JUDGMENT
N.L. Untwalia and B.N. Jha, JJ.
1. Petitioner No. 1 is the proprietor of a cinema hall situated in the town of Giridih in the district of Hazaribagh, which is known as the Moti Picture Palace. Petitioner No. 2 is his son and petitioner No. 3 is the Manager of the establishment. By Notification No. GSR 827 dated the 19th June, 1961, issued by the Central Government, cinema halls were also included in the class of establishments to which the Employees’ Provident Funds Act, 1952 (Central Act XIX of 1952), hereinafter called the Act, applies.
2. The petitioners’ case is that under mis-apprehension of the law and under some coercion, petitioner No. 1 submitted to the jurisdiction of the Act and the Employees’ Provident Funds Scheme, 1962 (hereinafter referred to as the scheme), framed thereunder, by depositing, on the 14th November, 1962, a sum of Rs. 96.50 Paise, towards provident fund contribution for the month of October, 1962. Lateron, on realising the correct position, he. made a representation to the then Regional Provident Fund Commissioner that the Act did not apply to his establishment. Respondent No. 1, on being satisfied about the correctness of the stand of petitioner No. 1, issued a letter dated the 19th July, 1963, a copy of which is Annexure ‘3’ to the writ application, releasing the petitioners’ establishment from the liability of the provident fund imposed under the Act. A certificate case filed for realisation of provident fund in respect of the period August, 1961, to September, 1962, was cancelled by the Certificate Officer, Hazaribagh, at the request of Respondent No. 1. In January, 1967, however, Respondent No. 1 issued a notice dated the 16th January, 1967, asking the establishment to appear before him on the 18th January, 1967, in connection with the enquiry to determine the amount due from the petitioners’ establishment. The notice was received actually on the 19th January, 1967, at 2-30 P.M. It was impossible to comply with it on the 18th January, 1967. A reply was, accordingly, sent on the 23rd January, 1967. A copy of the notice dated 16th January, 1967, is Annexure ‘4’ and that of the reply dated the 23rd January, 1967, is Annexure ‘5’. The petitioners’ case further is that without giving any further or reasonable opportunity of representing their case, an amount of Rs. 8,106/- was determined as the total of the employer and employees’ contributions and administrative charges by Respondent No. 1, by his order dated the 20th October, 1967, a copy of which is Annexure ‘6’. Petitioner No. 1, thereafter, represented his case to the Central Provident Fund Commissioner, New Delhi, who, finally informed him by his letter dated the 23rd May, 1968, a copy of which is Annexure ‘7’, that his establishment has rightly been covered under the Act with effect from the 31st July, 1961. A certificate case (No. 49 of 1968) has been filed before the Certificate Officer of Hazaribagh for realisation of the sum of Rs. 8521.79 Paise. A further notice dated the 4th June, 1968, has been issued asking petitioner No. 1 to attend the office of Respondent No. 1 on the 2nd July, 1968, in connection with the determination of the amount payable under the Act and the Scheme, for the period from September, 1967, to April, 1968.
3. The main contention put forward on behalf of the petitioners is that their establishment is not one to which the Act can apply. Hence the determination of the amount to the tune of Rs. 8,000/- and odd or any amount for future is without any justification basis and is ultra vires. The further attack is that no reasonable opportunity was given to the petitioners to represent their case as required by Sub-section (3) of Section 7-A of the Act.
4. In response to the show-cause notice served upon the respondents, cause has been shown by filing a counter-affidavit and the learned Government Advocate has appeared to place their case against the rule issued on them.
5. It is undisputed that the petitioners’ establishment is an establishment of the kind to which the Act has been applied from the 19th of June, 1961. For application of the provisions of the Act and the Scheme, how-ever, requirement of Clause (a) of Sub-section (3) of Section 1 of the Act has got to be fulfilled, which says that the provisions would apply to every establish-: merit specified or included in Schedule I, in which twenty or more persons are employed. The term “employee”, under Clause (f) of Section 2 of the Act, 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;
The definition, as it is, is very wide, but, it has to be read with paragraph 26 of the Scheme, Sub-paragraph (1)(a) of which reads as follows:
Every employee employed in or in connection with the work of a factory or other establishment to which this Scheme applies, other than an excluded employee shall be entitled and required to become a member of the Fund from the beginning of the month following that in which this paragraph comes into force in such factory or other establishment, if on the date of such coming into force he has completed one year’s continuous service or has actually worked for not less than 240 days during a period of twelve months or less in that factory or other establishment or in any other factory or other establishment to which the Act applies under the same employer, or partly in one and partly in the other.
A Bench of this Court, in the case of Kumar Brothers (Bidi) Private Limited v. The Regional Provident Fund Commissioner 1968 L. & I. C. 1578 had the occasion to consider as to what kind of employees, labourers or workers are included in the definition of the word “employee”, read with paragraph 26 of the Scheme. On an elaborate and careful consideration of the matter, it has been pointed out (at page 1585-column I) that
this definition includes all employees who are engaged in or in connection with the work of the establishment, including a person employed by or through a contractor in such work, provided they have completed the period of working days laid down in the Scheme for entitling an employee to the benefits of the fund. But a casual labour falls outside the scope-of Sub-section (3) of Section 1 of the Act, inasmuch as the service of a casual worker would not be ‘continuous service’ within the meaning of this expression contained in Explanation I to paragraph 26 of the Scheme.
On behalf of the petitioners it is asserted that in their establishment, at no point of time, there has been more than nineteen employees and Respondent No. 1, by including the casual labourers in the category of the employees, has erroneously held that at the relevant time there were more than twenty employees working in the petitioners’ establishment. Prima facie, this contention of the petitioners finds some support from two Annexures to the counter-affidavit, which are (1) a copy of a letter of the Inspector of Provident Funds, Dhanbad, dated the 18th July, 1967, to the Regional Provident Fund Commissioner (Annexure ‘D’) and (2) a copy of a letter dated the 6th August, 1967, addressed to petitioner No. 1, by Respondent No. 1 (Annexure ‘F’). In the latter, there is a statement to the following effect:
In fact, in the month of July, 1961, you had 18 workers on the regular strength and three casual workers, vide page 153 and 203 of your cash book.
The pages aforesaid of the cash book are found mentioned in Annexure D, wherein, after stating the number of employees as per the figures given in the attendance registers for the months of July to December, 1961, to be 18 or 19, the Inspector of the Provident Funds has further stated that two casual workers, Shree Ramu and Shree Mahabir worked for 6 and 6 1/2 days, respectively, on the 27th August, 1961, as would appear from page 153 of the cash book, and these workers had been regularly employed as evidenced by page 203 of the cash book. About a third worker, it is said that on the 26th August, 1961, one coolie was employed for publicity work and thus the total strength of workers in August, 1961, was 21.
6. From the facts stated, either in Annexure ‘D’ or in Annexure .’F’, it is not quite clear to us as to whether two or three workers, over and above the strength of 18 or 19 as regularly mentioned in the attendance registers, were casual workers, as explained in Kumar Brothers case, or, whether they could come under the definition of ’employee’ given in Section 2(f) of the Act, read with paragraph 26 of the scheme. An employee might have been paid his wages on daily basis, that will not make him a casual worker. For the application of the provisions of the Act and the Scheme, however, the employees must belong to the class of employees entitled and required to join the Fund in accordance with paragraph 26 of the Scheme. On the findings as recorded in the impugned orders, we are not satisfied that Respondent No. 1 arrived at the necessary finding of fact to hold that the Act applied to the petitioners’ establishment. Unless that finding is clearly recorded, no amount due under the Act or the Scheme can be determined under Section 7-A of the Act. On the materials placed before us, we are unable, nor is it advisable for us to investigate the questions of fact, to record a definite finding and say either way in regard to the application of the Act to the petitioners’ establishment. We are not impressed by the argument put forward on behalf of the petitioners that merely because on the 19th of July, 1963, Respondent No. 1 had issued a letter (Annexure ‘3’) that the petitioners’ establishment could not be covered by the Act and the Scheme framed thereunder, it is not open to the said respondent to arrive at a correct state of affairs. Firstly, it has to be pointed out that Section 7-A was introduced in the Act by Central Act XXVIII of 1963, with effect from the 30th November, 1963. The communication contained in the letter dated the 19th July, 1963, a copy of which is Annexure ‘3’ to the writ application, was issued before the coming into force of the said section providing for the machinery for the determination of the amount under the Act and the Scheme. Secondly, as has been said in the subsequent orders, the letter (Annexure ‘3’) was issued on misrepresentation of facts and not on a correct appreciation of them. This Court would not have agreed to exercise the writ jurisdiction to quash the subsequent order, if otherwise it was fit to be upheld merely because on an earlier occasion a letter was issued by respondent No. 1 stating therein that the petitioners’ establishment was not covered by the Act and the Scheme.
7. We, however, think that the petitioners did not get a reasonable opportunity to represent their case, as required by Sub-section (3) of Section 7A of the Act. The defect which we find in this regard is that the first notice which was issued on the 16th January, 1967, was received by the petitioners on the 19th January, 1967, after the expiry of the date, 18th January, 1967, fixed by the said notice. This fact is not controverted in the counter-affidavit. In the impugned order (Annexure ‘6’) there is a statement of fact that in spite of repeated reminders and personal contacts, the petitioners did not comply with the notice. In support of the above statement of fact, we get only Annexure ‘E’ to the counter-affidavit, which refers to the letter dated the 23rd January, 1967 (28th January, 1967 is a mistake in the copy-on verification we found from the original that the date is 23rd January, 1967) written by the petitioners, a copy of which is Annexure ‘5’, and stated that their request for the examination of the records at Giridih was rejected and they were directed to produce all the relevant records on the 25th May, 1967, at the Patna office of Respondent No. 1. The statement in paragraph 7 of the counter-affidavit is that a similar notice asking the petitioners to produce the records was issued on the 18th of May, 1967, but the petitioners did not produce the records. There is no statement that the said notice was received by or served on any of the petitioners. In paragraphs 7 and 9 of the affidavit in reply, the assertion is that no other notice was received by the petitioners, except the one dated the 16th January, 1967. On examining the office copy of Annexure ‘E’ from the file which was produced by the learned Government Advocate at our direction, we find that the draft was prepared under the initial of Respondent No. 1 on the 27th April, 1967. It seems to have been issued on the 18th May, 1967. There is nothing further to indicate, how it was sent -to the petitioners and when was it received by or served on them. In this view of the matter, we are not satisfied that the petitioners were given any reasonable opportunity of representing their case before the passing of the impugned order dated the 20th October, 1967 (Annexure ‘6’). A representation sent to the Central Provident Fund Commissioner, or his reply dated the 23rd May, 1968 (Annexure ‘7’) may merely explain some delay in the filing of the writ application and cannot be of any other use to either party, as there is no provision in the Act for filing of any representation, appeal or revision before the Central authority from an order of the Regional Provident Fund Commissioner, passed under Section 7A of the Act.
8. For the reasons stated above, in exercise of the powers of this Court under Article 227 of the Constitution, we set aside the order dated the 20th October, 1967, of the Regional Provident Fund Commissioner, Patna (Respondent No. 1), a copy of which is Annexure ‘6’, remand the case back to him and direct him to re-ascertain the question of the applicability of the Act and the Scheme to the petitioners’ establishment in the light of the Bench decision of this Court in Kumar Brothers case, referred to above, and in the light of what has been said by us in our judgment. He may proceed thereafter to determine afresh the amount due from the petitioners’ establishment under the provision of the Act or the Scheme in accordance with Section 7A of the Act. The matters must be determined after giving a fresh and reasonable opportunity to the petitioners. It follows, as a result of the quashing of the order dated the 20th October, 1967, of Respondent No. 1, that Certificate case No. 49 of 1968, pending in the court of the Certificate Officer, Hazaribagh, has to be withdrawn or cancelled and such steps as may be warranted by and appropriate under the law have got to be taken by Respondent No. 1 in regard to the various criminal cases filed under the Act against the petitioners or their establishment in the courts of the various Magistrates at Giridih. There will be no order as to costs.