LexMODERN TRANSPORTATION CONSULTATION SERVICES PVT. LTD. & ANR. versus CENTRAL PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION & ORS.
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MODERN TRANSPORTATION CONSULTATION SERVICES
PVT. LTD. & ANR.
v.
CENTRAL PROVIDENT FUND COMMISSIONER EMPLOYEES
PROVIDENT FUND ORGANISATION & ORS.
(Civil Appeal No. 7698 of 2009)
MARCH 26, 2019
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Employees’ Provident Fund and Miscellaneous Provisions
Act, 1952:
s. 17 (1) – Exemption from Employees’ Provident Fund
Scheme, 1952 – Retired employees of Railways who had withdrawn
all superannuation benefits including full amount in their Provident
Fund account – Re-employed on retainer basis with Private Limited
Company – Whether covered under Provident Fund Scheme or were
to be treated as ‘excluded employees’ in terms of Para 2(f) of the
Scheme – Held: To be covered under the expression ‘excluded
employee’ by virtue of clause (i) of para 2(f) r/w. clause (a) of para
69 (1), the employee must be such who was a member of the fund
established under the Provident Fund Scheme and had withdrawn
full amount of his accumulations in the said fund on retirement –
The employees in question since were not the members of the Fund
established under the Scheme, they could not have been treated as
‘excluded employees’.
Dismissing the appeal, the Court
HELD: 1. The concept underlying the enactment of
Employees’ Provident Fund and Miscellaneous Provisions Act,
1952 had been of providing for compulsory contributory provident
funds for safeguarding the future of industrial workers. Elaborate
provisions have been made in the Act for creation of a Fund, to
be settled in accordance with a Scheme to be framed by the Central
Government. However, the Act also provides for continuation of
such of the other provident funds, which are offering equal or
[2019] 5 S.C.R. 61
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SUPREME COURT REPORTS
[2019] 5 S.C.R.
more advantageous terms to the employees concerned and are
operating efficiently. [Para 9.1] [75-F-H]
2. There is no definition of an “excluded employee” in the
Act of 1952. In fact, this expression comes in operation for the
purpose of exclusion of certain employees from compulsion to
join the Fund created under the Scheme of 1952. Therefore, this
expression is defined only in the Scheme of 1952, in clause (f) of
paragraph 2 thereof. [Para 9.2.1] [79-E-F]
3. Paragraph 26 of the Scheme of 1952 specifies the classes
of employees entitled to, and required to, join the Fund as also
the co-related aspects. The expression “Fund”, as occurring in
Paragraph 26 refers to the Fund created under the Scheme of
1952. In the scheme and structure of the Act of 1952, it is but
clear that for the specified establishments or class of
establishments, the Central Government was to frame a Scheme,
to be called “the Employees’ Provident Fund Scheme”; and soon
after framing of such Scheme, a Fund was to be established, which
was to vest in, and administered by, the Board constituted under
Section 5A. The expression “Fund” is defined in the Act of 1952
to mean the provident fund established under a Scheme; and the
expression “Scheme” is defined to mean the Employees
Provident Fund Scheme framed under Section 5. Indisputably,
the Scheme of 1952 is the one framed by the Central Government
in exercise of the powers conferred by Section 5. [Paras 9.2.2
and 11] [80-D; 85-C-E]
4. By virtue of sub-section (1) of Section 17, an
establishment could be exempted from the operation of all or
any of the provisions of any Scheme if: (a) in regard to the
establishment to which the Act applies, the appropriate
Government is of opinion that the rules of its provident fund,
with respect to the rates of contributions, are not less favourable
for the employees than those specified in Section 6 and the
employees are in enjoyment of other provident fund benefits
which, on the whole, are not less favourable than the benefits
available under the Act or under the Scheme in relation to any
other establishment of similar character; and (b) in regard to any
other establishment, the appropriate Government is of opinion
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that benefits in the nature of provident fund, pension or gratuity,
as available to the employees of such establishment are, on the
whole, not less favourable than the benefits provided under the
Act or any Scheme in any other establishment of similar character.
[Para 12] [85-F-H; 86-A]
5. When an exemption is granted to an establishment under
clause (a) of sub-section (1) of Section 17 of the Act of 1952,
several duties are cast upon the employer as specified in sub-
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