AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (1) TMI 319
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....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 employees in any other establishment of a similar character. Now, t....
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....der 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 that the said expression "so far as may be" used in Section 17(1A)(a) of the said Act is for the purpose ....
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...., 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 Insurance Scheme or under any of the conditions specified under section 17, the Central Provident Fund Commissioner or such other officer as may ....
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....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 contributions credited, withdrawals made and interest accrued in respect of each employee; (ii) submit such returns to the Regional Provident Fund Commissioner or any other officer as the Central Government may direct from t....
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....ons 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 availed of in a situation like this. 22. From the aforesaid discussion it is clear that this case calls for interpretation of certain statutory provisions. It is not disputed, and possibly cannot be disputed, that the Act is a social welfare legislation. The Act....
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.... 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 statutory intent. The opening words of Section 14B are, "where an employer makes a default in the payment of contribution to the fund". This was incorporated by way of an amendment, vide Amending Act 37 of 1953. In this connection, the excerpts from the Statement of Objects and R....
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.... 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 again go back to what Justice Frankfurter said in the aforesaid article. This is of considerable importance. The learned Judge said: "...The process of construction, therefore, is not an exercise in logic or dialetic: The aids of formal reasoning are not irrelevant; they may simply be inadequate. The purpose of construction be....
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....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 clear that cancellation of the exemption granted does not amount to a penalty within the meaning of Section 14(2A). As already noted these provisions which form part of the Act, which is a welfare legislation are meant to ensure the employees the continuance of the benefits of the provident fund. They should be interpreted in such a way so that the purpose of the legislation is allowed....
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.... 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 held "consequently if there is a default in payment of the contribution to such a scheme it amounts to contravention of Section 6 punishable under Section 14(1A)". (See page 517 of the report) 48. Following the same parity of reasoning, we hold if there is a default in payment of contribution to such a scheme it amounts to contravention of Section 14B and damages can be levied. The High Court, with ....
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....s 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 rendered in the context of the well known Ram Janam Bhumi Babri Masjid controversy where a special Act, namely, Acquisition of Certain Area at Ayodhya Act was enacted and sub-section (3) of Section 6 of the said Act provides that the provisions of Sections 4, 5 & 7 shall "so far as may be" apply in relation to such authority or body or trustees as they apply in relation to the Central Government. In that context this Court ....