1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 14.10.2011 CORAM: THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)No.1069 of 2011 & M.P.(MD).No.1 of 2011 The Management, Virudhunagar District Central Cooperative Bank Ltd., Virudhunagar, Rep.by its Special Officer : Petitioner Vs. 1.Assistant Provident Fund Commissioner (Exem.) Employees Provident Fund Organisation, Regional Office, Lady Doak College Road, Chokkikulam, Madurai 625 002. 2.M.Narayanasamy 3.P.Narayanasamy : Respondents PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of writ of Certiorari to call for the records relating to impugned order passed by the first respondent vide D.TN/29718/Enf./Exem./RO/MDU/2010 dated 20.05.2010 and the consequential order vide D.TN/29718/Enf./Exem/RO/MDU/2010 dated 10.01.2011 and quash the same. For Petitioner : Mr.V.Nagendren for Mr.D.Shanmugaraja Sethu For Respondents : Mr.G.R.Swaminathan for R1 Mr.K.Muthu Ganesha Pandian for R2 ORDER It is a peculiar case filed by the management of District Central Cooperative Bank Limited. By the impugned order, dated 10.01.2011 passed by the Assistant Provident Fund Commissioner (Exem.), the first respondent herein, it was found that instead of paying provident fund share of the employer to one P.Narayanasamy, (the 3rd respondent herein), they have retained the amount. On a complaint being made, the petitioner bank was informed that there is no power with them to retain their share of provident fund at the time of settlement of EPF accounts of members who have left the https://hcservices.ecourts.gov.in/hcservices/ 2 service, for whatsoever reason (i.e) Dismissal/Termination / Retrenchment/ Retirement/ Migration. Therefore, the petitioner bank was advised to release the employer share of the provident fund accumulations immediately to the second respondent under an intimation to the office, failing which the bank was warned that the exemption granted to them under Section 17(1)(a) of the Act will be cancelled. Challenging the same, the writ petition came to be filed. 2. When the writ petition came on 08.03.2011, this Court ordered notice and granted an interim stay for two weeks and it was also extended subsequently. 3. The only question that arises for consideration is that even in a case of an exempted provided fund, whether the employer can retain their share on the ground that as the employee had taken certain amounts as loan and it was due to the bank or to any other corresponding cooperative societies. 4. The counsel for the petitioner stated that admittedly, the second respondent is owed amount due to the petitioner bank and his liability was Rs.6,05,802/-. Further surcharge proceedings under Section 87 had been initiated to recover the amount of Rs.70,054/- including the interest. 5. When asked under what provision the amounts have been retained, the counsel for the petitioner placed reliance upon the judgment of the Honourable Supreme Court in JARNAIL SING V. SECRETARY, MINISTRY OF HOME AFFAIRS reported in 1993 (1) SCC 47 and it was further contended that the Supreme Court in that case had considered the power of the employer to withhold amounts of gratuity in certain circumstances. It is in the light of the said judgment, they have retained the amount. A reference to the Judgment made in U.P. STATE SUGAR CORPORATION LTD., V. KAMAL SWAROOP TONDON reported in 2008 (2) SCC 41 was made, wherein it was held that an employer is entitled to recover any amount which is due to an employer for the terminal benefits. 6. Under the provisions of the Tamil Nadu Pension Rules, 1978 when a payment under the head of Death cum retirement Gratuity (DCRG), the rule specifically provides for retention of amounts due towards the State and therefore, there is no defect in them in withholding such amounts. In the present case the petitioner bank is covered by the Tamil Nadu Cooperative Societies Act, 1983 and Section 48 only enables them from retaining any wages or gratuity if any agreement is entered into for deduction of such amount, they may give effect to the same. Therefore, the counsel contended that the provident fund is also akin to the gratuity. Hence the impugned orders are liable to be set aside. 7. Such a contention in the absence of any specific provisions cannot be accepted. The judgments cited by the learned counsel are entirely on different context. Once amounts are deducted towards provident fund, the amount does not belong to the employer and it is https://hcservices.ecourts.gov.in/hcservices/ 3 kept as a separate fund and those amounts were not available to the employer. Under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 there is no provisions for retaining the employer's share of provident fund on any account. 8. Hence, there is no illegality or irregularity in the advise tendered by the first respondent by the impugned communication. The writ petition is misconceived and accordingly the writ petition stands dismissed. Consequently, the connected miscellaneous petition is closed. No costs. Sd/- Deputy Registrar (Writs) /True Copy/ Assistant Registrar To The Assistant Provident Fund Commissioner (Exem.) Employees Provident Fund Organisation, Regional Office, Lady Doak College Road, Chokkikulam, Madurai 625 002. Order made in W.P.(MD)No.1069 of 2011 & M.P.(MD).No.1 of 2011 14.10.2011 jikr NSV/8.11.11/3P/2C https://hcservices.ecourts.gov.in/hcservices/