{"id":212299,"date":"1998-07-22T00:00:00","date_gmt":"1998-07-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/jiyajeerao-cotton-mills-ltd-vs-dev-kumar-holani-and-others-on-22-july-1998"},"modified":"2015-09-02T03:52:19","modified_gmt":"2015-09-01T22:22:19","slug":"jiyajeerao-cotton-mills-ltd-vs-dev-kumar-holani-and-others-on-22-july-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/jiyajeerao-cotton-mills-ltd-vs-dev-kumar-holani-and-others-on-22-july-1998","title":{"rendered":"Jiyajeerao Cotton Mills Ltd vs Dev Kumar Holani And Others on 22 July, 1998"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Jiyajeerao Cotton Mills Ltd vs Dev Kumar Holani And Others on 22 July, 1998<\/div>\n<div class=\"doc_author\">Author: Nanavati.J.<\/div>\n<div class=\"doc_bench\">Bench: G.T. Nanavati, S.P. Kurdukar<\/div>\n<pre>           PETITIONER:\nJIYAJEERAO COTTON MILLS LTD.\n\n\tVs.\n\nRESPONDENT:\nDEV KUMAR HOLANI AND OTHERS\n\nDATE OF JUDGMENT:\t22\/07\/1998\n\nBENCH:\nG.T. NANAVATI, S.P. KURDUKAR\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>\t\t      J U D G M E N T<br \/>\nNANAVATI.J.\n<\/p>\n<p>     Leave granted.\n<\/p>\n<p>     Heard learned counsel for the parties.\n<\/p>\n<p>     Jiyajeerao Cotton\tMills Ltd.,  respondent no.10  is an<br \/>\nestablishment covered  by the Employees Provident founds and<br \/>\nMiscellaneous Provisions  Act, 1952 (hereinafter referred to<br \/>\nas the\tAct). It constituted &#8216;Jiyajee Cotton Mills Employees<br \/>\nProvident  Fund\t Institution&#8217;,\tthe  appellant\therein,\t and<br \/>\nframed its  Rules and Regulations in 1952. Respondent No. 10<br \/>\napplied\t to   the  Government\tof  India,  that  being\t the<br \/>\nappropriate Government\tat the\trelevant time,\tfor grant of<br \/>\nexemption under\t Section 17(1)(a) of the Act. The Government<br \/>\nof being  satisfied that  the employees were in enjoyment of<br \/>\nProvident Fund\tbenefits which\twere on\t the whole  not less<br \/>\nfavourable than\t the benefits provided under the Act and the<br \/>\nScheme granted exemption w.e.f. 1.11.1952, by a Notification<br \/>\ndated 1.1.63  published on  12.1.63. Respondents Nos. 1 to 9<br \/>\nwho were  the employees\t of the appellant and members of the<br \/>\nProvident Fund\twere discharged\t from service and paid their<br \/>\nprovident fund amounts. The Central Government by its letter<br \/>\ndated 29.1.83  forwarded  to  the  appropriate\tGovernments,<br \/>\nrevised conditions  for\t granting  exemption  under  Section<br \/>\n17(1). One  of the revised conditions was that any amendment<br \/>\nto the\tEmployees  Provident  Fund  Scheme  which  was\tmore<br \/>\nbeneficial to  the employees  than the existing rules of the<br \/>\nestablishment shall become applicable to them automatically.<br \/>\nIn view\t of this  revised  condition  the  said\t respondents<br \/>\nclaimed the  difference between the interest which was given<br \/>\nto them\t at the\t rate declared\tby the Board to Trustees and<br \/>\nthe rate  of interest declared by the Central Government for<br \/>\nthe years  1984-85 to  1988-89. As  the\t appellant  did\t not<br \/>\naccept their  demand they  filed a claim petition before the<br \/>\nCentral\t Provident  funds  commissioner\t who  referred\tthat<br \/>\npetition before\t the Central Provident Fund Commissioner who<br \/>\nreferred  that\tpetition  to  the  Regional  Provident\tFund<br \/>\nCommissioner. As  their claim  was not\tdealt  with  by\t the<br \/>\nRegional Provident  Fund commissioner  for some\t time,\tthey<br \/>\nfiled Writ  Petition M.P.  No. 901 of 1989 in the High Court<br \/>\nof Madhya Pradesh. The High Court by its order dated 26.7.89<br \/>\ndirected the Regional Provident fund Commissioner to dispose<br \/>\nof the said respondent&#8217;s claim within six months.\n<\/p>\n<p>     The  matter   was\tthereafter  heard  by  the  Regional<br \/>\nProvident Fund\tcommissioner who  held &#8211; with respect to the<br \/>\nrevised conditions  of exemption  that &#8220;It is worthwhile, to<br \/>\nmention that  the said\trevised conditions of exemption that<br \/>\n&#8220;It  is\t  worthwhile,  to  mention  that  the  said  revised<br \/>\nconditions of  exemption as  notified by  the Govt. of India<br \/>\ncannot be  given effect\t in respect  of particular  exempted<br \/>\nestablishment until  and unless\t the same is notified in the<br \/>\nOfficial Gazette by the appropriate Govt.\n<\/p>\n<p>     After referring  to Rule  16(f) and  Rule 18(i)  of the<br \/>\nexempted  Provident   fund  Scheme   of\t the  appellant\t and<br \/>\nRespondent No.\t10, the Regional Provident Fund Commissioner<br \/>\nheld that  the appellant being an exempted establishment the<br \/>\naccount of  each of  the employees  was to  be credited with<br \/>\ninterest at the rate decided by the Board of Trustees and as<br \/>\nthe exempted  scheme was not amended by the State Government<br \/>\nthey were  not entitled to the enhanced rate of interest. He<br \/>\nalso held  that\t even  with  lesser  rate  of  interest\t the<br \/>\nexempted scheme\t as a whole was not less favourable than the<br \/>\nStatutory  Scheme.   He,  therefore,   dismissed  the  claim<br \/>\npetition of the respondents.\n<\/p>\n<p>     The employees  challenged this  order by  preferring  a<br \/>\nwrit petition under Article 227 of the Constitution of India<br \/>\nto the\tHigh Court  of Madhya Pradesh. The High Court was of<br \/>\nthe view  that the approach of the Commissioner was perverse<br \/>\nand the\t respondents were  unnecessarily made  to  run\tfrom<br \/>\npillar to  post for payment of their legal dues. It referred<br \/>\nto para\t 60 of\tthe Statutory  Scheme and held that interest<br \/>\nwas required to be credited to the account of each member at<br \/>\nsuch rate  as was  determined by  the Central Government. It<br \/>\nfurther held  that in  view of\tthis clear provision made in<br \/>\nthe Scheme,  not paying interest at the higher rate amounted<br \/>\nto contravention  of the  Act and the Scheme. The High Court<br \/>\nwas also  of the view that the moment the Central Government<br \/>\ndeclared higher\t rate of  interest, the rule in the exempted<br \/>\nscheme enabling\t the appellant\tto pay\tinterest at a lesser<br \/>\nrate made  it less favourable to the employees. It also held<br \/>\nthat  in  view\tof  the\t revised  conditions  for  grant  of<br \/>\nexemption, the\tappellant was duty bound to comply with that<br \/>\nterm regarding\tpayment of  interest at enhanced rate as and<br \/>\nwhen  it   was\tnotified   by  the  Central  Government.  It<br \/>\naccordingly allowed  the petition and directed the appellant<br \/>\nand respondent no.10 to pay the difference as claimed by the<br \/>\nemployees.\n<\/p>\n<p>     The appellant  is challenging  the said order passed by<br \/>\nthe High  Court on  the ground\tthat it\t is illegal.  It was<br \/>\nsubmitted by  the learned counsel for the appellant that the<br \/>\nestablishment  of   respondent\t no.10\t was   an   exempted<br \/>\nestablishment and  as it  has framed its own Provident Funds<br \/>\nScheme with  rules and\tregulation, the\t provisions  of\t the<br \/>\nStatutory Scheme are not applicable to it. He also submitted<br \/>\nthat the  scheme framed by it being not less favourable than<br \/>\nthe statutory  scheme, the  High Court\twas not justified in<br \/>\ndirecting payment of interest at the higher rate declared by<br \/>\nthe Central  Government. He  also submitted that the revised<br \/>\nterms and  conditions for  grant of exemption recommended by<br \/>\nthe  Central   Government  did\t not  become   automatically<br \/>\napplicable to  the appellant  and they\tcould have been made<br \/>\napplicable only\t after an  amendment was  made by  the State<br \/>\nGovernment in the appellant&#8217;s exempted scheme to that effect<br \/>\nand was notified in the official gazette.\n<\/p>\n<p>     The undisputed  facts are\tthat the establishment of JC<br \/>\nMills limited  was granted  exemption under Section 17(1)(a)<br \/>\nas the\tProvident Funds Scheme made by it was found not less<br \/>\nfavourable than\t the statutory\tscheme.\t The  appellant\t had<br \/>\nframed its  own rules and regulations and under the exempted<br \/>\nscheme the  Board of  Trustees was  empowered to declare the<br \/>\nrate of\t interest every\t year for  crediting the same to the<br \/>\nProvident Funds\t account of  each member.  It is also not in<br \/>\ndispute that  the Government  of India revised the terms and<br \/>\nconditions for grant of exemption under Section 17(1)(a) and<br \/>\ncirculated the\tsame to\t all the State Governments and Union<br \/>\nTerritory  Administrations  by\tits  letter  dated  29.8.83.<br \/>\nAccording to  the revised  condition No.4 any amendment made<br \/>\nin the\tStatutory Scheme  which was  more beneficial  to the<br \/>\nemployees than\tthe existing rules of the establishment, was<br \/>\nto  become   applicable\t to   the   exempted   establishment<br \/>\nautomatically. It was on the basis of this revised condition<br \/>\nthat the  High Court  held that the appellant was duty bound<br \/>\nto comply  with the  said term\tand  grant  interest  at  an<br \/>\nenhanced rate notified by the Central Government, payment of<br \/>\ninterest at  lesser  rate  made\t the  exempted\tscheme\tless<br \/>\nfavourable to the employees.\n<\/p>\n<p>     As the  establishment of  respondent no.10\t was granted<br \/>\nexemption under\t Section 17(1)(a)  the\tstatutory  Provident<br \/>\nFunds Scheme  did not  apply to\t it.  The  High\t Court\twas,<br \/>\ntherefore,  clearly   wrong  in\t applying  para\t 60  of\t the<br \/>\nstatutory Scheme  to the  appellant and\t in holding that not<br \/>\npaying interest\t at the rate in terms of para 60 amounted to<br \/>\ncontravention of  the provisions  of the Act and the Scheme.<br \/>\nThe High  Court also misread the letter dated 29.8.83 issued<br \/>\nby the\tGovt.  of  India  and  misconstrued  Cordition\tNo.4<br \/>\ncontained in  the model\t notification sent  along with\tthat<br \/>\nletter. Before\twe refer to the said letter it may be stated<br \/>\nthat the  High Court  also failed  to  consider\t that  after<br \/>\n24.11.64 the State Government was the appropriate Government<br \/>\nin respect  of the establishment of respondent no.10 for the<br \/>\npurpose of  Section 17. By the said letter dated 29.8.83 the<br \/>\nGovernment of  India informed  all the State Governments and<br \/>\nthe Union  Territory Administrations  that the sub-committee<br \/>\nof Central Board of Trustees had reviewed the working of the<br \/>\nexempted establishments\t and has  recommenced tightening  of<br \/>\nthe existing  terms and\t conditions for\t grant of  exemption<br \/>\nunder Section  17(1)(a) so  as the ensure better compliance.<br \/>\nit was\talso stated therein that &#8220;A set of revised terms and<br \/>\nconditions of  exemption have  accordingly been\t revised.  A<br \/>\ncopy of\t the model  notification incorporating\tthe  revised<br \/>\nterms and  conditions is  enclosed. The\t State Government of<br \/>\nAndhra Pradesh etc. are requested to apply the revised terms<br \/>\nand conditions to all fresh cases of exemption under Section<br \/>\n17(1)(a).&#8221; Along  with the  said letter\t a copy of the model<br \/>\nnotification was  also sent.  What the\tHigh Court failed to<br \/>\nnotice was  that the revised terms and conditions were to be<br \/>\nmade applicable\t to fresh  cases of  exemption. The  Central<br \/>\nGovernment had\tnot made  any statutory\t amendment nor given<br \/>\nstatutory  directions  but  had\t only  requested  all  State<br \/>\nGovernments and\t Union Territory  Administrations  to  grant<br \/>\nexemption under\t Section 17(1)(a)  subject to the conditions<br \/>\nspecified in  the schedule  to the  model notification.\t The<br \/>\nrevised terms  and conditions  did not\tand could  not\thave<br \/>\nbecome applicable  automatically, and  in order to make them<br \/>\napplicable they\t were required\tto be  incorporated  by\t the<br \/>\nappropriate  Government\t  in   the   notification   granting<br \/>\nexemption under\t Section 17(1)(a).  As regards\tthe exempted<br \/>\nestablishments it  was rightly\tpointed out  by the Regional<br \/>\nProvident Fund\tcommissioner  that  unless  the\t appropriate<br \/>\nGovernment  issued  a  notification  amending  the  exempted<br \/>\nscheme and  published the  same\t in  the  Official  Gazette,<br \/>\ncondition no.4\tdid not\t apply to  them. Admittedly, to such<br \/>\nnotification amending  the exempted  scheme  framed  by\t the<br \/>\nappellant and  respondent no.10\t was  issued  by  the  State<br \/>\nGovernment. Therefore,\tthe appellant  and respondent  no.10<br \/>\nwere not  legally bound to credit the account of each of the<br \/>\nrespondent-employees with  higher rate\tof interest  for the<br \/>\nyears 1984-85  to 1988-89,  only because for those years the<br \/>\nCentral Government  had declared  interest at  higher rates.<br \/>\nThe  High   Court  really  misconstrued\t the  correct  legal<br \/>\nposition and unjustifiably criticised the Regional Provident<br \/>\nFund  commissioner   by\t observing  that  his  approach\t was<br \/>\nperverse. The  view taken  by the  Regional  Provident\tFund<br \/>\nCommissioner was  quite correct and the High Court was wrong<br \/>\nin taking a different view.\n<\/p>\n<p>     We, therefore,  allow this\t appeal, set aside the order<br \/>\npassed by the High Court and restore the order passed by the<br \/>\nRegional Provident  Fund commissioner.\tIn view of the facts<br \/>\nand circumstances  of the case there shall be no order as to<br \/>\ncosts.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Jiyajeerao Cotton Mills Ltd vs Dev Kumar Holani And Others on 22 July, 1998 Author: Nanavati.J. Bench: G.T. Nanavati, S.P. Kurdukar PETITIONER: JIYAJEERAO COTTON MILLS LTD. Vs. RESPONDENT: DEV KUMAR HOLANI AND OTHERS DATE OF JUDGMENT: 22\/07\/1998 BENCH: G.T. NANAVATI, S.P. KURDUKAR ACT: HEADNOTE: JUDGMENT: J U D G M E [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-212299","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Jiyajeerao Cotton Mills Ltd vs Dev Kumar Holani And Others on 22 July, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/jiyajeerao-cotton-mills-ltd-vs-dev-kumar-holani-and-others-on-22-july-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Jiyajeerao Cotton Mills Ltd vs Dev Kumar Holani And Others on 22 July, 1998 - Free Judgements of Supreme Court &amp; 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