The Additional Emoluments (Compulsory Deposit) Act, 1974

ADDITIONAL EMOLUMENTS (COMPULSORY DEPOSIT) 
ACT 1974 
THE ADDITIONAL EMOLUMENTS (COMPULSORY DEPOSIT) ACT, 1974 
ACT NO. 37 OF 1974 
[1st September, 1974] 
An Act to provide, in the interests of national economic development. for the compulsory deposit of 
additional emoluments and for the framing of a scheme in relation thereto, and for Matters conneeted 
therewith or incidental thereto. BE it enacted by Parliament in the Twenty-fifih Year of the Republic 
of Indiz as follows:- CHAP PRELIMINARY CHAPTER I PRELIMINARY 
Short title. extent and commencement. 
1. Short title, extent and commencement. (1) This Act may be called the Additional Emoluments 
(Compulsory Deposit) Act, 1974. 
(2) Tt extends to the whole of India, 
(3) It shall be deemed to have come into force on the 6th day of July, 1974, except section 14 which 
shall come mto force at once. 
Definitions. 2. Definitions. In this Act, unless the context otherwise requires.—- (a) “appointed day" 
means the 6th day of July, 1974; 499 (b) "additional dearness allowance™ means such dearness 
allowance as may be sanctioned from time to time, after the appointed day, over and above the 
amount of dearness allowance payable in accordance with the rate in force immediately before the 
date from which such sanction of additional deamess allowance is to take effect, Explanation 1.- 
Where payment of dearness allowanee is linked to a cost of living index or any other factor. any 
automatic payment, after the appointed day, of dearness allowance in consequence of any risc in 
such cost of living index or in consequence of any change in such other factor shall, notwithstanding 
the provisions of this clause, be deemed to be the additional deamness allowance, Explanation IT.-For 
the purpose of computation of the additional dearness allowance in relation to an employee whe 
enters into any post after the appointed day, dearness allowance payable, immediately before the 
appointed (Jay, in relation 1o such post shall be deemed to be the deamess allowance pavable to such 
employee as if, he were holding that post on the appointed day and any excess over and above the 
said dearness allowance shall be deemed, for the purposes of this Act, to be the additional dearness 
allowance in relation to such employee; (c) "additional wages" means such wages, over and above 
the wages pavable to an employee in accordance with the rates in force immediately before the 
appointed (Jay, as may become payable to the employee in respect of any period after the appointed 
day in‘pursuance of any wage revision, whether by or under an agreement or settiement between the 
parties or any award, decree or order of any court, tribunal or other authority or otherwise, but does 
nat include- (j) any increment due tg the employee in accordance with the time scale of pay 
applicable to the post held by him immediately before the appointed day, and any consequent 
inerease in any allowance (not being dearness allowance) admissible under any rule or order in force 
immediately before the appointed day: (i1) any higher wages payable to the employee on his- (a) 
promaotion to a higher post and any increment, being an increment within the prescribed limits, due 
to the employee in such higher post (b) deputation or transfer to an equivalent post or to any post 
involving higher responsibilities and duties; (iii) any special pay, honorarium, fee or reward payable 
for any spectal work done: (iv) any remuneration payable for overtime work: (v) any increase in 
wages consequent on the revision of the minimum rates of wages fixed under the Minimum Wages 
Act, 1948; (11 of 1948.) (vi) any increase in wages sanctioned in pursuance of the recommendations 
made- (a) by the Third Central Pay Commission; (b) before the appointed day, by any Pay 
Commission appointed by a State Government, 1n relation to the employees of that Government: 500 
(¢) by any committee constituted, before the appointed day, by Parhament, Supreme Court or any 
High Court i relation to any employee of Parliament, Supreme Court or High Court, as the case 
may be. Explanation I.-Where any wage revision made afier the appointed day is 1o be effective from 
a date prior 10 the appointed day, the wages payable immediately before, the appointed day. before 
such wage revision, shall, for the purposes of computation of additional wages', be deemed 1o be the 
wages. Explanation 11.-Any benus (including incentive and pro- duction bonus) paid after the 
appainted day al a rate over and above the rate at which it was last paid before the appointed day, 
shall be deemed or the purposes of this Act, 1o be additional wages; (d) "bank deposit rate" means 
the highest of the maximum rates at which interest may be paid on different classes of deposits 
(other than those maintained in savings account or those maintained by charitable or religious 
instiutions) by different classes of scheduled banks in accordance with the directions given or issued 
to banking companies generally by the Reserve Bank of India tinder the Banking Regulation Act, 
1949; (10 of 1949.) (¢) "dearness allowance” means all cash payments, by whatever name called, 
made to an employee on account of rise i the cost of living: (f) "Deposit Account” means an 
account opened and maintained under section 5; (g) "emoluments" includes wages and deamness 
allowance; (h) "employer" means,- (i) n relation to an estahlishment which is a factory, the owner or 
oceupier of the factory, including the agent of such owner or oceupier, and where a person is namel 
as manager of the factory under clause (f) of 
sub-scction (1) of section 7 of the Factories Act, 1948, (63 of 1948. ) the person so named; (i) in 
relation 16 an establishment belonging to or under the control of the Central Government or a State 
Government, the persan or authorily appointed by the appropriate Government for the supervision 
and control of the employecs. or where no person has been so appointed, the head of the Department 
concerned; (iii) in relation to an establishment belonging to or under the control of any local 
authority, the person appointed by such authority for the supervision and control of the employecs. 
or where no person has been so appointed. the Chief Executive Officer of the local authority; (v) in 
any other case, the person who, or the authority which, has the ultimate control over the affairs of the 
establishment, and where the said affairs are entrusted to any other person, whether called a 
manager, managing director or by any other name, such person; and includes, in the casc of a 
deceased employer, the legal representative of such deceased employer: 501 (i) "local authority” 
means any municipal committee, district board, body of port commissioners, panchayat or other 
authority legally entitied to, or entrusted by the Central or any State Government with the control or 
management of any municipal or local fund; (j) "nominated authority” means such authority as may 
be nominated by the Central Govermnment for the purposes of this Act and different authorities may 
be nominated for different purposes; (k) "notification” means a notification published m the Official 
Gazette; (1) "Prescribed" means preseribed by-rules made under this Act; (m) "Scheme" means a 
scheme framed under this Act; (n) "specified authority” means the authority specified 
under sub-section (1) of section 5; (o) "wages" means all remuneration (whether by way of salary, 
allowances or otherwise) expressed, or capable of being expressed, in terms of money, which would, 
if the terms of employment, express or implied- were fulfilled, be payable to a person employed in 
respect of his employment or of work done in such employment, and includes- (i) any remuneration 
payable under any agreement, or settlement between the parties or any award, decree or order of any 
court, tribunal or other authority; (ii) any remuneration to which the person employed is en titled in 
respeet of overtime work or holidays or any leave period; (iif) any additional remuneration payable 
under the terms of employment, including bonus, whether under a scheme of profit sharing or 
otherwise; (iv) any sum to which the person employed is entitled under any scheme framed under 
any Jaw for the time being in force; (v) any allowance paid for house accommodation, or where 
house accommodation is provided, the value of such accommodation, and the value of electricity or 
water, or both, supplied, and the value of medical attendance or other amenity, but does not include- 
(1) any contribution paid by the employer to any pension or provident fund, and the interest which
may have accrued thercon; 
(2) any travelling or running allowance or the value of any travelling concession; 502 
(3) any sum, not exceeding rupees two hundred and fifty per annum, paid to the employed person to 
defray special expenses entailed on him by the nature of his employment: 
(4) any compensation or gratuity payable on the termination of employment: 
(5) any dearness allowance. 
Persons to whom this Act applies. 3. Persons to whom this Act applies. This Act shall apply to an 
employee of- (a) the Central or State Government; (b) a Jocal authority: (¢) a company as defined in 
section 3 of the Companies Act, 1956, (1 of 1956.) including a foreign company within the meaning 
of section 591 of the Companies Act, 1956, and a Government company as defined 1n section 617 of 
that Act: (43 of 1961.) (d) any other corporation, including a society or body established by. or 
registered under, a Central, Provincial or State Act: (¢) any individual, association of persons or body 
of individuals, partnership firm or Hindu undivided family required by the Income-tax Act, 1961 (43 
of 1961.) to deduct income-tax at source from the emoluments paid to their employees: () any 
establishment owned or maintained n India by a trust, fund or institution established for @ 
or religious purpose, and required by the Income-tax Act, 1961, (43 of 1961.) to deduct income-tax 
at source from the emoluments paid to their employees; (g) any establishment, not being an 
cstablishment owned by Government, local authority or person specified. respectively. i clauses (a) 
to () (both inclusive), to which the provisions of any law relating to provident funds (other than 
those established under the Public Provident Fund Act, 1968) (23 of 1968.) applv: (h) any other 
establishment, not being an establishment to which any of the foregoing clauses apply, established at 
the nstance, or in pursuance of a resolution, of the Central or State Government or wholly or 
substantially financed by the Central or State Government.. Explanation.-Where any grant or loan to 
an establishment from the Consolidated Fund of India or of any State or of any Unjon territory 
having a Legislative Assembly in a financial year is not less than rupees five lakhs and the amount of 
such grant or Joan is not less than seventy-five per cent. of the total expenditure of that 
establishment, such establishment shall be deemed. for the purposes of this Act, to be substantially 
financed by the Central or State Government. as the case may be. 503 
Act to have overriding effect. 4. Act to have overriding effect. The provisions of this Act shall have 
effect notwithstanding anything inconsistent therewith contained in any enactment other than this 
Act or in any instrument having effect by virtue of any enactment other than this Act. CHAP 
COMPULSORY DEPOSIT OF ADDITIONAL EMOLUMENTS CHAPTER 11 COMPULSORY 
DEPOSIT OF ADDITIONAL EMOLUMENTS 
Additional Wages Deposit Account and Additional Dearness AllowanceDeposit Account. 5. 
Additional Wages Deposit Account and Additional Dearness 
Allowance Deposit Account. (1) There shall be opened by such authorities as may be specified in the 
scheme two separate accounts, to be known, respectively, as the Additional Wages Deposit Account 
and the Additional Deamess Allowance Deposit Account, and different authorities may be specified 
for different establishments or different categories of employees or establishments 
(2) The specified authority shall, in relation to each Deposit Account, open a scparate ledger account 
in the name of cach employec in relation to whom any contribution is made to the said Account, and 
credit the contributions so made in the said ledger account. 
Duty of employer or other person to make deductions of additionalwages and additional dearness 
allowance from emoluments. 6. Duty of employer or other person to make deductions of additional
wages and additional dearness allowance from emoluments, 
(1) For the purposes of this Act, the deductions specified in sub- 
section (2) shall be made.- (2) in the case of additional wages, for a period of one year from the appointed day; and (b) in the case of additional dearness allowance, for a period of 1[three vears) 
from the appointed day. 
(2) On the commencement of this section.- (a) every employer, who draws, frem the Consolidated 
Fund of India or of any State or of any Unien territory having a Legislative Assembly. and disburses, 
afier the appointed day, emoluments of an employee to whom this Act applies, shall, as and when 
emoluments are disbursed by him for any period, deduct from the emoluments so disbursed, the whole of the additional wages and one-half of the additional dearness allowance and credit the amount so deducted, in accordance with the scheme, to the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account, respectively; (b) every other employer. who 
disburses, after the appointed day, emoluments to any employee to whom this Act applics, shall. us and when emoluments are disbursed by him for any period, deduct from the emoluments so dishursed, the whole of the additional wages and one-half of the additional dearness allowance, and shall remit. in accordance with the scheme, the amounts so deducted to the nominated authority and 
on receipt of such amounts the nominated authority shall credit the amounts so received to the 
Additional Wages Deposit Account and the Additional Deamness Allowance Deposit Account. respectively -----—- I Subs. by Act 74 of 1976, 5. 2 (w.ef 11.6.1976). - Bt 504 (c)any 
employee, to whom this Act applies, who draws, afier the appointed day, his own emoluments shall,- 
(1) if he 1s employed in an establishment owned or maintained by Government, make deductions from his salary bill in respect of the whole of the additional wages and one-half of the additional dearness allowance and the specified authority shall credit the amount so deducted, in accordance 
with the scheme, to the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account, respectively; (ii) if he is employed in any other establishment, remit the whole of 
the additional wages and onc-half of the additional dearness allowance, in accordance with the scheme, to the nominated authority, and on receipt of such amount, the nominated authority shall 
credit the amount so received to the Additional Wages Deposit Account and the Additional Dearness 
Allowance Deposit Account, respectively, Explanation.-In computing the amount to be credited 10 the Addi- tional Wages Deposit Account and the Additional Deamness Allowance Deposit Account. the amount contributed [in relation to such additional wages or additional dearness allowance shall not- (a) to the extent of the contribution which 15 compulsorily required to be made to any provident 
or other fund under any law for the time being in force; or (b) to the extent of the contribution made to any other provident fund, recognised under any other law for the time being in force, at a rate 'not exceeding the rate at which such contribution was being made immediate before the appointed day, 
be taken into account. 
(3) The specified authority shall, as soon as may be practicable after the end of each year, prepare separately. in relation to the amounts credited to the respective Deposit Accounts to the credit of each employee, and furnish to the employec a copy of the said accounts showing theremn the amounts 
credited thereto in relation to the employee. 
Deposit to carry simple interest, 
7. Deposit to carry simple interest. (1) Every amount credited under section 6, in relation 1o an cemployee in a Deposit Account, shall carry simple interest at a rate, which shall be two and a half per cent. over and above the bank deposit rate. ' 
(2) The interest due on the amount credited in any Deposit Account shall be calculated in such manner as may be specified in the scheme.
(3) Interest aceruing on amounts credited under section 6 to any Deposit Account shall ensure to the 
benefit of the employees in relation to whom such amounts have been credited. 
(4) For the purpose of the deductions under section 801 of the Income-tax Act, 1961, (43 of 1961 
interest recerved on a deposit under this Act shall be deemed to be interest received on a deposit with 
a banking company to which the Banking Regulation Act, 1949, (10 of 1949.) applies. 
Assessment for —----- purpose of income tax. 
8. Assessment for ------ purpose of income tax. (1) For the purposes of computng, under the 
Income-tax Act, 1961, the total income of an employee, the amount credited to his ledger account in 
the Additional Wages Deposit Account or the Additional Dearness Allowance Deposit Account 
Shall not be included in his total income of the previous vear in which it is so credited; but so much 
of 505 the amount as is repaid to him shall be liable to be included in his total income of the previous 
year in which it is repaid. 
(2) For the purposes of computing, under the Income-tax Act. 1961, (43 of 1961.) the total income of 
an employce. the amount repaid to him under this Act shall be deemed to be salary paid to him in 
arrears and the provisions of sub-section (1) of section 89 of that Act shall apply accordingly 
Explanation.-In this section, "previous year" and "total income have the meanings respectively assigned to them in the Income-tax Act 1961 (43 of 1961.) 
Repayment of deposits. 
9. Repayment of deposits. (1) Subject to the provisions of sub- 
seetion (2}, every amount credited to the Deposit Accounts shall be repayable with interest due 
thereon,-- (a) in the case of an amount credited to the Additional Wages Deposit Account, at any 
tume afler the expiry of one year from the appointed day; and 1[(b) in the case of an amount credited to the Additional Dearness Allowance Deposit Account.- (i) for any period ending on the 30th dav of 
June, 1976. in cash, at any time after the expiry of two years from the appointed day: and (i) for any 
period ending after the 30th day of June. 1976,- (a) by crediting tithe provident fund account of the 
employee. at any time after the expiry of a period of four years from the appointed day, if such employec is a subscriber to any provident fund; (b) in cash, at any time after the expiry of a period of four years from the appointed day, in the case of an employee who 1s not a subscriber to any 
provident fund:] Provided that nothing in this seetion shall prevent earlier repayment of any amount credited to either of the Deposit Accounts with interest due thereon in any case in which any person authorised by the Central Government in this behalf is satisfied that extreme hardship will be caused unless such repayment is made: Provided further that an employee may. at his option, retain the 
whole or any part of the amount, credited in relation to him in the Additional Wages Deposit Account or the Additional Dearness Allowance Deposit Account, or both, until his Superannuation or until such date as may be specified by the Central Government in this behalf: Provided also that the whole of the amount standing to the credit of an employee (not being an employee in a seasonal 
establishment) in 1{the additional Wages Deposit Account shall be repaid 1o him in cash."| on his | 
[the Additional Wages Deposit Account shall be repaid to him in cash] superannuation or resignation from office or on the termination of his employment. 
(2) The aggregate amount credited to 1[any Additional Wages Deposit Account] relation to an employce shall be repaid to the employee in five equal annual instalments commencing from the expiry of onc year ***1 from the appointed day. together with interest due on the whole, or, as the case may be, part of the amount of compulsory deposit which remains unpaid. 
11(3) The aggregate amount credited to the Additional Deamess Allowance Deposit Account by or in
relation to an employee for the period ending on the 30th day of June, 1976, shall subject to the 
provisions of sub-section (5), be repaid, i cash, to the employee in five equal annual instalments 
commencing from the expiry of a period of two years from the appointed day,. together with interest 
duc on the whole or, as the case may be, part of the amount of compulsory deposit which remains 
unpaid. 
(4) The aggregate amount credited to the Additional Dearness Allowance Deposit Account by or in 
relation to an employee for the period commencing on the 1st day of July, 1976, and ending on the 
5th day of July, 1977, together with interest due on the whole, or, as the case may be, part of the 
amount of compulsory deposit which remains 
unpaid, shall, subject to the provisions of sub-section (5), be repaid 10 the employee in five, equal 
annual instalments commencing on the 6th day of July, 1978, and each such mstalment shall be 
credited to the provident fund account of the employee: Provided that the employer shall not be 
required 1o make any contribution under the Employees Provident Funds Act, 1932, or under any 
other law for the time being in force, in relation to the amounts so credited to the provident fund 
account of the employee: Provided further that, in the case of the employees who do not subseribe to 
any provident fund, the aggregate amount so repayable shall be repaid in cash in five equal annual 
instalments commencing on the 6th day of July, 1978, 
(5) On the supcrannuation, resignation or termination of employment of an employee, the whole of 
the amount standing to the credit of such employee in the Additional Dearness, Allowance Deposit 
Account, shall be repaid,- (a) in cash, in the case of any amount eredited to the Additional Dearness 
Allowance Deposit Account for any period ending on the 30th day of June, 1976; (b) in the case of 
any amount credited (o the Additional Deamness Allowance Deposit Account for any period ending, 
after the 30th day of June, 1976.- (1) by crediting such amount-to the provident fund account of such 
employee. if he is the subscriber of any such account, or (ii) in cash, where such employee is not a 
subscriber to any provident fund. Explanation.-For the purposes of this section, "provident, fund” has 
the meaning assigned to it in section 2(e) of the Provident Funds Act, 1925.] 
Power of Central Government to frame scheme. 
10. Power of Central Government to frame scheme. (1) The Central Government shall, by 
notification, frame one or more schemes in relation to the amounts credited to the Deposit Accounts 
under this Act. 
(2) A scheme framed under sub-section (1) may provide for- (a) the authorities by which the 
Additional Wages Deposit Aceount and the Additional Dearness Allowance Deposit Account, shall 
be opened and maintained; 1 Sub: 
Omitted & ins. by Act 74 of 1976, 5. 3 (w.e.f. 11-6- 1976). 
- 29 Law-65, 506 (b) the time and manner in which amounts deducted from 
additional wages or additional dearness allowance shall be deducted and credited to the respective 
Deposit Account; (c) the documents to be issued to persons in relation to whom amounts have been 
credited to the Deposit Accounts as evidence of such credit; (d) authority or authoritics by or through 
which credits to the Deposit Accounts may be made; (¢) the accounts to be maintained with respect 
1o the amounts credited to the Deposit Accounts and the officer by whom such Accounts shall be 
marntained; (f) the nomination of persons to receive the amount standing in a Deposit Account to the 
credit of an employee in the event of his death, and cancellation or change of such nomination; (g} 
the issue of duplicate of any document issued as evidence of any credit in the event of loss or 
destruction of the original and the fee, not exceeding rupees two, on the payment of which such 
duplicate may be issued; (h) repayment of amounts credited to the Deposit Accounts with interest 
due thereon and the conditions, if any, under which such repayment may be made; (i) any other 
matter which may be necessary or proper for the effective implementation of the scheme, 
(3) A scheme framed under this section may provide that all or any of its provisions shall take effect. cither prospectively or retrospectively, on such date, not being a date earlier than the appointed day. as may be specified in this behalf in the scheme and every scheme framed under this section shall have effeet notwithstanding anything contained in any law (other than this Act } for the tme bemg force or in any instrament having effect by virtue of any enactment other than this Act. 
(4) The Central Government may make a scheme to add to, amend or vary any scheme framed under sub-section M. 
Rounding off. 11. Rounding off. Where the amount of any credit to be made in any Deposit Account contains a part of a rupee, then, such part, if it is fifty paise or more, shall be increased 16 one complete rupee and if it Is less than fifty paise, it shall be ignored. CHAP MISCELLANEOUS CHAPTER 111 MISCELLANEOUS 
Amounts due to be first charge in the casc of insolvency orliguidation of the employer. 12. Amounts due to be first charge in the case of insolvency or 
liquidation of the employer. (1) Where any amount required by this Act to be credited 1o any Deposit Account or remitted to a nominated authority has not been so credited or remitted by any employer. the amount in respect of which such omission or failure was made, together with interest due thereon caleulated at the rate specified in sub- 
section (1) of section 7, shall, in the event of the employer being adjudicated by any court to be insolvent or, being a company is ordered by any court to be wound up, be deemed to be first charge on the assets of the insolvent or of the company. as the case may be, and shall have priority over all ather debts, and be paid in full, 507 
(2) The court shall cause the sum which is required, under sub- 
section (1), to be paid in priority to all other debts to be remitted to the. nominated authority for crediting the same to the appropriate Deposit Account. 
Transfer of establishments. 13. Transfer of establishments. Where an employer, in relation 10 an establishment to which this Act applies, transfers that establishment in whole or in part by sale. gift or otherwise or grants any licence in respect of such establishment the employer and the person to whom the establishment is so transferred or the licence is so given shall be jointly and severally liable to credit to the appropriate Deposit Account or. as the case may be. remit to the nominated authority, the sums which are required by this Act to be 5o eredited or remitted: Provided that the liability of the transferee or licensee shall be limited to the value of the assets obtained by him on such transfer or licence, as the case may be. 
Penalties. 
14. Penalties. (1) Whoever. with a view to- (a) avoiding making any deduction of additional wages and additional dearness allowance and crediting the same to the Additional Wages Deposit Account or the Additional Dearness Allowance Deposit Account, as the case may be. or (b) aiding or abetting any other person to avoid making any such deduction or credit, knowingly makes, or causes to be made, any statement or representation which he knows to be false or does not believe to be true, shall be punishable with imprisonment for a term which may extend to six In months, or with fine which may extend to one thousand rupees, or with both. 
(2) Any employer who omits or fails to credit to any Deposit Account or remit any amount to the nominated authority, as and when such credit or remittance becomes due under this Act or any scheme framed thereunder, shal) be punished- (a) with imprisonment for a term which shall not be
less than three months but may extend- (i) in the case of the first offence, to six months, and (11) in 
the case of any second or subsequent offence, to one year: Provided that the court may, for any 
adequate and special reasons, to be recorded by it in the judgment, impose a sentence of 
mmprisonment for a term lesser than three months or a fine in licu of imprisonment; and (b) also with 
fine which shall not be ess than the amount which has not been credited to a Deposit Account or 
remitted to the nominated authority as required by this Act, and the interest due there on, calculated 
at the rate specified m 
sub-section (1) of section 7, but may extend to twice the said amount and the interest due thereon, 
and out of the fine, if realised. the court trying the offence shall cause an amount equal to the amount 
which has not been credited to a Deposit Account or remitted to the nominated authority with 
nterest duc thereon, to be remitted to the nominated authority for 508 crediting the same to the 
appropriate Deposit Account, and on such amount being remitted to the nominated authority, the 
liability of the employer shall, to the extent of the amount so remitted by the court, stand discharged. 
(3) Whoever contravencs any provision of this Act or any scheme or order made thereunder for 
which no penalty has been separately pro- vided for shall be punished with imprisonment for a term 
which may extend to six months, or with fine which may extend to one thousand rupees, or with 
both. 
Offences by companies. 
15. Offences by companies. (1) Where any offence under this Act has been committed by a 
company, every person who at the time the offence was committed was in charge of, and was 
responsible to, the company for the conduct of the business of the company, as well as the company, 
shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished 
accordingly: Provided that nothing contained in this sub-section shall render any such person liable 
to any punishment, if he proves that the offence was committed without his knowledge or that he had 
exercised all due diligence to prevent the commission of such offence. 
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act. has been 
committed by a company and it is proved that the offence has been committed with the consent or 
connivance of, or is attributable to any neglect on the part of. any director, manager, secretary or 
other officer of the company, such director, manager, secretary or other officer shall be deemed 10 be 
guilty of that offence and shall be liable 1o he proceeded against and punished accordingly. 
Explanation.-For the purposes of this section,- (a) "company" means any body corporate and 
includes a firm or other association of individuals; and (b) "director”, in relation 1o a firm, means a 
partner in the firm, and, in relation to a Hindu undivided family, means the Karta of such family. 
Cognizance of offences. 16. Cognizance of offences, No court shall take cognizance of any offence 
punishable under this Act except upon a complaint made by the Central Government or any officer 
or authority authorised in writing by the Central, Government in this behalf. 
Power 10 exempt. 17. Power to exempt. Where the Central Government is of the opinion that it is 
necessary or expedient so 10 do either, in the public interest or having regard to the peculiar 
circumstances of any case, it may, by notification, and subject to such conditions, if any, as it may 
specify in the notification.- (a) exempt any establishment or category of employees, working in any 
establishment from the operation of all or any of the provisions of this Act; (b) exempt, in the case of 
extreme hardship to any employee, from crediting any amount in relation to such employee to the 
Additional Wages Deposit Account; 509 (¢) empower deductions from additional wages in relation 
10 an employee or class of employees, at a rate lesser than the rate specified in this Act. 
Power to delegate. 18. Power to delegate. The Central Government may, by notification, dircet that 
ally power which may be exercised by it under this Act or any scheme framed under this Act shall,
subject to such restrictions and conditions, if any. as it may specify in the notification, be exercised 
also by- (a) such officer or authority subordinate to the Central Government: or (b) such State 
Government or such officer or authority sub- ordinate to a State Government: or (¢} such other 
person or authority, as may be specified in the notification: Provided that the powers conferred by 
section 10) and section 24 shall not be delegated under this section. 
Protection against attachment, 
19. Protection against attachment. (1) The amount standing to the eredit of any employee in any 
Deposit Account shall not be hable to attachment under any decree or order of any court in respect of 
any debt or liability incurred by the employee. 
{2) Any amount standing to the credit of an employee, in any Deposit Account at the time of his 
death and payable to his, nominee under the scheme shall vest in the nominee and shall be free from 
any deht or other hability incurred by the deceased or incurred by the nominee before the death of 
the employee. 
Power to call for returns and inspect accounts. 
20. Power 1o call for returns and inspect accounts. (1) The nominated authority or any officer 
authorised by the nominated authority in this behalf may call for such returns, as may be prescribed. 
from any employer to whom this Act applies. 
{2) The books of account and other books and papers of any em- ployer to whom this Act zpplies 
shall be open 10 inspection by the nominated authority or any person authorised by the Central 
Government in this behalf during business hours: Provided that such inspection may be made 
without giving any previous notice to the employer or any officer of the employer. 
(3) The nominated authority or any authorised officer may. during the course of mspection.-- (i) 
make, or cause to be made, copies of the books of account and other books and papers; (if) place, or 
cause 10 be placed, any marks of identification thereon in token of the inspection having besn made. 
(4) If after inspection the nominated authority or the authorised officer finds that any additional 
wages or additional dearness allowance has not been credited by the employer to the appropriate 
Deposit Account or, as the case may be, remitted to the nominated authority, it, or he shall determine 
the amount in respect of which such credit or remittance has not been made: Provided that no such 
determination shall be madc except after giving to the employer a reasonable opportunity of being 
heard. 510 
(5) It shall be the duty of every employer to whom this Act applies, to furnish to the nominated 
authonty a copy of the award, deerce or order of any court, tribunal or other authority or agreement 
or settlement relating ta wage revision or revision of dearness allowance and also to produce such 
books of account and other books and papers as the nominated authority or the officer making the 
inspection may require. 
(6} Where any revision of wages or dearness allowance is made otherwise than in pursuance of any 
award, decree or order of any court, tribunal or other authority or agreement or settlement, the 
employer shall give an intimation to the nominated authority about such revision of wages or 
dearness allowance and furnish to the nominated authority such books of account and other books 
and papers as that authority may require. 
Protection of action taken in good faith. 21. Protection of action taken in good faith. No suit or other 
legal proceeding shall lie against the Central Government or any State Government or any officer 
authorised by the Centrai or State Government to discharge any functions under this Aet, for any loss
or damage caused or likely to be caused by anything which Is in good faith done or intended to be 
done in pursuance of this Act or any scheme framed thercunder. 
Persons performing functions under this Act to be public servants. 22. Persons performing functions 
under this Act to be public servants. Any person to whom any power of the Central Government is 
delegated under section 18 or who is authorised to exercise any Power specified in section 20 shall., 
if he) 1s not a public servant, be deemed to be a public servant within the meaning of section 21 of 
the Indian Penal Code. (45 of 1860.) 
Recovery of arrears, 23. Recovery of arrears. Without prejudice to the provisions of section 14, any 
amount which ought to have been credited under this Act to a Deposit Account or remitted to the 
nominated authority but has not been so, credited or remitted in accordance with the provisions of 
this Act or scheme or order made thereunder, shall be payable by the employer, together with interest 
duc thereon calculated 
at twice the rate at which interest is payable under sub-section (1) of section 7, and in default of such 
payment, such amount, together with interest due thereon at the aforesaid rate, shall be recoverable 
as an arrcar of land revenue: Provided that where any such amount has been recovered by the 
court under sub-section (2) of section 14, the said amount shall not be recoverable under this section 
Power to make rules. 24. Power to make rules. The Central Government may, by netification, make 
rules to carry out the provisions of this Act. 
Power to remove difficulties. 26. Power to remove difficulties. If any difficulty arises in giving effect 
to the provisions of this Act, the Central Government may, by order. not inconsistent with the 
provisions of this Act, remove the difficulty: Provided that no such order shall be made after the 
expiry of a period of two years from the appointed day. 
Repeal and saving. 
27. Repeal and saving. (1) The Additional Emoluments (Compulsory Deposit) Ordinance, 1974 (& of 
1974.) is hereby repealed. 
(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed 
(including any appointment, exemption, nomination, direction or order made thereunder) shall be 
deemed to have been done or taken under the corresponding provisions of this Act, and the repeal of 
the said Ordinance shall not affect any penalty or punishment incurred in respect of any offence 
committed against the said Ordinance or any investigation or legal proceeding in respect of such 
penalty or punishment and any such investigation or legal proceeding may be instituted or continued 
and any such penalty or punishment may be imposed as if section 12 and other provisions of the said 
Ordinance. necessary for the purposes aforesaid, had been included in this Act.

‹ Prev All Maharashtra acts Next ›