2012 (1) TMI 319 - SC - Indian Laws

Whether the employer of an establishment which is an exempted establishment under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 is subject to the provisions of Section 14B of the said Act whereby in cases of default in the payment of contribution to the provident fund, proceedings for recovery of damages can be initiated against the employer of such an exempted establishment ? Held that - Section 14B is attracted where an employer makes a default in the payment of any contribution to the fund. In the instant case admittedly default has taken place. 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 great respect, erred by coming to a contrary conclusion. High Court s interpretation of the expression so far as may be as limiting the ambit and width of Section 17(1A)(a) of the Act, in our judgment, cannot be accepted for two reasons as well. The High Court is guided in the interpretation of the word so far as may be on the basis of the principle that statutes does not waste words. The High Court has also relied on the interpretation given to so far as may be in the case of Dr. Pratap Singh and another v. Director of Enforcement, Foreign Exchange Regulation Act and others reported in AIR 1985 SC 989. It goes without saying that Foreign Exchange Regulation Act is a fiscal statute dealing with penal provisions whereas the aforesaid expression is to be construed in this Act which is eminently a social welfare legislation. Therefore, the parameters of interpretation cannot be the same. In the instant case, the High Court failed to discern the correct principle of interpretation of a social welfare legislation. 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. We hold that in a case of default by the employer by an exempted establishment, in making its contribution to the Provident Fund Section 14B of the Act will be applicable.

Summary

Issues Involved:
1. Applicability of Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 to exempted establishments.
2. Interpretation of the expression "so far as may be" in Section 17(1A)(a) of the Act.
3. Jurisdiction of the High Court in entertaining the writ petition despite the availability of an alternative statutory remedy.

Issue-wise Detailed Analysis:

1. Applicability of Section 14B to Exempted Establishments:
The central issue was whether an exempted establishment under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, is subject to Section 14B, which allows for the recovery of damages in cases of default in payment of contributions. The High Court had ruled in favor of the respondent, holding that exempted establishments are not subject to Section 14B. The Supreme Court, however, overturned this decision, stating that Section 14B applies to exempted establishments in cases of default. The Court emphasized that the Act is a social welfare legislation aimed at ensuring benefits to employees, and thus, its provisions should be liberally construed to fulfill its purpose.

2. Interpretation of "so far as may be" in Section 17(1A)(a):
The expression "so far as may be" was a point of contention, with the High Court interpreting it as limiting the applicability of Sections 6, 7A, 8, and 14B to exempted establishments. The Supreme Court disagreed, stating that this expression should not be treated as surplusage but should be interpreted in a manner that promotes the objectives of the Act. The Court referenced various legal principles and precedents, including the purposive approach to statutory interpretation, to conclude that the expression "so far as may be" does not restrict the application of Section 14B to exempted establishments.

3. Jurisdiction of the High Court:
The appellant argued that the High Court should not have entertained the writ petition as an alternative statutory remedy was available. The Supreme Court acknowledged this but chose to address the substantive issues due to the significant time lapse since the original order (2004) and the nature of the proceedings. The Court noted that while the statutory remedy of appeal should generally be availed of, it decided to resolve the matter on its merits given the circumstances.

Conclusion:
The Supreme Court concluded that Section 14B of the Act applies to exempted establishments, and the expression "so far as may be" should be interpreted in a manner that does not dilute the provisions of the Act. The Court emphasized the importance of interpreting social welfare legislation liberally to achieve its intended purpose. Consequently, the judgments of the Single Bench and Division Bench of the High Court were overruled, and the appeal was allowed.