Delhi High Court
M/S Naveen Vidya Bharti Public ... vs The Assistant Provident Fund ... on 22 July, 2019
$~28
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 22nd July, 2019
+ W.P.(C) 11075/2016 & CM Appln. 43300/2016
M/S NAVEEN VIDYA BHARTI PUBLIC HIGHER
SECONDARY SCHOOL THR ITS DIRECTOR ..... Petitioner
Through: Mr.Ramesh Kumar Mishra and
Mr.Mithilesh Kumar Jaiswal,
Advocates
versus
THE ASSISTANT PROVIDENT
FUND COMMISSIONER, BHOPAL ..... Respondent
Through: Mr.Keshav Mohan, Mr.Rishi K.
Awasthi and Mr.Piyush Vatsa,
Advocates
CORAM:
HON'BLE MR. JUSTICE J.R. MIDHA
JUDGMENT (ORAL)
1. The petitioner has challenged the order dated 22 nd November, 2013
passed by the Employees' Provident Fund Appellate Tribunal whereby the
petitioner's appeal was dismissed.
2. The petitioner School was covered under the ambit of Employees'
Provident Fund and Miscellaneous Provisions Act, 1952 (EPF Act) with
effect from January, 2010.
3. The Enforcement Officer of the respondent inspected the records of
the petitioner for the period 2008-2009 and 2009-2010 and recommended
the petitioner School to be covered from April, 2008 instead of January,
2010. According to the report, 18 persons were found working in April,
2008. As per the balance sheet, the School had a bus since April, 2008 and
after adding the driver and conductor of the school bus, the total number of
school employees were 20.
4. On 28th September, 2011, the respondent passed an order and
determined the liability of Rs.3,32,474/- as due and payable by the petitioner
for the inquiry period.
5. The petitioner preferred an appeal before the Appellate Tribunal
which was dismissed on 22nd November, 2013. The petitioner filed an
application for review before the learned Tribunal which was dismissed on
07th October, 2016.
6. Learned counsel for the petitioner urged at the time of the hearing that
the bus of the school was operated by an independent contractor who
employed a driver and a conductor. Learned counsel for the petitioner
submits that the school has not made any payment to the contractor for the
driver and conductor. The driver and conductor were not the employees of
the school and have been wrongly included by the department as the school
employees. Reliance is placed on Springdales School and Ors. v. Regional
Provident Fund Commissioner & Anr., 2005 SCC OnLine Del 1457,
International Airport Authority of India v. International Air Cargo
Workers Union, (2009) 13 SCC 374 and Katari Coloring Factory v.
Regional Provident Fund Commissioner, 1999 SCC OnLine Del 537. It is
further submitted that the Chairman of the School has been included as an
employee of the school on the ground that he was drawing a salary. It is
submitted that the Chairman of the school cannot be treated as an employee.
Reliance is placed on Regional Director, E.S.I. Corporation v. Sarathi
Lines (P) Ltd., 1997 SCC OnLine Ker 21, Employees' State Insurance
Corporation v. Ashok Plastics (P) Ltd., 1987 SCC OnLine Cal 333 and
Summer Fields School v. Regional Provident Fund Commissioner, 2016
SCC OnLine Del 1709.
7. Learned counsel for the respondent urged at the time of the hearing
that EPF Act is applicable to every establishment in which 20 or more
persons are employed. It is submitted that the payment register of the
petitioner for the month of April, 2008 records the name of 18 employees
including the Chairman and the Principal of the School. The balance sheet of
the school for the year 2008-2009 reflected payment of Rs.36,960/- towards
bus maintenance and Rs.1,26,095/- towards fuel expenses. The petitioner
claims to have an agreement with a contractor who employed the driver and
the conductor. Section 2(f) of the EPF Act is wide enough to cover the
persons employed through the contractor. It is submitted that Section 2(f) of
the EPF Act "includes any person employed by or through a contractor, in
or in connection with the work of an establishment." Reliance is placed on
BASF India Limited & Anr. v. M. Gurusamy & Anr., (2004) 101 FLR 724,
M/s P.M. Patel and Sons v. UOI, (1986) 1 SCC 32 and Royal Talkies v.
ESI Corporation, (1978) 4 SCC 204. With respect to the petitioner's
submissions that the Chairman of the School cannot be treated as an
employee, it is submitted that Section 2(f) of the EPF Act is wide enough to
include any person who is getting wages from the employer. It is submitted
that the Chairman was admittedly receiving wages and was shown in the
payment register of the employees of the school. Reliance is placed on
Employee State Insurance Corporation v. Apex Engineering Pvt. Ltd.,
(1998) 1 SCC 86, Saheli Marbles Private Limited v. APFC, 2015 SCC
OnLine Del 11797 and State of Maharashtra v. Ramdas Shrinivas Nayak,
AIR 1982 SC 1249.
8. Vide order dated 29th November, 2016, the petitioner was directed to
produce the record relating to the contractor alleged to have been employed
by the school and the payment made to the contractor. This Court also
directed the petitioner to produce the contractor along with the records with
respect to the driver and conductor.
9. The petitioner filed the copy of the agreement dated 12th October,
2008 as Annexure P-6, according to which the contractor agreed to operate
the bus on expenditure of maintenance and fuel and to pay the wages of the
driver and conductor. On 09th January, 2017, the petitioner filed the copy of
the agreement dated 12th October, 2008 which contains the financial terms.
10. In the present case, the petitioner had a bus since April, 2008.
However, the petitioner did not produce any document relating to the driver
and conductor of the school bus for the period April to October, 2008 and
therefore, it is presumed that the driver and conductor were employed by the
school during the said period. With respect to the petitioner's contention
that the driver and conductor were employed by the contractor by document
dated 12th October, 2008, Section 2(f) of the EPF Act is wide enough to
cover the persons employed through the contractor. That apart, the
document dated 12th October, 2008 appears to be a sham document created
with the dishonest intention of avoiding the liability. There is no merit in the
plaintiff contention that the Chairman of the school is not an employee.
Section 2(f) of the EPF Act includes all persons drawing wages from the
employer.
11. The writ petition is dismissed with cost of Rs.50,000/- to be paid by
the petitioner to the respondent.
12. The amount deposited by the petitioner along with interest accrued
thereon be released to the respondent.
13. Pending application is disposed of.
J.R. MIDHA, J.
JULY 22, 2019
ds
