PRANTIYA VIDHUT MANDAL MAZDOOR FEDERATION ETC. ETC. versus RAJASTHAN STATE ELECTRICITY BOARD AND ORS. ETC. ETC.

Citation: [1992] 2 S.C.R. 757 · Decided: 23-04-1992 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

PRANTIY A VIDHUT MANDAL MAZDOOR 
A 
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FEDERATION ETC. ETC. 
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v. 
RAJASTHAN STATE ELECTRICITY BOARD 
AND ORS. ETC. ETC. 
B 
APRIL 23, 1992 
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[KULDIP SINGH AND YOGESHWAR DAYAL, JJ.) 
Employees' Provident Funds and Miscellaneous Provisions Act, 1952 c 
Sections 2(b) and 6-"Basic wages for the time being payable''-lnter-
I 
pretation of-Award under Industrial Disputes Act-Gives revised pay scales 
to employees with retrospective effect-A"ears of wages paid to employees-
A.. 
Provident fund-Contribution-Employers liability to pay-Deduction from 
wage a"ears of employees-Whether arises. 
D 
A . dispute regarding wages and other conditions of service arose 
between the State Electricity Board-Respondent. No.1, and its workmen. 
The parties arrived at a settlement as a result of which the dispute was 
referred to the arbitrators under the Industrial Disputes Act. 
E 
The arbitrators entered upon the reference and gave an award dated 
y-
May 20, 1980, according to which various categories of workmen were to 
be paid higher wages with effect from April 1, 1980. The arrears of pay and 
other benefits accrued to the workmen were to be paid in four equal 
instalments. The first instalment was payable on December 1, 1985 and the 
F 
... 
remaining three at an interval of six months each . 
The Provident Fund authorities issued directions that the provident 
fund contributions be deducted from .the arrears paid to the workmen. 
Accordingly, when the first instalment was disbursed, the Board deducted G 
the employees contribµtion and also mad~ its own contribution as required 
under the Provident Fund Act. However, at the time of the second instal-
ment, the Board filed a Writ Petition under Article 226 challenging the 
directions of the Provident Fund authorities, contending that arrears 
payable to the employees as a result of the award of the arbitrators were 
.. ,,l. 
not the "basic wages" under section 2(b) of the Provident Fund Act. 
H 
757 
758 
SUPREME COURT REPORTS 
[1992) 2 S.C.R. 
A 
A Single Judge of the High Court dismissed the Writ Petition, but 
;)..._ 
on appeal a Division Bench set aside the judgment and allowed the Writ 
petition, holding that the contribution is to be paid on wages 'for the time 
being payable to the employees' and not on wages, the payment of which, 
even at a future date, is undecided and does not arise out of the contract 
B of employment, and that wages payable under an award of the arbitrators 
cannot be termed as deferred wages so as to mean that they had accrued 
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at a particular time but were payable at a later date according to the terms 
of the contract. 
Two appeals were filed against the judgment of the Division Bench 
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c to this Court, one by the Regional Provident Fund Commissioner and the 
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other by the. workmen of the Board. 
Allowing the appeals, and setting aside the judgment of the Division 
_x 
Bench, this Court, 
D 
HELD : 1.(i) The expression "basic wages for the time being payable 
to each of the employees" under section 6 of the Industrial Disputes Act 
means the basic wages at the relevant time. When the existing pay-scales 
are revised with effect from the back-date, then the revised-wages posterior 
to that date are the "basic wages for the time being payable". The High 
E 
Court fell into error in giving a strained interpretation to the provisions 
of the Provident Fund and Miscellaneous Provisions Act. [764 C] 
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1.(ii) When the original emoluments earned by an employee were 
"basic wages" under the Provident Fund Act, the substituted emoluments 
as a result of the award are to be regarded as "basic wages". [763 E] 
F 
2. When an award gives revised pay-scales, the employees become 
entitled to the revised emoluments and where the said revision is with the 
retrospective effect, the arrears paid to employees, as a consequence, are 
the emoluments earned by them while on duty. [763 CJ 
G 
3. The reference to the arbitration, the acceptance of the award' by 
the parties and the resultant wage increase with retrospective effect are 
the direct consequences of the settlement between the workmen and the 
Board. Revision of wage structure as a result of an award under the 
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Industrial Disputes Act, has to be taken as a part of the contract of 
H employment in the context of the Provivdent Fund and Miscellaneous 
MAZDOOR FEDERATION v. STATE ELECIY. BOARD [KULDIP SINGH, J.j 759 
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Provisions Act. [763 E] 
A 
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Harihar Polyfibres v. The Regional Director ES/ C

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