Power of exempt.
17. (1) The appropriate government may by notification in the Official Gazette and subject to such conditions as may be specified in the notification 2[exempt whether prospectively or retrospectively from the operation] of all or any of the provisions of any Scheme :
(a) any 3[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 3[establishment] of similar character or
(b) and 3[establishment] if the employees of such 3[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 employees that the benefits provided under this Act or any Scheme in relation to the employees in any other 3[establishment] of a similar character :
4[Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate government within such time limit as may be specified in the Scheme.]
5[ * * * ]
6[(1A) Where an exemption has been granted to an establishment under clause (a) of sub-section (1)
(a) the provisions of sections 6, 7A, 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 by specified in the Scheme;
(d) the Board of Trustees constituted under clause (b) shall –
(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.
(1B) Where the Board of Trustees established under clause (b) of sub-section (1A) contravenes or makes default in complying with any provisions of clause (d) of that sub-section the Trustees of the said Board shall be deemed to have committed an offence under sub-section (2A) of section 14 and shall be punishable with the penalties provided in that sub-section.
7[(1C) The appropriate government may by notification in the Official Gazette and subject to the condition on the pattern of investment of pension fund and such other conditions as may be specified therein exempt any establishment or class of establishments from the operation of the Pension Scheme if the employees of such establishment or class of establishments are either members of any other pension scheme or propose to be members of such pension scheme where the pensionary benefits are at par or more favourable than the Pension Scheme under this Act”] ]
(2) Any Scheme may make provision for exemption of any person or class of persons employed in any 3[establishment] to which the Scheme applies from the operation of all or any of the provisions of the Scheme if such person or class of persons is entitled to benefits in the nature of provident fund gratuity or old age pension and such benefits separately or jointly are on the whole not less favourable than the benefits provided under this Act or the Scheme.
Provided that no such exemption shall be granted in respect of a class of persons unless the appropriate government is of opinion that the majority of persons constituting such class desire to continue to be entitled to such benefits.
8[(2A) 9[The Central Provident Fund Commissioner may if requested so to do by the employer by notification in the Official Gazette and subject to such conditions as may be specified in the notification exempt whether prospectively or retrospectively any establishment from the operation of all or any of the provisions of the Insurance Scheme if he is satisfied that the employees of such establishment are without making any separate contribution or payment of premium in enjoyment of benefits in the nature of life insurance whether linked to their deposits in provident fund or not and such benefits are more favourable to such employees than the benefits admissible under the Insurance Scheme.
(2B) Without prejudice to the provisions of sub-section (2A) the Insurance Scheme may provide for the exemption of any person or class of persons employed in any establishment and covered by that Scheme from the operation of all or any of the provisions thereof if the benefits in the nature of life insurance admissible to such person or class of persons are more favourable than the benefits provided under the Insurance Scheme.]
10[(3) Where in respect of any person or class of persons employed in as establishment an exemption is granted under this section from the operation of all or any of the provisions of any scheme (whether such exemption has been granted to the establishment wherein such person or class of persons is employed or to the person or class of persons as such) the employer in relation to such establishment –
(a) shall in relation to the provident fund pension and gratuity to which any such person or class of persons is entitled maintain such accounts submit such returns make such investment provide for such facilities for inspection and pay such inspection charges as the Central Government may direct;
(b) shall not at any time after the exemption without the leave of the Central Government reduce the total quantum of benefits in the nature of pension gratuity or provident fund to which any person or class of persons was entitled at the time of the exemption; and
(c) shall where any such person leaves his employment and obtains re-employment in another establishment to which this Act applies transfer within such time as may be specified in this behalf by the Central Government the amount of accumulations to the credit of that person in that provident fund of the establishment left by him to the credit of that person’s account in the provident fund of the establishment in which he is re-employed or as the case may be in the fund established under the Scheme applicable to the establishment.
11[(3A) Where in respect of any person or class of persons employed in any establishment an exemption in granted under sub-section (2A) or sub-section (2B) from the operation of all or any of the provisions of the Insurance Scheme (whether such exemption is granted to the establishment wherein such person or class of persons is employed or to the person or class of persons as such) the employer in relation to such establishment :
(a) shall in relation to the benefits in the nature of life insurance to which any such person or class of persons is entitled or any insurance fund maintain such accounts submit such returns make such investments provide for such facilities for inspection and pay such inspection charges as the Central Government may direct;
(b) shall not at any time after the exemption without the leave of the Central Government reduce the total quantum of benefits in the nature of life insurance to which any such person or class of persons was entitled immediately before the date of the exemption 12[ * * * ];
13[ * * * ]
(4) any exemption granted under this section may be cancelled by the authority which granted it by order in writing if an employer fails to comply –
(a) in the case of an exemption granted under sub-section (1) with any of the conditions imposed under that sub-section 14[or sub-section (1A)] or with any of the provisions of the sub-section (3); 15[ * * * ]
16[(aa) in the case of an exemption granted under sub-section 17[(1C)] with any of the conditions imposed under that sub-section; and]
(b) in the case of an exemption granted under sub-section (2) with any of the provisions of sub-section (3);
18[(c) in the case of exemption granted under sub-section (2A) with any of the conditions imposed under that sub-section or with any of the provisions of sub-section (3A);
(d) in the case of exemption granted under sub-section (2B) with any of the provisions of sub-section (3A).]
19[(5) Where any exemption granted under sub-section (1) sub-section 17[(1C)] 20[sub-section (2) sub-section (2A) or sub-section (2B)] is cancelled the amount of accumulations to the credit of every employee to whom such exemption applied in the provident fund 21[the 22[Pension] Fund or the Insurance Fund] of the establishment in which he is employed 23[together with any amount forfeited from the employer’s share of contribution to the credit of the employee who leaves the employment before the completion of the full period of service] shall be transferred within such time and in such manner as may be specified in the Scheme or the 22[Pension] Scheme 24[or the Insurance Scheme] to the credit of his account in the Fund or the 22[Pension] Fund 24[or the Insurance Fund] as the case may be.
(6) Subject to the provisions of sub-section 17[(1C)] the employer of an exempted establishment to which the provisions of the 22[Pension] Scheme apply shall notwithstanding any exempted granted under sub-section (1) or sub-section (2) pay to the 22[Pension] Fund such portion of the employers contribution 25[ * * * ] to its provident fund within such time and in such manner as may be specified in the 22[Pension Scheme.] ] ]
Notes:
1. Substituted by Act 37 of 1953, s. 16, for section 17.
2. Substituted by Act 33 of 1988, s. 23, for certain words (w.e.f. 1-10-1988)
3. Substituted by Act 94 of 1956, s. 3, for “factory”.
4. Insrted by s. 23, ibid. (w.e.f. 1-10-1988).
5. The Explanation omitted by Act 28 of 1963, s. 11 (w.e.f. 30-11-1963).
6. Substituted by Act 33 of 1988, s. 23, for sub-section (IA) (w.e.f. 1-10-1988).
7. Substituted by Act 25 of 1996, s. 7, for sub-section (IC) (w.e.f. 16-11-1995).
8. Insrted by Act 99 of 1976, s. 34 (w.e.f. 1-8-1976).
9. Substituted by Act 33 of 1988, s. 23, for certain words (w.e.f. 1-10-1988)
10. Substituted by Act 28 of 1963, s. 11, for sub-section (3) (w.e.f. 30-11-1963).
11. Insrted by Act 99 of 1976, s. 34 (w.e.f. 1-8-1976).
12. The word “and” omitted by Act 33 of 1988, s. 23 (w.e.f. 1-10-1988).
13. Omitted by Act 33 of 1988, s. 23 (w.e.f. 1-10-1988).
14. Insrted by s. 23, ibid. (w.e.f. 1-10-1988).
15. The word “and” omitted by Act 16 of 1971, s. 27 (w.e.f. 23-4-1971).
16. Insrted by s. 27, ibid. (w.e.f. 23-4-1971).
17. Substituted by Act 33 of 1988, s. 23, for “(1A)” (w.e.f. 1-10-1985).
18. Insrted by Act 99 of 1976, s. 34 (w.e.f. 1-8-1976).
19. Substituted by Act 16 of 1971, s. 27, for sub-section (5) (w.e.f. 23-4-1971)
20. Substituted by Act 99 of 1976, s. 34, for certain words (w.e.f. 1-8-1976).
21. Substituted by s. 34, ibid., for certain words (w.e.f. 1-8-1976).
22. Substituted by Act 25 of 1996, s. 4, for “Family Pension” (w.e.f. 16-11-1995)
23. Insrted by Act 33 of 1988, s. 23 (w.e.f. 1-10-1988).
24. Insrted by Act 99 of 1976, s. 34 (w.e.f. 1-8-1976).
25. The words “as well as the employees’ Contribution” omitted by Act 25 of 1996, s. 7 (w.e.f. 16-11-1995).
