Madhya Pradesh High Court
M.P. Shikshak Congress & Ors vs Regional Provident Fund Commissioner on 17 September, 2014
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Writ Petition No.686/2001
17.9.2014.
Shri M.S. Bhatti, learned counsel for petitioner.
Shri J.K. Pillai, learned counsel for the respondents no.1
and 2.
Shri Kumaresh Pathak, learned Deputy Advocate General
for the respondent no.4-State.
With consent of learned counsel for the parties, the
petition is finally heard.
Petitioner representing the interest of private aided
educational institutions imparting school education while raising
an issue as to whether these institutions are exempted from the
provisions of the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952 and Para 32A of the Employees' Provident
Funds Scheme, 1952 framed thereunder by virtue of Section
16(1)(b) for the reasons of its being covered by any of the
scheme framed by the State Government.
The issue emanates from the decision by the Regional
Provident Fund Commissioner vide impugned order dated
13.3.2000 which, in turn, was in pursuance to the direction in
the case of M.P. Shikshak Congress vs R.P.F. Commissioner,
Jabalpur (1999) 1 SCC 396 which arose from the decision by a
Division Bench of this Court in Misc. Petition No.1555/1991 and
Misc. Petition No.3040/1991 decided on 15.4.1993, holding -
"3. Having considered the arguments on both
sides, we are of the view that the provisions of the
Employees Provident Fund Act, 1952 and Scheme
are applicable being more beneficial and effective
considering the interests of the employees of the
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Writ Petition No.686/2001
non-government educational institutions. It is
stated in the return that the deposits made by the
twelve institutions against the provident fund and
institutional funds are irregular and the institutions
having control over the said accounts, there is no
guarantee of the funds being not misused or
deposit made at sweet-will without any control.
4. Section (1)(3)(b) of the Provident Fund &
Misc. Provisions Act defines Notified Establishment.
Under Para 38 of the Scheme all educational
institutions are required to deposit the contributions
of the employees as well that of employees in the
Reserve Bank or the State Bank of India in E.P.F
Account by demand draft. In view of specific
provisions of the Central Act & Scheme, it is difficult
to hold that the non-governmental educational
institutions are not covered by the provisions of the
Act.
5. Question, therefore, to be considered is
whether Section 16(1)(b) can be said to exempt the
petitioners, by reason of its being covered by the
Central Provinces & Berar Education Manual (1928)
Appendix XVIII. The above Rules in Appendix XVIII
cannot be said to be surviving in view of specific
provisions made in Act No.21/78 and Institutional
Fund Rules, 1983.
7. Section 16(1)(b) as amended can apply only if
there is a finding that the institution is covered by
some scheme. In the instant case as pointed out,
the petitioners are required to abide by the
provisions of Rule 10 of the M.P. Ashaskiya
Shikshan Sanstha (Institutional Fund) Rules, 1983
and to make deduction towards the contributory
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fund and under clause (6) of Rule 10. Old
procedure for deposit of the provident fund given in
sub-rules (1) to (6) of Rule 10. The applicability of
the Employees' Fund & Misc. Provisions Act, 1952
has been specifically stated and the deposits have
to be made to the accounts maintained as per
scheme of the Act. Thus, it is amply clear that the
provisions of the Central Provinces & Berar Manual
Appendix XVIII do not apply to the present case.
Even if the petitioners are following the said
arrangement, the said arrangement cannot
continue as the petitioners are not covered by
Section 16 (1) (b) of the Act, also in view of State
Act of 1978 & Rules.
9. In the instant case, the petitioners submit
that they have been depositing the provident fund
as per Appendix XVIII of the C.P. & Berar Education
Manual. The question is whether they can be
allowed to continue with the said arrangement and
the view which we have taken the petitioners
cannot be allowed to retain the amount already
collected and whatever amount has been collected
will have to be deposited in the Reserve Bank or
the State Bank as per the provisions of Employees
Provident Fund & Misc. Provisions Act, 1952 &
Scheme."
The matter travelled to Supreme Court vide Civil Appeal
No.3969-70 of 1994 which came to be decided on 1.12.1998
(reported as M.P. Shikshak Congress vs R.P.F. Commissioner,
Jabalpur (1999 (1) SCC 396), in the following terms -
"12. Secondly, as the preamble and other
provisions of the State Act 20 of 1978 show the
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primary purpose of the State Act was to make
provisions for regulating the payment of salaries to
teachers and other employees of aided non-
Government schools. The Act did not even provide
for any scheme for setting up a provident fund. The
Act incidentally required that the institutional
contribution to any existing Provident Fund Scheme
should be paid into the institutional fund set up
under the said Act. Looking to the pith and
substance of the State Act of 1978 also, it cannot
be said that it in any way made provisions which
were repugnant to the Employees' Provident Fund
and Miscellaneous Provisions Act, 1952.
13. It was by reason of the notification of 6th of
March, 1982 that the Central Act was extended to
educational institutions. The Employees' Provident
Fund and Miscellaneous Provisions Act, 1952,
therefore, became applicable to educational
institutions in the State of Madhya Pradesh for the
first time on 6th of March, 1982. This was much
later than the enactment of the State Act 20 of
1978. The Parliamentary enactment, therefore,
would prevail over the State Act 20 of 1978,
assuming that the State Act of 1978 created or
affected any scheme for provident fund. Art.
254(2), therefore, has no application in the present
case.
....
15. However, after the application of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 to education institutions, in 1983 new Rules were framed by the State of Madhya Pradesh under Act 20 of 1978. These are referred to as the State Rules of 1983. Under the State Rules of 1983, for the first time a scheme was set out for Contributory Provident Fund covering the teachers and employees of aided schools. The State Government, however, was conscious of the fact that the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 was applicable :: 5 ::
Writ Petition No.686/2001in the State of Madhya Pradesh. Therefore, by Rule 10(6) of the State Rules of 1983, it was provided that the scheme as set out in the State Rules of 1983 would not apply where the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 apply. Clearly, therefore, far from there being any conflict between the State and the Central Legislation, the State Legislation by Rules framed in 1983 has excluded from the operation of the State scheme as framed under the 1983 Rules, those employees to whom the Central Act applies.
16. In this view of the matter, there can be no doubt that for the period 1st August, 1982 to 1st August, 1988 the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 was applicable to such teachers and employees of the aided schools in the State of Madhya Pradesh who are covered by the provisions of the scheme framed thereunder. The orders of the Regional Provident Fund Commissioner, therefore, in so far as the orders cover the period 1st August, 1982 to 1st August, 1988 are valid.
17. The said orders, however, also refer to an additional period from 1st of August, 1988 to 1st of December, 1988. According to the appellants, on 1st of August, 1988, by virtue of the amended S. 16(1)(b) of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 coming into effect, the provisions of the 1952 Act are no longer applicable to them. Section 16(1)(b) provides that the 1952 Act will not apply to any establishment under the control of the State Government whose employees are entitled to the benefit of Contributory Provident Fund in accordance with any scheme framed by the State Government conferring such benefits. Whether on 1st of August, 1988, there was any scheme in existence of the State Government which conferred Contributory :: 6 ::
Writ Petition No.686/2001Provident Fund benefit to the employees covered earlier by the Central Act of 1952 or not is a matter which the Regional Provident Fund Commissioner will have to examine if such a contention is raised before him by the appellants.
18. We, therefore, remit the matter to the concerned Regional Provident Fund Commissioner only for the limited purpose of examining whether for the period 1st of August, 1988 to 1st of December, 1988 the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, 1952 are applicable to the concerned institutions. The orders, however, for the period 1st August, 1982 to 1st August, 1988 are upheld."
In pursuance to the directions, Regional Provident Fund Commissioner took a decision vide impugned order dated 13.3.2000 holding :
"On the basis of above findings I, M. Joseph Pushpam, Regional Provident Fund Commissioner, Jabalpur in exercise of powers 7A(1)(a) of the Act and as per the direction of the Hon'ble Supreme Court in its order dated 1.12.1999 hold that the provisions of section 16(1)(b) of the Act are not applicable to the establishment and they continue to be covered u/s 1(3)(b) of the Act even w.e.f 01.8.1988 and onwards. Accordingly, all the aided non Govt. School run by the Societies/Managing Committee/Sansthan/Individual Employer/Individual Trustee situated in M.P are directed to comply with the Employees' Provident Fund and Miscellaneous Provision Act, 1952 w.e.f with the Employees Provident Fund and Miscellaneous Provision Act 1952 w.e.f 01.08.1982 or the date of coverage as the case may be, and continued to be covered even after 01.08.1988 onwards in respect of all :: 7 ::Writ Petition No.686/2001
employees employed in or in connection with the establishment including non-aided and casual contractual employees and also employees those who left their service within fifteen days of recent receipt of the order."
Though an appeal lies against the order dated 13.3.2000 before the Tribunal under Section 7-I of 1952 Act; however, the petitioner without exhausting the remedy of Appeal, has filed this petition. Pertinent it is to note that the two more petitions were filed against the order dated 13.3.2000 viz. Writ Petition No.1687/2001 and Writ Petition NO.1417/2001. In both these petitions, vide order-dated 7.9.2001 and order-dated 6.7.2004, the petitioners therein have been relegated to avail the remedy of appeal.
In the case at hand, learned counsel for the petitioner submits that though an appeal ought to have been preferred under Section 7-I of 1952 Act; however, since 14 years have passed from passing of order-dated 13.3.2000, the petitioner may not be driven to avail the remedy and the matter may be examined on merits.
It, however, being not disputed that in the batch of petitions connected with the present writ petition similarly situated private aided educational institution have abide by the decision dated 13.3.2000; wherein, the Regional Labour Commissioner after affording opportunity to the representatives of schools and the contentions raised on behalf of School Education Department that -
(a) In accordance with the directions of the :: 8 ::Writ Petition No.686/2001
Supreme Court in Civil Appeal No.3969-70 of 1994 passed on 1.12.1998 the State Government has decided to issue instruction to aided non-Govt. Schools to follow the provisions of the Act from 1.8.82 to 1.8.88.
(b) It was the duty of the employer that is the managing committees of the concerned institutions to contribute P.F. The liabilities of paying contribution of PF does not lie on the State Govt.
(c) The Government has decided to withdraw the grant of the aided institutions at the rate of 20% every year w.e.f. 1.4.2000.
(d) The State Govt. of M.P. School Education Department have not formulated any scheme and plan for the employees of the aided, non- government institutions either contributory provident fund or for old age pension.
Taking into consideration these facts, the Commissioner recorded following findings -
"I have perused the representations filed by the establishments, Education Department, office records and order of the Hon'ble Supreme Court & Hon'ble High court. I have heard all the parties. The only point in the present proceeding to be decided is as to whether in view of the amended provisions of section 16 of the Act w.e.f. 1.8.88 the Act continuous to apply to the establishments or not. The contention of the representative of the establishments are that they are under the control of the State Govt. and the employees are already in enjoyment of the P.F. & other benefits. The Hon'ble Division Bench of the Hon'ble High Court of M.P. at Jabalpur has already examined the issue of benefits :: 9 ::Writ Petition No.686/2001
and has concluded that the Schemes framed under the Act are much more beneficial to the employees of the establishment. The Hon'ble Supreme Court in its order dated 1.12.98 has quoted the sub-rule (6) of the rule 10 of Ashashkiya Shikshan Sanstha Institutional Fund Rules, 1983. According to the provision of this rules itself, the provision of the Act are applicable to the establishments. It is also a fact that the aid to the non-Govt. Institutions are not provided for the 100% of the employees. In other words, there are non-aided employees also who are paid by the societies of the institutions itself and their P.F. contributions are not recovered/paid. Further the submission made by the Education Department of the State Government and order dated 10.3.2000 issued by the M.P. Govt. School Education Department falsifies the contention of the establishment that they are under the control of the State Govt. The said order clearly states that the aided non-government education institutes are neither in the control nor owned by the State Govt. of M.P. The order further goes on to speak that the employer of the establishment are their respective societies. The State Govt. of M.P. (School Education Department) in its representation dated 29.2.2000 has clearly stated that the MP School Education Department has not approved any other scheme or plan which entitles the employees of the aided non- Govt. Education Institution for the benefits of the contributory fund or old age pension. Thus, the establishments do not fall under the provisions of Sections 16(1)(b) of the Act as they are neither owned nor controlled by the State Government or Central Government."
Though it is contended by learned counsel for petitioner :: 10 ::
Writ Petition No.686/2001that the Regional Provident Fund Commissioner has failed to take into consideration that the P.F. scheme and other benefits are available to the employees of private aided educational institutions; however, no such scheme is commended at which is more beneficial than the Scheme under 1952 Act, as would lead to holding of the impugned order dated 13.3.2000 suffering any illegality or that the scheme framed under the Act of 1952 are excluded vide Section 16(1)(b).
In view whereof, no interference is caused. During course of hearing, reliance is placed on a decision by a Division Bench in VTP Higher Secondary School Shivpuri vs State of M.P. 2012(1) MPLJ 211. However, it appears from the decision that the order passed by the Regional Provident Fund Commissioner on 13.3.2000 which was in pursuance to the direction by Supreme Court in M.P. Shikshak Congress (supra) was not brought to the notice of Hon'ble Judges. Had the same be brought to the notice, there would not have been the occasion to remand said matter for reconsideration. Thus, the judgment in VTP Higher Secondary School Shivpuri (supra) is of no assistance to the petitioner.
Consequently, petition fails and is dismissed. No costs.
(SANJAY YADAV) JUDGE vinod