Case: Union Of India & Anr Vs. Ogale Glass Works


Decision reasoning: 0[ds]23. From a review of the sections, it will be seen that the Act is essentially a measure for the welfare of the employees, and if the Act applies and scheme has been framed for an establishment, the employer is bound to make the contributions as provided for under Section 6. There is a statutory liability on an employer to pay the contribution at the rate mentioned in Section 6. Stringent provisions have been made for non-compliance with the requirement of the statute and very drastic powers have been given to the authorities to recover the contribution due from an employer. Though there is a hierarchy of officials, nevertheless, it is only the Central Government that has been given power under Section 19-A to give a direction not inconsistent with the provisions of the Act if any doubt arises regarding one or other matters referred to in Clauses (i) to (v) and that power is to be exercised when any difficulty or doubt arises in giving effect to the provisions of the Act. While the contention of the respondent is that the letter dated August 19, 1959 read with letter dated September 21, 1959 constitutes a direction given by the Central Government under Sec. 19-A according to the appellants no such direction has been given because the Central Government had no occasion to consider the matters mentioned under Clause (ii) of Section 19-A.This letter further emphasises that the respondent was raising a dispute regarding their non-liability to contribute in respect of certain sections mainly on the basis of the Bombay High Court decision. They also specifically referred to the appeal against the decision of the Bombay nigh Court pending in this court. It is on this basis that the respondent states that the excess amounts that have been paid by them may be retained till this Court finally decides the matter. Therefore, the non-liability pleaded by the respondent is again based upon the judgment of the Bombay High Court and the period during which the non-liability is sought to be extended is till this court finally adjudicates upon thethe basis of the letter dated August 19, 1959, the Regional Provident Fund Commissioner also informs the respondent that the Act and the Scheme will apply only to those sections and the excess contributions will be refunded. We High Court in our opinion, has laid undue emphasis on the use of the expression "we have since been advised by the Government of India" occurring in the letter of August 19, 1959. , According to the High Court some doubt must have been raised by the Regional Provident Fund Commissioner regarding the applicability of the Act to all the sections of the establishment of the respondent and these doubts must in turn have been referred to by the Central Provident Fund Commissioner to the Central Government for resolving the doubts. The Central Government, according to the High Court, can be moved only under S. 19A of the Act, and it must have given a direction, as indicated in the letter of August 19, 1959. Therefore, it is the view of the High Court that a final direction has been given under S. 19A by the competent authority, the Central Government, regarding non-applicability of the Act and the Scheme to (i) general, (ii) glass, and (iii) canteen sections of the respondent establishment. The advice that is referred to in the letter of the August 19, 1959 is really a direction of the Central Government. The High Court finds further support for this conclusion in the letter of September 21, 1959. This letter, according to the High Court, makes the position very clear that the decision of the Central Government regarding the non-applicability of the Act to the (i) general, (ii) glass, and (iii) canteen sections has been communicated to the respondent and in addition the Department has also undertaken to refund the excess payments made by the respondent in respect of the employees working in these three sections. According to the High Court the contentions of the respondent in this regard have been accepted by the Central Government and a decision, which has become final, has been given in favour of the respondent under S. 19A.31. We are not inclined to agree with this reasoning of the learned Judges of the High Court in the interpretation placed on these two letters. They have not given due weight to the earlier letters already referred to by us, where it has been categorically stated, even by the respondent, that its claim regarding non-applicability of the Act in respect of the three sections is exclusively based on the decision of the Bombay High Court and it wants the excess payment made by it to be kept to its credit till the matter is finally adjudicated upon by this Court. The Department also in its replies specifically refers to the matter pending in this Court in appeal. The High Court has ignored all these factors when it held that there has been a decision taken under S. 19A by the Central Government.It appears that in view of the fact that the respondent stopped making the contributions in respect of the employees in the three sections concerned the Union raised a dispute and the Government accordingly referred the said matter for adjudication to the industrial Tribunal, Maharashtra. The Tribunal has made an award on June 24, 1960 in I. T. No. 29 of 1960, which will be referred to by us when dealing with the second contention. At this stage it is enough to note that them was a reference regarding the provident fund and there was an award on June 24, 1960. This Court delivered its judgment on March 14, 1962 reversing the decision of the Bombay High Court. In view of the decision of this Court, which was favourable to the employees, the Union on March 28, 1962, addressed a letter to the Central Provident Fund Commissioner drawing his urgent attention to the decision of this Court wherein it has been held that the Act applies to all composite units. The letter then refers to the discontinuance of contributions by the respondent, in view of the letter dated September 21, 1959 of the Regional Provident Fund Commissioner. The Union reiterates that in view of the decision of this Court, the respondent is liable to pay the provident fund amount according to the Act and the Scheme. The officer is requested by the Union to take the necessary steps to realise the amounts from the employer, the respondent.38. On January 3, 1963 the Central Provident Fund Commissioner addressed a letter to the : Secretary, Government of India, Ministry of Labour and Employment. In the said letter the officer states that the applicability of the Act to the respondent has to be reconsidered in the light of the decision of this Court overruling. the decision of the Bombay High Court. The Officer proceeds to state that the respondent who was originally making the contributions stopped doing so after the decision of the Bombay High Court and the excess payment made between November, 1952 to December 1960 were adjusted in view of the advice given by the Central Government. The Central Provident Fund Commissioner finally requested the Government to reconsider the case of the respondent and to direct the same to pay the contributions as per the Act and the Scheme in the light of the decision of this court from November, 1952 to December. 1960 at the statutory rate.39. On January 21, 1963, the Union again wrote a letter to the Central Provident Fund Commissioner. After a reference to the various matters regarding the Bombay High Courts judgment and the contributions being stopped by the respondent and the decision of this Court as well as the award of the Industrial Tribunal in Reference I.T. No. 29 of 1960 it requested the officer to collect the provident fund contributions from the respondent from 1952 to 1959 in respect of general glass and canteen sections.40. On May 22, 1963, the order impugned by the respondent in its writ petition in the High Court was passed by the Regional Provident Fund Commissioner calling upon the respondent to pay its share of provident fund contribution at the statutory rates for the period November 1, 1952 to December 31, 1960 together with the administrative charges for the said period. It is stated that the demand is made as per the directions issued by the Government of India. The respondent made a representation by its letter dated May 27, 1963 disputing its liability to pay the amount and relied on the award of the Industrial Tribunal in I. T. No. 29 of 1960. The company also made a request for being furnished with a copy of the Governments directions. The Regional Provident Fund Commissioner sent a reply dated August 31, 1963 declining to furnish a copy of the Governments directions as they were all contained in the Departments files. It is further stated that the respondent has to pay the employers share of provident fund contributions at the statutory rates from November 1, 1952 to December 31, 1960 in view of the decision of this Court making the Act and the scheme applicable to a composite factory and the officer rejected the plea of the respondent that they are not liable to pay the amount.41. On October 5, 1963, the respondent sent a further communication to the Regional Provident Fund Commissioner. In that letter after setting out all the previous matters, the company took up the stand that there has been a decision by the Central Government under S. 19A of the Act and that the said decision is final and binding on the parties and that it is not open to the Department to go behind those directions. The Company refers to the letter written by the Regional Provident Fund Commissioner on September 21, 1959 regarding the decision of the Central Government about non-applicability of the Act to the three sections of the respondent. Ultimately, the respondent disputed its liability to pay the demand made on May 22, 1963 and has further stated that if the demand is pursued the respondent will seek relief in a Court of law.42. On January 22, 1964 the Regional Provident Fund Commissioner sent a reply stating, that the claim made by the respondent about its non-liability is rejected. The officer in turn called upon the respondent to pay its share of the provident fund dues and administrative charges immediately as demanded by the letter dated May 22, 1963. On receipt of this communication the respondent filed the writ petition.43. From the letters referred to above, which have passed between the respondent and the Department as well as the latter and the Union concerned subsequent to September 21, 1959, it is clear that the Department has been taking up the position consistently that the original decision of the Central Government not to apply the Act and the scheme to the three sections of the respondent was a purely tentative and provisional one and that decision was passed because of the decision of the Bombay High Court. The correspondence referred to above leaves no room for doubt that any decision taken by the Central Government if it can be called a decision-was a purely tentative one subject to the final adjudication that it to be made by this Court. Under those circumstances it is idle for the respondent to contend that when the authorities informed them that the Act has been made applicable only to some sections of its establishment, an irrevocable decision has been taken in favour of the Company. On the other hand, it is very clear from the stand taken by the officers, as well as the respondent itself, that it was only a tentative decision taken by the Government by which it advised the officers not to enforce the Act to the three sections of the establishment of the respondent in view of the decision of the Bombay High Court. Immediately after the decision of this Court was given on March 14, 1962, the employees Union of the Respondent promptly on March 28, 1962 moved the officers to apply the provisions of the Act as per the decision of this Court. It was only at that very late stage that the respondent took up the plea that there has been originally a decision by the Central Government under S. 19A of the Act and that the said decision having become final is binding on the Company and the Department. From the entire correspondence it is clear that there has been no final decision taken by the Central Government under section 19A of the Act regarding non-applicability of the Act and the scheme in respect of the three sections of the respondents establishment. At the most, a decision was taken to suspend the applicability of the act during the pendency of the appeal in this Court. Once the decision of the Bombay High Court was set aside by this Court, the Department was within its right in making the demand made under the letter dated May 22, 1963. Under sub-s. (2) of S. 3 of the Act, we have already pointed out that a scheme framed under sub-section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively. In fact there is no question of any claim being made in this case retrospectively. The position is that the amounts that were originally paid but later on adjusted or refunded in view of the Bombay High Courts judgment are being asked to be paid back for the same period in view of the judgment of this Court. Therefore, the demand made on May 22, 1963 to pay the amount from 1952 is in our opinion justified.44. The matter may be considered from another point of view also. It is the case of the respondent that there has been a direction given by the Central Government under S. 19A by letters dated August 19, 1959 and September 21, 1959. The matters referred to in these letters have already been referred to by us. The judgment of the Bombay High Court was given on March 7, 1957, if so, after the decision given by the High Court interpreting the Act in a particular manner, we fail to see how an occasion will arise for the Central Government giving a direction under S. 19A on the ground that a difficulty has arisen in giving effect to the provisions of the Act and that doubt has arisen regarding the matters mentioned in cls. (i) to (v). After a decision has been given by a court on a particular aspect relating to the Act and the scheme, in our opinion, there is no question of any difficulty arising in giving effect to the provisions of the Act or to any doubt arising in respect of the matters mentioned in cls. (i) to (v).The question whether an establishment, like that of the respondent relating to the glass works coming under cl. (2) of S. 19A was subject of a judicial adjudication and therefore Section 19A could not have come into play for the Central Government to give any direction. The Central Government and all other authorities were bound to give effect to the decision of the Bombay High Court so long as it held the field. Even according to the respondent as is seen by its letter dated December 10, 1957 addressed to the Regional Provident Fund Commissioner, when the Act and the Scheme were applied in 1952 to all the employees of the respondent, the latter raised an objection that the Act and the Scheme will apply only to employees engaged in the manufacture of Hurricane Lanterns and non pressure Stoves. The said letter also refers to the fact that the Regional Provident Fund Commissioner, Bombay, by his reply dated March 31, 1953 rejected the said objection and held that the whole of the establishment of the respondent was covered by the Act and the Scheme. There is no controversy that the respondent has been ever since making contributions in respect of all the employees and had raised no dispute at all till after the judgment of the Bombay High Court. The proper stage when a doubt might have arisen for the Central Government to exercise its jurisdiction under S. 19A was when the respondent raised an objection early in 1953 regarding non-applicability of the Act to all its employees, and when that objection was rejected on March 31, 1953. If the matter had been pursued further and the Central Government moved and a direction was given by the Central Government then it could be said that the Central Government has given a direction under S. 19A. The position before us is entirely different. After the decision of the Bombay High Court there is no warrant for assuming that there was still a difficulty or doubt in respect of which the Central Government had to give a direction under S. 19A. Considering the matter from this aspect also it follows that there could not have been a direction issued by the Central Government under section 19A when the letter of August 19, 1959 was sent by the Central Provident Fund Commissioner to the Regional Provident Fund Commissioner.45. To conclude we are not inclined to agree with the view of the High Court that there has been a decision under S. 19A of the Act under the letter dated August 19, 1959 read with letter dated September 21, 1959. There has been, in our opinion, no such decision and as pointed out earlier it was only a limited decision not to apply the Act and the scheme in view of the Bombay High Courts judgment till the disposal of the appeal in this Court. After the decision of this Court the demand made on the respondent is perfectly justified and the High Court committed an error in quashing the notice dated May 22, 1963.46. The second contention about the non-liability of the respondent based upon the award of the Industrial Tribunal in I. T. No. 29 of 1960 need not detain us very long. It is true that in view of the decision of the Bombay High Court the employees Union moved the State Government to refer the dispute regarding the provident fund. The Award dated June 24, 1960 has given as mentioned certain directions in this regard. The Company has been absolved from making any provident fund contributions during certain years on the ground that it has suffered loss. The award is not based upon circumstances which are relevant for the purpose of applying the Act and the scheme.47. Admittedly the appellants were not parties to the award. No doubt under the Industrial Disputes Act the Award will be binding as against the respondent and its workmen. But the appellants are seeking in these proceedings to enforce the statutory duty cast upon them to collect the contributions due from the respondent which again is a statutory liability under the Act and the scheme. The object of the appellants in enforcing the Act is only to discharge the statutory duty enjoined on them for the benefit of the employees concerned. In view of the decision of this Court, it is clear that the Act and the Scheme apply to all the sections of the respondent, and if so it follows that the respondent is liable to make contributions and that at the rate specified in the Act. Even the rate given by the Industrial Tribunal for the limited period is not in accordance with the Act. We have already pointed out trial the High Court has not expressed any opinion on the effect of the award. But according to us, the award in I. T. No. 29 of 1960 does not stand in the way of the appellants demand for the period mentioned in the letter dated May 22, 1953 regarding the provident Fund and the administrative charges.48. From the discussion contained above, it is also clear that even if a decision has been taken by the Central Government, it is not inconsistent with the provisions of the Act. On the other hand, as pointed out by us, that decision was only in accordance with the decision of the Bombay High Court subject to its being revised. If the appeal succeeded in this Court. The Department having succeeded in the appeal in this Court, it is clear that the demand made by the Department is justified.49. We however, make it clear that in realising the amounts on the basis of the demand dated May 22, 1963 the appellants will give due credit for any amounts that may have been contributed by the employer as its share of the provident fund under the award in I. T. No. 29 of 1960 for the periods in question. If no contribution has been made for those periods, it is open to the Department to realise the dues of the employer as per the provisions of the Act. If, however, the amounts have been contributed only at a lesser rate, the appellants can realise only the balance, if any, due under the Act and the scheme.50. A subsidiary contention was raised by Mr. Tarkunde that in any event the demand for payment of administrative charges for the period referred to in the letter of May 22, 1963 is not warranted. We are not inclined to accept this contention of the learned counsel. When once the employer is held liable for payment of its share of provident fund contribution for the periods in question, it follows that it will also be liable to pay the administrative charges.