Gujarat High Court
M/S C. C. Chokshi & Co vs Regional Provident Fund on 13 September, 2013
Author: Chief Justice
Bench: Bhaskar Bhattacharya
M/S C. C. CHOKSHI & COV/SREGIONAL PROVIDENT FUND COMMISSIONER - II C/LPA/1374/2009 CAV JUDGEMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL NO. 1374 of 2009 In SPECIAL CIVIL APPLICATION NO. 5957 of 2008 FOR APPROVAL AND SIGNATURE: HONOURABLE THE CHIEF JUSTICE MR. BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA ================================================================1
Whether Reporters of Local Papers may be allowed to see the judgment ?
2To be referred to the Reporter or not ?
3Whether their Lordships wish to see the fair copy of the judgment ?
4Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?
5Whether it is to be circulated to the civil judge ?
================================================================ M/S C. C. CHOKSHI & CO & 1....Appellant(s) Versus REGIONAL PROVIDENT FUND COMMISSIONER - II & 2....Respondent(s) ================================================================ Appearance:
MR UDAY JOSHI WITH MR. NIMESH PATEL for M/S TRIVEDI & GUPTA, ADVOCATES for the Appellant(s) No. 1 - 2 RULE SERVED for the Respondent(s) No. 1 - 3 ================================================================ CORAM:
HONOURABLE THE CHIEF JUSTICE MR. BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 13/09/2013 CAV JUDGEMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)
1. This appeal under Clause 15 of the Letters Patent is, at the instance of an unsuccessful applicant of a Special Civil Application No. 5957 of 2008, under Articles 226 and 227 of the Constitution of India, and is directed against the judgment and order dated 30th March, 2009, passed by a learned Single Judge of this Court, by which, His Lordship rejected the writ-application, thereby confirming the order passed by the Authorized Officer of the Employees' Provident Fund Organization, Vadodara.
2. The facts leading to the filing of this appeal may be summarized as under:-
2.1 The appellant No.1 is a duly registered Partnership firm of Chartered Accountants. The appellant No.2 is one of the partners of the firm.
The respondent No.1 is the Regional Provident Fund Commissioner-II, who is an Authorized Officer under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The respondent No.2 is the appellate authority appointed under the said Act by the Central Government. The respondent No.3 was an employee with the appellant firm, who initiated the proceedings before the respondent No.1 for the purpose of seeking benefit under the provisions of the Act.
2.2 The respondent No.1, on the premise that the appellant firm is covered under the provisions of the Act, initiated proceedings under Section 7A of the Act. The case of the authority under the Act is that at the relevant period, the firm had employed more than 20 employees and was, therefore, obliged in law to following the provisions of the Act.
2.3 The inquiry culminated in an order dated 24th November, 2003, passed by the Assistant Provident Fund Commissioner in exercise of its powers under Section 7A of the Act, by which it was held that the firm stood covered under the provisions of the Act with effect from 1st May, 1989, and directed the firm to comply with the provisions of the Act with effect from 1st May, 1989 with respect to all the employees, including the respondent No.3 herein.
3. Feeling dissatisfied by the order dated 24th November, 2003, the firm challenged the same by filing Special Civil Application No. 13404 of 2004 before this Court. The learned Single Judge of this Court (Coram: Akil Kureshi, J.), vide judgment and order dated 22nd September,, 2005, disposed of the petition by making the following observations:-
Having considered the submissions, short question is whether persons who are under training at the Vadodara office of the petitioner could have been considered as employees for the purpose of the said Act and included for considering the total number of employees to decide whether the establishment was required to be covered under the provisions of the said Act, since total number of employees at the relevant time exceeded 20.
Since full material particulars regarding the existing number of trainees at the establishment is not before me, it is not possible for me to pass final conclusive order in this regard. It will be for the authorities to re-examine the issue and come to an appropriate conclusion on the basis of the observations made here-in-above. For the above purpose, impugned order is quashed. The petitioner shall file a representation before the respondents indicating the number of employees and trainees with the establishment at the relevant period. After examining the records and conducting such inquiry as may be necessary, respondents shall pass fresh orders in accordance with law, bearing in mind the observations made in this order. With these directions, the petition is allowed to the above extent. Rule is made absolute accordingly. No order as to costs.
4. Pursuant to the order dated 22nd September, 2005, passed by the learned Single Judge of this Court, a fresh inquiry was initiated by the authority under Section 7A of the Act, for deciding whether the provisions of the Act could be made applicable to the appellant firm or not.
5. The respondent No.1, vide order dated 21st February, 2008, recorded a finding that the provisions of the Act were applicable to the appellant firm with effect from 13th July, 1985 under Section 2A of the Act. The respondent No.1 concluded by observing as under:-
In compliance of the orders of Hon'ble High Court of Gujarat, the matter has been re-examined thoroughly, the information and evidentiary documents have also been analyzed and it is concluded that the respondents are a branch of M/s. C.C. Chokshi & Co., Mumbai, under the managerial, financial and functional control of C.C. Chokshi, is already covered under the Act at Mumbai and therefore, is coverable under Section 2-A of the Act with effect from the date of its coming into being at Vadodara i.e. w.e.f. 13/07/1985 itself. Further, the claim of the complainant (Shri H.M.Prajapati) is held to be justified. He is entitled to PF benefits with effect from the date of joining i.e. 09/1985. The claim of Department to the effect that the establishment had 22 employees in May, 1989 and therefore, coverable under Section1(3)(b) is also held to be correct. But at the moment the establishment is coverable under the section 2A of the Act w.e.f. 13/07/1985 the coverage under section 1(3)(b) from 05/89 is stands ruled out and it not a matter of dispute at all as of now. Accordingly, I decide and order the applicability of the Act to the said establishment w.e.f. 13/07/1985 under section 2-A of the Act. The matter is disposed of accordingly.
6. Feeling dissatisfied, the appellants challenged the order of the respondent No.1 by filing Special Civil Application No. 5957 of 2008. The learned Single Judge affirmed the order passed by the respondent No.1, and consequently the writ-application came to be rejected.
7. Feeling dissatisfied, the appellants have come up with the present appeal.
8. Mr. Uday Joshi, the learned counsel appearing for M/s Trivedi and Gupta, on behalf of the appellants, submitted that the impugned order dated 13th March, 2009, passed by the learned Single Judge is contrary to the law laid down by the Supreme Court in a catena of decisions wherein, it has been held that an apprentice or a trainee is excluded from the said definition of 'employee', and such trainees are not employees in terms of Section 2 (f) of the Act, so as to make the provisions of the Act applicable to the appellant's firm. He relied on the following decisions of the Supreme Court:-
(1) Regional Provident Fund Commissioner, Manglore Vs. Central Arecanut & Coca Marketing and Processing Cooperative Limited, Manglore, (2006) 2 SCC 381;
(2) Sri Rama Vilas Service Limited Vs. Regional Provident Fund Commissioner, 2000 Part-1 LLJ Page-169;
(3) Employees' State Insurance Corporation and another Vs. TELCO Limited and another, 1976 1 LLJ 81; and (4) The Provident Fund Inspector, Guntur Vs. T.S. Hariharan, AIR 1971 SC 1519.
9. Mr. Joshi submitted that the observations of the learned Single Judge that the appellant had admitted before the authority that they had 16 employees and 12 Articled Clerks, whereas the appellant was entitled to appoint only 6 Articled Clerks, and therefore, the authority rightly arrived at the conclusion that 'there were 22 employees of the appellant at the relevant point of time', is completely baseless and contrary to the evidence on record. According to Mr. Joshi, the figure of 16 employees, is not borne out from the record, and the same could be termed as an erroneous conclusion on the part of the authority.
10. In such circumstances, Mr. Joshi prays that there being merit in the appeal, the same may be allowed by setting aside the order passed by the respondent No.1.
11. On the other hand, the respondent No.3, party-in-person, opposed the appeal submitting that the learned Single Judge committed no error, not to speak of any error of law, in rejecting the writ-application. According to the respondent No.3, the appellants have contravened the Regulation 43 relating to the engagement of Articled Clerks, and such contravention amounts to professional misconduct. The sum and substance of the submission of the respondent No.3 is that every Member of the Institute is obliged to act within the framework of the Chartered Accountants Act, and any violation, either of the Act or the Regulations, by a Member would amount to misconduct. The respondent No.3 alleged that under the provisions of the Act, the firm can appoint 6 Articled Clerks, whereas to wriggle out of the rigor of the provisions of the Act, the appellant firm came out with a case that they had employed 12 Articled Clerks, and such Articled Clerks could not be termed as employees under Section 2(f) of the Act.
12. In such circumstances, the respondent No.3 prays that there being no merit in the appeal, the same may be dismissed with costs.
13. Having heard the learned counsel appearing for the appellants, the party-in-person, and having gone through the materials on record, the only question that falls for our determination is, whether the learned Single Judge committed any error in passing the order impugned?
14. Before we proceed to consider the appeal on merits, it will be profitable to look into the few relevant provisions of The Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
"Section (1) Short title, extent and application - This Act may be called the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
(2) It extends to the whole of India except the State of Jammu and Kashmir, (3) Subject to the provisions contained in Section 16, it applies--
(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed, and
(b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf;
Provided that the Central Government may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification."
Section 2 - Definitions. -- In this Act, unless the context otherwise requires, --
(a) ..... to (e) .....
(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."
Section 2(h) defines "fund". It reads as under:-
2(h) "Fund"
means the provident fund established under a Scheme;
Section (j) defines "member". It reads as under:-
(j) "member" means a member of the Fund;.
15. Section 7A provides for determination of moneys due from employers. It reads as under:-
"7A.
Determination of moneys due from employers.
(1) The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner, or any Assistant Provident Fund Commissioner may, by order, -
(a) in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and
(b) determine the amount due from any employer under any provision of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary.
(2) The officer conducting the inquiry under sub-section (1) shall, for the purposes of such inquiry, have the same powers as are vested in a court under the Code of Civil Procedure, 1908(5 of 1908), for trying a suit in respect of the following matters, namely:-
(a) enforcing the attendance of any person or examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination of witnesses, and any such inquiry shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1960).
(3) No order shall be made under sub-section (1), unless the employer concerned is given a reasonable opportunity of representing his case.
(3A) Where the employer, employee or any other person required to attend the inquiry under sub-section(1) fails to attend such inquiry without assigning any valid reason or fails to produce any document or to file any report or return when called upon to do so, the officer conducting the inquiry may decide the applicability of the Act or determine the amount due from any employer, as the case may be, on the basis of the evidence adduced during such inquiry and other documents available on record.
(4) Where an order under sub-section (1) is passed against an employer ex parte, he may, within three months from the date of communication of such order, apply to the officer for setting aside such order and if he satisfies the officer that the show-cause notice was not duly served or that he was prevented by any sufficient cause from appearing when the inquiry was held, the officer shall make an order setting aside his earlier order and shall appoint a date for proceeding with the inquiry:
Provided that no such order shall be set aside merely on the ground that there has been an irregularity in the service of the show-cause notice if the officer is satisfied that the employer had notice of the date of hearing and had sufficient time to appear before the officer.
Explanation.
- Where an appeal has been preferred under this Act against an order passed ex parte and such appeal has been disposed of otherwise than on the ground that the appellant has withdrawn the appeal, no application shall lie under this sub-section for setting aside the ex parte order.
(5) No order passed under this section shall beset aside on any application under sub-section (4) unless notice thereof has been served on the opposite party."
16. We shall now look into the provisions of the Chartered Accountants Act, 1949. Section 2 (2) reads as under:-
"
2. Interpretation.-
(1)In this Act, unless there is anythingrepugnant in the subject or context, -
(a) associate means an associate member of the Institute;
(b) chartered accountant means a person who is a member of the Institute.
(c) Council means the council of the Institute;
(d) holder of a restricted certificate means a person holding a permanent or termporary restricted certificate granted by State Government under the Restricted Certificates Rules, 1932;
(e) Institute means the Institute of Chartered Accountants of India constituted under this Act;
(f) prescribed means prescribed by regulations made under this Act;
(g) Register means the Register of Members maintained under this Act;
(h) registered accountant means any person who has been enrolled on the Register of Accountants maintained by the Central Government under the Auditor's Certificates Rules, 1932;
(i) year means the period commencing on the 1st day of April of any year and ending on the 31st day of March of the succeeding year.(2)
A member of the Institute shall be deemed to be in practice when individually or in partnership with chartered accountants in practice, he, in consideration of remuneration received or to be received, -
(i) engages himself in the practice of accountancy; or
(ii) offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts, or records or the preparation, verification or certification of financial accounting and related statements or holds himself out to the public as an accountant; or
(iii) renders professional services or assistance in or about matters of principle or detail relating to accounting procedure or the recording, presentation or certification of financial facts or data;
or
(iv) renders such other services as, in the opinion of the Council, are or may be rendered by a chartered accountant in practice;
and the words to be in practice with their grammatical variations and cognate expressions shall be construed accordingly.
Explanation.
- An associate or a fellow of the Institute who is a salaried employee of a chartered accountant in practice or a firm of such chartered accountants in practice shall, notwithstanding such employment, be deemed to be in practice for the limited purpose of the training of articled clerks.
17. We shall now look into the relevant Regulations of the Chartered Accountants Regulations, 1988. The Chartered Accountants Regulations 1988, came into force from 1st June, 1988. Regulation 2 Clause (iv) defines 'Articled Assistant'. Chapter IV is with respect to the Articled Assistants and Audit Assistants. Regulation 43, reads as under:-
"
43. Engagement of Articled Assistants (1) Subject to the provisions of these Regulations and subject to such terms and conditions, as the Council may deem fit to impose in this behalf, the members designated as an associate or a fellow, who has been in practice continuously, whether in India or elsewhere or an associate or a fellow, who is deemed to be in practice within the meaning of Explanation to sub-section (2) of section 2 of the Act, shall only be eligible to engage an articled assistant or assistants:
PROVIDED that in the case of an associate or a fellow practicing outside India, the Council may impose such additional terms and conditions as it may deem fit.(2)
An associate or a fellow, covered by sub-regulation (1), shall be entitled to train such number of articled assistant or assistants, under such terms and conditions, as are specified in Tables I given hereinafter;
TABLE-I (Applicable to members practicing the profession of chartered accountants in his individual name or as proprietor or as partner) Category Period of continuous practice Entitlement of articled assistant or assistants (I) An associate or fellow in continuous practice for a period up to 3 years 1
(ii) An associate or fellow in continuous practice for any period from 3 years to 5 years 3
(iii) An associate or fellow in continuous practice for any period from 5 years to 10 years 7
(iv) An associate or fellow in continuous practice for any period from 10 years.10
18. Regulation 46 provides for registration of Articled Assistants. Regulation 46 reads as under:-
"46. Registration of articled assistants (1) The articles shall be executed in the form approved by the Council.(2)
A statement in the form approved by the Council together with documentary evidence of compliance with Regulation 45, shall be sent to the Secretary for registration so as to reach him within thirty days of the commencement of articles.(3)
If the statement mentioned in sub-regulation(2) above is not received within the time specified, the Secretary may condone the delay where the member proves to his satisfaction that he was prevented from the member within fifteen days after the expiry of the period so specified, failing which the Secretary shall treat the date of commencement of service as the 31st day prior to its receipt by him. If the date of commencement of service is changed by the Secretary, he shall communicate such change to the member who shall make appropriate change in the articles.(4)
Every articled assistant shall undergo theoretical education as imparted by the Institute. He shall apply in the form approved by the Council; pay such registration fee as an articled assistant and such tuition fee as may be fixed by the Council, which shall not exceed rupees twenty five thousand in any case taken together. The tuition fee may either be paid in lump sum or in such installments and at such intervals, as may be specified by the Council.(5)
Deleted.(6)
Every deed of articles executed under this regulation shall cover the full period of articled training prescribed under these Regulations or the full balance period, where such articles had been terminated before the expiry of their full term.(7)
The Council shall have the power to relax any of the requirements of this regulation in respect of persons enrolled as articled assistants/audit assistants prior to the date on which these Regulations come into force.(8)
The Council may, after giving the applicant an opportunity of being heard, refuse to register the articles.
19. Regulation 48 provides for stipend to Articled Assistants. Regulation 48 reads as under:-
"48. Stipend to articled assistants (1) Every principal engaging and training articled assistant or assistants, under regulation 43, shall pay every month to such assistant a minimum monthly stipend, at the rates specified in the Table below:
Table Classification of the normal place of service of the articled assistant During the first year of training During the second year of training During the remaining period of training 1 2 3 4
(i) Cities/towns having a population of twenty lakhs and above.
Rs.
1000/-
Rs.
1250/-
Rs.1500/-
(ii) Cities/towns having a population of four lakhs and above but less than twenty lakhs.
Rs.
750/-
Rs.
1000/-
Rs.1250/-
(iii) Cities/towns having a population of less than four lakhs.
Rs.
500/-
Rs.
750/-
Rs.
1000/-
Explanation 1
- For the purposes of this regulation, no stipend shall be payable for any excess leave taken.
Explanation 2
- For the purposes of determining the rates at which stipend is payable under this regulation, the period of articled training of the student under any previous principal or principals (not being any such period prior to 1st July, 1973) shall also be taken into account.
Explanation 3
- For the purposes of this regulation, the figures of population shall be taken as per the last published Census Report of India.
(2) The stipend under this regulation shall be paid by the principal to the articled assistant either (a) by a crossed account payee cheque every month against a stamped receipt to be obtained from the articled assistant; or (b) by depositing the amount every month in an account opened by the articled assistant in his own name with a branch of the bank to be specified by the principal.
20. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 was brought on the statute book for providing for the institution of Provident Funds for the employees in factories and other establishments. The basic purpose of providing for Provident Funds appears to be to make provision for the future safeguard of the industrial worker after his retirement, or for his dependents, in case of his early death. To achieve this ultimate object, the Act is designed to cultivate among the workers a spirit of saving something regularly, and also to encourage stabilization of steady labour force in the industrial centers.
21. Under Section 7A of the Act, the authority can determine the amount payable under the Act, or the Scheme by the employer. However, by reason of sub-section (3), no such order determining the dispute or the amount under Clause (a) or (b) of sub-section (1) can be passed without giving the employer a reasonable opportunity of representing his case. Therefore, the power under Section 7A is exercised only in the case where the dispute is raised either with regard to the applicability of the Act on any ground whatsoever or with regard to the determination of the amount due. The Scheme of the Act is clear. Section 1 sub-section (3) quoted above, makes the provisions of the Act applicable from the date of the Notification extending the Act to an establishment. Once an establishment comes under the purview of the Act by reason of the provisions contained in the Act, an employer is obliged to comply with the provisions of the Act in the teeth of various consequences including the penal ones. The application of the Act is not dependent either on the issue of notice upon the employer by the authority or on the determination by such authority. As soon as the conditions are satisfied, the Act becomes applicable to an establishment and the employer becomes liable to comply with the provisions thereof. It is only the question of liability under the Act when disputed by the employer, is to be determined under Section 7A of the Act. It is open to the employer to raise a dispute that the Act does not apply and, therefore, he is not liable to make the necessary payment. When such dispute is raised, the Inspector has to place the necessary material before the authority under Section 7A, together with his report, and then Section 7A is invoked and the entire process under Section 7A is to be undergone. In case the dispute is raised before the Commissioner, he is supposed to call for the report and undertake the exercise of his power under Section 7A.
22. In the present case, a complaint was received by EPFO at its Regional Office at Vadodara, alleging that the appellant firm came into existence at Vadodara from July, 1985, and had failed to show its records for the years 1985 and 1986 to the Provident Fund Inspector, and that the appellant firm had its own offices at Mumbai and Ahmedabad, much prior to the office at Vadodara, and, therefore, is covered under the Act from July 1985. Accordingly, a case under Section 7A of the Act was registered before the EPFO authority to decide the issue of the applicability of the provisions of the Act. The appellant firm took a defence that it had a lesser number of employees on its rolls than the statutory limit for coverability under Section 1 Clause 3 sub-section (b) of the Act. It is also the case of the appellant firm that they are only an offshoot of the parent company M/s C.C.Choksi & Company at Mumbai, and due to such reason, the firm is coverable under the Act from the date of its coming into existence, i.e. 13th July, 1985, under Section 2A of the Act, since the parent company M/s C.C.Choksi & Company have already been covered under the Act with effect from 31st October, 1964.
23. The authority under the Act, on the basis of the materials on record came to the conclusion that the Ahmedabad office of the appellant firm was also coverable from the date of its coming into operation i.e. with effect from 1st July, 1997, irrespective of the fact whether the firm had employed 22 employees or less than 20 or more than 20 on the date of its coming into existence i.e. 13th July, 1985. Accordingly, the authority came to the conclusion that the dispute with regard to the controversy of 22 employees or less than 22 employees would not come in the way of the applicability of the Act on the appellant firm, and the firm is covered within the provisions of the Act with effect from 13th July, 1985, with a staff strength of 3 employees.
24. It appears that the main bone of contention on behalf of the appellant firm was that they had engaged 12 Articled Clerks who were not their employees, but they were just trainees, and therefore, the firm was not covered under the provisions of the Act, since the strength of the employees was less than 20. This submission before the authority did not find favour, as according to the authority, the same was contradictory with the written admission of the firm itself. The authority took into consideration the provisions of Chapter IV of the Chartered Accountants Regulations, 1988, which we have referred to above, and recorded a finding that the firm at the most could have appointed only 6 Articled Clerks, and therefore, their stance that they had 12 Articled Clerks was not sustainable. The authority also recorded a finding that according to the inquiry report dated 21st March, 1997, the firm had admitted that they had 16 employees.
25. In such circumstances, the authority came to the conclusion that EPFO was right in submitting that the firm had 22 employees because 16 employees plus 6 employees is equal to 22 employees, and out of 12 Articled Clerks, if only 6 are entitled to be appointed, then the balance six are necessarily to be treated as employees.
26. The learned Single Judge, on the basis of such materials on record confirmed the findings recorded by the authority, and thought fit to reject the writ-application. In our opinion, after taking notice of all the relevant materials on record, if the learned Single Judge has reached to such a conclusion, then it cannot be said that the view taken by the learned Single Judge is unreasonable or erroneous warranting any interference at the hands of this Court in appeal. An apprentice means a learner. An apprentice, in some cases, may be paid allowances for subsistence, as provided under the Regulations 1988. An employee is a person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment. From the materials on record, it is difficult for us to reach to the conclusion, even if believe that there were 12 Articled Clerks taking into consideration the remuneration being paid to such Articled Clerks. Besides the above, an apprentice who is a learner, would not remain in the establishment for a long period of time, but here in the present case, we find that the persons said to have been appointed as Articled Clerks have worked for a long period of time which renders the defence of the firm doubtful that they are not employees but are Articled Clerks.
27. It is a settled law, as held by the Supreme Court in Surya Dev Rai Vs. Ram Chander Rai (2003) 6 SCC 675, that to be amenable to correction in certiorari jurisdiction, the error committed by the Court or authority on whose judgment the High Court was exercising jurisdiction, should be an error which is self-evident. An error which needs to be established by lengthy and complicated arguments or by indulging in a long drawn process of reasoning, cannot possibly be an error available for correction of writ of certiorari. If it is reasonably possible to form two opinions on the same material, the finding arrived at one way or the other, cannot be called a patent error. As to the exercise of supervisory jurisdiction of the High Court under Article 227 of the Constitution of India also, it has been held in Surya Dev Rai (supra) that the jurisdiction was not available to be exercised for indulging in reappreciation or evaluation of evidence or correcting the errors in drawing inferences like a court of appeal. If the learned Single Judge would have gone into the reappreciation of the evidence collected by the authority in the enquiry under Section 7A of the Act, then in such circumstances, the learned Single Judge could be said to have acted like an appellate Court which is not permissible for it to do under Article 226 or under Article 227 of the Constitution. Thus, in our opinion, the approach of the learned Single Judge to the matter was quite reasonable and correct.
28. We shall now deal with the decisions relied upon by Mr. Joshi, in support of his submissions.
28.1 In Regional Provident Fund Commissioner, Manglore (Supra), the employer invited applications from the applicants who were desirous of undergoing training at its Chocolate Factory on a stipend of Rs. 600/- per month, which may have increased to Rs. 800/- per month after 6 months. The company selected 45 persons out of 270 who were interviewed.
It was indicated that the training in the factory would not entitle any trainee to claim any right of appointment after completion of the training period. It was also stipulated that if any trainee left the factory within 1 year, he would be required to refund the amount received by him as stipend. Notice was issued by the Provident Fund Commissioner under Section 7A of the Act in respect of the said 45 trainees, and vide order dated 15th May, 1991, the Commissioner held that the trainees were employees for the purpose of the Act, and the Company was liable to pay the quantified amount. The writ-application was filed by the Company questioning the determination. The learned Single Judge held that the demand was unsustainable. The Commissioner went in appeal before the Division Bench, which dismissed the appeal confirming the order passed by the learned Single Judge. Aggrieved by the order passed by the Division Bench of the High Court, the Commissioner filed SLP before the Supreme Court. In the facts of the case and on the basis of the materials on record, the Supreme Court recorded a finding that admittedly the Standing Orders were not, at the relevant point of time, certified and, therefore, in terms of Section 12A of the Standing Orders Act, the Model Standing Orders were deemed to be applicable. The Supreme Court took the view that under the Model Standing Orders, an apprentice was described as a learner who was paid allowance during the period of training. The Supreme Court also took notice of the fact that the trainees were paid stipend during the period of training, and had no right of employment, nor any obligation to accept the employment, if offered by the employer. In such circumstances, the Supreme Court held that the trainees were apprentices engaged under the Standing Orders of the establishment and were excluded from the definition of an employee, according to the Section 2(f) of the Act. This decision in no manner helps the appellants as the same was delivered in the facts of that case. In the present case, the appellant, with a view to save itself from the applicability of the provisions of the Act, has put forward a defence that out of 22 employees 12 were Articled Clerks, and such defence is not acceptable since only 6 were entitled to be appointed according to the Regulations. Such was not the position in the case before the Supreme Court.
28.2 In Sri Rama Vilas Service Limited (Supra) the issue before the Division Bench of the Madras High Court was whether the persons appointed by the Company engaged in the business of Goods Transport Services were trainees as claimed by the Company or regular employees of the company as was contended by the Commissioner. On the basis of the materials on record, the Division Bench noticed that the company had been engaging trainees for the purpose of training in accordance with the Training Scheme, the Rules and Regulations as well as the Standing Orders, and that a separate scheme was also framed on 31st January, 1983. The Court also noticed that training had also been introduced with specified qualifications and the period of training. The trainees were paid stipend and were not eligible for any other benefits, monitory or otherwise which could be extended to the permanent category of workmen. In such circumstances, the Court took the view that there was no merit in the stance of the respondent that the company establishment had deliberately classified certain regular employees as trainees with a view to deny them the Provident fund benefit. This decisions was also rendered in the facts of that case and is not helpful in any manner to the appellant firm. In the present case, on the basis of the materials on record, we have noticed that the remuneration which was being paid to the so-called trainees was not by way of stipend but appears to be a full-fledged salary. If that be so, then it is very difficult to accept the stance of the appellants that the employees were trainees and not the regular employees.
28.3 In Employees State Insurance Corporation (Supra), the issue before the Supreme Court was whether the apprentice was an employee under the Employees State Insurance Act. The Supreme Court after considering the meaning of the word 'apprentice' and the legislative history of India, on the subject noticed that from the terms of agreement it was very clear that the apprentices were mere trainees for a particular period for a distinct purpose and the employer was not bound to employ them in the works after the period of training was over. This decision also is not helpful in any manner to the appellants as the same was rendered in the facts of that case.
28.4 In Provident Fund Inspector, Guntur (Supra), the issue before the Supreme Court was whether clause (b) of sub-section (3) of Section 1 when it spoke of the establishment employing 20 or more persons meant that the person so employed may be employed by the establishment for any purpose whatsoever and for however, short a duration, or that the employment may be for some minimum period in the establishment. In the facts of that case and considering the language of Section 1 clause 3 sub clause (b), the Supreme Court took the view that employment of a few persons on account of some emergency or for a short period necessitated by some abnormal contingency, which otherwise would not be a regular feature of the business of the establishment and which did not reflect its business prosperity or its financial capacity and stability from which it could reasonably be concluded that the establishment can in the normal way bear the burden of contribution towards the Provident fund under the Act would not be covered by this definition. The Court took the view that the word 'employment' should be construed as 'employment in the regular course of business of the establishment' and would not include employment of a few persons for a short period on account of some passing necessity or some temporary emergency beyond the control of the company. This decision also was delivered in the facts of that case and would not help the appellants in any manner. In the case in hand, there is nothing to indicate that the persons were employed on account of some emergency or for a short period necessitated by some abnormal contingency. From the materials on record, it is very clear that the appellants had appointed persons which could be termed as a regular feature of the business of the establishment.
29. Before parting with the matter, we may state that the party-in-person placed much stress on the issue of alleged professional misconduct on the part of the appellant firm so far as engagement of Articled Clerks is concerned. His argument was that in light of the specific finding recorded by the authority and confirmed by the learned Single Judge, the firm had engaged 12 Articled Clerks, whereas the Regulations permit engagement of maximum 6 Articled Clerks. This, according to the party-in-person, amounts to professional misconduct. Since we are not concerned with this issue, we do not express any opinion, but we are making a reference of the same only because the issue was raised by the party-in-person.
30. The inevitable conclusion is that the judgment of the learned Single Judge is on terra firma and needs no interference at our hands in this appeal. The appeal being devoid of any merit, deserves to be dismissed, and is, accordingly, dismissed with no order as to costs.
(BHASKAR BHATTACHARYA, C.J.) (J.B.PARDIWALA, J.) Mohandas After this order is passed, Mr.Joshi, the learned advocate appearing for the appellants prays for stay of operation of our above order.
In view of what has been stated above, we do not find any reason to stay our order. Therefore, the prayer is refused.
Certified copy of our order be delivered to the parties by 16th September 2013, if the certified copy is applied for.
(BHASKAR BHATTACHARYA, C.J.) (J.B.PARDIWALA, J.) /malek Page 27 of 27