- 1 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 16TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 60798 OF 2011 (L-PF) BETWEEN: PRAGATHI GRAMIN BANK, A REGISTERED RURAL BANK CONSTITUTED UNDER THE REGIONAL RURAL BANKS ACT, 1976, HAVING ITS HEAD-OFFICE AT PO.55, GANDHINAGAR, BALLARI, REP/BY ITS GENERAL MANAGER, M.S. RAJASHEKAR. … PETITIONER (BY SRI. HARSH DESAI, ADVOCATE) AND: 1. THE REGIONAL PROVIDENT COMMISSIONER, REGIONAL OFFICE, 4TH FLOOR, SRINATH COMPLEX, NEW COTTON MARKET, HUBLI-580 029. 2. THE ASSISTANT PROVIDENT COMMISSIONER, SUB-REGIONAL OFFICE, 4TH FLOOR, Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 SRINATH COMPLEX, NEW COTTON MARKET, HUBLI-580 029. 3. THE ENFORCEMENT OFFICER, EMPLOYEES PROVIDENT FUNDS, DISTRICT OFFICE, 2ND FLOOR, K.S. ENGINEERING WORKS BUILDING, 1ST CROSS, GARDEN AREA, SHIMOGA-577 201. … RESPONDENTS (BY SRI. P.V. GUNJAL, ADVOCATE FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORAIRI QUASHING THE ORDER DATED: 31-03- 2005/29-04-2005 BEARING NO.KN/PF/11439/ENF.335/7A/2005, PASSED BY THE ASSISTANT PROVIDENT COMMISSIONER, SUB- REGIONAL OFFICE, HUBLI/RESPONDENT-2 AS PER ANNEXURE-C AND THE ORDER DATED: 01/10/2010 IN ATA NO.467(6) OF 2005 PASSED BY THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL, NEW DELHI AS PER ANNEXURE-D. THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE) Heard the learned counsel appearing for petitioner and learned counsel appearing for respondents. 2. The petitioner is assailing the order dated 31.03.2005 / 29.04.2005 passed by Assistant Provident Fund Commissioner/second respondent. Said order is marked at Annexure-C. 3. The petitioner has also assailed the order dated 01.10.2010 marked at Annexure-D passed by the Appellate Authority under the Employees' Provident Funds Miscellaneous Provisions Act, 1952. 4. The authorities in terms of the impugned orders have concluded that the pygmy agents who were allegedly working under the petitioner-Bank (Sahyadri Gramin Bank before its merger with the petitioner). The original authority as well as the Appellate Authority rejected the petitioner's contention that the pygmy collectors are not the employees - 4 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 of the petitioner-Bank as such they are not entitled to any benefit under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. 5. Learned counsel appearing for the petitioner referring to the provisions of the Act of 1952, more particularly, the definition of ‘employee’ and ‘basic wages’ would urge that the pygmy collectors were not the employees of the petitioner-Bank. They were not paid regular wages. They were entitled to only the commission based on the performance as pygmy collectors, as such, there is no liability on the petitioner-Bank to provide benefit under the Provisions of Act of 1952. In support of his contention, learned counsel for the petitioner has relied on the following judgments: 1) Indian Banks Association vs. Workmen of Syndicate Bank and others1 2) Assistant General Manager, Syndicate Bank vs. K.P. Haridas2 1 (2001) 3 SCC 36 - 5 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 3) The Assistant Provident Fund Commissioner vs. The South Kanara Govt. Officer’s Co-op. Bank Ltd. and another3 4) Regional Provident Fund Commissioner (II) West Bengal vs. Vivekananda Vidyamandir and others4 6. Learned counsel for the respondents would urge that the Hon’ble Apex Court in the case of The Pachora People's Co-operative Bank Ltd. Vs. The Employees' Provident Fund Organization would urge that even the pygmy collector can be the employee of the Bank (in a appropriate cases) and the commission paid to the pygmy collector can also be considered as wages if a case made out. Thus, it is urged that the petitioner was required to produce the details relating to the nature of employment/contract with the pygmy agents and petitioner has not produced the records and the adverse inference has to be drawn against the petitioner for having not producing 2 Civil Appeal No.7576/2011 3 Writ Appeal No.6081/2001 4 Civil Appeal No.6221/2011 - 6 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 the records and the authorities are justified in passing the impugned orders. 7. This Court has considered the contentions raised at the Bar and perused the records. 8. It is indeed true that the Division Bench of this Court in The Assistant Provident Fund Commissioner vs. The South Kanara Govt. Officer’s Co-op. Bank Ltd. and another (Writ Appeal No.6081/2001) has concluded that the commission cannot be construed as ‘wages’. If the ratio in the said judgment is applied, the petitioner's contention is to be accepted provided what is paid to the pygmy agents was the ‘commission’. 9. However, it is required to be noticed that the Hon’ble Apex Court in The Pachora People's Co-operative Bank Ltd. (supra) has held that whether the ‘commission’ paid to the pygmy agents is really a ‘commission’ or basic wage which is camouflaged as ‘commission’ is a matter which requires finding on fact. - 7 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 10. It is noticed from the impugned orders that the enquiry was initiated based on the complaints said to have been filed by two pygmy agents. The authorities have not disclosed as to who are the pygmy agents who lodged the complaint. Without disclosing anything, the petitioner-Bank was called upon to produce the records relating to those pygmy agents. 11. It is also noticed that in the impugned orders, the said pygmy agents are not made parties. Likewise, in the present petition also, the pygmy agents are not made parties. If the petitioner's contention is accepted and impugned orders are set aside, as a consequence, the pygmy agents in whose favour the orders are passed will be deprived of the benefit which was available in terms of the impugned order. Thus, the pygmy agents are also necessary parties to the proceeding as the nature of contract/employment between the petitioner-Bank and the pygmy agents is required to be adjudicated in the presence of those pygmy agents. - 8 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 12. For the aforementioned reasons, the matter requires to be remanded to the authority/respondent No.2. 13. Hence the following: ORDER (i) Writ Petition is allowed in part. (ii) The order dated 09.03.2005 at Annexure-C and order dated 01.10.2010 marked at Annexure-D are set aside. (iii) The matter is remitted to the second respondent. (iv) The second respondent shall issue notice to the pygmy collectors/agents who are employed by the Sahyadri Gramina Bank, before it merge with petitioner bank. (v) It is made clear that nothing is expressed on the merits of the matter. (vi) All contentions are kept open. - 9 - HC-KAR NC: 2025:KHC-D:14064 WP No. 60798 of 2011 (vii) Considering the fact that the dispute is pending since 2005, the parties shall cooperate for early disposal of the case. Sd/- (ANANT RAMANATH HEGDE) JUDGE NAA CT:BCK LIST NO.: 1 SL NO.: 85