wp1524.11.odt 1/5 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR. WRIT PETN. NO.1524/2011 M/s K.J. Enterprises -vs- The Assistant Provident Fund Commissioner and others ------------------------------------------------------------------------------------------------------------------------------------ Office notes, Office Memoranda of Coram, appearances, Court's orders Court's or Judge's Orders. or directions and Registrar's orders. ------------------------------------------------------------------------------------------------------------------------------------ Shri S. S. Ghate, learned counsel for the petitioner. Dr. R.S.Sundaram, learned counsel for the respondents. CORAM : R. M. SAVANT, J. DATED : 21/07/2011. The above petition takes exception to the order dated 17th February, 2011 passed by the Employees Provident Fund Appellate Tribunal, by which order the appeal filed by the petitioner came to be rejected. On suspicion that the petitioner had committed default in the remittances in respect of the employees in question, proceedings under Section 7-A were initiated against the petitioner under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity referred to as the “said Act”). The petitioner was called upon to produce the relevant material viz. the Attendance Register for the period in question, Membership Eligibility Register, Cash-Book and Vouchers for the period in question, Wages/Salary Register/Pay Bills and any other documents necessary for ascertaining attendance of the workers and payment of wages, etc. wp1524.11.odt 2/5 The Enforcement Officer submitted his report dated 22/10/2008. In the said report it was stated that the petitioner is a contractor working for M/s. Jayaswal Neco Industries Limited, which is a covered establishment. The petitioner is also a covered establishment w.e.f. January, 2008 with the Code No.MH/66428 and had remitted dues from 01/01/2008 up to 8/2008 on basic wages only. The proceedings under Section 7-A of the said Act were concluded by the order dated 21/01/2009 being passed by the Assistant Provident Fund Commissioner on the basis of the material before him. The said Authority concluded that the petitioner is nothing but an operative plant of M/s. Jayaswal Neco Industries Ltd. In so far as the provident fund dues are concerned, the Authority on consideration of the Attendance/Wages Register and the bills received from M/s. Jayaswal Neco Industries Ltd., found that the provident fund dues had been calculated on Basic + D.A., whereas major part of the emoluments have shown as incentive and H.R.A. The Authority therefore on consideration of the said material in the form of sales/wages register and considering the number of days for which wages were paid, came to a conclusion that the incentive granted to the employees by the petitioner is nothing but the hidden wages, which were shown to have been paid to avoid the Provident Fund Liability. The Authority determined the amount payable by the petitioner calculated on the basis of the hidden wages, which were not shown by the petitioner and determined a sum of Rs.5,08,309/- as payable by the petitioner for the wp1524.11.odt 3/5 period in question. The break-up of the said amount is in the table appearing below paragraph No.6 of the said order dated 21/01/2009. The table inter alia discloses the liability towards Provident Fund Contribution which is to the extent of Rs. 3,11,020/-, on account of Family Pension Fund Contribution, it is Rs.1,65,334/-, on account of Employees Contribution under Employees being Insurance Scheme, it is Rs.9,924/-, on account of Administrative Charges, it is Rs.21,833/- and on account of the Administrative Charges payable under the Employees Deposit Linked Insurance Scheme, it is Rs.198/- making the total amount of Rs.5,08,309/-. It appears that the petitioner thereafter filed a review application before the same Authority inter alia contending that the incentive was paid depending upon the production given by the employees, etc., which finds a place in paragraph No.iii of the grounds on which review was sought. The said review application came to be rejected by the Assistant Provident Fund Commissioner by his order dated 21/01/2009 on the ground that no ground for review has been made out by the petitioner considering the limited grounds on which the review jurisdiction can be exercised. Aggrieved by the said order dated 21/01/2009 and the order dated 25/11/2008 passed under Section 7-A of the said Act, the petitioner filed an appeal under Section 7-1 of the said Act before the Employees Provident Fund Appellate Tribunal. The Tribunal taking into consideration the definition of “Basic Wages” under Section 2(b) of the said Act and wp1524.11.odt 4/5 considering the facts and circumstances of the petitioner’s case, came to a conclusion that the incentive allowance paid by the petitioner would come within the meaning of “Basic Wages” as it would come within the definition of emoluments. The Tribunal also recorded a finding that the incentive allowance is more than the basic wages and, therefore concluded that the petitioner was paying wages in guise of allowances to avoid the liability under the Provident Funds and Miscellaneous Provisions Act, 1952. The Tribunal therefore by its order dated 17/02/2011 dismissed the said appeal. The question whether the incentive allowance paid by the petitioner to its employees to be called wages has been answered by the Authority under Section 7-A as also the Appellate Tribunal by recording a finding of fact based on the material that was before them. During the course of the hearing of the above petition for admission, since the learned counsel for the petitioner had taken exception to the finding recorded by the Tribunal that the incentive allowance was more than the basic wages. This Court has perused the extract of the wages register from January, 2008 to September, 2008 at page No.57 of the paper book. The said extract unequivocally discloses that the incentive paid was much more than the basic wages almost to the extent of 3½ times of the basic wages, as can be seen for the month of January, 2008. The basic wages for the said month, which have been shown to be paid to the employees are in the sum of Rs.1,29,799/- whereas the incentive is in the sum of Rs.4,16,201/-. Similarly, is the case in respect of the other wp1524.11.odt 5/5 months up to September, 2008. The reason given by the petitioner for paying such a high amount of incentive allowance, in my view, cannot be accepted. It is pertinent to note that beyond stating that it is linked to production, nothing has been stated by the petitioner. The finding of fact therefore recorded by the Authority under Section 7-A of the said Act as well as the Tribunal, in my view, do not warrant any interference in the writ jurisdiction of this Court. The above Writ Petition is accordingly dismissed. The amount of Rs.50,000/- deposited in this Court by the petitioner is allowed to be withdrawn by the Provident Fund Authorities i.e. the Assistant Provident Fund Commissioner, Nagpur and to be appropriated towards the dues owed by the petitioner. JUDGE KHUNTE