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interpretation of the expression “so far as may be” has in our judgment, misinterpreted the intent and scope and the purpose of the Act.

REPORTABLE

Employees' Provident Fund Organisation of India

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO_655 OF 2012

(Arising out of SLP(C) No.17298/2009)

Regional Provident Fund Commissioner …Appellant(s)

– Versus –

The Hooghly Mills Co. Ltd. & Ors. …Respondent(s)

J U D G M E N T

GANGULY, J.

1. Leave granted.

2. The question which falls for consideration before

this Court in this case is whether the employer of

an establishment which is an `exempted

establishment’ under the Employees’ Provident Funds

1
and Miscellaneous Provisions Act, 1952 (hereinafter,

`the Act’) is subject to the provisions of Section

14B of the said Act whereby in cases of default in

the payment of contribution to the provident fund,

proceedings for recovery of damages can be initiated

against the employer of such an `exempted

establishment’.

3. The question was raised by the respondent before the

High Court and both the Single Bench and the

Division Bench of the High Court have recorded a

finding in favour of the respondent and held that

the respondent being an `exempted establishment’

cannot be subjected to the provisions of Section

14(B) of the Act.

4. The material facts of case are not much in dispute.

5. By notification dated 23.11.1967, the Central

Government in exercise of its power under Section

2
17(1) (a) of the Act granted exemption to the

respondent, which is a company registered under the

Companies Act subject to the provisions specified in

Schedule II annexed to the said notification. The

material part of the said notification is as

follows:

“S.O. Whereas, in the opinion of the

Central Government:

(1) The Rules of the provident fund

of the establishment mentioned in

Schedule I (hereto annexed and

(hereinafter referred to as the said

establishments), with the respect to

the employees therein then those

specified in section 6 of the

employees’ Provident Fund Act, 1952

(10 of 1952); and

(2) The Employees in the said

establishments are also in enjoyment

of other provident fund benefits

which on the whole are not less

favourable to the employees than the

benefits provided under the

Employees’ Provident Funds Scheme

1952 (hereinafter referred to as

the said School) in relation to the

employees in any other establishment

of a similar character.

Now, thereafter, in exercise of

the powers conferred by clause (a) of

sub-section (i) of section 17 of the

Employees’ Provident Fund Act 1952

(19 of 1952), the Central Government,
3
hereby exempt the said establishments

with effect from dates mentioned

against each of them, respectively

from the operation of all the

provisions of the said scheme,

subject to the conditions specified

in scheme hereto annexed, which are

in addition to the conditions

mentioned in the explanation to sub-

section (1) of the said section 17.”

6. The respondent company comes under Item No. 5 of the

notification. Initially the case of the respondent

company is that after the grant of exemption it

framed a scheme and created a Trust and appointed a

Board of Trustees from the Management of the said

Trust fund and was thus enjoying exemption under

Section 17(1A) (a) of the Act. It is also common

ground that there were defaults on the part of the

respondent company in making timely payment of dues

towards provident fund for the period between

October 1999 to October 2000 and then again from

November 2000 to July 2002. In view of such admitted

defaults, proceedings were initiated against the

respondent company and by notices dated 10.9.2003

and 11.10.2003 enclosing therewith the detailed

4
statement of delayed remittance of provident fund

and allied dues. As contemplated under Section 14(B)

of the Act, respondent was offered an opportunity to

represent their case on several dates by the

authorities under the Act and their case was listed

for hearing but nobody appeared on their behalf on

several dates. Thereafter, on the basis of some

representation on their behalf the matter was heard

and the Regional Provident Fund Commissioner II,

Sikkim and Andaman & Nicobar Islands by a detailed

order directed the respondent company to remit an

amount of Rs.32,62,153/- by way of damages to the

respective accounts, failing which, it was stated

that further action as provided under the Act and

the Schemes framed thereunder shall be initiated.

7. It is not in dispute that the said order dated

9.6.2004 is an appealable order under the provisions

of Section 7I of the Act. However, without filing

any appeal the respondent company filed a writ

petition before the learned Single Judge of the High

5
Court which ultimately upheld the contention of the

respondent company and, inter alia, came to

following finding:

“Under such circumstances, this court holds

that the impugned order cannot be sustained

in law as the concerned authority demanded

damages from the petitioners not only on

account of delayed payment of contribution

to the trust fund but also on account of

delayed payment of the contribution to the

pension fund and insurance fund.

The impugned order, thus, stands set

aside.

The Provident Fund Authority may,

however, ascertain damages under Section 14B

of the said Act afresh for delayed payment

of contribution to the pension fund as well

as the insurance fund.

The writ petition, thus, stands allowed

with the above observation.”

8. The learned Single Judge while allowing the writ

petition proceeded on the basis that the expression

“so far as may be” in Section 17(1A)(a) of the Act

will have to be given its proper meaning. If such

meaning is given then the provision in Sections 6,

7A, 8 and 14B of the Act cannot be applied in their

entirety. The learned Single Judge held that the

expression “so far as may be” cannot be treated as a

surplusage.

6
9. The learned judge further held that the said

expression “so far as may be” used in Section

17(1A)(a) of the said Act is for the purpose of

restraining the application of provisions in

Sections 6, 7A, 8 and 14B to the exempted

establishment. The learned Judge also held that the

damages which are recoverable under Section 14B of

the said Act could not go to the hand of the

individual affected employee. In case of delayed

payment, loss of the individual affected employee is

compensated by payment of interest under Section 7Q

of the said Act. Since the damages which are

recovered are not paid for compensating the losses

of the individual employee, the expression “so far

as may be” used in Section 17(1A)(a) of the said

Act, does not require liberal interpretation. The

said finding was given by the learned Single Judge

in the context of the argument made on behalf of the

appellant that the Act being social welfare

legislation, needs to be liberally construed.

7
10. The learned Judge ultimately accepted the meaning of

the expression “so far as may be” given by the

Constitution Bench of this Court in the case of Dr.

M. Ismail Faruqui etc. v. Union of India and others

– AIR 1995 SC 605.

11.Thereafter, an appeal was taken to the Division

Bench of the High Court by the appellant. The

Appellate Court also came to the conclusion that

Sections 6, 7A, 8 and 14B of the Act would not be

attracted to the defaulting `exempted

establishment’.

12.In view of the fact that Section 17(1A)(a) makes it

clear that those Sections would be applicable “so

far as may be”, the Appellate Court accepted the

reasoning given by the Writ Court and affirmed the

judgment.

8
13.It is against such a concurrent finding and

interpretation of the aforesaid provision of the

Act, we heard learned counsel for the parties.

14.For a proper appreciation on the point at issue, it

would be better to set out some of the relevant

provisions of the Act.

15.Section 2(e) & 2(fff) define `employer’ and

`exempted establishment’. Those definitions are as

under:

“2 (e) “employer” means–
(i) in relation to an establishment which is

a factory, the owner or occupier of the

factory, including the agent of such owner

or occupier, the legal representative of a

deceased owner or occupier and, where a

person has been named as a manager of the

factory under clause (f) of sub-section (1)

of section 7 of the Factories Act, 1948 ( 63

of 1948), the person so named; and
(ii) in relation to any other establishment,

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 a manager, managing

9
director or managing agent, such manager,

managing director or managing agent;”

“2 (fff) “exempted establishment” means an

establishment in respect of which an

exemption has been granted under section

17 from the operation of all or any of the

provisions of any Scheme or the Insurance

Scheme, as the case may be, whether such

exemption has been granted to the

establishment as such or to any person or

class of persons employed therein.”

16.Section 14(B) of the Act which provides for recovery

of damages reads as under:

“Section 14B – Power to recover damages –

Where an employer makes default in the

payment of any contribution to the Fund, the

Pension Fund or the Insurance Fund or in the

transfer of accumulations required to be

transferred by him under sub-section (2) of

section 15 or sub-section (5) of section 17

or in the payment of any charges payable

under any other provision of this Act or of

any Scheme or Insurance Scheme or under any

of the conditions specified under section

17, the Central Provident Fund Commissioner

or such other officer as may be authorised

by the Central Government, by notification

in the Official Gazette, in this behalf] may

recover from the employer such damages, not

exceedings the amount of arrears, as it may

thinks fit to impose:

Provided that before levying and recovering

such damages, the employer shall be given a

reasonable opportunity of being heard:

Provided further that the Central Board may

reduce or waive the damages levied under

this section in relation to an establishment

which is a sick industrial company and in

respect of which a scheme for rehabilitation
1
has been sanctioned by the Board for

Industrial and Financial Reconstruction

established under section 4 of the Sick

Industrial Companies (Special Provisions)

Act, 1985 (1 of 1986), subject to such terms

and conditions as may be specified in the

Scheme.”

17.Section 17(1A) which deals with power to grant

exemption reads as under:

“17 Power to exempt – (1) The appropriate

Government may, by notification in the

Official Gazette, and subject to such

conditions as may be specified in the

notification, exempt, whether

prospectively or retrospectively, from the

operation of all or any of the provisions

of any Scheme.

(a) any establishment to which this Act

applies if, in the opinion of the

appropriate Government, the rules of its

provident fund with respect to the rates

of contribution are not less favourable

than those specified in Section 6 and the

employees are also in enjoyment of other

provident fund benefits which on the whole

are not less favourable to the employees

than the benefits provided under this Act

or any Scheme in relation to the employees

in any other establishment of a similar

character; or

(b) any establishment if the employees of

such establishment are in enjoyment of

benefits in the nature of provident fund,

pension or gratuity and the appropriate

Government is of opinion that such

benefits, separately or jointly, are on

the whole not less favourable to such
1
employees than the benefits provided under

this Act or any Scheme in relation to

employees in any other establishment of a

similar character.

Provided that no such exemption shall be

made except after consultation with the

Central Board which on such consultation

shall forward its views on exemptions to

the appropriate Government within such

time limit as may be specified in the

Scheme.

(1A) Where an exemption has been granted

to an establishment under Clause (a) of

Sub-section (1),

(a) the provisions of Section 6, Section

7A, Section 8 and 14B shall, so far as may

be, apply to the employer of the exempted

establishment in addition to such other

conditions as may be specified in the

notification granting such exemption, and

where such employer contravenes, or makes

default in complying with any of the said

provisions or conditions or any other

provision of this Act, he shall be

punishable under Section 14 as if the said

establishment had not been exempted under

the said Clause (a);

(b) the employer shall establish a Board

of Trustees for the administration of the

provident fund consisting of such number

of members as may be specified in the

Scheme;

(c) the terms and conditions of service of

members of the Board of Trustees shall be

such as may be specified in the Scheme;

(d) the Board of Trustees constituted

under Clause (b) shall –

1
(i) maintain detailed accounts to show

the contributions credited,

withdrawals made and interest accrued

in respect of each employee;

(ii) submit such returns to the

Regional Provident Fund Commissioner

or any other officer as the Central

Government may direct from time to

time;

(iii) invest the provident fund monies

in accordance with the directions

issued by the Central Government from

time to time;

(iv) transfer, where necessary, the

provident fund account of any

employee; and

(v) perform such other duties as may

be specified in the Scheme.

18.Learned counsel for both the parties strenuously

urged before us that in this case we are only

concerned with the liability of the respondent

company in so far as provident fund is concerned.

Mr. Prdeep Ghosh, learned senior counsel for the

respondent company has very fairly submitted that

there are three accounts, namely, provident fund

contribution, pension fund contribution and the

Insurance fund contribution. The respondent company

does not enjoy any exemption in respect of pension
1
fund and insurance fund. Learned counsel further

submitted that Section 14B makes a distinction among

these three funds namely, provident fund

contribution, pension fund contribution and the

insurance fund contribution.

19.Ms. Aparna Bhat, learned counsel for the appellant

argued that both the Courts i.e. the writ court and

the appellate Bench of the High Court placed an

erroneous interpretation with regard to application

of Section 14B to an `exempted establishment’ by

misconstruing the expression “so far as may be”.

Learned counsel also submitted that while construing

the provisions of a social welfare legislation, like

the Act, the High Court has not given any reason why

it should not follow the well known principles of

liberal interpretation.

20.Learned counsel also urged that in the judgment of

the High Court there is no reason why despite the

fact that there exists an efficacious remedy of
1
appeal, the writ petition by the respondent company

was entertained. The High Court has come to a

finding that the grievance of the respondent company

that it was not given adequate opportunity of

hearing by the statutory authority is not correct on

facts. Therefore, the learned counsel submitted that

when an adequate opportunity of hearing was given,

but the same was not availed of by the respondent

company before the authority which passed the order

dated 9.6.2004, it was not open to the respondent

company to invoke the extraordinary writ

jurisdiction of the High Court. Learned counsel for

the respondent company however urged that since the

matter rested on an interpretation of various

Sections of the Act, an appeal to statutory

authority created under the said Act would not be an

efficacious remedy.

21.In the peculiar facts of the case and specially

having regard to the nature of the proceedings, we

do not wish to decide the controversy raised in this

1
case on the question of non-availability of a

statutory remedy. The impugned order was passed in

the year 2004 and thereafter the writ petition was

entertained by the two Benches of the High court and

after that the matter is pending before us. Now we

are in 2012. To dismiss the order of the two

Benches of the High Court inter alia on the ground

that the writ petition was entertained despite the

existence of a statutory remedy and then send it

back to the remedy of appeal after a period of eight

years, would not, in our judgment, be a correct

exercise of judicial discretion. However, we are of

the opinion that normally the statutory remedy of

appeal should be availed of in a situation like

this.

22. From the aforesaid discussion it is clear that this

case calls for interpretation of certain statutory

provisions. It is not disputed, and possibly cannot

be disputed, that the Act is a social welfare

legislation. The Act is one of the earliest Acts

1
after the Constitution came into existence. Prior to

its enactment, the requirement of having a suitable

legislation for compulsory institutional and

contributory provident fund in industrial

undertakings was discussed several times at various

tripartite meetings in which representatives of the

Central and State Governments and employees and

workers took part. Initially a non-official Bill on

the subject was introduced in the Central

Legislature in 1948 and was withdrawn with the

assurance that the Government would consider the

introduction of a comprehensive Bill. Finally, the

proposed legislation was endorsed by the conference

of Provincial Labour Ministers in January, 1952 and

later on the same was introduced in 1952. This

Court had occasion to expressly hold that the said

Act is a beneficial social welfare legislation to

ensure benefits to the employees. In the case of

Regional Provident Fund Commissioner v. S.D.

College, Hoshiarpur and others reported in (1997) 1

SCC 241, this Court while interpreting Section 14B

of the Act held that the Act envisages the
1
imposition of damages for delayed payment (paragraph

10 at page 244 of the report). This Court also held

that the Act is a beneficial social legislation to

ensure health and other benefits of the employees

and the employer under the Act is under a statutory

obligation to make the deposit. In paragraph 11, it

has also been held that in the event of any default

committed in this behalf Section 14B steps in and

calls upon the employer to pay damages.

23.If we look at the modern legislative trend we will

discern that there is a large volume of legislation

enacted with the purpose of introducing social

reform by improving the conditions of certain class

of persons who might not have been fairly treated in

the past. These statutes are normally called

remedial statutes or social welfare legislation,

whereas penal statutes are sometime enacted

providing for penalties for disobedience of laws

making those who disobey, liable to imprisonment,

fine, forfeiture or other penalty.

1
24.The normal canon of interpretation is that a

remedial statute receives liberal construction

whereas a penal statute calls for strict

construction. In the cases of remedial statutes, if

there is any doubt, the same is resolved in favour

of the class of persons for whose benefit the

statute is enacted, but in cases of penal statutes

if there is any doubt the same is normally resolved

in favour of the alleged offender.

25.It is no doubt true that the said Act effectuates

the economic message of the Constitution as

articulated in the Directive Principles of State

Policy.

26.Under the Directive Principles the State has the

obligation for securing just and humane conditions

of work which includes a living wage and decent

standard of life. The said Act obviously seeks to
1
promote those goals. Therefore, interpretation of

the said Act must not only be liberal but it must be

informed by the values of Directive Principles.

Therefore, an awareness of the social perspective of

the Act must guide the interpretative process of the

legislative device.

27.Keeping those broad principles in mind, if we look

at the Objects and Reasons in respect of the

relevant Section it will be easier for this court to

appreciate the statutory intent. The opening words

of Section 14B are, “where an employer makes a

default in the payment of contribution to the fund”.

This was incorporated by way of an amendment, vide

Amending Act 37 of 1953. In this connection, the

excerpts from the Statement of Objects and Reasons

of Act 37 of 1953 are very pertinent. Relevant

excerpts are:-

“There are also certain administrative

difficulties to be set right. There is no

provision for inspection of exempted

factories; nor is there any provision for

the recovery of dues from such factories.

An employer can delay payment of provident

2
fund dues without any additional financial

liability. No punishment has been laid down

for contravention of some of the provisions

of the Act.

This Bill seeks primarily to remedy

these defects’. – S.O.R., Gazette of India,

1953, Extra, Pt.II, Sec.2, p.910.”

28.Similarly, in respect of Section 17(1A), clause (a)

which makes Section 14B applicable to an exempted

establishment also came by way of an amendment,

namely, by Act 33 of 1988. Here also if we look at

the relevant portion of the Statement of Objects and

Reasons of Act 33 of 1988 we will find that they are

based on certain recommendations of the High level

committee to review the working of the Act. Various

recommendations were incorporated in the Objects and

Reasons and one of the objects of such amendment is

as follows:-

“(viii) the existing legal and penal

provisions, as applicable to unexempted

establishments, are being made applicable to

exempted establishments, so as to check the

defaults on their part;”

2
29.It is well known that an interpretation of the

statute which harmonizes with its avowed object is

always to be accepted than the one which dilutes it.

30.The problem of statutory interpretation has been a

matter of considerable judicial debate in almost all

common law jurisdictions.

31. Justice Felix Frankfurter dealt with this problem

rather comprehensively in his Sixth Annual Benjamin

N. Cardozo Lecture [See 47 Columbia Law Review 527

(1947)]. The learned Judge opined:-

“Anything that is written may present a

problem of meaning, and that is the essence

of the business of judges in construing

legislation. The problem derives from the

very nature of words. They are symbols of

meaning.”

32. About what the words connote, there is a very

illuminating discussion by Friedrich Bodmer, a Swiss

Philologist in his treaties “The Loom of Language”.

2
Bodmer, who was a Professor in the Massachusetts

Institute of Technology, said:-

“Words are not passive agents meaning the

same thing and carrying the same value at

all times and in all contexts. They do not

come in standard shapes and sizes like coins

from the mint, nor do they go forth with a

degree to all the world that they shall mean

only so much, no more and no less. Through

its own particular personality each word has

a penumbra of meaning which no draftsman can

entirely cut away. It refuses to be used as

a mathematical symbol.”

33. The aforesaid formulation by Professor Bodmer was

cited with approval by the Constitution Bench of

this Court in S.C. Advocates-on-Record Association &

ors., v. Union of India reported in 1993 (4) SCC 441

at page 553. Justice Holmes in Towne v. Eisner [245

US 418] thought in the same way by saying:

“a word is not a crystal, transparent and

unchanged; it is the skin of a living

thought and may vary greatly in colour and

content according to the circumstances and

the time in which it is used.”

34.Therefore, about the problem of interpretation we

may again go back to what Justice Frankfurter said

2
in the aforesaid article. This is of considerable

importance. The learned Judge said:

“…The process of construction, therefore, is

not an exercise in logic or dialetic: The

aids of formal reasoning are not irrelevant;

they may simply be inadequate. The purpose

of construction being the ascertainment of

meaning, every consideration brought to bear

for the solution of that problem must be

devoted to that end alone…”

35. Therefore, while construing the statute where there

may be some doubt the Court has to consider the

statute as a whole – its design, its purpose and the

remedy which it seeks to achieve. Chief Justice

Sinha of this Court, in State of West Bengal v.

Union of India reported in AIR 1963 SC 1241 at 1245,

emphasized the importance of construing the statute

as a whole. In the words of Chief Justice:-

“The Court must ascertain the intention of

the Legislature by directing its attention

not merely to the clauses to be construed

but to the entire statute; it must compare

the clause with the other parts of the law,

and the setting in which the clause to be

interpreted occurs”.

2
36. Lord Greene, Master of Rolls, also gave the same

direction in Re, Bidie (deceased), [(1948) 2 All ER

995, page 998]. In the words of Master of Rolls the

technique should be:-

“to read the statue as a whole and ask

oneself the question: `In this state, in

this context, relating to this subject-

matter, what is the true meaning of that

word’?”

37. Therefore, what is required to be done in the

instant case for construing the provisions of

Section 14B and 17(1A)(a) is to adopt a purposive

approach, an approach which promotes the purposes of

the Act which have been discussed above. About the

development of purposive approach, Bennion on

Statutory Interpretation (Fifth Edition) has traced

its origin:-

“General judicial adoption of the term

`purposive construction’ is recent, but the

concept is not new. Viscount Dilhorne,

citing Coke, said that while it is now

fashionable to talk of a purposive

construction of a statute the need for such

a construction bas been recognised since the

seventeenth century. In fact the

recognition goes considerably further back

than that.”

2
38. In this connection, the opinion of Lord Diplock in

Jones v. Wrotham Park Settled Estates [(1980) AC 74]

is very pertinent. At page 105 of the report the

learned Law Lord said:-

“I am not reluctant to adopt a purposive

construction where to apply the literal

meaning of the legislative language used

would lead to results which would clearly

defeat the purposes of the Act. But in

doing so the task on which a court of

justice is engaged remains one of

construction, even where this involves

reading into the Act words which are not

expressly included in it.”

39. This Court has already decided in N.K.
Jain
and

others v. C.K. Shah and others reported in (1991) 2

SCC 495 that for construing the provision of this

very Act a purposive approach should be adopted.

40. In N.K. Jain (supra) the question was whether

criminal proceedings can be instituted under Section

14 of the Act in respect of an establishment which

is exempted under Section 17 thereof, for

2
contravention of the provisions of Section 6 of the

Act.

41.Answering the question affirmatively the Court held

in paragraph 13:

“…legislative purpose must be noted and the

statute must be read as a whole. In our view

taking into consideration the object

underlying the Act and on reading Sections

14 and 17 in full, it becomes clear that

cancellation of the exemption granted does

not amount to a penalty within the meaning

of Section 14(2A). As already noted these

provisions which form part of the Act, which

is a welfare legislation are meant to ensure

the employees the continuance of the

benefits of the provident fund. They should

be interpreted in such a way so that the

purpose of the legislation is allowed to be

achieved.”

42. In coming to the aforesaid conclusion the learned

Judges relied on the famous dictum of Lord Denning

in Seaford Court Estates Ltd. v. Asher – (1949) 2

All E.R. 155 (CA) wherein the learned Judge stated

the position thus:

2
“…A Judge should ask himself the question

how, if the makers of the Act had themselves

come across this ruck in the texture of it,

they would have straightened it out? He must

then do so as they would have done. A judge

must not alter the material of which the Act

is woven, but he can and should iron out the

creases.”

43. In view of the interpretation of the Act in N.K.

Jain (supra) there is no difficulty in construing

the provision of Section 17(1A)(a) where it is

provided that when an exemption has been granted to

an establishment under Clause (a) of sub-section

(1), the provision of Sections 6, 7, 8 and 14B of

the Act shall, “so far as may be” apply to the

employer of the exempted establishment in addition

to such other condition as may be specified in the

notification granting such exemption.

44.If we look at sub-section (a) which has been set out

hereinbefore, we will find that sub-clause (a) of

Section 17(1A) is divided in two parts. The second

part is more specific in as much as it has been

2
clearly stated that where an employer contravenes

and makes default in compliance with any of the said

conditions and provisions or any other provisions of

this Act, (this would obviously include Section

14B), he shall be punishable under Section 14 as if

the said section had not been exempted under clause

(a). Therefore, there is a deeming provision giving

clear indication of application of Section 14B of

the Act to the `employer’ of an `exempted

establishment’.

45.Thus, the sweep of the second part of clause (a) of

Section 17(1A) which is preceded by the word `and’

is very wide.

46.Section 14B may also be considered in this

connection. Section 14B is attracted where an

`employer’ makes a default in the payment of any

contribution to the fund. In the instant case

admittedly default has taken place.

2
47. The expression `fund’ has been defined under Section

2(h) of the Act to mean the provident fund as

established under a Scheme. Though the word `scheme’

has been defined under Section 2(l) to mean the

employees provident fund scheme framed under Section

5, this Court in N.K. Jain (supra) held the

definition of the word `fund’ would apply to a

scheme operating in an establishment exempted under

Section 17. In that case it was urged on behalf of

the respondent that the expression `fund’ and

`scheme’ must be given a wide interpretation to

include fund under a private scheme. Such submission

on behalf of the respondent was noted in paragraph

16 at page 518 of the report. In para 17 at page 518

of the report, this Court on consideration of the

ratio in the case of Knightsbridge Estates Trust

Ltd. v. Byrne – (1940) 2 All E.R. 401 (Ch.D) and the

decision of this Court in National Buildings

Construction Corporation v. Pritam Singh Gill

reported in (1972) 2 SCC 1 and also various other

decisions accepted the said construction. Applying
3
these principles, decided in the aforesaid cases,

this Court has held “consequently if there is a

default in payment of the contribution to such a

scheme it amounts to contravention of Section 6

punishable under Section 14(1A)”. (See page 517 of

the report)

48.Following the same parity of reasoning, we hold if

there is a default in payment of contribution to

such a scheme it amounts to contravention of Section

14B and damages can be levied. The High Court, with

great respect, erred by coming to a contrary

conclusion.

49.Apart from that the High Court’s interpretation of

the expression “so far as may be” as limiting the

ambit and width of Section 17(1A)(a) of the Act, in

our judgment, cannot be accepted for two reasons as

well.

50. The High Court is guided in the interpretation of

the word “so far as may be” on the basis of the
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principle that statutes does not waste words. The

High Court has also relied on the interpretation

given to “so far as may be” in the case of Dr.

Pratap Singh and another v. Director of Enforcement,

Foreign Exchange Regulation Act and others reported

in AIR 1985 SC 989. It goes without saying that

Foreign Exchange Regulation Act is a fiscal statute

dealing with penal provisions whereas the aforesaid

expression is to be construed in this Act which is

eminently a social welfare legislation. Therefore,

the parameters of interpretation cannot be the same.

Even then in Pratap Singh (supra) this Court while

construing “so far as may be” held “if a deviation

becomes necessary to carry out the purposes of the

Act…………………… it would be permissible”. Of course the

Court held that if such deviation is challenged

before a Court of law it has to be justified.

51. In the instant case, the High Court failed to

discern the correct principle of interpretation of a

social welfare legislation. In this connection we

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may profitably refer to what was said by Chief

Justice Chagla about interpretation of a social

welfare or labour legislation in Prakash Cotton

Mills (P) Ltd. v. State of Bombay reported in (1957)

2 LLJ 490. Justice Chagla unerringly laid down:

“no labour legislation, no social

legislation, no economic legislation, can be

considered by a court without applying the

principles of social justice in interpreting

the provisions of these laws. Social justice

is an objective which is embodied and

enshrined in our Constitution……it would

indeed be startling for anyone to suggest

that the court should shut its eyes to

social justice and consider and interpret a

law as if our country had not pledged itself

to bringing about social justice.”

52. We endorse the same view. In fact this has been

endorsed by this Court in N.K. Jain (supra).

53. Reference in this connection may be made to what was

said by Justice Krishna Iyyer in the same vein in

the decision of Surendra Kumar Berma and others v.

Central Government Industrial Tribunal-cum-Labour

Court, New Delhi and Anr., reported in 1980 (4) SCC
3
443. The learned judge held that semantic luxuries

are misplaced in the interpretation of ‘bread and

butter’ statutes.

54.Unfortunately, the High Court missed this well

settled principle of interpretation of social

welfare legislation while construing the expression

“so far as may be” in interpreting the provision of

Section 17 (1A)(a) of the Act and unduly restricted

its application to the employer of an exempted

establishment.

55. The interpretation of the expression “so far as may

be” by this Court in its Constitution Bench decision

in M. Ismail Faruqui (supra) was given in a totally

different context. The said judgment on a

Presidential Reference was rendered in the context

of the well known Ram Janam Bhumi Babri Masjid

controversy where a special Act, namely, Acquisition

of Certain Area at Ayodhya Act was enacted and sub-

section (3) of Section 6 of the said Act provides
3
that the provisions of Sections 4, 5 & 7 shall “so

far as may be” apply in relation to such authority

or body or trustees as they apply in relation to the

Central Government. In that context this Court

held that the expression “so far as may be” is

indicative of the fact that all or any of these

provisions may or may not be applicable to the

transferee under sub-section (1). The objects

behind the said enactment are totally unique and the

same was a special law. Apart from this, this Court

did not lay down any general principle of

interpretation in the application of the expression

“so far as may be”. Their being vast conceptual

difference in the legal questions in that case, the

interpretation of “so far as may be” in M. Ismail

Faruqui (supra) cannot be applied to the

interpretation of “so far as may be” in the present

case.

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56. The High Court’s interpretation also was in error

for not considering another well settled principle

of interpretation. It is not uncommon to find

legislature sometime using words by way of abundant

caution. To find out whether the words are used by

way of abundant caution the entire scheme of the Act

is to be considered at the time of interpretation.

In this connection we may remember the observation

of Lord Reid in I.R. Commissioner v. Dowdall

O’Mahoney & Co. reported in (1952) 1 All E.R. 531 at

page 537, wherein the learned Law Lord said that it

is not uncommon to find that legislature is

inserting superfluous provisions under the influence

of what may be abundant caution. The same principle

has been accepted by this Court in many cases. The

High Court by adopting, if we may say so, a rather

strait jacket formula in the interpretation of the

expression “so far as may be” has in our judgment,

misinterpreted the intent and scope and the purpose

of the Act.

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57.For the reasons aforesaid, we are not inclined to

accept the interpretation of the High Court and we

are constrained to overrule the judgment of the

Single Bench as also of the Division Bench.

58.We hold that in a case of default by the employer by

an exempted establishment, in making its

contribution to the Provident Fund Section 14B of

the Act will be applicable.

59.The appeal is allowed. However, parties are left to

bear their own costs.

…………………..J.

(ASOK KUMAR GANGULY)

…………………..J.

New Delhi (T.S. THAKUR)

January 18, 2012

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