TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 517
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....ate Sri S.N. Murthy, Senior Advocate A/W Sri Somashekar, Advocate, By Sri H. Srinivas Rao, Advocate And Smt. Deepthi C.R., Advocate, For the Respondents : (By Sri M.N. Kumar, CGSPC For R-1; Smt. Nandita Haldipur, Advocate For R-2 & R-3) Stone Hill Education Foundation, UE Develoment India Pvt. Ltd., Deccan Cargo & Express Logistics Private Limited, Canadian International School, Mr. Shane Kells, Mr. John Nigel Gleave, Mr. Scott Zeuch, CPG Consultants India Pvt. Ltd., Mr. Raimi Bin A Rahim, Mantri Developers Private Limited, Jonathan Yach, ARM Embedded Technologies Pvt. Ltd., Sobha Developers Ltd., M/s. Toyota Tsusho India Pvt. Ltd., Mr. A. Murali, M/s. Toyotetsu India Auto Parts Pvt. Ltd., Ozone Propex Private Limited, Value And Budget Housing Corporation Pvt. Ltd., Metro Cash & Carry India Private Limited, Guenter Kari Redtenbacher, M/s. Toyota Kirloskar Motor Private Limited, M/s Toyota Kirloskar Auto Parts Pvt. Ltd., M/s. Transystem Logistics International Pvt. Ltd., M/s. Toyota Logistic Kishor India Private Limited, M/s. Toyota Techno Park (I) Pvt. Ltd. M/s. Sunchirin Autoparts India Pvt. Ltd. M/s. Mahindra Reva Electric Vehicles Ltd., M/s. Recaero India Private Limited, M/....
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....s other than the international workers, who draw exceeding Rs. 15,000/- per month is outside the purview of the Scheme. The international workers do not work till retirement, they work only for a limited period and thus, requiring them to pay PF contribution on their entire global salary would cause irreparable injury. According to the petitioners, international workers required to pay EPF contributions is arbitrary and hit by Article 14 of the Constitution of India. According to the petitioners - the employers and the employees, the provisions introduced in the Scheme are arbitrary and discriminatory. 6. Statement of objections filed by the Union of India - respondent No. 1: It is contended that, the Union of India has effected changes to the Act by making special provisions for different types of workers. The following are the special provisions made by the respondent for different types of workers from time to time: (I) With effect from 31.12.1956 para 80 was inserted in the Scheme to make a special provision in the Scheme in the case of Newspaper Establishment and Newspaper Employees. The said Scheme shall, in its application to Newspaper Establishments and Newspaper Employ....
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....on so deducted from the salaries of Indians was a loss for every worker as the benefits, according to the laws of the countries of their posting, are generally payable on completion of the minimum qualifying period of contribution or residence, which is normally ten years or more. An Indian worker deputed for a limited period of five years or so is generally less than the minimum qualifying period. Therefore, Indian workers, ever after remittance of social security contribution in the host countries, are not entitled to any social security benefits and with a view to protecting such rights of such migrant workers, the Government of India decided to introduce the statutory provisions in the EPF Scheme and the Pension Scheme in respect of the international workers and as per the amended provisions, an international worker from an SSA country is entitled to withdraw his provident fund accumulation on seizing to be an employee in an establishment covered under the Act. (VI) It is further submitted that the grievance of the petitioner that international workers can withdraw the full amount standing to their credit in the fund only on attaining the age of 58 years or on retirement on ....
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....unsel for respondent No. 1 - Union of India; Smt. Nandita Haldipur, learned counsel for respondent No. 2 and 3 (EPF), Smt.Shwetha Anand, learned counsel for respondent No. 2 (in W.P. Nos. 22507/2015 and 19464/2021) have been heard. 9. Arguments advanced by the petitioners' counsel: (I) Introduction of para 83 and para 43A is opposed to the object and intendment of the Act (II) There is manifest arbitrariness while introducing para 83 and para 43A. (III) Para 83 introduced in the Scheme is violative of para 2(f) of the Act "excluded employee" and violative of the Act, for the reasons that: (i) The Act provides for coverage of the weaker sections where there is a ceiling limit; (ii) No salary ceiling limit for international workers which is in contravention to the Act; (iii) Heavy burden is on the employer; (iv) Para 83 and para 43A are unconstitutional and hit by Article 14 of the Constitution of India and also illegal being opposed to the object of the EPF & MP Act, 1952. (v) Implications of amendment pertaining to insertion of para 83 and the international worker may be an Indian worker or foreign national: (a) An Indian employee working or having worked abroa....
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....onth, which is in total contravention of the Act; (m) The Scheme framed under Section 5 of the EPF & MP Act, 1952 cannot go beyond the definition of "employee" under the application and object of the Act under the definition of "excluded employee"; (n) Para 83 is contrary to Section 6 of the EPF Act and higher interest over and above the ceiling limit is not entitled and the huge burden is on the employer; (o) Article 14 is applicable to foreign citizens, even non-citizens have to be protected under Articles 14 and 21. The introduction of para 83 is a violation of fundamental rights; (p) Central Government has given a go-bye to the Act, no application of mind by the Government; (q) While bringing Para 83 into force, the Central Government has not looked into the objects of the Act; (r) The Scheme is oppressive and there is manifest arbitrariness while issuing notification by the Central Government and introducing para 83; (s) There is no intelligible differentia between the Indian employee and an international worker who is not covered under the Social Security Agreement or Bilateral Comprehensive Economic Agreement. There is no nexus between the object sought ....
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.... Union of India (UOI) and others AIR 1970 SC 1453 (III) Sri Dhyan Chinnappa, learned senior counsel along with Sri M.V. Sundara Raman, learned counsel and Sri Krishar Somaiah, learned counsel: (a) Lakshman and others vs. State of Madhya Pradesh (1983) 3 SCC 275 (b) Food Corporation of India and others vs. Ashis Kumar Ganguly and others (2009) 7 SCC 734 (c) K.T. Veerappa and others vs. State of Karnataka and others (2006) 9 SCC 406 (d) Ameerunissa Begum and others vs. Mahboob Begum and others AIR 1953 SC 91 (e) Ram Prasad Narayan Sahi and another vs. State of Bihar and others AIR 1953 SC 215 (f) Namit Sharma vs. Union of India (2013) 1 SCC 745 (g) Subramaniyan Swamy vs. Director, CBI (2014) 8 SCC 682 (h) State of Rajasthan vs. Basant Nahata (2005) 12 SCC 77 (i) State of Tamil Nadu vs. P. Krishnamurthy (2006) 4 SCC 517 (j) Global Energy Ltd. vs. Central Electricity Regulatory Commission (2009) 10 SCC 570 (IV) Sri Vasuki, learned senior counsel along with Sri C.K.Subrahmanya, learned counsel for Sri B.C.Prabhakar, learned counsel: (a) Sri Sudarshan v. Biradar vs. State of Karnataka and others W.P. No. 15800/2022 D.D. ....
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....dia has relied upon the following decisions of the Apex Court and various High Courts: (1) State of West Bengal vs. Anwar Ali Sarkar (1952) 1 SCC 1 (2) Kathi Raning Rawat vs. State of Saurashtra (1952) 1 SCC 215 (3) Lachmandas Kewalram Ahuja and another vs. State of Bombay (1952) 1 SCC 726 (4) Shamarao v. Parulekar vs. District Magistrate, Thana, Bombay and others (1952) 2 SCC 1 (5) State of Punjab vs. Ajaib Singh and another (1952) 2 SCC 421 (6) Budhan choudhry vs. State of Bihar (1954) SCC Online SC 19 (7) State of Kerala and another vs. N.M. Thomas and others (1976) 2 SCC 310 (8) The Bihar Eastern Gangetic Fisherman Co-Operative Society Ltd. vs. Sipahi Singh and others (1977) 4 SCC 145 (9) Pathumma and others vs. State of Kerala and others (1978) 2 SCC 1 (10) Jolly George Varghese and another vs. The Bank of Cochin (1980) 2 SCC 360 (11) M/s. P.M. Patel and sons and others vs. Union of India and others (1986) 1 SCC 32 (12) State of Kerala vs. Smt. A. Lakshmikutty and others (1986) 4 SCC 632 (13) Louis De Raedt vs. Union of India and others (1991) 3 SCC 554 (14) State of Arunachal Pradesh vs. Khudiram ....
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....s W.P. No. 1846/2018 D.D. on 07/08/2019 (35) Sachin Vijay Desai vs. Union of India and others W.P. No. 1846/2018 D.D. on 07/08/2019 13. This Court has carefully considered the contentions urged by the learned counsel for the parties and perused the material on record, having heard the point that arises for consideration is, "Whether introduction of para 83 of EPF Scheme and para 43A of EP Scheme is unconstitutional hit by Article 14 of Constitution of India?" 14. In order to appreciate the points that have been canvassed before this Court, it is necessary to refer to the provision of Article 14 of the Constitution with a view to determine the nature and scope of the guarantee that is implied in it. Article 14 reads as under: "14. Equality before law.-The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India." 15. Article 14 in Indian Constitution guarantees the right to equality for every citizen of the country. It encompasses the general principles of equality before the law and prohibits unreasonable discrimination between the two persons. It incorporates the idea of equality expressed in the....
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....t have a rational relation to the object sought to be achieved by the statute in question. The classification should be founded on a different basis, namely, geographical or according to the objects or occupations or the like. (i) What is necessary to be seen is that, there must be a nexus between the basis of the classification and the object sought to be achieved under the Act. 16. These principles were formulated in the State of Bombay vs. F.N. Balsara (1951) SCC 860. The Apex Court, later in State of West Bengal vs. Anwar Ali Sarkarhabib Mohamed (1952) 1 SCC 1 and Lachmandas Kawalram Ahuja vs. State of Bombay (1952) 1 SCC 725, gave deliberate consideration to the well settled principles underlying the guarantee in Article 14 of the Constitution. 17. The petitioners have challenged the constitutional validity of para 83 of the EPF Scheme and para 43A of the Pension Scheme as being unconstitutional is hit by Article 14 of the Constitution of India, and also as illegal being opposed to the very object of the EPF & MP Act, 1952. The EPF Scheme was introduced on 01.10.2008 to start with, and later it was amended on 03.09.2010 and the modified version was brought into effect fr....
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....a foreign country with which India has entered into a bilateral agreement being eligible to avail the benefits under the social security programme of that country, by virtue of eligibility gained or going to gain under the said agreement. (ii) An employee other than an Indian employee, holding other than an Indian passport working for an establishment in India to which EPF & MP Act, 1952 applies. (iii) The provisions of the EPF Act and Scheme have been extended to international workers with effect from 01.10.2008. (iv) A detached international worker contributing to the social security of the home country and certified as such by the detachment certificate for a specified period in terms of the bilateral SSA signed between that country and India is an "excluded employee" under these provisions. (v) Contribution is payable on total salary payable on account of the employment of the employee for the wages by an establishment covered in India even for responsibility outside India. (vi) There is no cap on the salary on which contributions are payable by the employer as well as the employee. (vii) There is no cap on the salary upto which the employer's share of contrib....
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....d the Scheme is to ensure that no person can be deprived of social security benefits and also known Indians deputed to work outside should not be deprived of the benefits. 20. Section 5 of the EPF & MP Act states that the Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees' Provident Fund Scheme for the establishment of provident funds under this Act for the employees or for any class of employees and specify establishments or class of establishments to which the said Scheme shall apply and they shall be established, as soon as, may be after the framing of the scheme, a Fund in accordance with the provisions of this Act and the Scheme. The fund shall vest in, and be administered by the Central Board constituted under Section 5A and the Scheme so framed may provide for all or any of the matters specified in Schedule II, subject to the provisions of the Act. A Scheme framed may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme. The Scheme framed under Section 5 of the EPF & MP Act has been amended from time to time. This powe....
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....ia, the institution of a pension scheme cannot be visualized in the near future is another alternative way for the provisions of gratuities after the prescribed period of service. The main defect of a gratuity Scheme, however, is that the amount paid to a worker or his dependents would be small, as the worker would not himself be making any contribution to the fund. Taking into account various difficulties, financial and administrative, the most appropriate course appears to be the institution of compulsory or contributory provident funds in which both the worker and employer would contribute. Apart from the advantages, there is the obvious one of cultivating among the workers a spirit of saving something regularly. The institution of provident fund of this type would also encourage the stabilization of a steady labour force in the industrial centers. The EPF & MP Act, 1952 is a social welfare legislation meant for the protection of industrial workers to enable them to have an alternative to the pension. The Act is also meant to inculcate savings for their future, especially for the period subsequent to their retirement. It is nowhere mentioned in the objects of the enactment i.e.,....
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....n his entire salary although both are by definition of international workers. The Government of India is unable to substantiate any nexus with the object sought to be achieved, para 83 is clearly discriminatory in treating the international workers of Indian origin and foreign origin differently and thus violative of Article 14 of the Constitution of India. The distinction in the amount of contribution between an employee going to a non- SSA country and an employee from a non-SSA country coming to India is clearly discriminatory and violative of Article 14. The demand for contribution on global salary i.e., salary earned by an international worker or remuneration received by an international worker from some other country or in home country should also be computed for the purpose of the contribution is on the face of it, arbitrary and hit by Article 14 of the Constitution of India. 25. The respondents in their statement of objections have claimed that para 83 has been introduced as a measure of reciprocity in order to honour social security agreements between India and other countries. Wherever the Government of India has entered into a social security agreement with another count....