Commissioner & Ors vs Rupa Co. Ltd. & Ors
2023 Latest Caselaw 246 Cal/2

OD-10

                                APO/184/2019

                    IN THE HIGH COURT AT CALCUTTA
                    CIVIL APPELLATE JURISDICTION
                            ORIGINAL SIDE



                                      THE REGIONAL PROVIDENT FUND
                                      COMMISSIONER & ORS.

                                             -Versus-

                                      RUPA CO. LTD. & ORS.

BEFORE :
THE HON'BLE JUSTICE T.S. SIVAGNANAM
          And
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : 30th January, 2023
                                                                    Appearance :
                                                              Mr. Anil Gupta, Adv
                                                              ...for the appellant.

                                                     Mr. Shyamal Sarkar, Sr. Adv.
                                                           Mr. Rajesh Gupta, Adv.
                                                     Mr. Meghajit Mukherjee, Adv.
                                                             ...for the respondent.

The Court : We have heard Mr. Anil Kumar Gupta, learned

standing counsel for the appellant and Mr. Shyamal Sarkar,

learned senior standing counsel assisted by Mr. Rajesh Gupta

and Mr. Meghajit Mukherjee, learned advocates for the

respondents.

This intra-court appeal filed by the Regional Provident

Fund Authority is against the order dated 4th August, 2016 in

WPO No.609 of 1999. The said writ petition was fled by the

respondents challenging an order passed by the appellant dated

10th February, 1999 by which the authority in exercise of its

powers conferred under Section 7A of the Employees' Provident

Funds and Miscellaneous Provisions Act, 1952 (the 'Act' for

brevity) that the respondents establishment employees the

contractors for cutting and making and/or working in connection

with the work of the respondents establishment and those

persons are entitled for the provident fund benefit. The

learned Writ Court at the time when the writ petitioner was

entertained had granted an order of interim stay. Ultimately,

the writ petition was allowed by the impugned order.

Aggrieved by the same, the assessee is before us by

way of this appeal.

After we have elaborately heard the learned advocates

appearing for the parities and also perused various decisions

cited at the bar, we first look into the factual aspect which

led to filing of the writ petition. In response to an enquiry

initiated by the authority under Section 7A of the Act, the

respondents filed their objection which was in the nature of a

preliminary objection contending that the persons to whom the

material is entrusted for the purpose of cutting and

manufacturing are independent job workers or commonly known as

the 'jobbers' as they undertook similar job on contract basis

for other companies as well. Furthermore, it was contended that

the said jobbers engaged by the appellant are separate

establishments and none of them on roll more than 20 per cent

to be brought under the coverage of the provisions of the Act.

Furthermore, it is contended that those persons employed by the

independent establishments would not fall within the definition

of employee as defined under Section 2(f) of the Act. This

preliminary objection has been decided against the respondents

which order was impugned in the writ petition.

Mr. Anil Gupta, learned standing counsel for the

appellant after referring to the factual position, placed

reliance on the decision of the Hon'ble Supreme Court in the

case of M/s. P.M. Patel & Sons & Ors. Vs. Union of India & Ors.

reported in (1986) 1 SCC 32 (AIR 1987 SC 447) and the decision

in the case of Officer-in-Charge, Sub-Regional Provident Fund

Office Vs. Godavari Garments Limited, reported in (2019) 8 SCC

149. Mr. Shyamal Sarkar, learned senior counsel appearing for

the respondents in his reply, after referring to the factual

details, has also placed reliance on the very same decision

cited by Mr. Gupta, namely, the decision in the case of P.M.

Patel (supra).

Before we take a look into the decisions cited at the

bar, we need to take note of the findings rendered by the

learned Single Bench. The learned Single Bench after examining

the factual and legal position and after noting the law on the

subject pointed out that the first duty cast upon the provident

fund authorities was to consider as to whether job workers were

independent contractors only after taking a decision on this

issue and if the answer to the issue is in the negative then

the second step to be taken is to ascertain the number and

identity of the workers employed by the contractor or

contractors and thereafter ascertain the amount of work that

each worker of the contractor had performed for the writ

petitioner at the proportion of monthly and daily wages etc.

and thereafter only the provident fund liability could have

been ascertained. The learned Writ Court, on facts, in no

uncertain terms, holds that the authority has not brought any

facts or evidence in this regard and in the absence of any

proper enquiry by the authority in the direction which they

ought to have proceeded, the learned Writ Court was convinced

that the order dated 10th February, 19999 passed by the

authority together with the order dated 13th September, 1999

are to be set aside. Further noting that on the date when the

writ petition was allowed, that is, 4th August, 2016, nearly 20

years had lapsed after the adjudication had commenced and,

therefore, observed that no information will be available at

that relevant point of time, however, mentioned that the

provident fund authorities may take steps in accordance with

law following the ratio of the judgment(s) which were referred

therein. Though the decision in P.M. Patel (supra) was referred

to by Mr. Gupta, the factual position therein should be taken

note of. In the said case the question for consideration was

whether the workers employed at their homes at the monthly

wages are entitled to the benefits of the EPF and the Schemes

framed thereunder. The Hon'ble Supreme Court after examining

the factual position found that in those cases that the work is

entrusted by independent contractors who treat the workers as

their own employees and get the work done by them either at

their own premises or in the dwelling homes of the workers in

order to fulfill and complete contracts entered into with the

manufacturers for the supply of finished products from the raw

materials supplied by the manufacturers to the contractors.

Further, the Hon'ble Supreme Court noted that, according to the

manufacturers, to whom workers had attend at the factories

within specified hours everyday and collect raw material for

taking to their homes for rolling beedis. Further, it was

contended that while it is true of home workers employed

directly by the manufacturers or who have been placed in

employment through contractors with the manufacturer, in the

case of home workers employed by independent contractors that

may not be so. Further, the Hon'ble Supreme Court pointed out

the most important test which needs to be considered is as to

whether there exists master and servant relationship between

the parties. As rightly pointed out by the learned Single Bench

the authority while initiating proceedings under Section 7A of

the Act did not endeavour to make any such enquiry and merely

agreed with the proposal made by the department without

deciding as to whether those contractors were independent

jobbers who had carried on manufacturing activities from the

materials supplied by the respondents as well as by other

similarly placed entities. The decision in Godavari Garments

Limited (supra) is also distinguishable on facts as in the said

case the Hon'ble Supreme Court held that the home workers were

permitted to do work off site and, therefore, it would not take

away their status and rights of the respondent company. Mr.

Sarkar, learned senior counsel, had brought to the notice of

the Court a decision taken by the Regional Provident Fund

Commissioner, Kolkata dated 1st August, 2000 in a proceeding

under Section 7A of the Act in the case of establishment,

namely, M/s. Biswanath Hosiery Mills Private Limited.

We find that the order to be an elaborate order wherein

all the factual and legal aspects were considered by the

authority and it was held that the 'jobbers' are not the

contractors of the establishment and the employees engaged by

the 'jobbers' do not fall under the definition of the proviso

to Section 2(f) of the Ac. Thus, we are of the clear view that

the learned Single Bench had rightly interfered with the order

passed by the authority and the decision rendered by the

learned Single Bench does not call for any interference.

Accordingly, the appeal [APO/184/2019] fails and the

same stands dismissed.

(T.S. SIVAGNANAM, J.)

(HIRANMAY BHATTACHARYYA, J.)

S.Das/S. Chandra