TaxTMI 
TaxTMI 
2012 (1) TMI 319
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....spondent being an 'exempted establishment' cannot be subjected to the provisions of Section 14(B) of the Act. 4. The material facts of case are not much in dispute. 5. By notification dated 23.11.1967, the Central Government in exercise of its power under Section 17(1) (a) of the Act granted exemption to the respondent, which is a company registered under the Companies Act subject to the provisions specified in Schedule II annexed to the said notification. The material part of the said notification is as follows: "S.O. Whereas, in the opinion of the Central Government: (1) The Rules of the provident fund of the establishment mentioned in Schedule I (hereto annexed and (hereinafter referred to as the said establishments), with the respect to the employees therein then those specified in section 6 of the employees' Provident Fund Act, 1952 (10 of 1952); and (2) The Employees in the said establishments are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under the Employees' Provident Funds Scheme 1952 (hereinafter referred to as the said School) in relation to the employee....
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....the respondent company and, inter alia, came to following finding: "Under such circumstances, this court holds that the impugned order cannot be sustained in law as the concerned authority demanded damages from the petitioners not only on account of delayed payment of contribution to the trust fund but also on account of delayed payment of the contribution to the pension fund and insurance fund. The impugned order, thus, stands set aside. The Provident Fund Authority may, however, ascertain damages under Section 14B of the said Act afresh for delayed payment of contribution to the pension fund as well as the insurance fund. The writ petition, thus, stands allowed with the above observation." 8. The learned Single Judge while allowing the writ petition proceeded on the basis that the expression "so far as may be" in Section 17(1A)(a) of the Act will have to be given its proper meaning. If such meaning is given then the provision in Sections 6, 7A, 8 and 14B of the Act cannot be applied in their entirety. The learned Single Judge held that the expression "so far as may be" cannot be treated as a surplusage. 9. The learned judge further held t....
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....1948 ( 63 of 1948), the person so named; and (ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent;" "2 (fff) "exempted establishment" means an establishment in respect of which an exemption has been granted under section 17 from the operation of all or any of the provisions of any Scheme or the Insurance Scheme, as the case may be, whether such exemption has been granted to the establishment as such or to any person or class of persons employed therein." 16. Section 14(B) of the Act which provides for recovery of damages reads as under: "Section 14B - Power to recover damages - Where an employer makes default in the payment of any contribution to the Fund, the Pension Fund or the Insurance Fund or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 or in the payment of any charges payable under any other provision of this Act or of any Scheme or....
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....nsultation shall forward its views on exemptions to the appropriate Government within such time limit as may be specified in the Scheme. (1A) Where an exemption has been granted to an establishment under Clause (a) of Sub-section (1), (a) the provisions of Section 6, Section 7A, Section 8 and 14B shall, so far as may be, apply to the employer of the exempted establishment in addition to such other conditions as may be specified in the notification granting such exemption, and where such employer contravenes, or makes default in complying with any of the said provisions or conditions or any other provision of this Act, he shall be punishable under Section 14 as if the said establishment had not been exempted under the said Clause (a); (b) the employer shall establish a Board of Trustees for the administration of the provident fund consisting of such number of members as may be specified in the Scheme; (c) the terms and conditions of service of members of the Board of Trustees shall be such as may be specified in the Scheme; (d) the Board of Trustees constituted under Clause (b) shall - (i) maintain detailed accounts to show the c....
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....ed the order dated 9.6.2004, it was not open to the respondent company to invoke the extraordinary writ jurisdiction of the High Court. Learned counsel for the respondent company however urged that since the matter rested on an interpretation of various Sections of the Act, an appeal to statutory authority created under the said Act would not be an efficacious remedy. 21. In the peculiar facts of the case and specially having regard to the nature of the proceedings, we do not wish to decide the controversy raised in this case on the question of non-availability of a statutory remedy. The impugned order was passed in the year 2004 and thereafter the writ petition was entertained by the two Benches of the High court and after that the matter is pending before us. Now we are in 2012. To dismiss the order of the two Benches of the High Court inter alia on the ground that the writ petition was entertained despite the existence of a statutory remedy and then send it back to the remedy of appeal after a period of eight years, would not, in our judgment, be a correct exercise of judicial discretion. However, we are of the opinion that normally the statutory remedy of appeal should be av....
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....that a remedial statute receives liberal construction whereas a penal statute calls for strict construction. In the cases of remedial statutes, if there is any doubt, the same is resolved in favour of the class of persons for whose benefit the statute is enacted, but in cases of penal statutes if there is any doubt the same is normally resolved in favour of the alleged offender. 25. It is no doubt true that the said Act effectuates the economic message of the Constitution as articulated in the Directive Principles of State Policy. 26. Under the Directive Principles the State has the obligation for securing just and humane conditions of work which includes a living wage and decent standard of life. The said Act obviously seeks to promote those goals. Therefore, interpretation of the said Act must not only be liberal but it must be informed by the values of Directive Principles. Therefore, an awareness of the social perspective of the Act must guide the interpretative process of the legislative device. 27. Keeping those broad principles in mind, if we look at the Objects and Reasons in respect of the relevant Section it will be easier for this court to appreciate the statuto....
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....drich Bodmer, a Swiss Philologist in his treaties "The Loom of Language". Bodmer, who was a Professor in the Massachusetts Institute of Technology, said:- "Words are not passive agents meaning the same thing and carrying the same value at all times and in all contexts. They do not come in standard shapes and sizes like coins from the mint, nor do they go forth with a degree to all the world that they shall mean only so much, no more and no less. Through its own particular personality each word has a penumbra of meaning which no draftsman can entirely cut away. It refuses to be used as a mathematical symbol." 33. The aforesaid formulation by Professor Bodmer was cited with approval by the Constitution Bench of this Court in S.C. Advocates-on-Record Association & ors., v. Union of India reported in 1993 (4) SCC 441 at page 553. Justice Holmes in Towne v. Eisner [245 US 418] thought in the same way by saying: "a word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used." 34. Therefore, about the problem of interpretation we may a....
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....nt. At page 105 of the report the learned Law Lord said:- "I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language used would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a court of justice is engaged remains one of construction, even where this involves reading into the Act words which are not expressly included in it." 39. This Court has already decided in N.K. Jain and others v. C.K. Shah and others reported in (1991) 2 SCC 495 that for construing the provision of this very Act a purposive approach should be adopted. 40. In N.K. Jain (supra) the question was whether criminal proceedings can be instituted under Section 14 of the Act in respect of an establishment which is exempted under Section 17 thereof, for contravention of the provisions of Section 6 of the Act. 41. Answering the question affirmatively the Court held in paragraph 13: "...legislative purpose must be noted and the statute must be read as a whole. In our view taking into consideration the object underlying the Act and on reading Sections 14 and 17 in full, it becomes cle....
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.... any contribution to the fund. In the instant case admittedly default has taken place. 47. The expression 'fund' has been defined under Section 2(h) of the Act to mean the provident fund as established under a Scheme. Though the word 'scheme' has been defined under Section 2(l) to mean the employees provident fund scheme framed under Section 5, this Court in N.K. Jain (supra) held the definition of the word 'fund' would apply to a scheme operating in an establishment exempted under Section 17. In that case it was urged on behalf of the respondent that the expression 'fund' and 'scheme' must be given a wide interpretation to include fund under a private scheme. Such submission on behalf of the respondent was noted in paragraph 16 at page 518 of the report. In para 17 at page 518 of the report, this Court on consideration of the ratio in the case of Knightsbridge Estates Trust Ltd. v. Byrne - (1940) 2 All E.R. 401 (Ch.D) and the decision of this Court in National Buildings Construction Corporation v. Pritam Singh Gill reported in (1972) 2 SCC 1 and also various other decisions accepted the said construction. Applying these principles, decided in the aforesaid cases, this Court has....
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....est that the court should shut its eyes to social justice and consider and interpret a law as if our country had not pledged itself to bringing about social justice." 52. We endorse the same view. In fact this has been endorsed by this Court in N.K. Jain (supra). 53. Reference in this connection may be made to what was said by Justice Krishna Iyyer in the same vein in the decision of Surendra Kumar Berma and others v. Central Government Industrial Tribunal-cum-Labour Court, New Delhi and Anr., reported in 1980 (4) SCC 443. The learned judge held that semantic luxuries are misplaced in the interpretation of 'bread and butter' statutes. 54. Unfortunately, the High Court missed this well settled principle of interpretation of social welfare legislation while construing the expression "so far as may be" in interpreting the provision of Section 17 (1A)(a) of the Act and unduly restricted its application to the employer of an exempted establishment. 55. The interpretation of the expression "so far as may be" by this Court in its Constitution Bench decision in M. Ismail Faruqui (supra) was given in a totally different context. The said judgment on a Presidential Reference was ....