THE HON’BLE SRI JUSTICE C.V.RAMULU WRIT PETITION No.34537 of 1997 AND WRIT PETITION No.6968 of 1998 Dated: 11.02.2010 W.P.No.34537 of 1997 Between: I.Suresh Kumar and others. .. Petitioners. And The Managing Director, Scheduled Caste Services Co-op. Society, (Social Welfare Engineering Wing), Pragathi Maidan, Nizamabad, and others. .. Respondents. W.P.No.6968 of 1998 Between: G.Ravi and others. .. Petitioners. And The Managing Director, Scheduled Caste Services Co.op. Society, (Social Welfare Engineering Wing), Pragathi Maidan, Nizambad and others. .. Respondents. COMMON ORDER: In these two writ petitions, common questions of fact and law arise for consideration; therefore, they are being disposed of by this common order. It appears, for the past several years, the petitioners in both these writ petitions have been working in Scheduled Caste Services Co- operative Society under the control of the 2nd respondent-Executive Engineer, Scheduled Caste Services Co-operative Society, on N.M.R. basis. While so, the 1st and 2nd respondents, being the employers of the petitioners, are under obligation to pay Provident Fund contribution for the petitioners, but as the same was not being followed by the employers, the Provident Fund authorities directed the 2nd respondent to pay the same in respect of the petitioners and some other similarly situated employees, for the period from 01.02.1987 onwards. Pursuant thereto, the employer paid the arrears of the Provident Fund contribution, in respect of the petitioners and other staff members, for the period from February, 1987 onwards and, later on, sought to recover the arrears of employees’ share, including the petitioners’ share, from their salaries of subsequent period. The petitioners contend that though they did not submit any application for sanction of loan, the 2nd respondent, vide proceedings dated 15.05.1997, suo- moto sanctioned an amount of Rs.1,82,737/-, as loan towards the arrears of their provident fund contribution payable to the Commissioner for Regional Provident Fund, Nizamabad, subject to the condition that the said loan is recovered in 24 monthly instalments from their salaries commencing from the month of May, 1997. Thereafter, when the 2nd respondent started recovery, the petitioners gave a representation/complaint to the provident fund authorities and the Assistant Commissioner of Labour, who thereupon, have categorically directed the 2nd respondent to stop recovery of arrears of the provident fund contribution of the employees, including the petitioners, from their salaries of subsequent period, for the reason that the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (for short ‘the Employees’ Provident Fund Act’) and the Schemes framed thereunder do not permit such recovery. The grievance of the petitioners is that in spite of such clear and categorical directions from the concerned authorities, the 2nd respondent started recovery of the alleged arrears of their Provident Fund contributions from their salaries of subsequent period. Hence, this writ petition. Respondents 1 and 2 filed counter affidavit, in W.P.No.34537 of 1997, stating that all the work Inspectors including the petitioners have made an application to the respondent Society to grant loan of Rs.1,82,787/- towards the arrears of their provident fund contribution. It is also stated that basing on the individual undertaking given by the employees empowering the respondent Society to deduct the said loan amount from their salaries/wages of subsequent period, the respondent Society had issued proceedings dated 15.05.1997 sanctioning an amount of Rs.1,82,787/-, as loan towards the arrears of Provident Fund contribution, in respect of 22 employees, subject to the condition that the said loan is recovered in 24 monthly instalments, and accordingly, the recovery is effected as per the said proceedings. It is further stated that the 3rd respondent, without issuing any notice, had issued the prohibitory orders restraining the respondent Society from deducting the arrears of the contribution of the employees’ provident fund, from the salaries of subsequent period, on the ground that such a recovery is not permissible under Section 32(1) of the Employees’ Provident Fund Act. Learned counsel for the petitioners submits that, in spite of clear and categorical directions issued by the authorities to stop deductions of arrears of employees’ provident fund contribution, from the salaries of the subsequent period, the 2nd respondent started such deductions. He also submits that it is well settled law that an employer has no right whatsoever to deduct the employees’ share of provident fund from the salaries of the employees other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable, and if such amount is not deducted at the time of payment of salaries, the employer himself shall have to pay that amount along with damages and will not be permitted to recover the same from the salaries of subsequent period. Learned Standing Counsel appearing for the 1st and 2nd respondents stated that in view of lack of funds, the salaries were not paid to the employees for a long period and, therefore, the employees’ provident fund contribution could not be paid during such period. He also submits that the employer, having paid the arrears of salaries to the employees, subsequently, without deducting their provident fund contribution, has every right to recover the employees’ provident fund contribution from their salaries of subsequent period. Further, he submits that the petitioners gave an undertaking empowering the employer to deduct the loan amount, sanctioned towards the arrears of their provident fund contribution, from their salaries of subsequent period. I have given my earnest consideration to the respective submissions made by the learned counsel on either side and perused the entire material made available on record. It is a fact that the petitioners and other staff members were not paid the salaries for a long period. It is the case of the respondents 1 and 2 that as they paid the arrears of the wages/salaries to the petitioners, without deducting their share of provident fund, at a later period, they sought to recover the arrears of the provident fund contribution of the petitioners, by granting loan to them, and accordingly, the 2nd respondent sanctioned loan vide impugned proceedings dated 15.05.1997, and started recovering such loan amount from the salaries of the petitioners, in 24 monthly instalments, commencing from the month of May, 1997. May be the respondents 1 and 2 paid the arrears of salaries to the petitioners, without deducting their share of provident fund, at a later point of time, but that does not mean that they are entitled to recover the arrears of provident fund contribution of the petitioners from the salaries of subsequent period, as such method is not contemplated either in Employees’ Provident Fund Act or the Rules made thereunder. Hence, the impugned action of the 2nd respondent, in recovering the arrears of provident fund subscription of the petitioners from the salaries of the subsequent period, is arbitrary and illegal. The writ petitions are, accordingly, allowed. No order as to costs. _____________ C.V.RAMULU,J 11.02.2010 v v