Madras High Court
The Assistant Provident Fund ... vs The Presiding Officer on 26 September, 2025
Author: B.Pugalendhi
Bench: B.Pugalendhi
WP(MD)No.1271 of 2016
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 26.09.2025
CORAM:
THE HONOURABLE MR.JUSTICE B.PUGALENDHI
WP(MD)No.1271 of 2016 and
WMP(MD)No.1044 of 2016
The Assistant Provident Fund Commissioner,
Employees' Provident Fund Organisation
P.B.No.588, Sree Complex, D Block,
No.18, Madurai Road, Tiruchirappalli.
...Petitioner
Vs
1.The Presiding Officer,
Employees' Provident Fund Appellate Tribunal,
Scope Minor, Core II, 4th Floor,
Lakshmi Nagar District Centre,
Lakshmi Nagar, New Delhi.
2.M/s.Sri Laxmi Textiles Pvt Ltd,
Venugopal Towers,
86, Nageswaran North Street,
Kumbakonam – 612 001,
Through its Director. ... Respondents
PRAYER: Writ Petitions filed under Article 226 of the Constitution of
India for issuance of a writ of certiorarified mandamus to call for the
records relating to the orders passed by the 1st respondent in ATA Nos.
766(13) 2012 dated 14.03.2013 and quash the same as illegal and
consequently direct the 2nd respondent to pay the contribution of
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WP(MD)No.1271 of 2016
Rs.3,46,382/- as per the proceedings in D4/TN/SRO-
TRY/32820/Compliance D/2012 dated 04.07.2012 within a time frame as
fixed by this court.
For Petitioner : Mr.N.Dilip Kumar
For Respondent : Mr.C.Karthikeyan
No.2
For Respondent : No representation
No.1
ORDER
This writ petition has been filed by the EPF organisation as against the order passed by the 1st respondent EPF appellate tribunal.
2.The 2nd respondent establishment is involved in retail sale of textiles and ready-made dresses and it is covered under the Employees Provident Fund and Miscellaneous Provident Funds Act [herein after shall be referred to as 'the EPF Act'].
3.The enforcement officer of the PF authority has conducted an inspection of the 2nd respondent establishment on 11.07.2011 and filed her report on 13.07.2011 that the 2nd respondent has failed to enroll 11 2/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016 employees under the EPF scheme and also failed to enroll 49 other employees shown as apprentices. Based on this report dated 13.07.2011 an enquiry was conducted for determination of the dues under Section 7A of the EPF Act. Pending enquiry the 2nd respondent informed that they have enrolled 11 casual workers and remitted the dues and with regard to other 49 employees they claim that they were engaged only as apprentices as per the standing orders certified under the Industrial Establishment (Standing Orders) Act, 1946 and therefore, they would not come under the purview of the EPF Act.
4.The EPF authority found that these employees have been shown as apprentices in order to avoid the EPF contribution. It was also found that the apprentices were engaged in the regular course of business activities. Hence, the authority has passed order in D4/TN/SRO- TRY/32820/Compliance D/2012 under Section 7A of the EPF Act dated 24.07.2012 directing the 2nd respondent to pay the contribution for the apprentices also for the period from April 2011 to March 2012. 3/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016
5.As against the order of the EPF authority, the 2nd respondent establishment preferred an appeal before the 1st respondent appellate tribunal in ATA No.766(13) 2012 and the same was allowed by Tribunal on the ground that the authority has failed to consider the certified standing orders issued by the competent authority, which enables the 2nd respondent establishment to engage apprentices. Challenging the order of the appellate tribunal, this writ petition has been filed by the EPF organisation.
6.Mr.N.Dilip Kumar, learned counsel for the EPF organisation submits that the 2nd respondent is a retail textile unit, there is no necessity for them to engage this number of apprentices, there is no agreement for apprenticeship, there is no place for training, the period of apprenticeship is not specified and they have engaged those apprentices for the activities carried out in regular course of business.
7.The learned counsel has relied on the judgments of this court in M.R.F.Ltd vs. The Presiding Officer, EPF Appellate Tribunal, 4/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016 New Delhi and others (WP NO.26590 of 2003 dated 18.10.2011) and submits merely because some workers had been labelled as apprentices that by itself will not take away the jurisdiction of the authority from piercing the veil and see the true nature of the such appointments. Further, the learned counsel has also relied on the judgment of this court in N.E.P.C. Textiles Ltd vs. The Assistant Provident Fund Commissioner (WA.No.581 of 2002 dated 22.01.2007) and submits that the EPF authority under Section 7A of the EPF Act can factually find whether the establishment is liable to pay contribution to the employees provident fund and whether those persons engaged as apprentices are really apprentices or employees.
8.The learned counsel further submits that under Section 7A of the EPF Act, the authority has got power to go behind the term of appointment and to find out where they are really engaged as apprentices and the authority can also decide as to whether they are really workmen or apprentices.
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9.On the other hand Mr.C.Karthikeyan, the learned counsel for the 2nd respondent establishment submits that the Joint Commissioner of Labour, Tiruchirappalli the authority under the Industrial Establishments (Standing Orders) Act has certified that the respondent establishment is entitled to engage the apprentices. He has relied on the Government order in GO.Ms.No.2272 Labour and Employment dated 11.11.1986 and submits that even if any establishment employs less than 20 workmen, the Industrial Establishments (Standing Orders) Act is applicable to them. Pursuant to the notices, they have enrolled 11 casual employees along with their contribution. However, the authority has passed the above orders under Section 7A including the apprentices as employees of the establishment and they are liable to pay the contribution under Section 7A. In the event the authority is having any doubt with regard to the engagement of their services they ought to have verified those who have been registered as apprentices. However, without doing so they have simply brought the apprentices also under the liability for contribution.
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10.The learned counsel further submits that the Joint Commissioner of Labour has issued certification of standing orders to the 2nd respondent establishment enabling them to engage apprentices. Although the authority claims that there is no necessity for any training in a retail establishment, they are providing training to the apprentices on the behaviour and the technicalities to handle the customers. Therefore, according to the learned counsel there is no reason to interfere with the orders of the 1st respondent / EPF appellate tribunal.
11.This court has considered the submissions and perused the materials on record.
12.The 2nd respondent establishment is involved in retail sale of textiles and ready-made dresses and it is covered under the EPF Act and hence liable to remit benefits to its employees under the Act. The allegation against the 2nd respondent establishment is that it has failed to enroll its apprentices / trainees with the petitioner organisation and also failed to pay EPF contribution under the Act. 7/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016
13.The issue to be addressed in these writ petitions is whether the persons said to be apprentices of the 2nd respondent are to be treated as apprentices or employees under the EPF Act.
14.It would be relevant to refer to Section 2(f) of the EPF Act, which defines an employee as follows:
“2(f) employee means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer,and includes any person—
(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), or under the standing orders of the establishment;”
15.The above provision makes it clear that an apprentice engaged under the Apprentices Act 1961 or appointed as per the standing orders 8/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016 of the establishment cannot be considered to be employees under the EPF Act. The 2nd respondent establishment has placed its certified standing orders dated 31.07.2002 before this court which specifically provides for the engaging of apprentices.
16.The petitioner EPF organisation claims that the 2nd respondent is not an “industrial establishment” under the Industrial Establishments (Standing Orders) Act 1946 and hence they cannot rely on the standing orders. At this juncture it would be pertinent to point out Section 2 (e) of the Industrial Establishments (Standing Orders) Act 1946, which provides the definition of “Industrial Establishment” and only such industrial establishments defined under this section can get their standing orders certified under this Act. Section 2(e) of the Industrial Establishments (Standing Orders) Act 1946 is extracted hereunder:
2(e) “industrial establishment” means
(i) an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act, 1936, or ... ... ...” 9/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016
17.From the above it is clear that as per Clause (i) of the above provision, industrial establishments as defined in the Payment of Wages Act 1936 are also covered under the Industrial Establishments (Standing Orders) Act 1946. Section 2 (ii) (h) of the Payment of Wages Act 1936 provides for the definition of an industrial establishment and it allows the appropriate government to extend the application of the Act to any establishment by notification in the official gazette. By virtue of the said power conferred under the above provision, the State Government by a notification made in G.O.Ms.No.78, Labour and Employment Department, dated 26.6.1996 has extended the provisions of the Payment of Wages Act to all the shops and commercial establishments employing twenty or more persons. Therefore, by virtue of this notification, the provisions of the Industrial Employment (Standing Orders) Act, 1946 are applicable to the 2nd respondent establishment and the 2nd respondent establishment is an industrial establishment under the Act and as such the standing orders obtained by them is valid.
18.The Hon’ble Supreme Court in The Regional Provident Fund 10/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016 Commissioner,Mangalore vs. M/s Central Aercanutand Coca Marketing and Processing Co-op Ltd reported in 2006 (2) SCC 381 has held that apprentices appointed under the Apprentices Act 1961 or under standing orders cannot be considered to be employees under the EPF Act. The relevant portions are extracted hereunder:
“12.In the present case, admittedly the Standing Orders were not at the relevant point of time certified. Therefore, in terms of Section 12-A of the Standing Orders Act, the Model Standing Orders are deemed to be applicable. Section 2(f) of the Act defines an employee to include an apprentice, but at the same time makes an exclusion in the case of an apprentice engaged under the Apprentices Act or under the Standing Orders. Under the Model Standing Orders an apprentice is described as a learner who is paid allowance during the period of training.
13.In the case at hand, trainees were paid stipend during the period of training. They had no right to employment, nor any obligation to accept any employment, if offered by the employer. Therefore, the trainees were 'apprentices' engaged under the 'Standing Orders' of the establishment.11/15
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14.Above being the position, it cannot be said that the concerned 45 trainees were employee in terms of Section 2(f) of the Act. In other words, an apprentice engaged under the Apprentices Act or under the Standing Orders is excluded from the definition of an 'employee' as per Section 2(f) of the Act.”
19.A perusal of the certified standing orders of the 2nd respondent reveals that it specifically provides for engaging of “apprentices” who would be paid with a stipend amount. Accordingly as per the standing orders the 2nd respondent has engaged apprentices in their establishments. Thus the apprentices appointed by the 2nd respondent under the certified standing orders cannot be considered as employees under the EPF Act and therefore, the 2nd respondent establishment is not required to enroll the apprentices under the EPF Act.
20.The bone of contention of the petitioner organisation is that there is no necessity for the 2nd respondent retail textile unit to engage more number of apprentices and that there is no agreement for apprenticeship, there is no place for training, the period of training is not 12/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016 specified and they were also engaged in the same work as the regular employees. The Joint Commissioner of Labour, Tiruchirappalli, the authority to certify the Standing Orders has considered the case of the 2nd respondent and has permitted them to engage apprentice, however there is no ceiling fixed as to the number of apprentices. Similarly the ceiling for the stipend is also not prescribed. The 2nd respondent establishment claims that they are providing training in difference aspects to the apprentices and they are paid with stipend only. From the available materials it is seen that the authority during the enquiry has not ascertained by examining any of the apprentices that whether they have been engaged as regular employees. In view of the certified standing orders and the available materials, this court is not inclined to interfere with the orders of the appellate tribunal and accordingly these writ petitions are dismissed. No costs. Consequently connected miscellaneous petitions are closed.
26.09.2025 Index : Yes / No DSK 13/15 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/09/2025 12:37:47 pm ) WP(MD)No.1271 of 2016 To The Presiding Officer, Employees' Provident Fund Appellate Tribunal, Scope Minor, Core II, 4th Floor, Lakshmi Nagar District Centre, Lakshmi Nagar, New Delhi.
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