Bombay HC refuses to interfere with Rs. 15K cap on PF contribution

It refused to interfere with the ceiling on grounds that the scheme was framed to provide social security to large number of Indian workers during old age.

The Bombay high court (HC) recently refused to interfere with the cap on contribution to the Employees’ Provident Funds Scheme, 1952, and dismissed a petition challenging its validity. A division bench of justice Akil Kureshi and justice SJ Kathawalla was hearing a plea, filed by Sachin Desai, challenging the validity of the Rs.15,000 cap on contribution that can be made by the employer as well as the employee.

Bombay high court recently refused to interfere with the cap on contribution to the Employees’ Provident Funds Scheme. (HT FILE)

Desai, an employee of Bayer Crop Sciences Limited, contended that the provisions concerned were arbitrary and discriminatory, as the ceiling was applicable only to Indian workers. No such cap is imposed on contributions by ‘international workers’ or their employers, he said. Under the scheme, international workers are defined as Indians working abroad or foreign nationals working in India.

Desai’s counsel, senior advocate Milind Sathe, submitted that the Provident Fund Act is a social welfare legislation and the scheme, framed under the Act, is meant to provide social security to employees in organised and unorganised sectors. The provisions of the scheme should be interpreted bearing in mind the object behind it and the discriminatory part should be struck down. The bench, however, rejected the argument of discriminatory treatment to Indian workers. The judges said the international worker formed a separate and distinct class and special provisions were made for the class. Different treatment to the class was not a violation of the principle of equality, the judge said. It said that this is not a case where homogeneous classes of persons were artificially divided, but a case where two separate and distinct classes were treated differently.