Madras High Court
Gudalur Taluk Muslim vs The Regional Provident Fund ... on 30 March, 2012
Author: K.Chandru
Bench: K.Chandru
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.03.2012 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.No.5579 of 2009 and M.P.No.1 of 20009 Gudalur Taluk Muslim Orphanage Committee, Regd. Society S.No.40/76 C.H.Nagar, Chembala, Gudalur, Nilgiris District rep by its General Secretary, Mr.K.A.Mohammed Kutty Hajee ...Petitioner Vs. 1.The Regional Provident Fund Commissioner, Dr.Balasundaram Road, Coimbatore. 2.The Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Dr.Balasundaram Road, Coimbatore. 3.The Enforcement Officer, Employees Provident Fund, Allexander Cottage, State Bank Road, Ootacamund, Nilgiris. ...Respondents This writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorarified mandamus to call upon the records of the respondents culminating with the order of the first respondent in his proceedings No.TN/CB/72427/ ENF/CC18/2008, dated Nil of January, 2009 and signed in December, 2008 and quash the same and also direct the respondents to treat the GTMO Primary School, Gudalur, GTMO Matriculation School, Gudalur and the GTMO Higher Secondary School, Gudalur as three independent establishments and cover the employees employed therein separately in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act. For Petitioner : Mr.M.Ravi Bharathi For Respondents : Mr.M.Jayaraman O R D E R
The petitioner is Gudalur Taluk Muslim Orphanage Committee, represented by its General Secretary. In this writ petition, they have come forward to challenge an order passed under Section 7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for short EPF Act) by the second respondent.
2. By the impugned order, it was ascertained that the petitioner had not paid the Provident Fund dues from 3/06 to 10/08 and the amount was worked out to Rs.9,73,528/-. It was further stated if the amount was not paid in time, it will also attract damages and levy of interest and appropriate recovery action will be initiated for recovering the amount.
3. When the matter came upon 03.04.2009, notice was taken by the learned Standing Counsel appearing for the respondent PF organisation and an interim stay was granted.
4. On notice from this Court, a counter affidavit has been filed by the respondents dated 02.12.2009 and the petitioner has filed a reply affidavit dated 11.07.2011. Subsequently, an application was filed by the petitioner in M.P.No.1 of 2010 seeking to fix an early date for hearing of the writ petition. This Court by an order dated 05.04.2010 directed the writ petition to be listed on 10.06.2010. However, the matter was not listed.
5. It was agreed by the petitioner that M/s.Gudalur Taluk Muslim Orphanage Educational Institution run by the Gudalur Taluk Muslim Orphanage Committee, Gudalur was brought under the purview of the EPF Act with effect from 01.12.2003 and they have also been allotted a separate code number. The Committee is running three schools namely GTMO Primary School, GTMO Matriculation School, GTMO Higher Secondary School. Therefore, Section 1(3)(b) of the Act squarely applies to the entire establishment. Since they had failed to pay the dues in respect of three institutions, an order under Section 7A of the EPF Act was passed vide proceedings dated 23.05.2006.
6. Considering the financial difficulties expressed by the petitioner and accepting the recommendation of the Area Enforcement Officer, waiver of employees' share for the period from 12/03 to 8/05 was accepted. But however, as the petitioner had defaulted in making contribution, damages were levied under Section 14-B and interest under Section 7Q. The area Enforcement Officer after inspecting the institution filed a report dated 10.11.2008 and 19.11.2008 and found that 19 to 75 employees were not enrolled from 01.06.2006 to 01.10.2008. A statement in respect of non-enrolled staff were prepared and handed over to the Administrative Officer of the petitioner. On behalf of the petitioner, one K.A.Mohammed Kutty Hajee, Correspondent appeared on 05.01.2009 before the second respondent during enquiry under Section 7A. The non-enrolment of the employees were brought to the notice and it was admitted that several employees were not covered.
7. The petitioner Association originally started a primary school in the year 1984. Subsequently, the same institution was upgraded as Matriculation School in the year 1994. Thereafter, higher secondary school was started in the year 2001. Therefore, it satisfied the coverage initially when they had 20 employees. Subsequently, employees strength was raised to 75 and in that view of the matter after enquiry assessment was made.
8. The contention of the petitioner was that all the three wings of the schools are different and they cannot be clubbed together. It is a trust run for the welfare of orphan children and is not funded by government. They agreed that there are 10 teachers and 1 staff working in the primary school, 16 teachers and 2 staff working in the matriculation school and 17 teachers and 1 staff working in the Higher Secondary School. Hence, none of the three schools were having the minimum strength required for coverage.
9. It is not clear as to how the petitioner never filed any appeal against the order passed by the respondent in terms of Section 7-I of the EFF Act. In normal circumstances, they should have been directed to move the appellate Tribunal and no writ petition will lie. In any event, the contention that three wings of the same school are different entities also cannot be accepted.
10. In this context, it is necessary to refer to judgment of the supreme Court reported in (2001) 1 SCC 1 [Noor Niwas Nursery Public School v. Regional Provident Fund Commissioner and others], wherein the Supreme Court in identical circumstances held that two schools run by the same educational agency was a single unit in terms of Section 2A of the EPF Act. In paragraphs 3 to 6, the Supreme Court held as follows:-
"3. The Provident Fund Commissioner on this material held that the two institutions constitute one and the same establishment and, therefore, are covered by the Act. This order of the Provident Fund Commissioner was unsuccessfully challenged before the High Court. Hence this appeal.
4. Whether two units are one or distinct will have to be considered in the light of the provisions of Section 2-A of the Act which declares that where an establishment consists of different departments or has branches whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. In such cases, the court has to consider how far there is functional integrity between the two units, whether one unit cannot exist conveniently and reasonably without the other, and on the further question, in matters of finance and employment, the employer has actually kept the two units distinct or integrated. In fact, this Court set out certain tests in Pratap Press v. Secy., Delhi Press Workers' Union1. However, we may point out that each case would depend upon its own peculiar facts and has to be decided accordingly.
5. In the present case, when two units are located adjacent to one another and there are only two teachers with an aaya, a clerk and a peon, it is difficult to believe that the society which runs 30 schools would run a separate school consisting of such a small number of staff. If the unit of the appellant School was not part of the unit of Francis Girls Higher Secondary School, the Head Clerk, Mrs Wadhavan could not have been in possession of the particulars of the appellant School and could not have furnished such particulars to the Inspector when he visited the school in connection with the grant of a code number. Undisputably, the two units are run by the same society and they are located in one and the same address thereby establishing geographical proximity and nothing worthwhile has been elicited in the cross-examination of the Inspector in regard to inquiries made by him from Mrs P. Wadhavan. Mrs P. Wadhavan was not examined before the Provident Fund Commissioner. All these facts clearly point out to one factor that the two units constitute one single establishment. After all the appellant School caters to nursery classes, while the higher classes are provided in Francis Girls Higher Secondary School. Thus, the link between the two cannot be ruled out. In the facts and circumstances of the case, we hold that the view taken by the Provident Fund Commissioner as affirmed by the High Court in this regard is correct.
6. However, the learned counsel for the appellant drew our attention to the letter sent to Francis Girls Higher Secondary School wherein the said School has been excluded from the purview of the Act in view of the fact that the provident fund in respect of all the employees is subscribed under another scheme. The learned counsel submitted that if the two units were put together as a single establishment, the Act would be applicable and otherwise not, inasmuch as it falls short of the number of minimum of employees for the applicability of the Act under Section 1(3)(b) of the Act. We are not impressed with this argument. The two establishments have more than 20 employees and the exemption granted under Section 17 of the Act is subject to the condition that such exclusion will not apply to the appellant's unit because the same would not be covered under another scheme for subscribing to the provident fund. When the entire establishment is covered by the Act, only part of the establishment is excluded and condition of exclusion being applicable only to a part, we fail to understand as to how the appellant can rely upon the said letter to claim non-applicability of the Act on the ground that it falls short of the number of employees."
s 11. In the light of the above, the writ petition stands dismissed. No costs. Consequently, connected miscellaneous petition is closed.
svki To
1.The Regional Provident Fund Commissioner, Dr.Balasundaram Road, Coimbatore.
2.The Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Dr.Balasundaram Road, Coimbatore.
3.The Enforcement Officer, Employees Provident Fund, Allexander Cottage, State Bank Road, Ootacamund, Nilgiris