IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP No. 12344 of 2002(T)
1. K.V.JAYA, W/O. VIJAYAN,
... Petitioner
2. K.R.THANKAPPAN, KATTAMMAKKADA VEEDU,
Vs
1. THE WELFARE FUND INSPECTOR,
... Respondent
2. THE DEPUTY TAHSILDAR, REVENUE RECOVERY,
3. THE VILLAGE OFFICER,
4. SRI.K.D.SURESH, KOTTAPPULLY VEEDU,
For Petitioner :SRI.M.C.JOHN
For Respondent :SRI.K.HARILAL, SC, KTWWF BOARD
Coram
Dated : 12/08/2004
O R D E R
.PL 58
.TM 5
.BM 5
M. RAMACHANDRAN,J.@@
jAAAAAAAAAAAAAAAAAA
———————————@@
j
O.P.Nos.12344 & 23834 OF 2002@@
jAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
———————————@@
j
Dated this the 12th day of August,2004.@@
jAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
J U D G M E N T@@
jEEEEEEEEEEEEEEE
.SP 2
((HDR 0
O.P.Nos.12344 & 23834/2002
-#-
))
.HE 1
Revenue recovery proceedings initiated by
the Welfare Fund Inspector, towards contribution to the
Toddy Workers Welfare Fund for the year 2000-01 in
respect of Toddy Shop Numbers 96 to 99, 119 to 122,
147, Mamala Range are under challenge. The assessment
order is marked as Ext.P1 in O.P.No.23834 of 2002,
dated 25-3-2002. Advance assessment notice dated
18-12-2001 is marked as Ext.P1 in O.P.No.12344 of 2002.
Even though it had been found in the enquiry that the
fourth respondent–Sri.Suresh was the person who was
running the shop for the period from 1-4-2000 to
31-3-2001, because of the definition clause of Section
2(c) under the Act, assessing authority held that the
licensees might as well come within the purview of the
term `employer’. Liability has been cast on a group of
persons who are (1)Sri.K.R.Thankappan,(2) Smt.K.V.Jaya,
(3)Sri.M.S. Viswanathan, (4)Sri.T.K.Babu and (5)
Sri.T.C.Jose. First and second persons referred to
above are the petitioners in O.P.No.12344 of 2002 and
they challenged the preliminary determination, of
course, but only after the final assessment.
Sri.T.C.Jose is the petitioner in the latter original
petition and he filed the writ petition, pointing out
that in view of the interim orders in the earlier
proceedings, the demand was inadmissible. In addition
to them, the fourth respondent Sri.Suresh, who was
actually running the shops during the relevant period,
as could be seen from the order, has also been made as
liable for the contribution in respect of the shops.
But, there is nothing to show that he had complained
about the assessments or demands.
2. Reference is made by the determining
authority in Ext.P1, to the statements made by the
employees, before him, that during the above period,
the shops concerned were being managed and run by
Mr.Suresh– the fourth respondent. He was the person
who was paying the wages and the welfare fund
contribution was being recovered from their wages by
him. After referring to this position, the Officer had
held that on the basis of evidence and enquiries made
by him, the employers were the six persons, as none of
the licensees were left out. Contribution had been
assessed at Rs.6,51,718/-. However, a part of the
amount had already been remitted and the balance amount
of Rs.2,69,516/- and interest of Rs.47,887/- were
therefore assessed as payable. Recovery steps had been
initiated thereafter.
3. Ext.P1 is dated 18-12-2001, and Ext.P1
assessment order, is dated 25-3-2002. It appears that
Mr.Suresh had made further remittances towards the
liability, and the balance payable was demanded as
Rs.1,11,358/-, the amount payable for January, February
and March, 2001 (Ext.P3 in O.P.No.23834/2002).
4. The only question is whether it may be
possible to fasten the liability on the petitioners in
spite of circumstance that they were found as not in
the management of the shops. It may be that they had
not objected to the provisional assessment, or
challenged the final assessment by resorting to any
appeal. The pleadings are scanty, and the petitioner
in O.P.No.23834/2002 has even no idea about the real
assessment year to which he has been assessed. But,
the issue has to be considered, as to whether law
recognises a notional liability. They were licensees,
who had been awarded the contract jointly in the
auction conducted by the Excise Authorities, but the
question is whether liability could have been fastened
on them severally and jointly, for this sole reason.
5. A counter affidavit has been filed by the
Welfare Fund Inspector in O.P.No.12344/2002. It had
been admitted that Sri.Suresh was the person who was
running the shop for the period concerned, but taking
notice of the definition of the term `employer’ under
Section 2(c) of the Kerala Toddy Worker’s Welfare Fund
Act, 1969, the authority claims that it would have been
possible to validly bind the others as well, as coming
within the definition of employer.
6. There are no disputes about any other
factual position, and we may go directly to the issue.
The only objection raised in the Original Petition is
that none of them were employers vis-a-vis the
employees of the shops at Mamala. They had not engaged
any workmen, collected contributions nor defaulted in
payment, so as to warrant the harassment of recovery.
7. We may look into the definition of
`employer’ under Section 2(c) which is as following:–
” `employer’ means any person who employs,@@
iA AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
.SP 1
whether directly or through another person, or@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
whether on behalf of himself or any other@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
person, one or more employees and includes any@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
person who has a licence for the manufacture,@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
(distribution, storage or sale) of toddy under@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
the Abkari Act for the time being in force.”@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
.SP 2
The definition of the term `employee’ under Section
2(d) also might be relevant which is extracted herein
below:-
” `employee’ means any person who is employed@@
i AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
.SP 1
for wages in connection with the tapping,@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
manufacture, (transport, storage or sale) of@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
toddy and who gets his wages directly or@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
indirectly from the employer and includes any@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
person employed by or through a contractor or@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
through an agent in or in connection with the@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
tapping, manufacture, transport or sale of@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
toddy.”@@
AAAAAAA
.SP 2
8. An assessment can be there only after a
combined reading of the above said terms. It is well
settled that definitions have to be understood subject
to the context. `Employer’ of course is an inclusive
definition, but the principal part of the definition
indicates that he should be the man who employs on
behalf of himself or any other person, one or more
employees. Only if this condition is not
satisfactorily answered, it should be necessary to go
to the inclusive part of the definition.
9. The definition of employee also is
significant in this context. It denotes a person who
is employed for wages and gets his wages directly or
indirectly from the employer. I find considerable
force in the submission that when the workmen had
tendered evidence, and records indicated that it was
the fourth respondent who alone was the employer, it
was a perverse stand and illogical reasoning, and a
proposition difficult to be digested that only for the
reason that licence had been obtained, in the name of a
compendium of persons, and that too under the Abkari
Act, all of them are to be roped in and made answerable
for the contribution to the employees welfare fund.
The attempt is artificial to the core, and the
legislature might not have envisaged to fasten such
liability on a person who had no connection with the
actual business. The definition was only to see that a
person cannot disclaim liability by hiding behind the
curtain. One or other person should have been
answerable to the claims.
10. Mr.Thomas Kutty, learned Government Pleader
however had brought to my attention a judgment in
W.A.No.770 of 1986 as also the judgment in O.P.No.11636
of 1992 dated 13-01-1993. According to him, this Court
had occasion to consider the issue on a previous
occasion. I find that the Division Bench in judgment
dated 6-10-1988, however has not adverted to this
issue, specifically, as the contention raised by the
appellants/petitioners was that during the period when
the shop was being run departmentally, persons who had
been in management could not have been considered as
employers as defined in section 2(c) of the Act. The
contention had been rejected, but the fact remains that
the issue that was decided had no relevance since the
employment had been admitted in the said case. In the
latter judgment referred to, the petitioners apparently
were similarly situated like the petitioners herein.
There was an internal arrangement by a group
subdividing the shops among themselves, and the issue
which had arisen was as to whether the group will be
answerable for the claims in respect of shops which
they had not run. It was held that because of
inclusive definition, any internal arrangements could
not have come to their rescue.
11. However, undisputed facts compel me to
examine the issue, in some more details, here. A group
of persons had been the successful auctioneers.
Thereafter, the shops were taken over by the fourth
respondent. This was never objected to either by the
Excise Department, or the Toddy Workers Welfare Fund
Board or even the workmen. After the Act and Scheme
were brought into force, it appears that loop holes in
the matter of remittance of contributions found had to
be appropriately plugged up. In order to ensure
collection of amounts due from an employer before the
expiry of the period of his contract, it had been
considered necessary to provide for advance collection
due from him and for adjusting the amounts so
collected, against the final determined amount.
Therefore, Section 8-A had been incorporated by Act 31
of 1978. Thereby, every employer, pending
determination under Section 8 of the Act, was to pay
every month, by way of an advance contribution an
amount equivalent to one-twelfth of the amount payable
annually in respect of the shop, according to the
latest determination under the said section. This was
payable on or before the 5th day of the succeeding
month. In case of failure to pay advance contribution,
the Welfare Fund Inspector was to issue a notice to the
defaulter and if dues were not paid within seven days,
it had to be recovered forthwith. Under Section 8A(4),
the amount paid as above for the year was to be
adjusted against the amount determined under Section 8
for that year.
12. As per the statutory scheme framed, the
employer was in the first instance liable to remit both
the contributions payable by himself and on behalf of
the members employed by him. Para 35 of the scheme
enumerated the duties of the employer to send returns
within fifteen days of the close of each month. There
was duty for maintaining an inspection note book. He
was to maintain full and accurate accounts. Para 36
cast a duty on the shop owner to furnish in specific
form the full particulars pertaining to the affairs of
the establishment. Specific provisions also obliged
him to send intimation of any change in such person.
Such details were to be recorded in the registers
maintained by the Board Office. There was a further
provision regarding the time frame for sending
statement of wages and other details. Right, for
verification of correctness of the statement, by the
trade union functioning in the industry had been
provided.
13. In the instant case, it has to be presumed
that such statements had been forwarded by the fourth
respondent and the order shows that advance
contribution from month to month was being remitted by
the employer. Some details have been given in
Ext.P1(a) filed in O.P.No.23834 of 2002. This
indicates that the employees as well as the Board had
accepted the fourth respondent as employer for the
shops concerned. No doubt ever was there in the minds
of any body at any time. Even after the final
assessment, there has been further remittance. It is
clear that only when balance amount was remaining
unpaid, attempt had been made to proceed against the
present petitioners, as well.
14. I am of the opinion that having accepted
the fourth respondent as the employer in respect of the
shops for the relevant year, the respondent is estopped
from taking a stand that for technical reasons that
some others too are licence holders, such group becomes
equally answerable. The inclusive definition was not
intended to apply to such a situation at all.
15. We may look at the issue from a different
perspective. Definition of employee becomes
significant now. An employee has a claim for wages,
only against the person who had employed him. There
would not have been a contingency that no employer was
there available at all for the shops. The employees
had no case that petitioners in these two original
petitions had been their employer at any point of time
or had paid any wages for the work that had been
carried out. Nor have they a case that petitioners had
appropriated contribution, recovered from them. The
anxiety of the Act, of course, could be understood that
liabilities for payment of wages and contributions
cannot be annulled or got rid of by hiding under any
terms of contract. But, at least where the employees
allege and claim that a named person was their employer
and when this factual position had been also found by
the Welfare Fund Inspector, artificial definition which
would have application only in stray contingencies
could not have been imported at all. Petitioners are
therefore well-founded in their submission that they
should not have been made liable for the contributions,
in respect of the Toddy Shop Nos.96 to 99,119 to 122
and 147 for the year concerned. The fourth respondent
alone was responsible and answerable for the welfare
fund contribution and dues could have been collected
from him alone.
16. In this view, the Original Petitions
deserve to be allowed. The impugned orders and demands
are set aside as against the petitioners.
.JN
.SP 1
M.RAMACHANDRAN, JUDGE@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAA
((HDR 0
))
.HE 2
mbs/
.PA
.SP 2
……………..T…….T……L.T…….T…….T…….T…….J
(M. RAMACHANDRAN,J)@@
jAAAAAAAAAAAAAAAAAAA
——————————————–
——————————————–
O.P.Nos.12344 & 23834 OF 2002@@
AAAAAAAAAAAAAAAAAAAAAAAAAAAAA
——————————————–
J U D G M E N T@@
jAAAAAAAAAAAAAAA
DATED:12TH AUGUST,2004@@
jAAAAAAAAAAAAAAAAAAAAAA