JUDGMENT
Lakshmanan, C.J.
1. This appeal is directed against the judgment of Hon’ble Justice Ms. GYAN SUDHA MISRA, dated of January, 29, 1998 passed in S.B. Civil Writ Petition No. 3007/1997. The appellant is a hospital run by an autonomous body, which is a charitable hospital and as per the government requirement number of patients are treated totally free of cost. According to the appellant, for the employees working in the hospital and covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as ‘the Act’) the management is paying contribution with respect to their own employees are concerned and are complying with the provisions of the Act. The open space leading to the hospital building is in possession of the management and is leased out to lessee on year to year basis and the lessee to whom the open place is leased out carries thereon the business of cycle stand by making his own arrangements and the employees employed with the lessee are under the control and supervision of the lessee itself and that the management has no concern or control over them.
2. The appellant hospital received a notice dated July 12, 1991 (Annexure 1 to the writ petition) and another notice dated November 6, 1996 (Annexure 6) from the Regional Provident Fund Commissioner, Jaipur calling upon them for depositing contribution with respect to the employees employed by the lessees running cycle-stand, security guards and cleaning employees. The management deposited the contribution with respect to the security guards and cleaning employees engaged through contractors, in connection with the activities of the hospital and settled the matter with the respondent. However, the management made representation to the non-appellant with respect to coverage of these unspecified employees under the provisions of the Act and raising demand of depositing contributions for the employees engaged in the cycle-stand. However, the department did not agree to the contentions raised by the management and directed them to deposit sum of Rs. 61,199/- for the periods between June 1991 to August, 1996 through an order dated April 1, 1996 (Annexure 10 to the writ petition).
3. Aggrieved by the order dated April 1, 1996, a writ petition was filed by the appellant before this Court, which was dismissed by the learned single Judge vide order dated January 29, 1998. Being aggrieved by the order of dismissal, this special appeal has been filed.
4. Mr. Kewal Ram, the learned counsel for the appellant made the following submissions at the time of hearing and cited few decisions in support of his contentions. The contentions are:
(a) that the authority constituted under the Act has failed to conduct any inquiry to establish the amount due from each lessee during the period between the period June 1991 to August, 1996. It is primarily the responsibility of the lessee to make contribution as per the provisions of the Act and not that of the appellant hospital;
(b) that the authority competent has not quantified the amount due against those lessees who had been leased out this place from year to year basis;
(c) that the cycle stand is run by lessees during the period June 1991 to August, 1996 and that the employees engaged by the lessees for running the cycle stand were not even remotely connected with the activities of the hospital and that the land leased out to the lessees is absolutely a separate affair and that the employees had no connection with the hospital and as such, not covered by the provisions of the Act;
(d) the impugned order dated April 1, 1996 (Annexure 10) is absolutely a non-speaking order, without analysing the evidence produced during the enquiry under Section 7-A of the Act conducted by the respondent in exercise of the quasi-judicial powers. The authority has not even quantified the wages received by the workmen as the base for calculating the amount due on account of contribution which is a must. Neither the names of the employees were mentioned, nor the wages have been quantified in the order passed by the respondent. Therefore, the order impugned is arbitrary and without any basis and, therefore, is not sustainable;
(e) an alternative submission in ground (g) is also raised and argued. According to the learned counsel for the appellant, under the provisions of the Act and the Employees’ Provident Funds Scheme, 1952 (hereinafter referred to as the Scheme), the principal employer is responsible to deposit the amount due against the contractors for employees employed through contractors in respect of the contract employees. In the instant case, the lessees were contractors and if at all any employee is employed by them, the amount could be realised from the appellant but under the provisions of the Act and the scheme the appellant is entitled to get the amount reimbursed from those lessees. Since the respondent has not specified the lessees and the employees employed by each lessee during the period of lease and has only directed that the management to pay the whole amount even though power is vested in the respondent to specify the same. As such, the order passed by the respondent could not be sustained in the eyes of law.
5. Learned counsel for the appellant in support of his contentions relied upon the following judgments : The Management of Central Coal Washery v. The Workmen and Anr. AIR 1978 SC 1424 : 1978-II-LLJ-350 and Food Corporation of India v. The Provident Commissioner and Ors. 1990 (1) SCC 68, Food Corporation of India v. Union of India and Ors. 1998 LIC 1552, National Thermal Power Corporation Ltd. v. Regional Provident Fund Commissioner and Anr 1998 (4) LLN 557 and the order passed in Parvati Construction Company v. Rajasthan Housing Board 1998-II-LLJ-970 (Raj).
6. Per contra, Mr. Narendra Jain, the learned counsel appearing for the respondent after inviting our attention to the reply filed to the writ petition, urged the following submissions by way of reply to the arguments advanced by the learned counsel for the appellant. In support of his contentions, Mr. Jain placed strong reliance on three rulings reported in Mridang Cinema v. Union of India and Ors. 1989 (2) RLR 836, Royal Talkies, Hyderabad and Ors. v. Employees’ State Insurance Corporation AIR 1978 SC 1478 : 1978 (4) SCC 204 : 1978-II-LLJ-390, and P.M. Patel & Sons and Ors. AIR 1987 447 : 1986 (1) SCC 32. He invited our attention to the relevant provisions of the Act and paras 26-B, 30 and 36 of the Scheme. Mr. Jain submitted that since the management has paid a sum of Rs. 14,168 as contribution for the period from February 1988 to May 1991, which was determined on account of PF contribution in respect of employees employed at Cycle Stand, who were employed through contractors and that amount has already been deposited with the management. Therefore, the appellant cannot be allowed to take a plea that they are not liable to pay the contribution for the employees employed by the contractors for the cycle-stand. Mr. Jain also contended that the submissions now made in the appeal were not agitated when an earlier order dated July 1, 1996 was passed for the period from 2/88 to 5/91. Therefore, the submissions now made cannot be allowed to be raised. He further submitted that it was the primary duty of the establishment to submit all the relevant papers and furnish all the relevant information. The department has considered the reply submitted during the enquiry under Section 7-A of the Act in its proper perspective. In fact the case was fixed on November 29, 1996 and was adjourned to December 2, 1996, December 20, 1996, January 3, 1997 and January 10, 1997 and after giving the opportunity, the impugned order was passed and the authority has adjusted the amount which had been deposited already by the establishment and has determined the only amount due after such adjustment. It is submitted that the order dated April 1, 1997 is quite legal and in accordance with the provisions of law. It is also submitted that the Hon’ble Supreme Court and this Court have taken the view that the employees employed on Cycle stand through the contractor are also employees of the principal employer and, therefore, the matter is fully covered by the decisions of the Supreme Court as well as the judgments rendered by this Court.
7. A learned single Judge of this Court on a consideration of the arguments advanced by the counsel appearing on either side and following the rulings cited in Royal Talkies case (supra) and in the case of Mridang Cinema (supra) has dismissed the writ petition holding that the employees employed by the contractor in the hospital who are engaged in the cycle-stand will have to be treated as ’employees’ within the meaning of the Act Being aggrieved the above special appeal had been filed by the establishment.
8. Before considering the decisions cited by the learned counsel appearing on either side, we would like to refer certain provisions of the Act. Section 2(f) of the Act defines “employee” which 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 employed by or through a contractor in or in connection with the work of the establishment. A perusal of the definition of the word ”employee” in the Act is however, completely different from the definition of ‘worker’ and ‘workman’ respectively in the Factories Act and the Industrial Disputes Act. The definition in the Act of 1952 specifically includes any person employed by or through a contractor in or in connection with the work of the establishment. The definition of the “employee” is wide enough to include a person permitted to work for someone else. Thus, in our opinion, the employee employed by the contractor has also been included in the definition of “employee”. Therefore, the Act of 1952 which intended to include such persons, the management is liable to pay contribution for those employees.
9. Section 7-A of the Act deals with the procedure for determination of amount due from the employer. Our attention was invited to para 26-B of and also the difference between Section 7-A and para 26-B of the Scheme. A perusal of Section 7-A of the Act would show that there is no express provision for hearing an employee while para 26-B provides for hearing both the employer and the employee. Para 26-B reads thus:
“26-B. Resolution of doubts: If any question arises whether an employee is entitled or required to become or continue as a member, or as regards the date from which he is so entitled or required to become a member, the decision, thereof of the Regional Commissioner shall be final.
Provided that no decision shall be given unless both the employer and the employee have been heard.”
Under Section 7-A of the Act there is no express provision for hearing an employee. On the other hand in para 26-B of the Scheme, the dispute is to be resolved after hearing both the employer and the employees.
10. In the instant case, there is no material to show that the management has requested the Commissioner to summon the contractors to produce the respective list of the employees engaged by them to work at the place in question and, therefore, the Commissioner neither summoned the contractors nor the list of the employees maintained by them. Therefore the judgment cited by the learned counsel for the appellant in the case of Food Corporation of India v. The Provident Fund Commissioner and Ors. (supra) of the Supreme Court is not applicable to the facts and circumstances of this case and the contention raised by the appellant in para (k) of the grounds in the writ petition to the same effect has no merit. In that case the Supreme Court took into consideration the grievance of the Food Corporation of India that it has requested the Commissioner to summon the contractors to produce the respective lists of the workers engaged by them to work at the depots of the Corporation in the State but the Commissioner did not summon the contractors and the list of workers maintained by them. In that context the Supreme Court has held that it would be failure to exercise the jurisdiction particularly when a party to the proceedings requests for summoning evidence from a particular person. As rightly pointed out by the learned counsel for the respondent that in Para 30 of the Scheme, the payment of contribution shall be made by the employer in the first instance, i.e. both the contribution payable by himself and also on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such a member. In respect of the employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution and also administrative charges. Sub-para (3) of Para 30 of the Scheme fixed the responsibility of the principal employer to pay both, the contribution payable by himself in respect of the employees directly employed him and also in respect of the employees employed by or through a contractor and also administrative charges. Para 36 of the Scheme deals with the duties of the employer. As per para 36 of the Scheme, every employer shall send to the Commissioner a consolidated return in such form as the Commissioner may specify, all the employees qualifying to become members of the provisions of the Act showing the basic wage, retaining allowance and dearness allowance including the cash value of any food concession paid to each of such employee.
11. Our attention was invited to Annexure 5, the order dated July 1, 1996 issued by the Office of the Regional Provident Fund Commissioner, Rajasthan Jaipur. By the said order, the PF Commissioner in exercise of the powers conferred upon him under Section 7-A of the Act determined a sum of Rs. 14,168/- as payable by the employer in relation to the appellant for the period from date of contract i.e. 2/88 to 5/91. It is stated in the reply filed by the respondent that the said order was not challenged by the management and the amount as determined was also deposited by the management. There is no rejoinder filed by the management to the above statement made in para 3 of the reply. Therefore, as rightly pointed out by the learned counsel for the respondent, that the appellant management is estopped from raising the submissions now made in the writ petition and also in the appeal when an earlier order dated July 1, 1996 was passed for the period from 2/88 to 5/91 and the amount has also been deposited by the management without any demur.
12. Learned counsel for the appellant submitted that the order impugned in the writ petition is non-speaking. We have perused the order dated April 1, 1996 (Annexure 10) impugned in the writ petition. The order deals with all the aspects of the matter namely, issue of show cause notice, opportunity given to the management for representing their case and to produce the relevant records, the dates of adjournments and the appearance of an Advocate on behalf of the appellant and the written statement filed etc. The order also deals with the deposition made by one G.S. Rao, Section Supervisor appeared on behalf of the department, and that a sum of Rs. 61,199/- as per the details given in the schedule is payable by the employer in relation to the hospital. Therefore, the P.F. Commissioner in exercise of power under Section 7-AF of the Act determined a sum of Rs. 61,199/- details of which are given in the schedule attached to the order by the employer in relation to the hospital. It is true that the order does not refer to the contentions of the parties. In our opinion, the order cannot be called as non-speaking order simply because it does not refer to the contentions of the parties.
13. The judgments cited by the counsel for the appellant in the case of Food Corporation of India (supra) deals with the headload workers engaged by contractor in loading and unloading operations at Railway Station. A contention was made that there was an agreement between FCI and the Union of Railway Goods Shed Workers and that disputed workers exclusively did work of FCI. The Supreme Court held that the disputed workers are the employees of the FCI. The Supreme Court set aside the judgment of the High Court and held that the decision of the High Court is based on assumptions. The Supreme Court remitted the matter for fresh hearing.
14. In the case of National Thermal Power Corporation Ltd. (supra), a Division Bench of the High Court at Calcutta held for the purpose of deciding the question as to whether the workers were employed by the Corporation directly or through the contractor it would be necessary for summoning the contractor or examining them for the purpose of effective determination and that the officers conducting enquiry for purpose of making an effective determination have same powers as are vested in a Court under the Civil Procedure Code. As already noticed there is no evidence to show that the management has requested the Commissioner to summon the contractors and the list of the workmen maintained by them. Since no request was made by the management, it is not obligatory on the part of the Commissioner to summon the contractors or the list of the workmen employed by them. Therefore, the above Division Bench decision will not be of any assistance to the appellant.
15. Another judgment of a learned single Judge of this Court deciding S.B. Civil Writ Petition No. 688/1996 decided on April 29, 1997 (supra) was also relied upon by the learned counsel for the appellant. The real question in that case was whether the manner of engagement of the labourers to carry out the nature of the work alleged in the petition, the labourers can be said to be employees within the meaning of the Act of 1952 and who is the authority to decide that question. Whether the principal employer-the respondent can determine that question and enforce the provisions of the Act or it would require adjudication by the authority as provided under Section 7-A of the Act. The learned Judge referring to Sub-clause (1) of para 30 of the Scheme has observed that the said para imposes a responsibility and liability on the employer to pay both the contributions in the first instance i.e. his contribution and the contribution of the employee engaged by him directly or through contractor. Sub-clause (2) of para 30 provides that in respect of the employees employed by or through contractor, the contractor shall recover the contribution payable by each employee and shall pay to the principal employer the amount of members contribution with an equal amount of his contribution. Thus, it is held that the responsibility is upon the contractor to deposit both the contributions under the Scheme for the employees engaged by him. In this instant case, no material is placed before us whether the contractor has paid his contribution to the principal employer or not. Under these circumstances, as per the alternative prayer made in the writ petition that the establishment is entitled to get the amount reimbursed from those contractors as contended in para (G) of the Special Appeal and as per the provisions of the Act and Scheme the principal employer is responsible to deposit the amount due against the contractors for employees employed through contractors in respect of contract employees and thereupon to recover the entire amount paid by them from those lessees, the appellant is entitled to recover the amount from those lessees.
16. We shall now consider the judgments cited by the learned counsel for the respondent. In the case of Royal Talkies (supra), the Supreme Court in an identical case held that the employees of the cycle stand in Cinema theatre by the contractors are covered by definition of “employee” and that the Cinema owner is liable as principal employer for their contribution.
17. In another Supreme Court judgment in the case of P.M. Patel (supra) the Supreme Court has construed the term of the definition of “employee” and held that the terms of the definition of “employee” are wide and that they include not only persons employed directly by the employer but also persons employed through contractor and that they include not only persons employed in the factory but also persons employed in connection with the work of the factory. That was a case of home worker rolling beedis at home. The Supreme Court held that by virtue of the fact that the employee rolls beedis is, involved in any activity connected with the work of the factory engaged in the task of rolling beedis. The Supreme Court has further held that the words “in connection with” in the definition of “employee” cannot be confined to work performed in the factory itself as a part of the total process of the manufacture. A Division Bench of this Court in the case of Mridang Cinema (supra) held that the employees employed in the cycle stand by a contractor/licensee is covered under the definition of the Act and that the principal employer is liable to pay the contribution for restaurant and cycle stand workers even if they have been given on licence/contract. The Bench also held that the employees of independent contractor of cycle stand are within the sweep of definition of “employee” as given in Section 2(f) of the Act and therefore, provisions of the Act will also be applicable so far as those employees are concerned.
18. In our view, the claim of the appellant has to be straightaway rejected in view of its not challenging the earlier order dated July 1, 1996 passed for the period between 2/88 to 5/91 and pursuant to the said order, the management has also deposited the amount determined by the Commissioner for the contract given for the cycle stand. Since the said order has not been challenged the appellant is stopped from challenging the present order by its own conduct. The appeal is also to be rejected in view of the two Supreme Court rulings AIR 1978 SC 1478 (supra) and AIR 1987 SC 447 (supra) which are directly on the point. The case of Royal Talkies (supra) deals with an identical case of employees of cycle stand run in a Cinema theatre by contractors. In this context the contention of the learned counsel for the appellant that there is no privity of contract between the employees and the establishment cannot at all be accepted. In this case, the establishment has permitted the contractor to run the cycle stand and pursuant to the same arrangement between them, the contractor maintained the cycle-stand. Running a cycle stand in a theatre or hospital is not irrelevant to the purpose of the establishment. It is incidental to the running of the hospital. The workmen employed by the contractor is not extraneous or contrary to the purpose of the establishment. The operation namely, keeping a cycle stand is identical to the primary purpose of the hospital within the meaning of Section 2(9)(ii) of the Act. As already noticed, the whole goal of the statute is to make the principal employer primarily liable to pay the contribution of the contractor for the workers engaged by him on the premises whether they are there in the work or are merely in connection with the work of the establishment. From the several circumstances mentioned above, it is clear to our mind that a cycle stand is meant primarily for the persons who visit the hospitals. Since, cycle stands are meant exclusively for the convenience of the persons visiting the hospital, it can safely be concluded that the management is amenable to the provisions of coverage of the Act. As pointed out by the Supreme Court in the case of Royal Talkies (supra), Section 2(9) contains two substantive parts and that the expression “in connection with the work of an establishment” ropes in a wide variety of workmen who may not be employed, in the establishment but may be engaged only in connection with the work of the establishment and that some nexus must exist between the establishment and the work of the employees. The Supreme Court also held that it is enough if the employee does some work which is ancillary, incidental or has relevance to or link with the object of the establishment. In our opinion, the facility of providing a cycle stand is an amenity for the persons visiting the hospital and therefore, has connection with the work of the establishment.
19. For the foregoing reasons, we are unable to countenance the submissions made by the learned counsel for the appellant. We therefore, confirm the judgment of the learned single Judge and dismiss the special appeal. The management shall pay the contribution as determined by the Commissioner and is at liberty to recover the same from the contractors. The appeal is also liable to be dismissed since the matter is fully covered by the decisions of the Supreme Court as well as by this Court. However, there will be no order as to costs.