It’s on the back of a defunct newspaper that Bharatiya Janata Party leader Subramanian Swamy is stoking trouble for the Nehru-Gandhi family. And it’s a defunct newspaper that could prove to be his bugbear.
In Kerala, 160 former employees of a now-defunct Malayalam daily, Express, are gearing up to file a case in the High Court against the “anti-corruption crusader” for allegedly defaulting on the payment of their gratuity, provident fund and Employees’ State Insurance premium after he acquired majority stake in the publication.
In 1993, Swamy had acquired the newspaper published from the state’s cultural capital of Thrissur since 1944 by buying 51% of the shares in the publishing company, Express (Malayalam) Pvt Ltd. The company was wound up in the year 2000 under Section 433(e) of the Companies Act, citing insolvency.
The former employees say the company withheld their gratuity and stopped paying the provident fund and Employees’ State Insurance contribution after Swamy became its chairman. They also allege they were not paid salaries for several months before the paper folded up.
P Ajithkumar, secretary of the Express unit of the Kerala Newspaper Employees Federation, claims the employees came to know about the provident fund and ESI defaults in 1996, when some of them were denied treatment in ESI hospitals in the state.
“We have been fighting the case since then,” said Ajithkumar. “We submitted numerous petitions to the PF Commissioner, ESI Director and Labour Commissioner, but they did not take action against the political leader. We have now decided to move the High Court against not only Swamy but also the authorities for not complying with the provisions of the concerned Acts.”
Who bears the responsibility?
The former employees, who did not pursue the case in recent years, were spurred by thecase Swamy filed against top Congress leaders, including Sonia and Rahul Gandhi, over misappropriation of funds in taking control of the now-defunct National Herald. They say Swamy had no moral right to fight this or any other graft cases unless he fulfilled his obligation to them.
Swamy, for his part, has repudiated the former employees’ claims, saying the company had already been ordered to wound up.
But advocate Thampan Thomas, who has represented the Express employees in a few cases, claims that Swamy still bears the responsibility of paying the statutory benefits.
“Whoever inherits a company is personally liable to pay the statutory benefits to the employees even if it is liquidated,” said the lawyer. “The employees have a legal right to claim gratuity, PF and ESI. The case will remain open until the employees acknowledge receipt of the dues.”
The law lays down stringent penalty for those defaulting on employee benefits.
Stuck cases
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 provides for imprisonment of not less than a year and a fine in case of default in payment of the employees’ contribution to the provident fund that is deducted by the employer from their wages.
Similarly, the Employees’ State Insurance Act provides for punishment under Section 406 of the Indian Penal Code (imprisonment of up to three years) for non-payment or delayed payment of the employee’s contribution.
In the past, Swamy was fined Rs 3,000 for not providing the records related to ESI contributions, though the main default case is yet to move forward. Also stuck are cheating cases filed by the investors in the company who alleged that their money wasn’t repaid.
Ajithkumar alleges the authorities had failed to make the economist-turned-politician accountable for the liabilities because of his political clout. The former employees are hopeful that the judiciary will ensure payment of their statutory dues, which runs into crores. As per the law, an employer who fails to pay the contribution is liable to pay the sum with interest at the rate of 12% per annum.
A senior journalist, who served the newspaper in various capacities for over 30 years, says the high moral ground that Swamy holds now was not evident during the time he captained the publication. The journalist accuses Swamy of ruining the daily, which was popular in central Kerala for its nationalist and socialist views, by placing people unrelated to journalism at the helm.
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