Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

March 20th, 2013

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 — Sections 12 & 17 — Provident fund — Continuing liability to pay excess amounts than one under statutory liability — Respondent-bank has its own scheme for payment of provident fund — Under the scheme, bank has to pay higher amounts to its employees than one under the statute — Commissioner, Regional Provident Fund, initially exempted the Bank from complying with the statute which continued for 2 years — Subsequent withdrawal of exemption — Bank issued a notice of change under section 9A of ID Act to discontinue payments in excess of its statutory liability — Challenged — Whether, bank can restrict its liability? Yes — Respondent is under obligation to pay to its employees as per the statutory scheme — Respondent cannot be compelled to pay amounts in excess of its statutory liability — Industrial Disputes Act, 1947 — Section 10.

HELD: The Regional Provident Fund Commissioner vide order dated 29.08.1981 exempted the respondent bank from complying with the statutory provisions of the Scheme with effect from 1.9.1981. Admittedly, the respondent bank paid provident fund to its employees as per its own Scheme for the period from 1.9.1981 to 31.8.1993.

The said exemption/relaxation granted on 29.8.1981 was withdrawn and cancelled on 14.10.1991 and the respondent bank was directed to implement the provisions of the statutory Scheme. Despite cancellation of the exemption, the respondent bank continued to pay excess provident fund to its employees in accordance with the earlier Scheme till 31.8.1993. Thereafter, the respondent bank issued a notice of change under section 9A of the Industrial Disputes Act, 1947 expressing its intention to discontinue payment of provident fund in excess of its statutory liability with effect from 1.11.1998. It may be pertinent to mention that owing to huge accumulated losses of the respondent bank, the bank though continued to pay according to the provisions of the statutory Scheme, but discontinued payment of provident fund in excess of its statutory liability.

The respondent bank is under an obligation to pay provident fund to its employees in accordance with the provisions of statutory Scheme. The respondent bank cannot be compelled to pay the amount in excess of its statutory liability for all times to come just because the respondent bank formed its own trust and started paying provident fund in excess of its statutory liability for some time. The appellants are certainly entitled to provident fund according to statutory liability of the respondent bank. The respondent bank never discontinued its contribution towards provident fund according to the provisions of the statutory Scheme.

The view which has been taken by the learned Single Judge and affirmed by the Division Bench of the High Court is just, fair, appropriate and in consonance with the provisions of the 1952 Act.

Marathwada Gramin Bank Karamchari Sanghatana v. Management of Marathwada Gramin Bank[Bench Strength 2], Civil Appeal No. 7766/2011 (Arising out of SLP (C) No. 1067/2009)(09/09/2011), 2011 AIR(SC) 3567: 2011(9) SCC 620: 2011(11) JT 585: 2011(10) SCALE 184: 2011(7) SLT 389: 2011(4) LLJ 305: 2011 LIC 4449: 2011(5) SLR 689 [Dalveer Bhandari, J.: Deepak Verma, J.]

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