SC

Shree Changdeo Sugar Mills and Anr.

vs.

Respondent: Union of India and Anr

Labour and Industrial - settlement - Section 2 of Employees Provident Funds Act, 1952 - contribution
towards provident fund can only be on basic salary - in order to attract provisions of Act of 1952 it
is not necessary that workmen must actually be on duty or have actually worked - workmen may
be deemed to be on duty while on strike or during lock out - it is duty of employer to contribute
towards provident fund - agreement between workmen and employer implies that employer has
taken liability of contributing workmen's share towards provident fund.

Shree Changdeo Sugar Mills and Anr. vs. Union of India and Anr. (09.01.2001 - SC) :
MANU/SC/0015/2001

7. In support of his submission he relied upon the case of Burmah Shell Oil Storage and Distributing
Co. Ltd. vs. Regional Provident Fund Commissioner, Delhi reported in 1981 (2) L.L.J. 86. In this case it
has been held that a settlement allowance is not a basic wage.

8. He also relied upon the case of Bridge & Roof Co. (India) Ltd. vs. Union of India
MANU/SC/0274/1962 : (1962)IILLJ490SC . In this case the question was whether production bonus
payable as part of a contract of employment was basic wage within the meaning of Section 2(b) of
the Employees Provident Funds Act, 1952 It was held that production bonus was a kind of incentive
and would, therefore, not be a basic wage.

9. He also relied upon the case of Dinesh Khare vs. Industrial Tribunal, Jaipur and others reported
MANU/RH/0072/1981, wherein one month's wages were paid to a workman under Section
33(2)(b) of the Industrial Disputes Act. The question was whether provident fund was deductible
on this amount. The Court held that this was in the nature of a notice pay and was therefore, not a
basic wage within the meaning of Section 2(b) of the Employees' Provident Funds Act and
therefore, provident fund was not deductible on this amount.

10. He also relied upon the case of India United Mills Ltd. v. Regional Provident Fund Commissioner
Bombay and others MANU/MH/0154/1960. In this case also the question was whether payment
made to a workman for termination of his service in lieu of a notice would be a basic wage within
the meaning of Section 2(b) of the Employees' Provident Funds Act. It was held that the amounts
paid as notice pay for termination do not fall within the term basic wage and, therefore, provident
fund cannot be deducted on it.
Shree Changdeo Sugar Mills and Anr. vs. Union of India and Anr. (09.01.2001 - SC) :
MANU/SC/0015/2001
38. (1) The employer shall, before paying the member his wages in respect of any period or part of
period for which contributions are payable, deduct the employee's contribution from his wages
which together with his own contribution as well as an administrative charge of such percentage [of
the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food
concessions admissible thereon) for the time being payable to the employees other than an
excluded employee, as the Central Government may fix. He shall within fifteen days of the close of
every month pay the same to the fund by separate bank drafts or cheques on account of
contributions and administrative charge]:

Delhi Press Patra Prakashan Ltd. vs. The Regional Provident Fund Commissioner and Ors. (11.09.2009
- DELHC) : MANU/DE/2302/2009