Jewel Homes Pvt. Ltd. Vs.

Employees Provident Fund Organisation

IN THE HON’BLE
HIGH COURT OF KERELA
Jewel Homes Pvt. Ltd.
(Appellant)
v.
Employees Provident Fund Organisation
(Respondent)

MEMORANDUM FOR THE APPELLANT

COUNSEL FOR APPELLANT

(Vivek Kumer Tandon)

ROLL. NO. :188 SECTION – C SEM: V

HIDAYATULLAH NATIONAL LAW

UNIVERSITY, RAIPUR
Date of Submission : 26-09-2016

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

TABLE OF CONTENTS

LIST OF ABBREVIATIONS ............................................................................................................................... 3

INDEX OF AUTHORITIES ................................................................................................................................ 4
STATEMENT OF FACTS .................................................................................................................................. 5
STATEMENT OF JURISDICTION ...................................................................................................................... 6
ISSUES RAISED ............................................................................................................................................... 7
SUMMARY OF ARGUMENTS ......................................................................................................................... 8
WRITTEN SUBMISSION.................................................................................................................................. 9
1. The interest to be paid by the petitioner was erroneously computed............................................. 9
PRAYER FOR RELIEF ..................................................................................................................................... 12

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

LIST OF ABBREVIATIONS
& And

AIR All India Reporter

Anr. Another

Edn. Edition

Hon’ble Honourable

i.e. That is

J. Justice

M.P. Madhya Pradesh

No. Number

Ors. Others

S. No. Serial Number

SCC Supreme Court Cases

SCR Supreme Court Reports

v. Versus

www World wide web

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

INDEX OF AUTHORITIES

Statutes referred:

 THE CONSTITUTION OF INDIA, 1950

 EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

JUDICIAL DECISIONS:

 Harrisons Malayalam Ltd. (M/s.) v. Regional Provident Fund Commissioner and others
 Organo Chemical Industries v. Union of India
 Arcot Textile Mills Ltd. Vs. The Regional Provident Fund Commissioner and Ors.
 Regional Provident Fund Commissioner v. Hooghly Mills Co. Limited and Ors.

BOOKS REFERRED:

 MISHRA, S.N., LABOUR AND INDUSTRIAL LAWS, 27TH EDITION

 GOSWAMI, V.G., LABOUR AND INDUSTRIAL LAWS, 9 TH EDITION

DICTIONARIES:

 CONCISE OXFORD DICTIONARY, 10TH. ED., OXFORD UNIVERSITY PRESS, 2002

 BRYAN AND GARNER, BLACK'S LAW DICTIONARY, (6th Edn. Sweet & Maxwell)

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

STATEMENT OF FACTS

 The Jewel Homes Pvt. Ltd., which is a private limited company, incorporated under the
Indian Companies Act, 1956, has brought in challenge the decision of Assistant Provident
Fund Commissioner, Employees Provident Fund Organisation, Kochi.

 The dispute in the present case between the parties arose on account of the fact that the
petitioner failed to remit the contribution made to the Employees Provident Fund Scheme
1952 the Employees Deposit Linked Insurance Scheme, 1976 and the Employees
Pension Scheme, 1995 and on May 23, 2011, the Assistant Provident Fund
Commissioner, Employees Provident Fund Organisation, Kochi called upon the
petitioner to pay the sum of Rs. 17,236/- by way of interest under section 7-Q of the Act
for the period from March 2007 to December, 2009. A statement showing the amount due
under section 7-Q of the Act for each month was enclosed along with Ext.P1.

 Upon receipt of Ext.P1, the petitioner filed reply Ext.P2 representation dated 6.7.2011
contending that the contribution for a particular month, for example March 2007 which is
deducted from the salary paid for that month in April 2007 need be remitted with the
Employees Provident Fund Organisation only by 15th of May and not by 15th of April as
held by the Employees Provident Fund Organisation. It is against Ext.P3 order issued by
the Assistant Provident Fund Commissioner, Employees Provident Fund Organisation,
Kochi levying the sum of Rs. 17,236/- as interest under section 7Q of the Act for delayed
payment of contribution to the Employees Provident Fund Scheme 1952, the Employees
Deposit Linked Insurance Scheme, 1976 and the Employees Pension Scheme, 1995
during the period from March 2007 to December 2009 the petitioner has approached the
Hon’able High Court.

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

STATEMENT OF JURISDICTION

The appellant has approached the Hon’ble High Court of Kerela under Article 226 of the
Constitution of India.

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

ISSUES RAISED

THE FOLLOWING ISSUE FOR CONSIDERATION HAS COME UP BEFORE THE

HON’BLE HIGH COURT OF KERELA.

1. Whether the interest to be paid by the petitioner has been erroneously computed?

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

SUMMARY OF ARGUMENTS

1. The interest to be paid by the petitioner has been erroneously computed because the
interest of Rs. 17,236/- levied by the Assistant Provident Fund Commissioner, Employees
Provident Fund Organisation, Kochi on the petitioner under section 7Q of the Act for
delayed payment of contribution as the interest can be levied only from the 21st day of
the month following the month in which the contribution is deducted from the employees.

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

WRITTEN SUBMISSION

1. The interest to be paid by the petitioner was erroneously computed.

The Employees' Provident Funds & Miscellaneous Provisions Act, 1952 has been enacted with
the main objective of protecting the interest of the employees after their retirement and their
dependents after death of the employee. The Act provides insurance to workers and their
dependents against risks of old age, retirement, discharge retrenchment or death.

The Act has various provisions which provides for contributory provident fund with
contributions made both from the employer and the employee. In case of any default on the part
of the employer penal damages and simple interest can be imposed under Section 14 B and 7Q of
the Act.

The Act also provides for the interest to be paid on the amount due from the employer to pay the
contribution in the stipulated time, Section 7Q of the Employees' Provident Funds &
Miscellaneous Provisions Act, 1952 states that:

"The employer shall be liable to pay simple interest at the rate of twelve per cent. per annum or
at such higher rate as may be specified in the Scheme on any amount due from him under this
Act from the date on which the amount has become so due till the date of its actual payment:
Provided that higher rate of interest specified in the Scheme shall not exceed the lending rate of
interest charged by any scheduled bank."

It is respectfully submitted that the delay reckoned for the purpose of demand of interest is not
correct in as much as the due date reckoned in the statement annexed to the letter under
reference, is erroneous, in as much it is not reckoned in terms of Paragraph 38(1) of the
Employees Provident Fund Scheme, 1952. Going by Paragraph 38 of the Employees Provident
Fund Scheme, contributions are payable only within 15 days of the close of the month, in which
wages is paid and deduction towards contributions is made.

When that be so, as wages to the employees for each month, are being paid by the petitioner in
the succeeding month, with deductions towards employees' contributions being made in the

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

succeeding month only; the contributions are to be paid from the petitioner only before 15th of
the month following the month in which payment of wages is made.

For instance, the wages for the month of March 2007, being paid in April 2007 with deductions
towards employees' contributions being made only in April 2007; contributions from the
petitioner are payable in terms of Paragraph 38 of the Employees Provident Fund Scheme, only
by 15.5.2007 and not by 15.4.2007 as is reckoned in the order Ext. P3. Hence it is apt to mention
here that the interest to be paid by the employer on account of default of making the contribution
should not be calculated from 15.5.2007 and not by 15.4.2007 and those 30 days should be left
out while calculating the interest.

In the case of Arcot Textile Mills Ltd. Vs. The Regional Provident Fund Commissioner and
Ors.1 the Hon'ble Supreme Court of India recognised that there can be errors with regard to the
period and the calculation of interest and held that "It is a statutory power which is exercised by
the competent authority under the Act. Once the said authority takes recourse to the measure for
computation and sends a bald order definitely the affected person can ask for clarification and
when computation sheet is provided to him he can file an objection. Though, the area of
delineation would be extremely limited yet the said opportunity cannot be denied to the affected
person."

In another case of Regional Provident Fund Commissioner v. Hooghly Mills Co. Limited and
Ors.2 the Hon'ble Apex Court said "The language employed in Section 7Q provides for levy of
interest on delayed payment and the rates have been stipulated. When a composite order is
passed or order imposing interest becomes a part of the order or levy in any of the provisions of
the Act the authority grants a reasonable opportunity of hearing to the employer/affected party."

The Apex Court has in Organo Chemical Industries v. Union of India3interpreting paragraph 38
of the scheme held as follows:

1
AIR 2014 SC 295
2
2012 (1) SCALE 422
3
1979 (2) LLJ 416

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

" Under para 38, the employer is authorized before paying the member employee his wages in
respect of any period or part of period for which contributions are payable, to deduct the
employee's contribution from his wages. It further provides that the deposit of such contribution
shall be made by the employer within fifteen days of the close of every month, i.e. a contribution
for a particular month has got to be deposited by the 15th day of the month following.”

Merely because there is delay in payment of contributions, liability to pay damages does not
arise automatically, but the same shall be decided by applying mind objectively to the merits of
each case and not by resorting to mere arithmetic calculation of damages as per the structured
formula.4

Therefore it is humbly submitted that the interest levied as per Ext.P1 will have to be refixed by
giving it 30 days’ time for remittance of the contribution which was deducted from the wages
paid to the employees.

4
Harrisons Malayalam Ltd. (M/s.) v. Regional Provident Fund Commissioner and others 2013 LLR 1083

MEMORANDUM ON BEHALF OF THE APPELLANT

 Jewel Homes Pvt. Ltd. Vs. Employees Provident Fund Organisation

PRAYER FOR RELIEF

Wherefore in the lights of the facts stated, authorities cited, arguments advanced, the appellant
humbly requests the Hon’ble Court to adjudge and declare that:-

1. The quantum of the interest shall be refixed.

2. The decision of the Assistant Provident Fund Commissioner shall be reversed.

And, pass any order or decree in the favour of the Appellant as the Court may deem fit in the
lights of Justice, Equity & Good Conscience.

All of which is most humbly prayed.

COUNSEL ON BEHALF OF APPELLANT 26TH SEPTEMBER 2016

VIVEK KUMAR TANDON

MEMORANDUM ON BEHALF OF THE APPELLANT