{"id":160448,"date":"2004-08-12T00:00:00","date_gmt":"2004-08-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/k-v-jaya-vs-the-welfare-fund-inspector-on-12-august-2004"},"modified":"2016-05-19T13:19:14","modified_gmt":"2016-05-19T07:49:14","slug":"k-v-jaya-vs-the-welfare-fund-inspector-on-12-august-2004","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/k-v-jaya-vs-the-welfare-fund-inspector-on-12-august-2004","title":{"rendered":"K.V.Jaya vs The Welfare Fund Inspector on 12 August, 2004"},"content":{"rendered":"
Kerala High Court<\/div>\n
K.V.Jaya vs The Welfare Fund Inspector on 12 August, 2004<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nOP No. 12344 of 2002(T)\n\n\n1. K.V.JAYA, W\/O. VIJAYAN,\n                      ...  Petitioner\n2. K.R.THANKAPPAN, KATTAMMAKKADA VEEDU,\n\n                        Vs\n\n\n\n1. THE WELFARE FUND INSPECTOR,\n                       ...       Respondent\n\n2. THE DEPUTY TAHSILDAR, REVENUE RECOVERY,\n\n3. THE VILLAGE OFFICER,\n\n4. SRI.K.D.SURESH, KOTTAPPULLY VEEDU,\n\n                For Petitioner  :SRI.M.C.JOHN\n\n                For Respondent  :SRI.K.HARILAL, SC, KTWWF BOARD\nCoram\n\n Dated :     12\/08\/2004\n O R D E R\n<\/pre>\n
.PL 58
\n.TM 5
\n.BM 5
\n           M. RAMACHANDRAN,J.@@
\n          jAAAAAAAAAAAAAAAAAA\n<\/p>\n
           ———————————@@
\n          j<\/p>\n
           O.P.Nos.12344 & 23834 OF 2002@@
\n          jAAAAAAAAAAAAAAAAAAAAAAAAAAAAA<\/p>\n
         ———————————@@
\n        j
\n         Dated this the 12th day of August,2004.@@
\n        jAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA<\/p>\n
           J U D G M E N T@@
\n          jEEEEEEEEEEEEEEE
\n.SP 2
\n((HDR 0
\nO.P.Nos.12344 & 23834\/2002\n<\/p>\n
\t\t\t\t-#-\n<\/p>\n
))
\n.HE 1
\n          \t\tRevenue recovery proceedings  initiated  by
\n          the Welfare Fund Inspector, towards contribution to the
\n          Toddy  Workers  Welfare  Fund  for  the year 2000-01 in
\n          respect of Toddy Shop Numbers 96 to  99,  119  to  122,
\n          147, Mamala  Range are under challenge.  The assessment
\n          order is marked as  Ext.P1  in  O.P.No.23834  of  2002,
\n          dated 25-3-2002.     Advance  assessment  notice  dated
\n          18-12-2001 is marked as Ext.P1 in O.P.No.12344 of 2002.
\n          Even though it had been found in the enquiry  that  the
\n          fourth  respondent–Sri.Suresh  was  the person who was
\n          running the  shop  for  the  period  from  1-4-2000  to
\n          31-3-2001,  because of the definition clause of Section
\n          2(c) under the Act, assessing authority held  that  the
\n          licensees  might as well come within the purview of the
\n          term `employer’.  Liability has been cast on a group of
\n          persons who are (1)Sri.K.R.Thankappan,(2) Smt.K.V.Jaya,
\n          (3)Sri.M.S.   Viswanathan,  (4)Sri.T.K.Babu   and   (5)
\n          Sri.T.C.Jose.   First  and  second  persons referred to
\n          above are the petitioners in O.P.No.12344 of  2002  and
\n          they   challenged  the  preliminary  determination,  of
\n          course,  but   only   after   the   final   assessment.
\n          Sri.T.C.Jose  is  the petitioner in the latter original
\n          petition and he filed the writ petition,  pointing  out
\n          that  in  view  of  the  interim  orders in the earlier
\n          proceedings, the demand was inadmissible.  In  addition
\n          to  them,  the  fourth  respondent  Sri.Suresh, who was
\n          actually running the shops during the relevant  period,
\n          as  could be seen from the order, has also been made as
\n          liable for the contribution in respect  of  the  shops.
\n          But,  there  is  nothing to show that he had complained
\n          about the assessments or demands.\n<\/p>\n
          \t2.\tReference  is  made  by   the   determining
\n          authority  in  Ext.P1,  to  the  statements made by the
\n          employees, before him, that during  the  above  period,
\n          the  shops  concerned  were  being  managed  and run by
\n          Mr.Suresh– the fourth respondent.  He was  the  person
\n          who   was   paying  the  wages  and  the  welfare  fund
\n          contribution was being recovered from  their  wages  by
\n          him.  After referring to this position, the Officer had
\n          held  that  on the basis of evidence and enquiries made
\n          by him, the employers were the six persons, as none  of
\n          the licensees  were  left  out.   Contribution had been
\n          assessed at Rs.6,51,718\/-.   However,  a  part  of  the
\n          amount had already been remitted and the balance amount
\n          of  Rs.2,69,516\/-  and  interest  of  Rs.47,887\/-  were
\n          therefore assessed as payable.  Recovery steps had been
\n          initiated thereafter.\n<\/p>\n
          \t3.\tExt.P1  is  dated  18-12-2001,  and  Ext.P1
\n          assessment order, is dated 25-3-2002.  It appears  that
\n          Mr.Suresh  had  made  further  remittances  towards the
\n          liability, and the  balance  payable  was  demanded  as
\n          Rs.1,11,358\/-, the amount payable for January, February
\n          and March, 2001 (Ext.P3 in O.P.No.23834\/2002).\n<\/p>\n
          \t4.\tThe  only  question  is  whether  it may be
\n          possible to fasten the liability on the petitioners  in
\n          spite  of  circumstance  that they were found as not in
\n          the management of the shops.  It may be that  they  had
\n          not   objected   to   the  provisional  assessment,  or
\n          challenged the final assessment  by  resorting  to  any
\n          appeal.   The  pleadings are scanty, and the petitioner
\n          in O.P.No.23834\/2002 has even no idea  about  the  real
\n          assessment year  to  which  he has been assessed.  But,
\n          the issue has to  be  considered,  as  to  whether  law
\n          recognises a  notional liability.  They were licensees,
\n          who had  been  awarded  the  contract  jointly  in  the
\n          auction  conducted  by  the Excise Authorities, but the
\n          question is whether liability could have been  fastened
\n          on them severally and jointly, for this sole reason.\n<\/p>\n
          \t5.\tA counter affidavit has been filed  by  the
\n          Welfare Fund  Inspector  in  O.P.No.12344\/2002.  It had
\n          been admitted that Sri.Suresh was the  person  who  was
\n          running  the  shop for the period concerned, but taking
\n          notice of the definition of the term  `employer’  under
\n          Section  2(c) of the Kerala Toddy Worker’s Welfare Fund
\n          Act, 1969, the authority claims that it would have been
\n          possible to validly bind the others as well, as  coming
\n          within the definition of employer.\n<\/p>\n
          \t6.\tThere  are  no  disputes  about  any  other
\n          factual  position, and we may go directly to the issue.
\n          The only objection raised in the Original  Petition  is
\n          that   none   of  them  were  employers  vis-a-vis  the
\n          employees of the shops at Mamala.  They had not engaged
\n          any workmen, collected contributions nor  defaulted  in
\n          payment, so as to warrant the harassment of recovery.\n<\/p>\n
          \t7.\tWe   may   look   into  the  definition  of
\n          `employer’ under Section 2(c) which is as following:–\n<\/p>\n
           ”\t`employer’ means any  person  who  employs,@@
\n          iA AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n.SP 1
\n                  whether  directly or through another person, or@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  whether on  behalf  of  himself  or  any  other@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  person,  one or more employees and includes any@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  person who has a licence for  the  manufacture,@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  (distribution,  storage or sale) of toddy under@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  the Abkari Act for the time being in force.”@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA<\/p>\n
.SP 2
\n          The definition of the  term  `employee’  under  Section
\n          2(d)  also  might be relevant which is extracted herein
\n          below:-\n<\/p>\n
           ”\t`employee’ means any person who is employed@@
\n          i  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n.SP 1
\n                  for  wages  in  connection  with  the  tapping,@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  manufacture,  (transport,  storage  or sale) of@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  toddy  and  who  gets  his  wages  directly  or@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  indirectly  from  the employer and includes any@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  person employed by or through a  contractor  or@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  through  an  agent in or in connection with the@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  tapping,  manufacture,  transport  or  sale  of@@
\n                  AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
\n                  toddy.”@@
\n                  AAAAAAA<\/p>\n
.SP 2\n<\/p>\n
          \t8.\tAn assessment can be  there  only  after  a
\n          combined reading  of  the above said terms.  It is well
\n          settled that definitions have to be understood  subject
\n          to the  context.   `Employer’ of course is an inclusive
\n          definition, but the principal part  of  the  definition
\n          indicates  that  he  should  be  the man who employs on
\n          behalf of himself or any  other  person,  one  or  more
\n          employees.     Only    if   this   condition   is   not
\n          satisfactorily answered, it should be necessary  to  go
\n          to the inclusive part of the definition.\n<\/p>\n
          \t9.\tThe  definition   of   employee   also   is
\n          significant in  this  context.  It denotes a person who
\n          is employed for wages and gets his  wages  directly  or
\n          indirectly from  the  employer.    I  find considerable
\n          force in the  submission  that  when  the  workmen  had
\n          tendered  evidence,  and  records indicated that it was
\n          the fourth respondent who alone was  the  employer,  it
\n          was  a  perverse  stand  and illogical reasoning, and a
\n          proposition difficult to be digested that only for  the
\n          reason that licence had been obtained, in the name of a
\n          compendium  of  persons,  and that too under the Abkari
\n          Act, all of them are to be roped in and made answerable
\n          for the contribution to  the  employees  welfare  fund.
\n          The   attempt  is  artificial  to  the  core,  and  the
\n          legislature might not have  envisaged  to  fasten  such
\n          liability  on  a  person who had no connection with the
\n          actual business.  The definition was only to see that a
\n          person cannot disclaim liability by hiding  behind  the
\n          curtain.    One   or  other  person  should  have  been
\n          answerable to the claims.\n<\/p>\n
          \t10.\tMr.Thomas Kutty, learned Government Pleader
\n          however had brought  to  my  attention  a  judgment  in
\n          W.A.No.770 of 1986 as also the judgment in O.P.No.11636
\n          of 1992 dated 13-01-1993.  According to him, this Court
\n          had  occasion  to  consider  the  issue  on  a previous
\n          occasion.  I find that the Division Bench  in  judgment
\n          dated  6-10-1988,  however  has  not  adverted  to this
\n          issue, specifically, as the contention  raised  by  the
\n          appellants\/petitioners  was that during the period when
\n          the shop was being run departmentally, persons who  had
\n          been  in  management  could not have been considered as
\n          employers as defined in section 2(c) of the Act.    The
\n          contention had been rejected, but the fact remains that
\n          the  issue  that was decided had no relevance since the
\n          employment had been admitted in the said case.  In  the
\n          latter judgment referred to, the petitioners apparently
\n          were  similarly  situated  like the petitioners herein.
\n          There  was  an  internal   arrangement   by   a   group
\n          subdividing  the  shops among themselves, and the issue
\n          which had arisen was as to whether the  group  will  be
\n          answerable  for  the  claims  in respect of shops which
\n          they had  not  run.    It  was  held  that  because  of
\n          inclusive  definition,  any internal arrangements could
\n          not have come to their rescue.\n<\/p>\n
          \t11.\tHowever,  undisputed  facts  compel  me  to
\n          examine the issue, in some more details, here.  A group
\n          of  persons  had  been  the   successful   auctioneers.
\n          Thereafter,  the  shops  were  taken over by the fourth
\n          respondent.  This was never objected to either  by  the
\n          Excise  Department,  or  the Toddy Workers Welfare Fund
\n          Board or even the workmen.  After the  Act  and  Scheme
\n          were  brought into force, it appears that loop holes in
\n          the matter of remittance of contributions found had  to
\n          be appropriately  plugged  up.    In  order  to  ensure
\n          collection of amounts due from an employer  before  the
\n          expiry  of  the  period  of  his  contract, it had been
\n          considered necessary to provide for advance  collection
\n          due   from   him  and  for  adjusting  the  amounts  so
\n          collected,  against  the   final   determined   amount.
\n          Therefore,  Section 8-A had been incorporated by Act 31
\n          of 1978.      Thereby,    every    employer,    pending
\n          determination  under  Section  8 of the Act, was to pay
\n          every month, by  way  of  an  advance  contribution  an
\n          amount  equivalent to one-twelfth of the amount payable
\n          annually in respect  of  the  shop,  according  to  the
\n          latest determination  under the said section.  This was
\n          payable on or before the  5th  day  of  the  succeeding
\n          month.  In case of failure to pay advance contribution,
\n          the Welfare Fund Inspector was to issue a notice to the
\n          defaulter  and if dues were not paid within seven days,
\n          it had to be recovered forthwith.  Under Section 8A(4),
\n          the amount paid  as  above  for  the  year  was  to  be
\n          adjusted  against the amount determined under Section 8
\n          for that year.\n<\/p>\n
          \t12.\tAs per the  statutory  scheme  framed,  the
\n          employer was in the first instance liable to remit both
\n          the  contributions  payable by himself and on behalf of
\n          the members employed by him.  Para  35  of  the  scheme
\n          enumerated  the  duties of the employer to send returns
\n          within fifteen days of the close of each month.   There
\n          was duty  for  maintaining an inspection note book.  He
\n          was to maintain full and accurate accounts.    Para  36
\n          cast  a  duty  on the shop owner to furnish in specific
\n          form the full particulars pertaining to the affairs  of
\n          the establishment.    Specific  provisions also obliged
\n          him to send intimation of any change  in  such  person.
\n          Such  details  were  to  be  recorded  in the registers
\n          maintained by the Board Office.  There  was  a  further
\n          provision   regarding   the   time  frame  for  sending
\n          statement of wages  and  other  details.    Right,  for
\n          verification  of  correctness  of the statement, by the
\n          trade  union  functioning  in  the  industry  had  been
\n          provided.\n<\/p>\n
          \t13.\tIn  the instant case, it has to be presumed
\n          that such statements had been forwarded by  the  fourth
\n          respondent   and   the   order   shows   that   advance
\n          contribution from month to month was being remitted  by
\n          the employer.      Some  details  have  been  given  in
\n          Ext.P1(a) filed  in  O.P.No.23834  of   2002.      This
\n          indicates  that  the employees as well as the Board had
\n          accepted the fourth  respondent  as  employer  for  the
\n          shops concerned.   No doubt ever was there in the minds
\n          of any  body  at  any  time.    Even  after  the  final
\n          assessment, there  has  been further remittance.  It is
\n          clear that  only  when  balance  amount  was  remaining
\n          unpaid,  attempt  had  been made to proceed against the
\n          present petitioners, as well.\n<\/p>\n
          \t14.\tI  am  of  the opinion that having accepted
\n          the fourth respondent as the employer in respect of the
\n          shops for the relevant year, the respondent is estopped
\n          from taking a stand that  for  technical  reasons  that
\n          some others too are licence holders, such group becomes
\n          equally answerable.    The inclusive definition was not
\n          intended to apply to such a situation at all.\n<\/p>\n
          \t15.\tWe  may  look at the issue from a different
\n          perspective.    Definition    of    employee    becomes
\n          significant now.    An  employee has a claim for wages,
\n          only against the person who had employed  him.    There
\n          would  not have been a contingency that no employer was
\n          there available at all for the shops.    The  employees
\n          had  no  case  that  petitioners  in these two original
\n          petitions had been their employer at any point of  time
\n          or  had  paid  any  wages  for  the  work that had been
\n          carried out.  Nor have they a case that petitioners had
\n          appropriated contribution, recovered from  them.    The
\n          anxiety of the Act, of course, could be understood that
\n          liabilities  for  payment  of  wages  and contributions
\n          cannot be annulled or got rid of by  hiding  under  any
\n          terms of  contract.   But, at least where the employees
\n          allege and claim that a named person was their employer
\n          and when this factual position had been also  found  by
\n          the Welfare Fund Inspector, artificial definition which
\n          would  have  application  only  in  stray contingencies
\n          could not have been imported at all.   Petitioners  are
\n          therefore  well-founded  in  their submission that they
\n          should not have been made liable for the contributions,
\n          in respect of the Toddy Shop Nos.96 to  99,119  to  122
\n          and 147  for the year concerned.  The fourth respondent
\n          alone was responsible and answerable  for  the  welfare
\n          fund  contribution  and  dues could have been collected
\n          from him alone.\n<\/p>\n
          \t16.\tIn   this   view,  the  Original  Petitions
\n          deserve to be allowed.  The impugned orders and demands
\n          are set aside as against the petitioners.
\n.JN<\/p>\n
.SP 1
\n                                           M.RAMACHANDRAN, JUDGE@@
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\n((HDR 0<\/p>\n
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\n.HE 2
\n          mbs\/
\n.PA
\n.SP 2
\n……………..T…….T……L.T…….T…….T…….T…….J
\n                                 (M. RAMACHANDRAN,J)@@
\n                                jAAAAAAAAAAAAAAAAAAA\n<\/p>\n
                                ——————————————–\n<\/p>\n
        \t\t       ——————————————–
\n        \t\t\tO.P.Nos.12344 & 23834 OF 2002@@
\n           AAAAAAAAAAAAAAAAAAAAAAAAAAAAA\n<\/p>\n
        \t\t       ——————————————–
\n        \t\t\t J U D G M E N T@@
\n           jAAAAAAAAAAAAAAA<\/p>\n
                                 DATED:12TH AUGUST,2004@@
\n                                jAAAAAAAAAAAAAAAAAAAAAA<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court K.V.Jaya vs The Welfare Fund Inspector on 12 August, 2004 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. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-160448","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nK.V.Jaya vs The Welfare Fund Inspector on 12 August, 2004 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/k-v-jaya-vs-the-welfare-fund-inspector-on-12-august-2004\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"K.V.Jaya vs The Welfare Fund Inspector on 12 August, 2004 - 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