Case: Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi

for recording of administration expenses of the Fund is required to be kept under Para 49. Para. 52 deals with the investment of monies belonging to employees provident fund and provides that such monies be deposited in the Reserve Bank or the State Bank of India or in such other scheduled banks as may be approved by the Central Government from time to time or be invested subject to the directions as the Central Government may from time to time give in securities mentioned or referred to in Clauses (a) to (d) of Section20 of the Indian Trusts Act, 1882. All expenses incurred in respect of, and loss, if any, arising from, any investment shall be charged to the Fund. Para 53 provides that the Fund not including the administration account shall be, except With the previous sanction of the Central Government, be expended for any purpose other than the payment of the sums standing to the credit of individual member of the Fund or to their nominees or heirs or legal representatives in accordance with the provisions of the scheme. All expenses, relating to the administration of the Fund including those incurred on Regional Committee are to be made from the Fund in terms of para 54 of the scheme. Similarly all expenses of administration of Fund including the fees and allowances of the trustees of the Central Board and salaries, leave and joining time allowance, travelling and compensatory allowances, gratuities and compassionate allowances, pensions, contributions to provident fund and other benefit funds instituted for the officers and employees of the Central Board, the cost of audit of the accounts, legal expenses and cost of stationery and forms incurred in respect of Central Board, cost and all expenses incurred in connection with the construction of office and staff quarters shall be met from the Administration Account of the Fund. The member of the scheme is entitled only to the interest determined as per para 60. Chapter VIII deals with nominations, payments and withdrawals from the Fund. 11. We cannot accept the argument that the Regional Provident Fund Commissioner, being Central Government, cannot be held to be rendering service within the meaning and scheme of the Act. The Regional Provident Fund Commissioner, under the Act and the scheme discharges statutory functions for running the scheme. It has not, in any way, been delegated with the sovereign powers of the State so as to hold it as a Central Government being not the authority rendering the service under the Act. The Commissioner is a separate and distinct entity. It cannot legally claim that the facilities provided by the scheme were not service or that the benefits under the scheme being provided were free of charge. The definition of consumer under the Act includes not only the person who hires the services for consideration gut also the beneficiary, for whose benefit such services are hired. Even if it is held that administrative charges are paid by the Central Government and no part of it is paid by the employee, the services of the Provident Fund Commissioner in running the scheme shall be deemed to have been availed of for consideration by the Central Government for the benefit of employees who would be treated as beneficiary within the meaning of that word used in the definition of consumer. This Court in Spring Meadown Hospital & Another v. Haijol Ahluwalia through K. S. Ahluwalia and Another, 1998 SC 1577 , to which one of us (SAGHIR AHMAD, J) was a party has already held that the consumer means a person who hires or avails of any services and includes any beneficiary of such service other than the person who hires or avails the services. The Act gives comprehensive definition of consumer who is the principal beneficiary of the legislation but at the same time in view of the comprehensive definition of the term consumer even a member of the family of such consumer was held to be having the status of consumer. In an action by any such member of the family of beneficiary of the service it will not be open for a trader to take a stand that there was no privity of contract. In this regard this Court specifically held : In the present case, we are concerned with clause (ii) of Section 2(1)(d). In the said clause a consumer would mean a person who hires or avails of any services and includes any beneficiary of such services other than the person who hires or avails of the services. When a young child is taken to a hospital by his parents and the child is treated by the doctor, the parents would come within the definition of consumer having hired the services and the young child would also become a consumer under the inclusive definition being a beneficiary of such services. The definition clause being wide enough to include not only the person who hires the services but also the beneficiary of such services which beneficiary is other than the person who hires the services, the conclusion is irresistible that both the parents of the child as well as the child would be consumer within the meaning of Section 2(1)(d)(ii) of the Act and as such can claim compensation under the Act. * 12. A perusal of the scheme clearly and unambiguously indicate that it is a service within the meaning of Section 2(1)(o) and the member a consumer within the meaning of Section 2(1)(d) of the Act. It is, therefore, without any substance to urge that the services under the scheme are rendered free of charge and, therefore, the scheme is not a service under the Act. Both the State as well as National Commission have dealt with this aspect in detail and rightly came to the conclusion that the Act was applicable in the case of the scheme on the round that its member was a consumer under section 2(1)(d) and the scheme was a service under Section (1)(o).

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]A perusal of the scheme unambiguously shows that it is for consideration which is applicable to all those factories and establishments covered under the Act and the scheme who are required to become a member of the Fund under the scheme. Para 26 provides that every connection with in any work of the factory or other establishment to which the scheme applies other than an excluded employee, shall be entitled and required to become a member of the Fund from the date the said para comes into force in such factor or the establishment. The scheme provides for the Board of Trustees, the appointment, power of Commissioner and other staff of Board of Trustees, membership of the Fund, contribution, etc. Chapter V deals with contribution. The employer who is otherwise not a member of the scheme is obliged to contribute under the scheme at the rates specified therein of the basic wages, dearness allowance including cash value of any food concession and repairing allowances, if any, payable to each employee to whom the scheme applies. The contribution of the employee has to be equal to the contribution payable by the employer in respect of such employee. The words in respect of are significant as they indicate the liability of the employer to pay his part of the contribution in consideration of the employee. But for the employment of the employee there is no obligation upon the employer to pay his part of the contribution to the scheme. The administrative charges, as required to be paid under para 30 of the, scheme are also paid for consideration of the employee being the member of the scheme. It is immaterial as to whether such charges are deducted actually from the wages of the employee or paid by his employer in respect of the employee-member of the scheme working for such employer. The administrative charges are further required to be determined having regard to the basic wages, the dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon for the time being payable to the employee. If the contention of the appellant is accepted that as no part of the administrative charges are deducted from the actual wages of the employee, he cannot be deemed to be Wiring the services of scheme, the consequences of such an interpretation shall Frustrate the object of the Act and the scheme as in that event no obligation can be cast upon the employer to pay contributions which are equal to the contribution payable by the employee along with the administrative charges. The scheme has to be given such an interpretation which serves the purpose intended to be achieved by it keeping in view the objects of the Act. The administrative charges are in lieu of the membership of the employee and for the services rendered under the scheme. It cannot be held that even though the employee is the member of the scheme, yet the employer would only be deemed to be a consumer for having made payments of the administrative charges. Admittedly, no service is rendered to the employer under the scheme which is framed for the benefit of the employee under Sections 5, 6 and 7 of the Act. Chapter VII provides for administration of the Fund, Accounts and Audit. A separate account called Central Administration Account for recording of administration expenses of the Fund is required to be kept under Para 49. Para. 52 deals with the investment of monies belonging to employees provident fund and provides that such monies be deposited in the Reserve Bank or the State Bank of India or in such other scheduled banks as may be approved by the Central Government from time to time or be invested subject to the directions as the Central Government may from time to time give in securities mentioned or referred to in Clauses (a) to (d) of Section20 ofthe Indian Trusts Act, 1882. All expenses incurred in respect of, and loss, if any, arising from, any investment shall be charged to the Fund. Para 53 provides that the Fund not including the administration account shall be, except With the previous sanction of the Central Government, be expended for any purpose other than the payment of the sums standing to the credit of individual member of the Fund or to their nominees or heirs or legal representatives in accordance with the provisions of the scheme. All expenses, relating to the administration of the Fund including those incurred on Regional Committee are to be made from the Fund in terms of para 54 of the scheme. Similarly all expenses of administration of Fund including the fees and allowances of the trustees of the Central Board and salaries, leave and joining time allowance, travelling and compensatory allowances, gratuities and compassionate allowances, pensions, contributions to provident fund and other benefit funds instituted for the officers and employees of the Central Board, the cost of audit of the accounts, legal expenses and cost of stationery and forms incurred in respect of Central Board, cost and all expenses incurred in connection with the construction of office and staff quarters shall be met from the Administration Account of the Fund. The member of the scheme is entitled only to the interest determined as per para 60. Chapter VIII deals with nominations, payments and withdrawals from the Fund11. We cannot accept the argument that the Regional Provident Fund Commissioner, being Central Government, cannot be held to be rendering service within the meaning and scheme of the Act. The Regional Provident Fund Commissioner, under the Act and the scheme discharges statutory functions for running the scheme. It has not, in any way, been delegated with the sovereign powers of the State so as to hold it as a Central Government being not the authority rendering the service under the Act. The Commissioner is a separate and distinct entity. It cannot legally claim that the facilities provided by the scheme were not service or that the benefits under the scheme being provided were free of charge12. A perusal of the scheme clearly and unambiguously indicate that it is a service within the meaning of Section 2(1)(o) and the member a consumer within the meaning of Section 2(1)(d) of the Act. It is, therefore, without any substance to urge that the services under the scheme are rendered free of charge and, therefore, the scheme is not a service under the Act. Both the State as well as National Commission have dealt with this aspect in detail and rightly came to the conclusion that the Act was applicable in the case of the scheme on the round that its member was a consumer under section 2(1)(d) and the scheme was a service under Section (1)(o)