THE DAILY PARTAP V. THE REGIONAL PROVIDENT FUND COMMISSIONER, PUNJAB, HARYANA INSC 506

CASE BRIEF CASE NAME Daily Pratap Vs. regional Provident Fund commissioner FACTS The appellants were newspaper printers in Jalandhar. They offered a production bonus to their employees for doing additional work or filling up for absent employees. The bonus amount was not in any particular proportion to the extra work done but was rather an arbitrary amount. The Regional Provident Fund Commissioner filed a suit claiming that they had not created a provident fund for bonuses as required under the Employees Provident Fund Act. In response to a writ the appellants contended that the amounts paid did not constitute wages and hence there was no liability on their part to remit to the PF Fund and that the amounts which the appellants had earlier deposited in response to a writ should be refunded to them. The counsel for the appellants had contended that the only question in hand was that of the refund. The AG of the state of Haryana conceded on the matter of the refund. The counsel for the petitioners held that this was a matter of social equity since the fund created was for the poor workers to enable them to have good financial security and such intentions of the authorities should be considered with a liberal view.

ISSUE The first issue is whether the authorities had jurisdiction to decide the question of deduction of PF from the bonus paid on its merits and also whether the authorities were in the right to consider the limited question of refund to appellants of the disputed amounts The second issue is regarding whether the appellants were liable to remit contributions to the Provident Fund as per the Provident Fund Act on payments made by them to their workers HOLDING: It was held that the production bonus scheme was not a genuine one as the amount of extra money was not proportional to the extra output therefore did not fall under the legal requirements of a production bonus scheme and was not a true production bonus scheme. Hence, the money held was counted as wages and the pf remittance on the same was held to be correct

RATIONALE The six-member bench held that in order to be a genuine production bonus scheme payment made to the workmen should have had a direct nexus and linkage with the extra amount of work done. In the absence of such a link, the extra amount could not be considered as paid under such a scheme and should therefore be considered part of the employee’s wages on which deductions as per Section 6 of the PF Act were a statutory liability