Gujarat High Court Case Information System
Print
SCA/7898/2011 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 7898 of 2011
=========================================================
VVF
LTD - Petitioner(s)
Versus
ASST.PROVIDENT
FUND COMMISSIONER & 1 - Respondent(s)
=========================================================
Appearance :
MR
K M PATEL, LD SENIOR ADVOCATE WITH MR HARMESH D NANAVATY
for Petitioner
RULE NOT
RECD BACK for Respondent(s) : 1 - 2.
MS E.SHAILAJA for
Respondent(s) : 1 -
2.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE RAVI R.TRIPATHI
Date
: 30/08/2011
ORAL
ORDER
1. Present
petition is filed by M/s. V V F Ltd., through its authorized
signatory Shri Bhavin L Malaviya, challenging the order passed by the
Assistant Provident Fund Commissioner, Rajkot dated 01/05/2007
whereby the present petitioner is directed to pay a sum of
Rs.9,78,970/- and amount of Rs.4,21,001/- as interest within fifteen
days from the receipt of the order under Section 7A and 7Q of
Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.
1.1 The
petitioner filed an appeal being ATA No.431(5) of 2007 before the
Employees Provident Fund Appellate Tribunal, who decided the appeal
by order dated 07/03/2011 and dismissed the same. Thereafter, the
authorities passed a recovery order dated 05/04/2011, a copy of which
is produced at Annexure – F.
2. Learned
Senior Advocate, Mr.K M Patel appearing with Mr.H D Nanavati, for the
petitioner submitted that the order under Section 7A is passed
without issuing Notices to the concerned contractors though the case
of the petitioner – establishment was that the amount which is
alleged to have been shown as payment of overdue wages is in-fact the
actual wages paid to the workman. Learned Senior Advocate for the
petitioner submitted that the contractors did have their independent
Provident Fund Code and even on that ground the Notices were required
to be issued to those contractors. Learned Senior Advocate submitted
that the issue which was involved in the matter – the
allegations about the payment of amount under the guise of overtime
payment which was alleged to be the actual wages paid to the workman
could not have been decided in absence of hearing the concerned
contractors and relevant record being produced by them.
3. On
05/07/2011, this Court issued Notice returnable on 25/07/2011 and
granted ad-interim-relief. On 26/07/2011 the Court issued Rule and
ad-interim-relief granted earlier was ordered to continue till then.
4. Today,
when the matter is taken up for consideration learned Senior Advocate
requested that if the matter could be heard finally to which learned
Advocate, Ms. E Shailaja has no objection and therefore the matter is
taken up for consideration and final disposal.
5. Having
heard learned Senior Advocate for the petitioner and having noticed
the relevant discussion in the order of the Assistant Provident Fund
Commissioner, the Court is prima-facie of the opinion that the
Assistant Provident Fund Commissioner has not given required
attention to the contention raised by the petitioner –
establishment. Relevant part of the order impugned reads as under:
“….Further,
the issue to be decided is whether the PF contribution is payable on
overtime paid by the three contractors M/s. Vandana Enterpreises,
M/s. National Associates, M/s. National Corporate Services.
In this regard, Section 2 (b) of the Act is relevant which clearly
excludes overtime payment from the basic wages. Hence, the
provisions of the Act is relevant which clearly excludes overtime
payment from the basic wages. Hence, the provisions of the Act are
quite clear that overtime is not basic wages accordingly it is not
liable for PF deduction as per the provisions of the Act. However,
the real
issue here not not whether overtime is liable for PF deduction
because the Act clearly excludes overtime payment from basic waged as
defined in Section 2 (b). But whether overtime shown by contractors
was actually overtime paid to employees or was merely an adjustment
of actual wages to evade PF liability.
The establishment in this record has contended that breach of
Factories Act can not convert overtime payment into basic wages.
However, the close scrutiny of the salary / wages register of the
contractor reveals that all employees are paid on daily basis and
overtime paid to them is on hourly basis. Whereas the representative
of the establishment themselves has submitted that these contractor
employees are working on piece rate basis. Which makes it difficult
to understand that how employees engaged on piece rate basis are paid
overtime on hourly basis. Hence, the establishment’s statements are
contradictory. On the one hand, it is saying that contractor
employees are working on piece rate basis on the other hand, it is
saying that overtime is paid for extra hours of work done by contract
employees….”
(emphasis
supplied)
6. Learned
Senior Advocate for the petitioner submitted that in absence of
hearing the contractors and the material available with them, the
Assistant Provident Fund Commissioner could not have passed the order
impugned. Learned Senior Advocate submitted that to that extent the
order is required to be quashed and set aside as without hearing the
contractors and taking into consideration the material available with
them, no adjudication / order could have been passed. Learned Senior
Advocate submitted that the appellate authority has also erred in not
taking into consideration the aforesaid contention raised by the
petitioner – establishment.
6.1 Learned
Senior Advocate for the petitioner submitted that the case of the
petitioner-establishment is not appreciated in its true perspective.
Learned Senior Advocate submitted that case of the petitioner was
that concerned contractors were paid on piece rate basis.
7. The
Court is of the opinion that submission made by learned Senior
Advocate requires to be accepted and the same are accordingly
accepted. The order passed by the Assistant Provident Fund
Commissioner is quashed and consequently the order passed by the
appellate Tribunal is also quashed and set aside.
8. At
the request of learned Advocate, Ms.E Shailaja, it is clarified that
quashing of the order does not take away the authority against three
concerned contractors of the Assistant Provident Fund Commissioner of
taking up the matter de novo in accordance with law and
calling upon the contractors for explaining the controversy about the
overtime paid to the workman.
9. Rule
is made absolute to the aforesaid extent with no order as to costs.
(RAVI
R TRIPATHI, J.)
sompura
Top