MAHARASHTRA STATE CO-OPERATIVE BANK LTD. versus THE ASSISTANT PROVIDENT FUND COMMISSIONER AND ORS.

Citation: [2009] 15 S.C.R. 1 · Decided: 08-10-2009 · Supreme Court of India · Bench: B.N. AGRAWAL · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

t 
[2009] 15 (ADDL.) S.C.R. 1 
MAHARASHTRA STATE CO-OPERATIVE BANK LTD. 
A 
v. 
THE ASSISTANT PROVIDENT FUND COMMISSIONER 
AND ORS. 
(Civil Appeal No. 6893 of 2009) 
OCTOBER 8, 2009 
[B.N. AGRAWAL, G.S. SINGHVI AND AFTAS- At.AM, JJ.] 
I 
Employees' Provident Funds and Miscellaneous 
Provisions Act, 1952: 
8 
c 
S. 11 - Provident funds dues payable by employer -
Held: Would be first charge on assets of establishment -
Such dues shall be paid in priority to all other debts - Priority 
clause enshrined in s. 11 operate against statutory as well as D 
.>( 
non-statutory and secured as well as unsecured debts 
including a mortgage or pledge - On facts, held, sugar bags 
pledged by Sugar Mills in favour of appellant-bank as security 
for repayment of loan together with interest- Deeds of pledge 
executed did not have effect of transferring of ownership of E 
sugar bags to bank - Sugar bags could be attached and sold 
for realization of provident fund dues of the workers -
Constitution of India, 1950 - Articles 38, 43. 
-4, 
Legislative intent behind enactment of the 1952 Act -
Explained. 
Purposive interpretation - The 1952 Act is social welfare 
legislation - Courts to give purposive interpretation to the 
provisions contained therein in view of Directive Principles of 
State Policy - Interpretation of statutes. 
--4 
Contract: Pawn or pledge - Necessary ingredients. -
Discussed. 
The question which .arose for consideration in these 
F 
G 
1 
H 
2 
SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R. 
A appeals was whether the sugar bags pledged by Sugar 
Mills in favour of the appellant-bank as security for 
repayment of the loan together with interest could be 
attached and sold for realization of the dues of provident 
funds etc. payable by the employer i.e., the management 
9. of the Sugar Mills under the Employees' Provident Funds 
and Miscellaneous Provisions Act, 1952. 
Dismissing the appeals, the Court 
HELD.: 1. The framers of Indian Constitu-tion were 
C alive to the plight of the working class and particularly the 
unorganized labour employed in factories and other -
establishments. They were also conscious of the fact that 
the goals of justice - social, economic and political and 
> 
equality of status and of opportunity proposed to be 
__ 
D incorporated in the preamble to the Constitution would 
)<. 
remain illusory for weaker sections of society unless the 
State· takes affirmative legislative and administrative 
measures for ameliorating the conditions of those 
·sections including the workers employed in factories etc. 
E Therefore, specific provisions were incorporated in Part 
IV of the Constitution with the title "Directive Principles 
of State Policy" casting an obligation upon the State to 
apply these principles in making laws. Article 38 which 
>--
has been renumbered as clause (1) thereof by the 
F Constitution (Forty-fourth Amendment) Act, 1978 
declares that the State shall strive to promote the welfare 
of the people by securing and protecting, as effectively 
as it may, a social order in which justice, social, economic 
and political, shall inform .all the institutions of national 
life. Clause (2) of Article 38 mandates the State to strive 
G to minimize the inequalities in income, and endeavour to 
elimin.ate inequalities. in status, facilities and 
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opportunities, not only amongst individuals but also 
amongst groups of people residing in different areas or 
H 
-1 
MAHARASHTRA STATE CO-OP. BANK LTD. v. ASSTT. 
3 
../ 
PROVIDENT FUND COMMNR. AND ORS . 
{ 
engaged in different avocations. Article 43 casts a duty A 
' 
on the State to make efforts to secure by suitable 
<' 
legislation or economic organization or in any other way, 
to all workers, agricultural, industrial or otherwise, work, 
) 
a living wage, conditions of work ensuri.ng a decent 
' 
A 
standard of life and full enjoyment of leisure and social 
B 
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and cultural opportunities, and, in particular, social 
opportunities. [Para 16] [19-E-H; 20-A-D] 
{ 
Recovery Officer and Assistant Provident Fund 
Commissioner v. Kera/a Financial Corporation (2002) 3 LLJ c 
643 Kerala; A.P. State Financial Corporation v. Official 
Liquidator (2000) SCC 291; Central Bank of India v. State of 
Kera/a (2009) 4 SCC 94, referred to. 
~ 
2.1. With a view to ensure that the employers 
'II' 
( 
religiously comply with the mandate of provisions D 
enacted for benefit of the workers, the legislature has not 
only provided for imposition of penalty and dama

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