of contribution including the allowances other than basic pay and dearness allowances such as HRA etc. Petitioner entered appearance before the 1[st] respondent and explained that the allowances paid to the employees will not come within the definition of Section 2(b) of 1952 Act as the allowances are not the part of basic wages ``` WP(C) NO. 8476 OF 2022 ``` ``` 3 ``` and neither any contribution was paid on those allowances. Para 29 of the EPF scheme was also referred to, which specifies that the contribution is required to be paid only on basic wages, DA and retaining allowances. Vide order dated 13.03.2013, 1[st] respondent directed the petitioner to pay contribution on allowances including HRA, incentive and conveyance etc. Petitioner preferred an appeal bearing No.596/2019. 2. Appellate Tribunal noticing the order of the Commissioner to be non-speaking, set aside the same and remanded the matter for assessment of the dues by excluding HRA. 3. Sri.Benny.P.Thomas, learned counsel appearing on behalf of the petitioner submitted that the tenor and mode of the order of the Appellate authority by remanding the case to the Commissioner has not kept open regarding the payment of other allowances like washing and conveyance allowances ``` WP(C) NO. 8476 OF 2022 ``` ``` 4 ``` in as much as that in another matter pertaining to M/s. Top Notch Healthcare Products Pvt. Limited in the similar situation on remand by Tribunal Commissioner vide order dated 13.01.2020 Ext.P5, held the establishment to be not liable and pay conveyance and other charges to the employees. The definition of 'basic wages' under Section 2(b) or Section 6 of the 1952 Act or para 29 of the scheme had never been amended after 1959. The allowances paid by the petitioner to the employees are either compensatory or depending upon the attendance and performance, which vary from employer to employee, months to month and not of general in nature. In other words, the PF contribution is payable only on basic wages and dearness allowance but no contribution is payable on the allowances under any of the heads as noticed by the Commissioner. 4. On the other hand, Sri.Thomas Mathew Nellimoottil, learned counsel representing the respondents, in support of ``` WP(C) NO. 8476 OF 2022 ``` ``` 5 ``` the contention, relied upon the judgment dated 15.10.2020 in W.P.(C).No.17507/2016 titled as **Employees Provident Fund Organization** v. **M.S.Raven Beck Solutions (India) Ltd.** , whereby while quashing the order of the Tribunal and restoring the order of Assistant Provident Fund Commissioner Enforcement, directed the management to pay uniform allowances, uniform washing, food and travelling allowances. The aforementioned directions were issued keeping in view the observations recorded by Supreme Court in _**Regional Provident Fund Commissioner (II), West Bengal and Others**_ v. _**Vivekananda Vidyamandir and Others**_ , decided in Civil Appeal No.6221 of 2011 and another connected appeals. Even otherwise, there was no cause of action for the petitioner to assail the order as the pith and substance of the order of Tribunal did not give any cause of action as it was passed in their favour. No purpose would have been served to obtain the stay of the order and urged this Court for dismissal ``` WP(C) NO. 8476 OF 2022 ``` ``` 6 ``` of this writ petition with exemplary costs. 5. I have heard the learned counsel for the parties and apprised the paper book and am of the view that there is no force and merit in the submissions. It would be expedient to extract the relevant portion of the order of the Tribunal whereby the order of the Commissioner was in total set aside with the following observations: 7. On a perusal of the impugned order, I find that the same is an absolute non speaking order. Though there is mention regarding the allowances paid, it is absolutely unclear as to which are all the allowances included in the assessment of dues. It is seen that HRA component which is specifically excluded U/s 2(b)(2) of the Act is also included in the assessment. The impugned order is that “The allowance is merely a balancing component after allocating the total wages into various nomenclatures like basic, HRA, conveyance etc. and the same possess all the characteristic of basic wages as per the definition” Impliedly all the allowances are taken into consideration including that of HRA. The learned Counsel for the appellant pointed out that since HRA is specifically excluded under the ``` WP(C) NO. 8476 OF 2022 ``` ``` 7 ``` provisions of the Act, it is not correct on the part of the respondent authority to include HRA for assessment of provident fund contribution. It is felt that the respondent authority took such a decision in view of the fact that the HRA component was introduced by the appellant from 06/2011 which was not available earlier and there is no DA paid to the employees. However the HRA being a specifically excluded allowance it is not correct on the part of the respondent authority to include the same in the assessment of provident fund dues. 8. Considering the facts, circumstances, pleadings and evidence in this appeal, I am not inclined to sustain the impugned order. Hence the appeal is allowed, the impugned order is sets aside and the matter is remitted back to the respondent to re-assess the dues, after excluding HRA, within a period of 6 months, after issuing notice to the appellant along with a copy of the report of the Enforcement Officer. In case the appellant fails to appear or produce the records called for, the respondent is at liberty to assess the dues according to law. 6. On perusal of the aforementioned order, it is evident that the Tribunal while setting aside the order of the ``` WP(C) NO. 8476 OF 2022 ``` ``` 8 ``` Provident Fund (Enforcement) Commissioner noticed that all allowances are taken into consideration including that of HRA. In fact, HRA was not included, which has been excluded by the Tribunal and direction had been issued to the Provident Fund Commissioner to re-assess the dues. The expression 'dues' would not only include basic wages, but allowances. It would be for the petitioner to raise all the pleas whether the employees are entitled to other allowances as the payment of the special contribution was depending upon the efficacy and work of the employees, which vary from employee to employee. Reliance of the order of the Commissioner in some other connected matter Ext.P5 would not have an over-riding effect on the Commissioner in the proceedings, for, the position of law as on today is that as per the findings recorded by the Single Bench of this Court by relying upon the judgment of Supreme Court (supra) depending upon the facts and circumstances and the evidence brought on record. It ``` WP(C) NO. 8476 OF 2022 ``` ``` 9 ``` would be in the domain of the Commissioner to assess whether the employees of the petitioner establishment would be entitled to the allowances. The apprehension expressed in the present writ petition is far-fetched. This writ petition is totally abuse of the process of the Court. Such writ petitions cannot be entertained in the first instance. Be that as it may. It requires to be dismissed with costs of Rs.20,000/- to be paid to the Legal Service Authority of Kerala. **Sd/AMIT RAWAL JUDGE** nak ``` WP(C) NO. 8476 OF 2022 ``` ``` 10 ``` ## **`APPENDIX OF WP(C) 8476/2022`** |`PETITIONER EXHIBITS`|| |---|---| |`Exhibit P1`|`TRUE COPY OF THE ORDER DATED 13.03.2013 IN`| ||`PROCEEDINGS NO.KR/KC/27366/ENFF-1(5)/2013.`| |`Exhibit P2`|`TRUE COPY OF THE MEMORANDUM OF APPEAL`| ||`NO.596/2019/OLD NO.225/(7)/2013) DATED`| ||`25.03.2013 WITHOUT ANNEXURES.`| |`Exhibit P3`|`TRUE COPY OF THE REPLY DATED 23.01.2021 IN`| ||`APPEAL NO.596/2019 (OLD NO.225/(7)/2013)`| |`Exhibit P4`|`TRUE COPY OF THE ORDER DATED 16.11.2021 OF`| ||`APPEAL NO.596/2019/OLD NO.225/(7) 2013).`| |`Exhibit P5`|`TRUE COPY OF THE ORDER DATED 13.01.2020 IN`| ||`PROCEEDINGS NO.KR/KCH/ENT/1(2)/13836/2020.`|