Disposed

Elite Foods Private Ltd. v. the Assistant Provident Fund Commissione

Kerala HC6 Nov 2012WP(C)/1907/2009

Case brief

AI extract

What is this about?

In a writ petition, the petitioner challenged a direction to pay EPF contribution on milk allowance, arguing it was not part of wages. The court held that liability requires factual enquiry. It remitted the matter for enquiry under Section 7A of the EPF Act, ordered a decision within two months, and kept the demand in abeyance.

What did the court decide?

Referral for enquiry under Section 7A of the EPF Act; decision within two months; demand kept in abeyance.

Elite Foods Private Ltd. Vs the Assistant… — Pension and Retirement Benefits | Kerala HC (2012)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE A.M. SHAFFIQUE

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TUESDAY, THE 6TH DAY OF NOVEMBER 2012/15TH KARTHIKA 1934

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WP(C). No. 1907 of 2009 (B)

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PETITIONER:

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ELITE FOODS PRIVATE LTD. DEVELOPMENT AREA, AROOR, ALAPPUZHA DISTRICT 688 534, REPRESENTED BY ITS FACTORY MANAGER.

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BY ADV. SRI. N. RAGHURAJ

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RESPONDENT:

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THE ASSISTANT PROVIDENT FUND COMMISSIONER, EMPLOYEES' PROVIDENT FUND ORGANISATION, KALOOR, COCHIN-682 017.

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BY ADVS. SRI. S. GOPAKUMARAN NAIR (SR.) SRI. M. CHANDRA BOSE

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C). No. 1907 of 2009 (B)

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APPENDIX

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PETITIONER'S EXHIBITS:-

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EXT. P1	-	COPY OF THE COMMUNICATION BEARING NO.KR/KC/13227/ ENF.II(1)/2008/5482 DATED 13.08.2008.
EXT. P2	-	COPY OF THE COMMUNICATION BEARING NO. KR/KC/13227/ENF. II(5)/2008/7599 DATED 21.10.2008.
EXT. P3	-	COPY OF THE COMMUNICATION DATED 06.11.2008.
EXT. P4	-	COPY OF THE COMMUNICATION BEARING NO. KR/KC/13227/ENF. II(1)/2008/9012 DATED 25.11.2008.

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RESPONDENT'S EXHIBITS:- NIL

//TRUE COPY//

P.A. TO JUDGE.

A.M.SHAFFIQUE, J.

---------------------------------------------------W.P.(C) No. 1907 of 2009 - B

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--------------------------------------------------Dated this the 6^th day of November, 2012

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J U D G M E N T

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The petitioner is aggrieved by Exts.P1, P2 and P4 issued by the Employees Provident Fund Organization. By virtue of Exts.P1 and P2, it was indicated that the petitioner failed to pay the contribution towards milk allowance paid to the employees from January, 2005 onwards. The petitioner filed an objection, Ext.P3 dated 6.11.2008 stating that the milk allowance does not form part of the basic wages, Dearness Allowance or any other amount on the basis of which contribution can be paid. Based on the said objection, Ext.P4 order was passed informing the petitioner that by virtue of paragraph 29 of the Employees' Provident Fund Scheme, the Dearness Allowance includes cash value of any food concession and therefore the petitioner is liable to pay contribution for the the said amount also. Under these circumstances, challenge is made by the petitioner.

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Counter affidavit has been filed by the EPF Department inter alia contending that the milk allowance given to the

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W.P.(C) No. 1907 of 2009 - B

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employees also form part of the food concession and hence it is a cash value. It is also submitted that proceedings were initiated under S.7A of the Act to enable the petitioner to present his grievances or contentions and finally a decision is yet to be taken and since the petitioner had moved the High Court, enquiry under S.7A is kept pending.

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Learned counsel for the petitioner also relied upon the judgment in Tata Power Company Limited and Others v. Regional Provident Fund Commissioner (2008-III-LLJ-992 (Bombay) for the position that food allowance agreed to be paid by the petitioner to its employees under a settlement does not amount to “cash value of any food concession”. The judgment in Malabar Fruit Products Co. v. E.S.I. Corporation (1991(2) KLT 484) is also relied upon to indicate that a Division Bench of this Court had found that allowance for milk does not form part of the wages. Admittedly, the said judgment is based on the definition of wages under S.2(22) of the Employees State Insurance Act. Since the said Act does not contain any provision, similar to the Employees Provident Fund Act, the said judgment may not apply.

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W.P.(C) No. 1907 of 2009 - B

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As to whether the milk allowance form part of “cash value of the concession is purely a question of fact”. Though the Department had already come to such a view, since an objection is raised by the petitioner as Ext.P3, definitely an enquiry under S.7A is required, to determine whether contribution is payable for such amount or not. Under these circumstances, I am of the view that the writ petition is disposed of with the following directions:

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(i) The Department shall conduct an enquiry under S.7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and determine whether the petitioner is liable to pay contribution on the milk allowance paid to the workers, with notice to the petitioner and after hearing them.

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(ii) The decision shall be taken within two months from the date of receipt of copy of this judgment.

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W.P.(C) No. 1907 of 2009 - B

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(iii) Petitioner is at liberty to challenge any

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adverse decision.

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