My friend is a construction contractor and currently holding a work order dated May 2014 to complete a construction work of two floors from a construction company. For this work order, he had submitted the quotation in the month of January 2014.
He had quoted the labor rates without considering provident fund applicability to site workers/casual laborers; this was done in view of the stay order granted by the High Court on 8th September 1997 against the applicability of the provisions of the amended para 26 (ii) of the Employees Provident Fund Schemes 1952 to the temporary and casual construction site workers as per the writ petition no. 2593/1997 filed by Builders Association of India.
On 28/08/2014, in the case of Builders Association Of India vs. Union Of India, the Delhi High Court has given a judgment and has made the Provident Fund scheme applicable to temporary and casual site workers.
Now, this construction company is withholding the payments of the contractor, stating that he has to register under the EPF Act, and only then will they release 20% of his labor payments. But the contractor has not been engaging laborers more than 20, and the EPF Act is not applicable to him.
Questions:
1. Whether the construction company's stand is correct to withhold the labor payments of the work order which is dated before this new judgment of the High Court?
2. Can the contractor get his 20% withheld money back by stating that the PF is not applicable to this work order now because the labor rates and work order were decided previous to this judgment?
From India, Pune
Acknowledge(0)
Amend(0)
He had quoted the labor rates without considering provident fund applicability to site workers/casual laborers; this was done in view of the stay order granted by the High Court on 8th September 1997 against the applicability of the provisions of the amended para 26 (ii) of the Employees Provident Fund Schemes 1952 to the temporary and casual construction site workers as per the writ petition no. 2593/1997 filed by Builders Association of India.
On 28/08/2014, in the case of Builders Association Of India vs. Union Of India, the Delhi High Court has given a judgment and has made the Provident Fund scheme applicable to temporary and casual site workers.
Now, this construction company is withholding the payments of the contractor, stating that he has to register under the EPF Act, and only then will they release 20% of his labor payments. But the contractor has not been engaging laborers more than 20, and the EPF Act is not applicable to him.
Questions:
1. Whether the construction company's stand is correct to withhold the labor payments of the work order which is dated before this new judgment of the High Court?
2. Can the contractor get his 20% withheld money back by stating that the PF is not applicable to this work order now because the labor rates and work order were decided previous to this judgment?
From India, Pune
Acknowledge(0)Amend(0)
I read your post carefully and completely. I read the entire matter of Builders Association of India vs. Union of India, Delhi High Court, which was decided in August 2014. You are a new member on this forum, and you are representing your friend who is in building construction contracting. You have not mentioned the place of work of construction by your friend. From your profile, I could gather that you are a consultant from Pune, Maharashtra.
You have mentioned in your thread the matter of Builders Association of India (writ petition no. 2593/1997) HC Mumbai: Nagpur Bench, but neither you nor your friend has an update on it. This matter was decided in February 2006, vacating the stay order stated by you against the writ petitioners.
The matter between Builders Association of India vs. Union of India, Delhi High Court, which was decided in August 2014, states that the action initiated by the respondents against the petitioners under the provisions of the Act is liable to be continued in accordance with the law.
Answers to Your Questions
1. Whether the construction company's stand is correct to withhold the labor payments of the work order which is dated before this new judgment of the High Court?
The stand of the construction company, i.e., PE, is very much correct in withholding the bills of your friend irrespective of the date of the work order.
2. Can the contractor get his 20% withheld money back by stating that the PF is not applicable to this work order now because the labor rates and work order were decided previous to this judgment?
The contractor, i.e., your friend, cannot take any stand but to comply with the law. You cannot say that the PF Law is not applicable to your/your friend's work order. You cannot say that the labor rates and work order were decided previous to the judgment of Delhi HC even if the work of you/your friend is being carried out in Delhi.
I need not say at least to you that ignorance of the law is no excuse. You said that the rates were quoted in light of writ petition no. 2593/1997, which was decided long back.
Regards
From India, Mumbai
Acknowledge(1)
Amend(0)
2584You have mentioned in your thread the matter of Builders Association of India (writ petition no. 2593/1997) HC Mumbai: Nagpur Bench, but neither you nor your friend has an update on it. This matter was decided in February 2006, vacating the stay order stated by you against the writ petitioners.
The matter between Builders Association of India vs. Union of India, Delhi High Court, which was decided in August 2014, states that the action initiated by the respondents against the petitioners under the provisions of the Act is liable to be continued in accordance with the law.
Answers to Your Questions
1. Whether the construction company's stand is correct to withhold the labor payments of the work order which is dated before this new judgment of the High Court?
The stand of the construction company, i.e., PE, is very much correct in withholding the bills of your friend irrespective of the date of the work order.
2. Can the contractor get his 20% withheld money back by stating that the PF is not applicable to this work order now because the labor rates and work order were decided previous to this judgment?
The contractor, i.e., your friend, cannot take any stand but to comply with the law. You cannot say that the PF Law is not applicable to your/your friend's work order. You cannot say that the labor rates and work order were decided previous to the judgment of Delhi HC even if the work of you/your friend is being carried out in Delhi.
I need not say at least to you that ignorance of the law is no excuse. You said that the rates were quoted in light of writ petition no. 2593/1997, which was decided long back.
Regards
From India, Mumbai
Acknowledge(1)Amend(0)
1. The copy of the judgment of the Honourable High Court, as mentioned by the initiator of this thread, has not been enclosed to examine the issue.
2. It is also not mentioned in the remarks whether the petitioner, Builder Association of India, has filed any appeal in the Honourable Supreme Court of India or not. If so, what is the order of the Honourable Supreme Court of India has not been mentioned.
3. Further, I personally feel that in such issues where the matters are being contested in the Higher Courts like the High Court/Supreme Court, the seniors or experts have no scope of recording their opinion since the matter is examined in detail by the Honourable Courts. So far as I understand, no court will ever pronounce any judgment against the law enacted by the legislature (in this case, the EPF & MP Act, 1952, as reported) until and unless the law under consideration is not challenged as violative of any provisions of the Constitution of India. If no appeal has been filed in the Honourable Supreme Court of India, compliance with the order of the Honourable High Court is required to avoid the levy of any penalty, interest, or damages, etc.
From India, Noida
Acknowledge(0)Amend(0)
2. It is also not mentioned in the remarks whether the petitioner, Builder Association of India, has filed any appeal in the Honourable Supreme Court of India or not. If so, what is the order of the Honourable Supreme Court of India has not been mentioned.
3. Further, I personally feel that in such issues where the matters are being contested in the Higher Courts like the High Court/Supreme Court, the seniors or experts have no scope of recording their opinion since the matter is examined in detail by the Honourable Courts. So far as I understand, no court will ever pronounce any judgment against the law enacted by the legislature (in this case, the EPF & MP Act, 1952, as reported) until and unless the law under consideration is not challenged as violative of any provisions of the Constitution of India. If no appeal has been filed in the Honourable Supreme Court of India, compliance with the order of the Honourable High Court is required to avoid the levy of any penalty, interest, or damages, etc.
From India, Noida
Acknowledge(0)Amend(0)
Dear Harsh Kumar ji, Please find the attachment of Judgement in Builders Association of India Vs UOI dated 28.08.2014 to examine the issue as you stated in your post.
From India, Mumbai
Acknowledge(2)
Amend(0)
From India, Mumbai
Acknowledge(2)Amend(0)
Construction Company's Stance on Withholding Payments
The construction company's stance is correct even in view of Sandeep Dweller's case of the Bombay High Court, which refers to the Apex Court decision in Hariharan's case, much prior to the Delhi High Court decision. The casual workers were engaged by contractors relating to the regular business of the construction company in that case, and a similar position appears here, notwithstanding the contractors engaged fewer than 20 persons.
Regarding the Second Question
The money cannot be taken back as the matter was sub judice, and after the final decision, all liabilities determined finally are related back to the inception of the case. Even during interim orders, directions were given to implement the scheme with regard to those workers.
From India, New Delhi
Acknowledge(0)Amend(0)
The construction company's stance is correct even in view of Sandeep Dweller's case of the Bombay High Court, which refers to the Apex Court decision in Hariharan's case, much prior to the Delhi High Court decision. The casual workers were engaged by contractors relating to the regular business of the construction company in that case, and a similar position appears here, notwithstanding the contractors engaged fewer than 20 persons.
Regarding the Second Question
The money cannot be taken back as the matter was sub judice, and after the final decision, all liabilities determined finally are related back to the inception of the case. Even during interim orders, directions were given to implement the scheme with regard to those workers.
From India, New Delhi
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Construction Accident.zip
EPF Pension15000.xl s