Allowed

G S Karnawat and Ors. v. Ajmer Central Cop. Bank Ltd. and

Rajasthan HC9 Mar 2021CW/572/2000

Case brief

AI extract

What is this about?

The High Court set aside an order directing recovery of employee Provident Fund contributions from retired petitioners' salaries. Holding that since the liability was fixed on the employer, Section 12 of the EPF Act prohibited deduction from wages.

What did the court decide?

Impugned order directing recovery from petitioners' salaries set aside; interim stay order made absolute.

G S Karnawat and Ors. Vs Ajmer Central… — Pension and Retirement Benefits | Rajasthan HC (2021)

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(1 of 5)

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[CW-572/2000]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Civil Writ Petition No.572/2000

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G. S. Karnawat S/o Sh. Roop Singh, aged about 53 years, working as Branch Manager, R/o behind Prakash Clinic, Foy Sagar Road, Ajmer.

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Hitesh Mehta S/o Sh. Guman Mal Mehta, aged about 56 years, Branch Manager, Khailand Branch, R/o Rambla Road, Near Ram Bhawan, Ajmer.

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Sampat Singh Jain S/o Sh. U.M. Jain, aged about 45 years, Clerk cum Godown Keeper, at Kekri Branch of Bank Ajmer, R/o “Kumtha Gali”, Lakhan Kotri, Ajmer.

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S. K. Panwar S/o Sh. Shanti Swaroop Panwar, aged about 48 years, Cashier-cum-Clerk, Headquarter Ajmer, R/o 135/39, Adarsh Nagar Railway Station, Vigyan Nagar, Ajmer.

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Yogendra Singh S/o Sh. K.C. Yadav, aged about 52 years, Clerk-cum-Godown Keeper, Jaipur Road Branch, Ajmer, R/o Sabjee Mandi, Kaisar Ganj, Ajmer.

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S.Sindhu S/o Sh. Ram Singh, aged 48 years, Cashier-cumClerk, Jaipur Road Branch, R/o Housing Board, T-4, Shastri Nagar, Near Mamta Sweet House, Ajmer.

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----Petitioners

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Versus

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The Ajmer Central Co-operative Bank Ltd., through its Administrator, Collector, District Ajmer.

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The Managing Director, Ajmer Central Co-operative Bank Limited, Jaipur Road, Ajmer.

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Regional Provident Fund Commissioner, Jyoti Nagar, Jaipur.

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----Respondents

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For Petitioner(s) : Mr. Sunil Samdaria Mr. Ramesh Chand Bairwa For Respondent(s) : Mr. Virendra Lodha Sr. Advocate with Mr. T P Sharma

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HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA

Judgment

09/03/2021

(2 of 5)

[CW-572/2000]

The short controversy involved in the present petition is in relation to the order passed by the Ajmer Central Co-operative Bank dated 29.10.1999 whereby it was directed that a recovery of an amount as mentioned therein be made from the salary of the petitioners in 23 installments in relation to the amount which was to be contributed by the employees share and the Provident Fund. 2. Brief facts which require to be noticed are that the petitioners who were holding different posts in the Ajmer Central Co-operative Bank are members of the Employees’ Provident Fund Scheme and their deductions to the tune of eight and one-third per cent were to be made as their part of the contribution in terms of Section 6 of the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952, (in short, “the Act of 1952”). However, the Bank vide its order dated 06.09.1996 directed a lump sum amount of Rs.500/- to be deducted from each of the employee working in the Bank resulting in a dispute arising for which the petitioners alongwith others submitted representation and after enquiry, an order was passed on 07.05.1998 by the office of the Regional Provident Fund, Commissioner holding such lump sum deductions as unjustified with directions to follow the provisions of Section 6 of the Act of 1952.

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As the deductions of Rs.500/- lump sum was made from the employees salary for the period from September, 1996 to July, 1998 whereas deductions as per Section 6 of the Act of 1952 of eight and one-third per cent were required to be made, the bank therefore, issued the order of recovery of the aforesaid amount which was part of the share to be contributed by the employees by the impugned order.

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(3 of 5)

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[CW-572/2000]

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Learned counsel for the petitioners submit that such deductions could not have been made in light of Section 12 of the Act of 1952 and Para 32 of the Employees’ Provident Funds Scheme, 1952 (in short, “the Scheme of 1952”). Such recovery of share of contribution which was on account of the fault of the Bank could not have been made.

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This Court vide order dated 21.02.2000 stayed the recovery amount. The interim order has continued till today and the recoveries stood stayed. All the six petitioners have already attained superannuation and have retired.

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Learned counsel for the Bank submits that as the amount was part of the contribution to be paid by the employees in terms of Section 6 of the Act of 1952 and the same had not been paid, the recovery could be made in view of the Para 32 of the Scheme of 1952.

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I have considered the submissions.

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A look at the Section 12 of the Act of 1952 reads as under:-

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“ 12. Employer not to reduce wages, etc. – No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employees is entitled under the terms of his employment, express or implied.”

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(4 of 5)

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[CW-572/2000]

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Para 32 of the Scheme of 1952 reads as under:-

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“ 32. Recovery of a member’s share of contribution. -- (1) The amount of a member’s contribution paid by the employer or a contractor shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and not otherwise:

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Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable:

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Provided further that the employer or a contractor shall be entitled to recover the employee’s share from a wage other than that which is paid in respect of the period for which the contribution has been paid or is payable where the employees has in writing given a false declaration at the time of joining service with the said employer or a contractor that he was not already a member of the Fund:

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Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writing of the Inspector be made from the subsequent wages.

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(2) Deduction made from the wages of a member paid on daily, weekly or fortnightly basis should be totalled up to indicate the monthly deductions.

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(3) Any sum deducted by an employer or the contractor from the wages of an employee under this Scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted.”

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(5 of 5)

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[CW-572/2000]

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Thus, on the conjoint reading of both the provisions, it is apparent that if a liability for the payment of contribution has been fixed on the employer, the same cannot be recovered from the employees in terms of Section 12 of the Act of 1952, however, if the employee does not on his own deposit his contribution, the recovery can be made from him in terms of Para 32 of the Scheme of 1952.

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In the present case as per the order passed by the Regional Provident Fund Commissioner, Rajasthan dated 07.05.1998, the Bank has been fastened with the liability after passing an order under Section 7A of the Act of 1952. Thus, such a liability could not have been recovered from employee by reducing the salary of the petitioners as per Section 12 of the Act of 1952 and the order impugned therefore, is liable to be set aside and it is accordingly set aside. As the recovery was already stayed by this Court, the interim order passed by this Court is made absolute.

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Learned counsel submits that aforesaid findings should be limited to petitioners alone. After a long lapse of time, this court is of the view that this order shall be limited to the petitioners alone who have approached this Court in time and would not be applicable on others from whom recovery has already been made.

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The writ petition is accordingly allowed.

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All pending applications shall also stand disposed of. No costs.

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(SANJEEV PRAKASH SHARMA),J

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SAURABH YADAV /670/2

G S Karnawat and Ors. v. Ajmer Central Cop. Bank Ltd. and

Case brief

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G S Karnawat and Ors. v. Ajmer Central Cop. Bank Ltd. and

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