Bombay High Court
Tata Engineering And Locomotive Co. ... vs Union Of India (Uoi) And Ors. on 10 September, 1990
Equivalent citations: [1991(62)FLR191], (1995)IIILLJ603BOM
JUDGMENT S.M. Daud, J.
1. This petition under Article 226 of the Constitution takes exception to the petitioner being directed to answer queries vis-a-vis workers employed by respondents Nos. 3 and 4.
2. Petitioner has its factory at Pune and other places in India. It is in the business of manufacture of commercial vehicles and engineering goods. It has a work-force of near about 13,000 employees. The said employees are covered by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 hereinafter referred to as 'the Act'. In relation to its factory at Pimpri, the conservancy work is attended to by employees of the 3rd respondent. The 4th respondent is said to be a supplier of certain goods required by the petitioner in the manufacture of commercial vehicles. Petitioner's grievance is that respondent No. 2 has been illegally demanding that it supply information in relation to the work-force employed by respondent Nos. 3 and 4. This is despite the fact that these respondents are not its creations and have an independent existence of their own. Petitioner has no supervision or control over the employees engaged by respondent Nos. 3 and 4. The queries addressed to it by the 2nd respondent were uncalled for. Section 7-A of the Act which empowers the 2nd respondent to do various things is ultra vires the Constitution. Hence this petition for a declaration that Section 7-A is ultra vires, that the employees of the 3rd and 4th respondents are covered under separate code numbers for which reason the petitioner cannot be called upon to account for payments made by or on their behalf and a declaration that the 4th respondent is not a contractor.
3. Respondents 3 and 4 support the stand taken by the petitioner and plead that they have independent existence of their own. They were and always had been ready and willing to give to their employees the bene-
fits available under the Act and also furnish the requisite particulars to the 2nd respondent. It was the 2nd respondent who initially had refused to give the 3rd respondent a separate code. Even after this separate code number was given, the 2nd respondent persisted with queries being addressed to the petitioners in respect of the employees of the 3rd respondent.
4. No return has been filed on behalf of respondents Nos. 1 and 2. Mr. Master representing them contends that on their own showing the petitioner and the 3rd respondent were not functioning as principal to principal but as the principal-employer and contractor, respectively. That being the position and regard being had to Section 8-A of the Act, there was nothing wrong in the 2nd respondent calling upon the petitioner to furnish information in relation to the employees engaged in conservancy work at its factory although the engagement may have been by the 3rd respondent.
5. Counsel for the petitioner submits that having regard to the material on record, it is clear that respondent No. 3 had an independent existence of its own. It was a Cooperative Society registered as such under the Maharashtra Cooperative Societies Act and was engaged in business of various types. Not only was the 3rd respondent in the business of supplying manpower to various concerns including the petitioner, but it was also in the business of preparing cushion furniture and cushion articles. A concern could do business in the manufacture and sale of articles and also being in the service business by supplying man power required by different concerns. To the reply of Mr. Master for Respondent Nos. 1 and 2 that there was an admission about Respondent No. 3 being a contractor of the petitioner, the latter's counsel rejoins that the 3rd respondent was supplying manpower not only to itself but also to other concerns.
In fact*/* Respondent No. 3 has approached the 2nd respondent of its own accord and came out with the information that it was doing business as from 16th September 1979. To that effect is Exh. A. Page 32 of the petition shows the strength of the employees of the 3rd respondent from 16th September 1979 to 30th November 1981. In the year 1979 i.e. from September to December 1979, the total number of employees working for the 3rd respondent ranged from 118 to 266. From January to May 1980, there was a decline, the number of employees ranging between 7 to 11. This is explained by Respondent No. 3 as being due to a set-back suffered by it in the obtaining of a licence. From June 1980 onwards the 3rd respondent had a large work force, quite a number of whom were covered by the Act. Page 33 is the application made by the Chairman of the 3rd respondent for coverage under the Act. The 2nd respondent went on ignoring Respondent No. 3's demand and insisting that it had no locus standi of its own to apply for a separate code number. This according to the 2nd respondent, was because of the 3rd respondent being a mere contractor.
6. All that Respondent No. 2 gives out is a misleading impression of Respondent No. 3 being a subservient to the petitioner. The relationship between the two has to be gathered from the circumstances as a whole and not by picking a word here and there. Seen thus, it will be clear that Respondent No. 3 is in the business of supplying manpower to different establishments and has an existence of its own. Mr. Master relies upon Section 8-A of the Act which enjoins the employers and the contractors to recover the contribution of the employees and remit the same along with that of theirs. This has no bearing on the subject under consideration for the contractor contemplated by that section is one who is a mere front or headman of the principal employer. That cannot be said of the position occupied by the 3rd respondent in this case. Here, the 3rd respondent is very much there on its own. It was argued that the conservancy staff in the Pimpri factory belonging to the petitioner works in the Pimpri factory and therefore in the establishment of the petitioner. This makes the staff the employees of the principal employer i.e. the petitioner. This submission of Mr. Master is in reply to reliance placed by Counsel for the petitioner upon a certain passage from 1974, Labour Industrial Cases. 707. Where the work is done it is only one of the aspects to determine the relationship between the parties concerned in any particular transaction. Here, the position that the so-called contractor is an entity by itself. It is anxious to be recognised as such, From the very inception it has been pushing itself to get registration under the Act by soliciting a separate code number. It had made no secret of the fact that it started business on 16th September 1979. All this it would not have been done but for the fact that it was aware of its not being subservient to the petitioner. The petitioner is a client of the 3rd respondent as also the other concerns to whom it supplies manpower. I would therefore hold that the case of the petitioner vis-a-vis the 3rd respondent stands established.
7. Turning to the insistence of the 2nd respondent in relation to the 4th respondent, the material on record is to the effect that the 4th respondent is a supplier of auto parts to various concerns located in the Pune industrial belt. One such purchaser from the 4th respondent is the petitioner. But that would not make the purchaser a principal employer vis-a-vis the employees of the 4th respondent. Being a supplier of goods, the 4th respondent has an existence independent of the petitioner and the latter cannot be asked to supply particulars in relation to the employees of the 4th respondent. The vires of Section 7-A has been challenged by the petitioner, but this contention is no longer open to be agitated, regard being had to the decision in Prakash Kothari v. The Regional Provident Fund Commissioner, Maharashtra & Goa reported in 1989 II CLR 756 wherein a Division Bench of our High Court at Nagpur has affirmed the constitutional validity of Section 7. Being bound by the said decision, I negative the challenge to its validity raised in this petition. Hence the order:-
ORDER Queries addressed to petitioner vis-a-vis the employees of Respondent Nos. 3 and 4 governable under the Act are hereby quashed. Petitioner is not liable to furnish any information on this score. Rule in these terms is made particularly absolute, with parties being left to bear their own costs.