Delhi High Court
Jaggi And Co. vs Presiding Officer, Employees ... on 11 September, 2007
Equivalent citations: (2008)ILLJ759DEL
Author: Hima Kohli
Bench: Hima Kohli
JUDGMENT Hima Kohli, J.
1. With the consent of the parties, the matter is taken up for hearing and final disposal.
2. The present writ petition is directed against an order dated 21st September, 2005 passed by the Employees Provident Fund Appellate Tribunal (hereinafter referred to as `the Appellate Tribunal') upholding the orders dated 28th January, 2000 passed by the Regional Provident Fund Commissioner (RPFC), Delhi under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short `the Act') whereby the Act was made applicable to the petitioner establishment with effect from 1st June, 1989 on the ground that as on 5th June, 1989, strength of the employees of the petitioner establishment was 20, and rejecting the appeal filed by the petitioner establishment.
3. Briefly stated, facts of the case are that the petitioner establishment is engaged in the sale of fruits in Subzi Mandi, Azadpur. The Inspector of the RPFC visited the premises of the petitioner establishment on 22nd June and 6th July, 1989 for the purpose of inspecting as to whether the petitioner establishment would be covered under the Act and met one Sh.K.N.Jaggi, who transpired to be the husband of one of the partners of the petitioner establishment, Smt.Sulakshana Jaggi. Sh.K.N.Jaggi handed over a letter dated 22nd June, 1989 to the Inspector on the letterhead of the petitioner establishment, giving details about the said establishment, duly signed by him. In the said letter, information was given with regard to the name of the petitioner establishment, the date on which the establishment was started, its activities, details of the partners, the employee strength/attendance register as on 1st June, 1998 and the number of piece rate casual labourers. A copy of the partnership deed of the petitioner establishment, executed on 17th December, 1983 was also handed over by Sh.K.N.Jaggi to the Inspector. On the basis of the aforesaid information received by the Inspector, he recommended coverage of the petitioner establishment with effect from 1st June, 1989 under the Act and accordingly submitted a report to his office. On the basis of the said report, a coverage letter dated 24th July, 1989 was issued to the petitioner establishment, covering it under the Act with effect from 1st June, 1989.
4. As the petitioner did not report compliance of the provisions of the Act, proceedings under Section 7A of the Act were initiated against it and summons dated 11th April, 1990 were issued to the petitioner establishment. In response to the aforesaid summons, the petitioner establishment gave a reply stating inter alia amongst others, that the petitioner establishment never employed 20 or more persons and therfore it did not attract coverage under the Act, that the petitioner establishment appeared to have been clubbed with certain other establishments contrary to the provisions of law, that a PF Inspector visited the premises of the petitioner establishment in the year 1989 and noted down certain information of his own and made the petitioner sign on "the dotted line" which they did, thus allegedly falling into a trap. Evidence was also adduced by both the parties and proceedings in the case were held on at least 84 dates right from 23rd May, 1990 to 15th September, 1999.
5. After discussing the facts of the case and the respective contentions and the deposition of both the parties, the RPFC rejected the application of the petitioner establishment challenging the applicability of the Act to it. It was held that the petitioner establishment had been rightly covered under the Act with effect from 1st June, 1998. Thereafter, the petitioner establishment was directed to produce records/account books etc. for determining the amount due and payable by it on the next date of hearing. Aggrieved by the aforementioned order, the petitioner establishment preferred an appeal before the Appellate Tribunal.
6. It was contended on behalf of the petitioner establishment that Sh.K.N.Jaggi was not a partner of the firm and had no authority to sign the letter dated 22nd June, 1989 on behalf of the petitioner, nor could have the said letter been used against it for extending the applicability of the Act to the petitioner establishment. It was further argued that since the names, parentage and designation in respect of the 12 piece rate casual workers had not been mentioned in the letter dated 22nd June, 1989, the list of employees contained in the said letter could not be relied upon. It was lastly argued that the casual workers could not have been included in the strength of employees of the petitioner establishment for taking the strength as 20 in number and thus making the Act applicable to the petitioner. After dealing with all the pleas raised by the petitioner establishment, the Tribunal rejected each one of them and held that there was no material illegality or irregularity in the order of the RPFC dated 28th January, 2000 and thus the appeal was rejected.
7. Counsel for the petitioner establishment assailed the impugned order on the same lines before this Court and argued that the Appellate Tribunal wrongly relied on the report of the Inspector dated 22nd June, 1989 despite the fact that neither was it signed by any of the partners of the petitioner establishment, nor did it contain the details of names, designation, date of appointment etc. of the employees stated to be engaged in the petitioner establishment. It was also canvassed that a perusal of the report would go on to show that as the same did not furnish the designation, date of employment, names and signatures of the employees nor the salary drawn by them, therefore, it could not reasonably be believed that they were employed by the petitioner establishment. It was emphasized that the petitioner had never employed 20 or more persons in connection with its business and the RPFC, as also the Appellate Tribunal overlooked the affidavit filed by the partner of the petitioner establishment to the said effect. It was lastly contended that 12 piece rate casual workers could not have been included to take the figure of the number of employees of the petitioner establishment to 20 and the RPFC, as also the Appellate Tribunal erred in including the said casual workers as employees of the petitioner establishment while they were actually the employees of the contractor.
8. On the other hand, counsel for the RPFC defended the impugned order and emphasized that the letter dated 22nd June, 1989 was issued on the letterhead of the petitioner establishment and Sh.K.N.Jaggi who was the signatory of the said letter had detailed knowledge about all the employees. Thus, it could not be stated that the information contained in the said report was furnished by the Inspector of the respondent by compelling Sh.K.N.Jaggi to affix his signatures thereon. It was submitted that details of all the employees were not required to be considered at the stage of deciding as to whether the petitioner establishment was covered under the Act and the said issue would arise only subsequently, once an establishment was held to be covered. Counsel for the RPFC drew the attention of this Court to Section 6 of the Act, as also paragraphs 30 and 36B of the Employees' Provident Fund Scheme, 1952 (hereinafter referred to as `the Scheme'), to state that the aforesaid provision as also the relevant paragraphs of the Scheme refer to contributions payable to each of the employees, whether employed by the employer directly or by or through a contractor and thus the petitioner establishment could not escape its liability by seeking to exclude the 12 piece rate casual workers engaged through the contractor from its employment, for the purposes of deciding its coverage under the Act.
9. I have heard the counsels for the parties and have perused the impugned order dated 28th January, 2000 passed by the RPFC, the order dated 21st September, 2005 passed by the Appellate Tribunal, as also the deposition of the parties placed on the record and the other documents filed by the petitioner establishment.
10. The plea raised on behalf of the petitioner establishment that since Sh.K.N.Jaggi was not a partner of the petitioner establishment, thus he had no authority to sign the letter on behalf of the petitioner establishment, and therefore the said letter could not have been used by the RPFC against the petitioner for extending the applicability of the Act to it, is unacceptable for the reason that counsel for the petitioner has not been able to point out any provision in the Act which requires the RPFC to take into consideration only such information as furnished by the authorized representative of an establishment for the purposes of taking a decision on the issue of coverage under the Act so as to arrive at any conclusion. The RPFC is entitled to take into consideration all relevant material as may be made available to it and nothing precluded the Authority from taking note of the statement of Sh.K.N.Jaggi for the purposes of deciding the applicability of the Act to the petitioner establishment. Secondly, in the present case, the person concerned, namely, Sh.K.N.Jaggi was obviously well versed with all the details of the employees of the petitioner establishment. This is evident from a perusal of the report dated 22nd June, 1989 which is not only prepared on the letterhead of the petitioner establishment, but is also signed by Sh.K.N.Jaggi with a rubber stamp of the petitioner establishment being affixed thereon.
11. Also, the Appellate Tribunal was right in observing that Sh.K.N.Jaggi is the husband of one of the partners of the petitioner establishment and that it is not uncommon that women are made partners in the firm but the actual business is conducted by their husbands. In the present case, Sh.K.N.Jaggi is the husband of one of the partners, namely, Sulakshna Jaggi, and the brother of other two partners of the petitioner establishment. Not only his presence at the petitioner establishment at the time of visit of the Inspector but the information furnished by him in the report goes on to show that he was well in the know of the affairs of the petitioner establishment. It is hard to believe that the Inspector conjured the entire facts and figures from the air like a rabbit out of a magician's hat, not only to come up with the correct date on which the petitioner establishment was started, but also the nature of the activity of the establishment, the particulars of the partners of the petitioner establishment, as also the employees' strength along with their respective salaries as contained in the said report. Therefore, the plea of the petitioner establishment that the RPFC could not have, under any circumstances, taken into the consideration the report dated 22nd June, 1989 for deciding the issue of coverage can only be treated with disbelief and be rejected outright.
12. It is also relevant to note that in the reply dated 18th April, 1990 filed by the petitioner establishment to the coverage notice received by it, there is no plea taken to the effect that Sh.K.N.Jaggi did not have any authority to sign the report, he not being a partner of the petitioner establishment. Instead, as indicated above, the pleas raised in the reply were that the petitioner establishment had never employed 20 or more persons and that it had been clubbed with other establishments contrary to the provisions of law, and that the PF inspector had taken out a paper and pencil and started scribbling something on the same, where after in an arbitrary fashion, he made the partners of the petitioner establishment sign on the dotted line. Thus the petitioner establishment at no stage questioned or disowned Sh.K.N.Jaggi's authority and only sought to blame the PF inspector for the alleged trap set up by him in which the petitioner establishment claims to have fallen. The attempt to question the authority of Sh.K.N.Jaggi was obviously taken as a defense on second thoughts. Fact of the matter is that the RPFC gave the petitioner a long rope to prove and establish its case, which is borne out by the number of adjournments granted by the RPFC, running into about 84 in number, but the petitioner establishment failed to establish its case for exemption from coverage under the Act.
13. The other contention raised on behalf of the petitioner establishment is that as the details about the names, designation, parentage, rate of wages and work assigned to the 12 piece rate casual workers were not mentioned in the report, the same could neither be relied upon nor could the same be acted upon. There is force in the argument of the counsel for the RPFC that the said information was not relevant at the time of deciding the issue of coverage of the petitioner establishment under the Act and that the aforesaid information would only be necessary once the petitioner establishment was held to be covered under the Act by calling upon it to furnish all the relevant details, including its books of accounts etc. for initiating proceedings under Section 7A of the Act. This fact is evident from a perusal of the order dated 28th January, 2000 passed by the RPFC wherein directions were issued to the petitioner establishment to produce the records mentioned in Section 7A summons, before the concerned Presiding Officer for determination of the dues payable by the petitioner establishment.
14. The last contention raised on behalf of the petitioner establishment to the effect that casual workers could not have been included in the strength of employees of the petitioner establishment for taking the same up to 20 in number and making the Act applicable to it, is also devoid of merits for the reason that Section 6 of the Act does not distinguish between employees engaged by the employer and those engaged through a contractor and instead refers to both, i.e. employees employed by an establishment directly or by or through a contractor. Even the definition of `employee' does not distinguish between a casual employee or a regularly engaged employee and instead includes employees employed by or through a contrary in connection with the work of the petitioner establishment. Similarly, paragraphs 30 and 36B of the Scheme also do not make any such distinction. In fact both the provisions require an employer in the first instance to pay contribution payable by him as also on behalf of the member employed by him directly or by or through a contractor. Para 36B of the Scheme also enjoins every contractor to submit to the principal employer, a statement showing recoveries of contributions in respect of the employees employed by or through him. Therefore, the claim of the petitioner establishment that the 12 piece rate casual workers working under the contractor ought to have been excluded by the RPFC while considering the case of applicability of the Act to the petitioner establishment is contrary to the intendment of the Act and is rejected.
15. For the aforesaid reasons, this Court does not find any illegality, perversity or irregularity in the impugned order dated 28th January, 2000 passed by the RPFC and the impugned order dated 21st September, 2005 passed by the Appellate Tribunal that calls for any interference by this Court while exercising its extraordinary jurisdiction under Article 226 of the Constitution of India. The writ petition being devoid of merits is dismissed while leaving the parties to bear their own costs.