IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. L.P.A. No.1139 of 2011 (O&M) Date of decision: 20.7.2011 Assistant Provident Fund Commissioner -----Appellant. Vs. M/s G4S Security Services (India) Ltd. & another. -----Respondents. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Kamal Sehgal, Advocate for the appellant. Mr. Harvinder Singh, Advocate and Mr. Ravi Kant Sharma, Advocate for respondent-caveator. --- ADARSH KUMAR GOEL, ACJ 1. This appeal has been preferred against order of learned Single Judge upholding the order of the Tribunal under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short, “the Act”) on the issue of determination of Provident Fund dues of the respondent- employer. 2. The Employees Provident Fund Commissioner issued notice under Section 7A of the Act alleging that the employer-respondent was wrongly calculating the provident fund contributions by making unjustified exclusion from the component of ‘basic wage’. It was further stated that the contribution was L.P.A. No.1139 of 2011 liable to be calculated under Section 6 of the Act with reference to ‘basic wage’, Dearness Allowance and Retaining Allowance. The ‘basic wage’ could not be less than ‘minimum wage’. 3. The respondent-employer contested the allegation by submitting that calculation of contribution was made as per statutory provision and there was no requirement for taking basic wage to be equal to minimum wage. The employer was entitled to take basic wage as per Section 2(b) of the Act by excluding the allowances liable to be excluded under the said provision. The Commissioner rejected the stand of the employer as follows:- “18……. I hold that splitting of minimum wages into basic, HR and other allowance was clearly a subterfuge in order to avoid statutory liability of Provident Fund. I further order that the Provident Fund is to be paid on the entire minimum wages disclosed by the establishment and the splitting of minimum wages should not be allowed. The matter of payment of provident fund and other dues on overtime allowance is being examined separately and separate orders will be issued in this regard……” 4. On appeal, the Tribunal reversed the stand of the Commissioner and upheld the plea of the employer holding as under:- “6. On the basis of the above discussions, the wages payable by the appellant to its employees is in accordance with minimum wages and the pay structure of the appellant is as per law and the PF contribution shall be payable on the basic wages paid 2 L.P.A. No.1139 of 2011 to the employees. In nutshell, the appellant is liable to pay its share of PF contribution on the basic wages payable + other allowances permissible under the Act and not on entire minimum wages which the employer is paying to its employees. The HRA and other allowances, which is part of Appellant’s wage structure, are not a part of Basic Wage as per the definition of the basic wages defined under Section 2 (b) of the Act and the Appellant is not liable to pay PF contribution on the same…..” 5. The above view of the Tribunal has been upheld by learned Single Judge as follows:- “It is thus evident that under the provisions of the Employees Provident Fund Act, the definition of wage has an appended exclusion clause in which the various allowances which are quite broad in nature have been provided so as to enable the employee to determine its liability to make the contribution to the fund. The Minimum Wages Act on the other hand provides for a definition of wage which is distinct from that of the basic wage and that definition of wage includes within its ambit House Rent Allowance but does not include certain other allowances which are being detailed therein. The objects and reasons of both the statutes are manifestly distinct even though they converge on the beneficial aspect of the welfare of an employee. The laws of interpretation of statute also provides that nothing more is to be read into the language of a 3 L.P.A. No.1139 of 2011 statute and the words are to be read and interpreted as they exist to acknowledge the legislative intent. Having regard to the aforesaid, there is little hesitation to hold that the contention of the learned counsel for the petitioner is mis-placed and that the respondents have rightly excluded certain allowances such as House Rent Allowance, washing allowance and conveyance allowance while determining their liability towards the fund.” 6. We have heard learned counsel for the parties. 7. Learned counsel for the appellant submits that the view taken by the Commissioner was consistent with the spirit of the Act and for computing contribution under Section 6, ‘basic wage’ could not be taken to be less than minimum wage. 6. We are unable to accept the submission. The statute having defined the term ‘basic wage’ which for the purposes of the Act could not be less than the minimum wage, there was no compulsion to hold that the definition of ‘basic wage’ should be equated to the definition of ‘minimum wage’ under the Minimum Wages Act, 1948. No doubt wage less than minimum wage in violation of law cannot be paid but it does not imply that for calculation of contribution for EPF Act, the employer could not follow statutory provisions of the said Act which permits contribution to be computed with reference to ‘basic wage’ as defined thereunder. 4 L.P.A. No.1139 of 2011 7. We, thus, do not find any error in the view taken by learned Single Judge. The appeal is dismissed. (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE July 20, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 5