Marathwada Gramin Bank v. Marathwada Gramin Bank Karmachari Sanghatna

Facts

• Workers claimed PF contributions should be computed on basic wages plus dearness allowance
• Bank computed PF only on basic wages, excluding DA and other allowances
• Section 2(b) of the EPF Act defines "basic wages" and excludes certain allowances
• Question: does DA fall within or outside the exclusion?

Issue

1. Whether dearness allowance and universally paid allowances are part of "basic wages" for EPF contribution purposes.

Held

• DA that is universally paid and linked to cost of living index is part of basic wages
• Allowances paid uniformly to all employees (not linked to individual conditions) form part of basic wages
• Only allowances that are genuinely variable, conditional, or paid to specific categories are excluded
• PF must be computed on basic wages + DA

Ratio Decidendi

Dearness allowance and allowances universally paid to all employees are part of "basic wages" for EPF computation. Only allowances that are genuinely special, conditional, or paid to select categories are excluded from the computation base.