IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 22.11.2010 CORAM THE HONOURABLE MR. JUSTICE R.SUDHAKAR Writ Petition No.36683 of 2006 and M.P.No.1 of 2006 Madras School of Social Work, Run by the Society for Social, Education & Research, represented by its President, Nos.32A and 33, Casa Major Road, Egmore, Chennai-600 008. ... Petitioner vs. The Assistant P.F. Commissioner (C & R), Office of the Employees'' P.F. Organization, No.37, Roytapettah High Road, Chennai-600 014. ... Respondent Writ Petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records and to quash the order bearing No.CCII/4/26001/Enf/Regl/2006 dated 07.09.2006 passed in the impleading petition. For Petitioner : Mr.Gupta For Respondent : Mr.K.Gunasekar ----- O R D E R
Writ Petition is filed praying to issue a Writ of Certiorari, to call for the records and to quash the order bearing No.CCII/4/26001/Enf/Regl/2006 dated 07.09.2006 passed in the impleading petition.
2. The Regional Provident Fund Commissioner issued a summon dated 16.8.2005 to the petitioner under Section 7/A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as “the Act”), calling upon the petitioner to appear and furnish records as follows:
“Now, THEREFORE, your are hereby summoned to appear before Regional/Assistant Provident Fund Commissioner at No.37, Royapettah High Road, Chennai-14, either in person or through an authorised representative on the 6th day of September, 2005 at 11.00 A.M. to give evidence and to produce all the relevant record including those mentioned below for conducting an inquiry and determining the amount due from you.
1. Attendance Register
2.Membership Eligibility
Register
3. Cash Book and vouchers
4. Payment Register/Pay Bills
5.Any other document
necessary for ascertaining
attendance, payments etc.
For the period from January 2004 onwards.
Further, you are called upon to file mothwise statement of the amounts due under the Act with reference to your Books of accounts such as Cash Book/Voucher/Wages Register Salary Register, in respect of your Employees’ inclusive of Employees’ through contractor, if any.
It is also observed that you have not furnished the monthly return in Form 12-A for the above said period which constitute a separate offence under the Act. You are therefore called upon to submit the same on the date of inquiry even if you have not remitted the dues.”
The hearing was adjourned to another date and in the meanwhile petitioner filed an application on 28.4.2006 to implead the Ministry of Youth Affairs and Sports, Government of India, New Delhi in the proceeding pending before the Employees’ Provident Fund Organisation stating that they are necessary and proper party. This application was taken up by the authority and the plea for impleading the Ministry of Youth Affairs and Sports, Government of India, New Delhi, as a party in the Section 7A enquiry was rejected on four points which reads as follows:-
“1. Madras School of Social Works is covered under EPF & MP Act 1952 and allotted separate Code No.TN/26001 and not connected with the Ministry of Youth and Sports.
2. The person in charge of Madras School of Social Works is only responsible for compliance of provisions of the Act and Scheme and not Ministry of Youth Affairs and Sports.
3. Any dispute of difference of opinion between Ministry of Youth Affairs and Sports and Madras School of Social Work should be settled between you amicably and EPFO has no role to play in that.
4. In respect of notification issued by the Central Government and notified in Gazette of 20-26th July 2003 which speaks of exclusion from EPF & MP Act 1952, only those establishments which are financed by grants in aid from Central or State Government are excluded and does not included any liability of employer towards employer’s contribution for PF. Hence Madras School of Management cannot be excluded on the basis because employer’s contribution has been paid from grants in aid amount only. Inquiry is adjourned to 13.10.2006.”
Such order of the Employees’ Provident Fund Authority is now under challenge.
3. In this case, notice of motion was ordered on 28.9.2006 and interim stay was granted.
4. A counter-affidavit has been filed by the respondent supporting the stand taken by the Employees’ Provident Fund Authority and refuting the contentions made in the writ petition. According to the respondent, the Ministry of Youth Affairs and Sports is not relevant to the proceedings initiated under Section 7A of the Act. The specific case of the respondent as contained in the counter affidavit is as follows:-
“8. Further, it is respectfully submitted that the petitioner establishment is covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and allotted separate code number TN/26001 with effect from 1.8.1990.”
“11. It is respectfully submitted that the petitioner establishment is covered under Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and allotted separate code No.TN/26001 and not connected with Ministry of Youth Affairs and Sports.”
5. On this plea, Shri K.Gunasekar, learned counsel appearing for the respondent submitted that the writ petition is totally misconceived. The Writ Petition has been filed only to delay the adjudication proceedings.
6. The plea of the petitioner’s counsel is that the Ministry of Youth Affairs and Sports, Government of India has given the grant in aid and entrusted the petitioner, the activity of training, orientation and research centre for National Service Scheme. For the purpose of activities relating to National Service Scheme, four Employees’, viz., one co-ordinator, two labourers and one supporting staff (typist) were sanctioned and funded by the annual grant in aid by the Government of India, Ministry of Youth Affairs and Sports. According to the petitioner, they were called upon to employ the persons on contract basis. The National Service Scheme TORC Unit was started at the petitioner’s institution in the year 1984. It is not disputed by the petitioner as stated in para 3 of the writ affidavit that Provident Fund Account was opened by the petitioner, in the Chennai PF office in respect of the following four Employees and their account numbers are also given hereunder:-
“(i) Ms.M.Nandini, Typist, A/c No.TN/26001/2
(ii) Dr.J.Visuvathas Jeyasingh,
Co-ordinator(Training) A/c No.TN/26001/6
(iii) Dr.Vijayaram, Lecturer A/c No.TN/26001/8
(iv) Mr.A.Mohan Doss, Lecturer A/c Nos.TN/26001/43
and 64.”
It is also admitted by the petitioner that till 31.3.1999, the amount spent by the petitioner under NSS-TORC scheme was reimbursed by the Ministry of Youth Affairs and Sports. It is admitted by the petitioner that from 1999 till 31.3.2004, the Ministry of Youth Affairs and Sports refused to reimburse the amount. Petitioner refers to an agreement entered into by the petitioner with the Ministry of Youth Affairs and Sports and pleads that the employer’s contribution is required to be paid by the Ministry of Youth Affairs and Sports and not by the petitioner and for this reason, they filed an application to implead the Ministry of Youth Affairs and Sports which was negatived by the authority.
7. This Court, on going though the averments made in the application filed for impleading the Ministry of Youth Affairs and Sports and the statement of fact contained therein, and also considering the factual aspects of this case, is unable to find any irregularity or error in the order of the authority for the following reasons:-
(i) Even in the application filed before the Employees’ Provident Fund Authority and also in the affidavit filed before this Court, the petitioner has clearly admitted that the project was started in the year 1984 and all the four Employees as mentioned above working under the NSS-TORC Scheme were covered by a provident Account opened by the petitioner at the Chennai Provident Fund Office. Therefore, for 15 long years all the four Employees have been shown as Employees of the petitioner and the employer’s Provident Fund Contribution has been paid. The default in payment started in the year 2004 as could be seen from the summon dated 16.8.2005 issued by the respondent. It is apparent that from 1984 till 2004, the petitioner has been paying the contribution. Even in the absence of reimbursement by Ministry of Youth Affairs and Sports from 1999 the contribution was made. Since the above four Employees are covered by a Provident Fund Account showing the petitioner as employer, as rightly contended by the respondent in the counter-affidavit, the question of impleading the Ministry of Youth Affairs and Sports does not arise. The payment made by Ministry of Youth Affairs and Sports to the petitioner has no relevance insofar as the respondent department is concerned.
(ii) In the impugned order it has been stated that the person in-charge of the petitioner institution is only responsible for compliance of the Act and Scheme and not the Ministry of Youth Affairs and Sports. This stand is justified as admittedly from 1984 till the issuance of the summons, it is the petitioner that has been paying the employer’s contribution. How the situation has changed after the issuance of the summons is not explained by the petitioner. No document to show the employment of the four persons by the Ministry of Youth Affairs and Sports has been produced before the authority or before this Court except mere statement. Therefore, petitioner’s plea has no basis.
(iii) In para 4 of the writ affidavit and also in the petition filed before competent authority, it has been very explicitly stated by the petitioner that the Ministry of Youth Affairs and Sports have refused to reimburse the amount from 1.4.1999 to 31.3.2004. Obviously, it denotes that there is dispute and therefore, the authority was justified in stating that the dispute or difference of opinion between the Ministry of Youth Affairs and Sports and the petitioner should be settled between themselves and the Employees’ Provident Fund Authority had no role to play. This Court is in respectful agreement with the reasoning of the authority.
(iv) The plea of the petitioner that the provisions of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 will not apply in this case, appears to be an afterthought and has been rightly rejected by the authority. If this plea now taken by the petitioner is to be considered, then the petitioner has to explain why the Provident Fund Account was started in the names of the four persons as mentioned above from the year 1984 and the amount has been paid continuously till 31.3.1999 without demur and thereafter till the default. Such plea should have been taken at the earliest point of time. For more than 20 years the contribution has been paid in respect of the four Employees. The new plea now raised cannot be accepted on account of delay and laches.
(v) The decision of the Apex Court in Bharath Heavy Electricals vs. – Employees’ State Insurance Corporation reported in 2008(2) LLN 58 relied upon by petitioner’s counsel will apply if there is any dispute with regard to determination of the liability between the principal employer and the contractors. The above said decision will not apply to the facts of the present case, as admittedly, the petitioner has been paying the employer’s Provident Fund Contribution from 1984 and no dispute has been raised for more than two decades till the impugned summon has been issued.
(vi) Learned counsel for the petitioner relied upon the decision rendered by a learned Judge of this Court in Chennai Petroleum Corporation Ltd., (represented by its Deputy Secretary Sri M.Sankaranarayanan) vs. – Assistant Provident Fund Commissioner, (Exemp), Chennai, reported in 2006(1) LLN 948 to contend that the petition filed for impleading necessary party should have been allowed and the refusal in the case is bad. It is a case where in an enquiry proceedings under section 7A of the Act, the records relating to enquiry was available with the contractors and hence, the employer sought permission to implead the contractors. That is not the plea in the present case. There is no dispute with regard to the Employer, Employees relationship as it is supported by the Employee’s Provident Fund Account Number issued by the Employees’ Provident Fund Authority in respect of four Employees. The question of treating any other person as employer does not arise in this case and hence the above said decision will not apply to the facts of the present case.
8. For all the above said reasons, the writ petition fails and is therefore, dismissed. The competent authority is directed to conclude the proceedings at the earliest. No costs. Consequently, connected miscellaneous petition is closed.
22.11.2010
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ts
To
The Assistant P.F. Commissioner (C & R),
Office of the Employees'' P.F. Organization,
No.37, Roytapettah High Road,
Chennai-600 014.
R.SUDHAKAR,J.,
ts
Order in
W.P.No.36683 of 2006
Date 22.11.2010
