Full Judgment Text
WP/5767/1997
: 1 :
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5767 OF 1997
The Ratnakar Bank Ltd., Kolhapur .. Petitioners
V/s.
The Regional Provident Fund
Commissioner, Kolhapur & Ors. .. Respondents
Mr. Vaibhav Gaikwad i/b. Mr. A.M. Kulkarni
for the Petitioners.
Mr. Suresh Kumar for Respondent No.1.
CORAM : SMT. NISHITA MHATRE, J.
TH
DATED : 15 JULY, 2010.
ORAL JUDGMENT:
1. The question which arises in this Writ Petition
is the applicability of the Employees Provident
Fund and Miscellaneous Provisions Act, 1952, (for
short “the Act”), to a Multi State Co-operative
Bank.
2. The few facts which are necessary to appreciate
the controversy between the parties are as follows.
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WP/5767/1997
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3. The petitioner-Bank, which is a Multi State Co-
operative Bank, sought a clarification from the
respondents as to whether their establishments were
covered by the provisions of the aforesaid Act. The
Regional Provident Fund Commissioner, Goa, informed
the petitioner-Bank that their Bank was not covered
by the Act. However, a show cause notice was issued
rd
to the petitioner-Bank on 23 August, 1995 by the
respondent No.1 calling upon it to show cause as to
why damanges should not be levied for non payment
of the contribution of provident fund. The
petitioner-Bank immediately replied to that notice
contending that since it was a Multi State Co-
operative Bank, it was not covered by the
provisions of the aforesaid Act and, therefore, no
contributions had been paid by the petitioner-Bank.
th
An order was passed on 11 October, 1995 by
respondent No.1 declaring that the petitioner-Bank
was guilty of delayed payments of provident fund
contributions. Therefore, a demand of Rs.78,015/-
was made on the petitioner-Bank for the provident
fund contributions payable from November, 1990 to
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WP/5767/1997
: 3 :
December, 1991 together with damages and other dues
payable u/s. 14B of the Act. This order was
th
communicated to the petitioner-Bank only on 8
January, 1997. As the amount was not paid, the
th
demand notices were issued on 20 February, 1997
th
and 16 May, 1997 to the petitioner-Bank directing
it to pay the aforesaid amount. The petitioner-Bank
was informed that in case of default, steps would
be taken to realize the amount in accordance with
the provisions of Section 8B to Section 8G of the
Act. Hence, the present Writ Petition.
4. Mr. Gaikwad, the learned Advocate appearing for
the petitioner-Bank, has taken me through the
aforesaid notices and the petitioner-Bank’s reply
to the said notices as well as the demands made off
the petitioner-Bank for the damages. He submits
that the Division Bench of this Court has already
taken the view that the provisions of the Employees
Provident Fund Act are not applicable to the Multi
State Co-operative Banks. He fortifies his
submission by relying on a judgment in the case of
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WP/5767/1997
: 4 :
The United Western Bank Ltd. vs. Central Provident
Fund Commissioner and Ors., reported in 1984 LAB.
I. C. 1504 . Mr. Gaikwad then points out that after
the judgment of the Division Bench in the aforesaid
th
case, a notification was issued on 25 February,
2000, under Section 5 read with Section 7(1) of the
Act. By this notification, the Employees’ Provident
Fund Scheme, 1952 was amended. The words “Banks
doing business in one State or Union Territory and
having no departments or branches outside that
State or Union Territory” found in Para 1(3)(b)
Item III were deleted. They were substituted by the
words “Banks other than the Nationalized Banks
established under any Central or State Act”. The
notification was challenged in Civil Writ Petition
No.314 of 2001 by a Bank on the ground that an
arbitrary distinction was drawn between the
Nationalized Banks and other Banks and therefore
the amendment violated Articles 14 and 21 of the
th
Constitution of India. By the order dated 13
August, 2009, the Division Bench of this Court in
the aforesaid Writ Petition in the case of The
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WP/5767/1997
: 5 :
United Western Bank Ltd. and Anr. V/s. The
Secretary, Government of India and Ors . has quashed
th
the said notification dated 25 February, 2000
being violative of Article 21 of the Constitution
of India. The Division Bench of this Court followed
the judgments of three different High Courts while
drawing this conclusion. The Division Bench
observed that there was no reason to take a
different view. Mr. Gaikwad therefore submits that
the Writ Petition must be allowed and the impugned
orders should be set aside.
5. Mr. Suresh Kumar, the learned Advocate
appearing for respondent No.1, fairly concedes that
the judgment in the case of The United Western Bank
Ltd. vs. Central Provident Fund Commissioner and
Ors. (supra) covers the issue in the present Writ
Petition. The Division Bench has held that the
notification of 1965 indicates that the language in
the notification was similar and even if one
condition ceases to exist, then the applicability
of the Act also must cease. Once the petitioner-
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WP/5767/1997
: 6 :
Bank became a Multi State Co-operative Bank, the
Act ceased to apply to it and therefore all orders
passed in exercise of powers under the Act must be
quashed.
6. Rule made absolute in terms of prayer clauses
(a) to (f).
7. No orders as to costs.
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: 1 :
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5767 OF 1997
The Ratnakar Bank Ltd., Kolhapur .. Petitioners
V/s.
The Regional Provident Fund
Commissioner, Kolhapur & Ors. .. Respondents
Mr. Vaibhav Gaikwad i/b. Mr. A.M. Kulkarni
for the Petitioners.
Mr. Suresh Kumar for Respondent No.1.
CORAM : SMT. NISHITA MHATRE, J.
TH
DATED : 15 JULY, 2010.
ORAL JUDGMENT:
1. The question which arises in this Writ Petition
is the applicability of the Employees Provident
Fund and Miscellaneous Provisions Act, 1952, (for
short “the Act”), to a Multi State Co-operative
Bank.
2. The few facts which are necessary to appreciate
the controversy between the parties are as follows.
::: Downloaded on - 01/04/2024 15:39:41 :::
WP/5767/1997
: 2 :
3. The petitioner-Bank, which is a Multi State Co-
operative Bank, sought a clarification from the
respondents as to whether their establishments were
covered by the provisions of the aforesaid Act. The
Regional Provident Fund Commissioner, Goa, informed
the petitioner-Bank that their Bank was not covered
by the Act. However, a show cause notice was issued
rd
to the petitioner-Bank on 23 August, 1995 by the
respondent No.1 calling upon it to show cause as to
why damanges should not be levied for non payment
of the contribution of provident fund. The
petitioner-Bank immediately replied to that notice
contending that since it was a Multi State Co-
operative Bank, it was not covered by the
provisions of the aforesaid Act and, therefore, no
contributions had been paid by the petitioner-Bank.
th
An order was passed on 11 October, 1995 by
respondent No.1 declaring that the petitioner-Bank
was guilty of delayed payments of provident fund
contributions. Therefore, a demand of Rs.78,015/-
was made on the petitioner-Bank for the provident
fund contributions payable from November, 1990 to
::: Downloaded on - 01/04/2024 15:39:41 :::
WP/5767/1997
: 3 :
December, 1991 together with damages and other dues
payable u/s. 14B of the Act. This order was
th
communicated to the petitioner-Bank only on 8
January, 1997. As the amount was not paid, the
th
demand notices were issued on 20 February, 1997
th
and 16 May, 1997 to the petitioner-Bank directing
it to pay the aforesaid amount. The petitioner-Bank
was informed that in case of default, steps would
be taken to realize the amount in accordance with
the provisions of Section 8B to Section 8G of the
Act. Hence, the present Writ Petition.
4. Mr. Gaikwad, the learned Advocate appearing for
the petitioner-Bank, has taken me through the
aforesaid notices and the petitioner-Bank’s reply
to the said notices as well as the demands made off
the petitioner-Bank for the damages. He submits
that the Division Bench of this Court has already
taken the view that the provisions of the Employees
Provident Fund Act are not applicable to the Multi
State Co-operative Banks. He fortifies his
submission by relying on a judgment in the case of
::: Downloaded on - 01/04/2024 15:39:41 :::
WP/5767/1997
: 4 :
The United Western Bank Ltd. vs. Central Provident
Fund Commissioner and Ors., reported in 1984 LAB.
I. C. 1504 . Mr. Gaikwad then points out that after
the judgment of the Division Bench in the aforesaid
th
case, a notification was issued on 25 February,
2000, under Section 5 read with Section 7(1) of the
Act. By this notification, the Employees’ Provident
Fund Scheme, 1952 was amended. The words “Banks
doing business in one State or Union Territory and
having no departments or branches outside that
State or Union Territory” found in Para 1(3)(b)
Item III were deleted. They were substituted by the
words “Banks other than the Nationalized Banks
established under any Central or State Act”. The
notification was challenged in Civil Writ Petition
No.314 of 2001 by a Bank on the ground that an
arbitrary distinction was drawn between the
Nationalized Banks and other Banks and therefore
the amendment violated Articles 14 and 21 of the
th
Constitution of India. By the order dated 13
August, 2009, the Division Bench of this Court in
the aforesaid Writ Petition in the case of The
::: Downloaded on - 01/04/2024 15:39:41 :::
WP/5767/1997
: 5 :
United Western Bank Ltd. and Anr. V/s. The
Secretary, Government of India and Ors . has quashed
th
the said notification dated 25 February, 2000
being violative of Article 21 of the Constitution
of India. The Division Bench of this Court followed
the judgments of three different High Courts while
drawing this conclusion. The Division Bench
observed that there was no reason to take a
different view. Mr. Gaikwad therefore submits that
the Writ Petition must be allowed and the impugned
orders should be set aside.
5. Mr. Suresh Kumar, the learned Advocate
appearing for respondent No.1, fairly concedes that
the judgment in the case of The United Western Bank
Ltd. vs. Central Provident Fund Commissioner and
Ors. (supra) covers the issue in the present Writ
Petition. The Division Bench has held that the
notification of 1965 indicates that the language in
the notification was similar and even if one
condition ceases to exist, then the applicability
of the Act also must cease. Once the petitioner-
::: Downloaded on - 01/04/2024 15:39:41 :::
WP/5767/1997
: 6 :
Bank became a Multi State Co-operative Bank, the
Act ceased to apply to it and therefore all orders
passed in exercise of powers under the Act must be
quashed.
6. Rule made absolute in terms of prayer clauses
(a) to (f).
7. No orders as to costs.
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