THE Supreme Court last week set aside the judgment of the Calcutta high court and held that in a case of default of provident fund contribution by an “exempted establishment”, it would be liable for legal action. The question involved in the case, Regional PF Fund Commissioner vs Hooghly Mills, was under the Employees’ Provident Funds and Miscellaneous Provisions Act whether exempted companies can be subjected to proceedings for recovery of damages if they default in the contributions. The high court ruled that such exempted employers could not be proceeded against. According to the Act, establishments which have better schemes for provident fund than the statutory one, may be exempted. The high court, by interpreting Section 17, concluded that the company was exempted. Overruling the high court, the Supreme Court stated that since it is a social welfare law, courts should interpret provisions, if there is any doubt, in favour of the beneficiaries. “The interpretation of the Act must not only be liberal but it must be informed by the values of Directive Principles of State Policy in the Constitution.”
From India, Malappuram
1454From India, Malappuram
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Thanks a lot. It is very very useful information. No big words to express our happiness on sharing such worth information. Keep doing it. With personal regards, Sundararaman
From India, Madras
From India, Madras
Thank you very much, Mr. Agrawal, for highlighting the recent judgment of the Supreme Court regarding exempted establishments. This judgment clarifies that exempted establishments are to be treated similarly to unexempted establishments when assessing contributions remitted by the employer to the private trust and in recovery proceedings by the Regional PF Commissioner. Therefore, exempted establishments are not in a better position.
Regards, KK
From India, Bhopal
Regards, KK
From India, Bhopal
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