The issue raised in the writ petition by the petitioner-employer covered under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as (EPF Act) is as to whether a payment made by the employer in excess of the statutory contribution is to be continued for all time. Admittedly, the petitioner was an employer, who was paying contribution to the Employees Provident Fund Organisation in excess of the statutory limit as provided under the EPF Act. The petitioner had been maintaining a provident fund of its own, which was later transferred and voluntarily covered under the EPF Act. On revision of pay being effected to its employees without noticing paragraph 26A of the Employees Provident Fund Scheme, the employer was paying contributions for the entire pay drawn by the employers; even that excluding Rs.6,500/-. This was not on a concious decision taken or by virtue of a joint request by the employer and the employye, as WPC.2152/2012 : 2 : contemplated under the provision 26(6) of the Scheme.
2. When the petitioner sought to reduce such contributions, to make it in tune with the statutory limit, the petitioner was issued with Ext.P1, which was replied to, by Ext.P2. However, the Employees Provident Fund Organisation, in Ext.P3 found that, as per Section 12 of the EPF Act, no benefits due to an employee shall be reduced directly or indirectly. Notice was issued for conducting an enquiry under Section 7A as indicated in Exts.P5 and P7. The petitioner resisted the enquiry for reason of the issue being under consideration of the Regional Provident Fund Commissioner. Hence, an order imposing fine of Rs.5,00/- was also passed at Ext.P10.
3. The enquiry under Section 7A was stayed by this Court by an interim order dated 25.01.2012 following the decision in 2006(3) KLT 391 Vijayan v. Secretary to Government. The said position has also been affirmed by the Hon'ble Supreme Court in Marathwada Gramin Bank Karamchari Sanghatana v. Marathwada Gramin Bank (2011(9)SCC 620); wherein it is clearly held that the WPC.2152/2012 : 3 :
employer is under an obligation to pay provident fund contribution, with respect to its employees only in accordance with the provisions of the statutory scheme. It is also held that an excess payment over and above the minimum prescribed as per the statute, can be discontinued by the employer, and so long as the contributions, are in accordance with the statutory liability, the respondent organisation cannot compel the employer to pay more than what is statutorily prescribed.
4. In such circumstance, the enquiry initiated under Section 7A would be futile, insofar as the employer cannot be compelled to pay contribution above the statutory limit despite the fact that they were remitting contribution in excess of the same. The employer/petitioner in the writ petition also takes a specific stand that the reduction in contribution was only due to the financial constraints of the employer. Following the above binding precedents, it has to be declared that the petitioner herein, cannot be compelled to pay contributions over and above that prescribed in the statute. The coverage is admitted and the payment of WPC.2152/2012 : 4 :
contribution is also admitted. The petitioner has been agitating a reasonable dispute raised before the Regional Provident Funds Commissioner is evident from Ext.P3 and P4 and an enquiry under Section 7A without determination of the dispute, was not proper. Hence, Ext.P1 order of fine will also be set aside.
Writ petition allowed. No costs.
Sd/-
(K. VINOD CHANDRAN, JUDGE) jma //true copy// P.A to Judge