Assistant Provident Fund Commissioner vs ISHWAR LAL VERGE

-THIS appeal under Section 15 of the C.P. Act, 1986 (the Act) from the order of the District Forum, Kota, made on 17.7.2002 in Complaint No. 129/2001, arises under the following circumstances.

MR. Ishwar Lal Verge, Respondent No. 1 (the complainant) had been appointed as Deputy Registrar in Engineering College, Rawatbhata Road, Kota, respondent No. 2 (the Institution) vide order dated 16/17.8.1996. He joined his duties on 21.8.1996 and served the said institution till 31.10.1999. Although at the time of appointment of Sri Verge the pay scales already stood revised by the State Government by order dated 17.2.1998 and such revised pay scales were made applicable w.e.f. 1.9.1996 but monetary benefits of the revised scales were given to the employees w.e.f. 1.9.1997.

As per case of the complainant the Institution was though a Non-Government Educational Institution but it was duly recognised by the State Government for imparting education in Engineering subjects to the students and the provisions of the Employees Provident Funds and Misc. Provisions Act, 1952 (the E.P.F. Act) were applicable to the Institution. Deduction from the salaries paid/payable to the employees of the Institution used to be made for the said purpose and remitted by the Institution, along with its own contribution, to the Assistant Provident Fund Commissioner, Kota, Rajasthan (the appellant).

IT appears that on 9.8.2000, 11.8.2000 and 17.8.2000 the Enforcement Officers of the appellant had made an inspection of the accounts of the Institution and noted that P.F. contributions had been restricted upto Rs. 5,000/- w.e.f. March, 1998 and thus the Institution had reduced the quantum of benefits of Provident Fund to its employees. The Enforcement Officers had though instructed the Institution that calculation of the contribution of the share of the employee and of the employer on the full salary of employees should be made and deposited with the appellant, yet the Institution had failed to deposit the arrears over and above the ceiling limit of Rs. 5,000/-. An inquiry contemplated under Section 7A of the EPF Act, was, therefore, held by Sri Khem Chand of the Sub-Regional Office, EPF, Vigyan Nagar, Kota (The Inquiry Officers) into such irregularity.

THE Inquiry Officer, vide its order dated 22.10.2001, opined that in view of applicability of Section 12 of the EPF Act the quantum of benefit of P.F. Contribution, as per provisions of the EPF Act, should not have been withheld and reduced in the cases of such employees, who were already availing the benefit of PF Contribution over and above the ceiling limit of Rs. 5,000/-. Payment of the arrear of difference over and above Rs. 5,000/- from March, 1998 onward and charged from the employees from time-to-time was, therefore, recommened to be made to them. During the pendency of the above inquiry under Section 7 of the EPF Act, the complainant stood retired w.e.f. 31.10.1999. Since he was being paid salary over and above Rs. 5,000/- under the revised pay scales, deductions on account P.F. were although made from his full salary upto 28.2.1998 but those were restricted to the ceiling of pay at Rs. 5,000/- thereafter w.e.f. 1.3.1998 onward. It was in the above background that the complainant filed his complaint under Section 12 of the Act against the appellant and the Institution alleging therein that- (I) although he was paid the arrear amounting to Rs. 26,509/- being the difference of revised pay for the period from 1.1.1997 to 31.12.1997 but a sum of Rs. 5,268/- on account of employees and employees contribution to his PF A/C was not credited to his said account, and that (II) by its unilateral act the Institution illegally restricted his and its own contributions to his PF A/c up to his salary at Rs. 5,000/- and thus loss of a sum of Rs. 37,000/- was caused to him. He accordingly prayed for the payment of the above mentioned two amounts, besides compensation for mental agony at Rs. 25,000/- and cost of litigation at Rs. 5,000/- from the appellant and the Institution.

IN the replies, filed by the appellant and the INstitution separately, payments made to the complainant were justified on the ground of their being in consonance and conformity with the relevant rules in force at the relevant time.

BY its impugned order the District Forum accepted the claim of the complainant in respect to the afore-mentioned two amounts and decreed the same accordingly with cost at Rs. 500/- and Rs. 2,000/- as compensation for mental agony as against the appellant only. The complaint, as against the Institution, was, however, dismissed on the ground that there was the relationship of master and servant and not of provider of service for consideration and Consumer between the Institution and the complainant respectively.

At the very outset, Mr. N.C. Jain, the learned Counsel for the appellant, submitted that in deciding the complaint against the appellant, the D.F. heavily relied upon the orders made by the concerned authorities under the provisions of the EPF Act but such reliance by the District Forum had become invalid due to the provisions of EPF Act having been held as not applicable to the Institutions like that in this case, by the Hon''ble Rajasthan High Court in the case of Union of India v. Digamber Jain Secondary School, etc., RLR 2002(1) 803. The learned Counsel for the complainant although supported the impugned order and vehemently submitted that the impugned order was in conformity with the report of the Inquiry Officer, appointed by appellant''s own office and there were no reasons to ignore such report but he could not dispute the legal position as has since been declared by the Hon''ble Rajasthan Court on the subject in the cited case.

IN the cited case the question that arose for consideration of the Hon''ble High Court was as to whether recognised Non-Government Educational INstitutions, which are managed by private managements (whether receiving grant-in-aid or not), are within effective control of the State Government and are entitled to be excluded from applicability of EPF Act, 1952. Answering the above question in the affirmative the Hon''ble High Court observed and held in Para Nos. 16 to 18 of the report as under : (16) We have heard learned Counsel for both the sides and have also gone through the order passed by the learned Single Judge. The provisions of Section 16(1)(b) of the EPF Act, 1952, make it very clear that the Central Act does not apply in cases where there is a scheme or rule framed by the State Government for the benefits available under EPF Act, 1952. It is established that the State Rules of 1963 were already in force since 1963 and, therefore, the benefits under EPF Act, 1952 were available to the establishments of the institutions who have filed the petitions and the scheme made there under was applicable and the same was valid. (17) IN this view of the matter, we are clearly of the opinion that the establishments belonging to or under the control of the State Government and their employees were entitled to the benefits of the contributory provident fund in accordance with the rules which were already there in Rajasthan for such benefits and, therefore, there is no question of the applicability of the Central Act so far as such institutions are concerned. The learned Single Judge in the judgment has classified the educational institutions in the State of Rajasthan in four categories as under : (1) Those educational institutions, which are owned, controlled and managed by State Government, which are called Government educational institutions, and where the services of employees are at par with State Government employees; (2) the second category of educational institutions in State of Rajasthan, are owned and controlled by State Government but managed by universities, local authorities, or other authorities of the State. (3) the third category of educational institutions are those, which are recognised institutions, but are being managed by private managements, registered under the Registration of Societies Act and are called Non-Government Educational INstitutions; and (4) there are fourth category of educational institutions, in State of Rajasthan, which are recognised by State Government and are also on the list of Grant-in-Aid of State Government, but managed by private managements, registered under the Registration of Societies Act and are also called Non-Government Educational INstitutions." (18) INstitutions against whom the present petition has been filed are clearly covered by the third and fourth categories as above and they are clearly covered by the definition Clauses (p) and (q) of Section 2 of the State Act of 1989 and Rule 2(r) and (s) of the State Rules of 1993, the argument that such institutions are still governed by the Central Act of 1952 has been stated only to be rejected. Keeping in view the provisions contained in Section 16(1)(b) read with definition Clauses (p) and (q) of Section 2 of the Act of 1989 and also keeping in view the provisions under Section 16(1)(b) of EPF Act, 1952, it is very clear that the Central Act, i.e., EPF Act, 1952 does not apply to such institutions. In view of the above position of law, as declared by the Hon''ble High Court, it needs to be examined as to which category of the educational institutions, the Institution in the present case belongs and which are the Statutes and Rules and/or Scheme applicable to the case of the respondent Institution for the purpose of grant of relief, if any, to the complainant. Although the above decision had been rendered by the Hon''ble High Court on 12.2.2002, prior to the decision of the complaint on 17.7.2002, but the said decision was not brought to the notice of the learned District Forum, which could thus have no occasion to examine the respective cases of the parties in the light of the law laid down by the Hon''ble High Court. Material relevant to and necessary for the decision of the pertinent question was placed by either of the parties neither before the District Forum nor before us. We are, therefore, not in a position to decide the question at our stage. In order to do justice to both the parties it is necessary that the case be re-examined by the DF in the light of the above mentioned decision of the Hon''ble Hight Court and the observations made hereinabove by us.

IN the result the impugned order is set aside and the case is remanded to the District Forum to hear the parties afresh, after allowing them to produce such relevant evidence in support of their respective cases as they think proper in the light of the observations made by us in this order and decide the complaint according to law, preferablywithin a period of three months after putting in appearance by the parties before it on 23.2.2004. The record of the Forum is set back forthwith. If any amount has either been paid to the complainant or deposited with the Forum with reference to appellant''s cheque No. 464700 dated 7.8.2000 for Rs. 2,500/- , in compliance of the impugned order of the Forum, the same shall not be re-paid or refunded to the appellant during the pendency of the complaint. Appeal allowed.