1984 (3) TMI 441 - HC - Indian Laws

Summary

Issues Involved:
1. Non-payment of Provident Fund dues to employees.
2. Employer's failure to deposit contributions.
3. Obligations of the Provident Fund Commissioner.
4. Impact of the Sick Textile Undertakings (Nationalisation) Act, 1974.
5. Legal and social implications of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

Issue-wise Analysis:

1. Non-payment of Provident Fund dues to employees:
The petitioner, an unemployed mill-hand, filed a petition under Article 226 of the Constitution of India, seeking a writ against the respondents to pay the Provident Fund dues to all employees, including himself, of the mills taken over by the National Textile Corporation. The petitioner argued that the employees were not paid their full dues because the employers had not paid certain contributions.

2. Employer's failure to deposit contributions:
The petitioner was employed with M/s. Kalyanmal Mills, Ltd., Indore, and his contributions were regularly deducted from November 1952 until his retirement on December 21, 1980. Upon retirement, the petitioner was entitled to the full amount of his Provident Fund, but was informed that the employer had not deposited the employee's contribution for 17 months and the employer's contribution for 26 months during 1970-71 and 1972-73. The petitioner contended that the respondents could not avoid payment on the excuse that they had not recovered contributions from the employers.

3. Obligations of the Provident Fund Commissioner:
The respondent, Regional Provident Fund Commissioner, admitted that several employees had not been paid their full Provident Fund amounts due to the employers' failure to deposit contributions. The Commissioner argued that the Provident Funds Act does not obligate them to pay the Provident Fund money if the dues have not been paid by the employer. The court, however, held that the employee should not suffer for no fault of his own and is entitled to the full amount, including both his and the employer's contributions, irrespective of whether the employer actually remitted the amount to the Fund.

4. Impact of the Sick Textile Undertakings (Nationalisation) Act, 1974:
The mills were nationalised under the Sick Textile Undertakings (Nationalisation) Act, 1974, and their ownership was vested in the National Textile Corporation. Compensation was awarded to each nationalised mill for disposing of all liabilities for the pre-takeover period. However, no money was received from the Commissioner of Payments, leading to the non-payment of Provident Fund dues. The court held that the respondents could not evade payment responsibilities and must find a solution to meet such situations.

5. Legal and social implications of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952:
The Act is a piece of social security legislation aimed at providing financial security to industrial workers after retirement or to their dependents in case of early death. The court emphasized that the employee's contributions are deemed credited to the Fund once deducted from wages, and the employer is equally bound to contribute his share. The court referenced the Supreme Court's judgment in Grammo Chemical Industries v. Union of India, highlighting the social and economic justice guaranteed by the Constitution and the responsibility of the Provident Fund Commissioner to ensure compliance with the Act and Scheme.

Conclusion:
The petition was allowed with costs. The respondents were directed to pay the amount from the existing Fund to the petitioner for the period in question within three months. The court underscored the importance of social and economic legislation and the responsibility of the respondents to address such issues in accordance with the provisions of the Act. Counsel's fee was set at Rs. 200, and the security deposit of Rs. 150 was ordered to be refunded to the petitioner.