Madras High Court
(Through Video Conference) vs The Assistant Provident Fund ... on 2 February, 2021
W.P.(MD)No.1593 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 02.02.2021
CORAM:
THE HONOURABLE MR.JUSTICE M.S.RAMESH
W.P.(MD)No.1593 of 2021
and W.M.P.(MD) Nos.1357 & 1358 of 2021
(Through Video Conference)
The Palliyadi Handloom Weavers' Co-operative
Production and Sale Society Limited No.2489,
Rep. By its Managing Director,
Valvachakoshtam Village,
Kanyakumari District. ... Petitioner
Vs
1. The Assistant Provident Fund Commissioner,
Employees Provident Fund Organization,
Sub-Regional Office,
43 P/1, Trivandrum Road,
Tirunelveli 627 002
2. The Assistant Provident Fund
Commissioner / Recovery Officer,
Employees Provident Fund Organization,
Regional Office,
65 A, Water Tank Road,
Nagercoil 629 001
Kanyakumari District.
3. The Manager,
Kanyakumari District Central Co-op Bank,
Alexander Press Road, Nagercoil 629 001
Kanyakumari District ... Respondents
1/12
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W.P.(MD)No.1593 of 2021
PRAYER: Petition filed under Article 226 of the Constitution of India to
issue a Writ of Certiorari, calling for the records of the 1 st respondent,
pertaining to his order in proceedings No.TN/TI/33252/Enf.1(4)/KK-I/97
dated 10.12.1997 on his file, and the consequential order of the 2nd
respondent in No.TN/NGL/33252/Recy/8F/2021 dated 06.01.2021 on his
file, quash the same.
For Petitioner : Mr.Thampi K.N.
For RR1 & 2 : Mr.K.Gurunathan,
Standing Counsel
ORDER
The petitioner herein, is a Co-operative Society registered under
the provisions of the Tamil Nadu Cooperative Societies Act, 1983. By an
order, dated 10.12.1997 passed under Section 7(A) of the Employees
Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter
called as the 'Act'), the Provident Fund dues from the petitioner Society
was determined for the period between September 1978 to October 1997.
Consequently, an order dated 30.12.1997, under Section 8(F) of the Act
was passed.
2. Challenging the aforesaid proceedings, the petitioner had filed a
suit in O.S.No.183 of 1998 before the District Munsif Court,
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W.P.(MD)No.1593 of 2021
Padmanabhapuram. The suit in O.S.No.183 of 1998 as well as the appeal
in A.S.No.32 of 2000 before the Sub Judge, Padmanabhapuram filed as
against the dismissal of the suit, came to be dismissed and the petitioner
had preferred the Second Appeal before this Court in S.A. No.2120 of
2003, which also was dismissed on 11.12.2019. On the strength of the
dismissal order, the first respondent had issued a notice for compliance of
the order passed in the Second Appeal, which required the petitioner
Society to deposit the amount levied under Section 7(A) of the Act for
the period between September 1978 to October 1997. Consequently, the
impugned order dated 06.01.2021 came to be passed under Section 8(F)
of the Act. Challenging the orders under Sections 7(A) and 8(F) of the
Act, the present writ petition has been filed.
3. Mr.KN.Thampi, learned counsel for the petitioner placed
reliance on the communication from the Development Commissioner,
Handlooms, Ministry of Textiles, dated 13.02.1998 as well as the order
of this Court passed in W.P.No.14028 of 2000, dated 11.02.2006 and
submitted that the weavers of the petitioner's Society were only members
of the Society and there was no “Master-Employees” relationship and
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W.P.(MD)No.1593 of 2021
therefore, the provisions of the Act is not attracted. Consequently, the
orders under section 7(A) and 8(F) requires to be quashed.
4. Per contra, the learned standing counsel for the respondents 1 &
2 submitted that the weavers of the petitioner's Society are deemed to be
'employees' as defined under the Act and the provisions of the Act are
applicable to the petitioner's Society and therefore, there is no infirmity
in the impugned orders.
5. I have given careful consideration to the submissions made by
the respective counsels. Admittedly, the order passed under Section 7(A)
of the Act was the subject matter of the civil proceedings, which became
final, pursuant to the judgment passed in S.A.No.2120 of 2003, dated
11.12.2019 by this Court. In other words, the levy under Section 7(A) of
the Act for the contribution period between September 1978 to October
1997, was put to challenge in the civil proceedings.
6. This Court, while dismissing the Second Appeal on 11.12.2019,
had rejected the contentions of the petitioner's Society that the provisions
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W.P.(MD)No.1593 of 2021
of the Act and the schemes cannot be implemented in respect of the
petitioner's Society and consequently directed the petitioner to deposit
the amount along with interest assessed by the respondents towards the
outstanding provident fund contribution of the workers. The relevant
portion of the Judgment reads thus:-
“16. This Court keeps in mind that the EPF Act is a
beneficial social welfare legislation which was enacted by the
Legislature for the benefit of the workmen. It is meant for the
protection of weaker sections of society, namely, workmen
who had to eke out their livelihood from the meagre wages
they receive after toiling hard for the same. Hence, the
provisions under the EPF Act have to be interpreted in a
manner which is beneficial to the workmen. A harmonious
construction alone would help carry out the purpose of the
Act.
17. Accordingly, this Court rejects the contention that
the provisions of the Employees' Provident Funds Act and the
Schemes cannot be implemented at all in respect of appellant
Society. This Court is fully satisfied that the decisions arrived
at by the Courts below does not require interference by this
Court.
18. Further, there is no dispute that during the enquiry
under Section 7-A, the petitioner-society was given ample
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W.P.(MD)No.1593 of 2021
opportunity to put forth their case. As earlier pointed out that
the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952, is a piece of legislation intended for
conferring certain benefits on the working class of people.
May be the methodology adopted by the appellant-Society in
getting the work from the workers community would be
different. But, they cannot wriggle out their dutiful
responsibility towards paying EPF dues to the workers. Once
wages are paid by the establishment either directly or
indirectly as stated in the statute, it goes without saying that
the workers fell within the definition of 2(f) of the EPF Act.
The founding fathers of the Constitution of India thought it fit
that it is a beneficial enactment pursuant to the constitutional
mandate keeping in view the basic human rights of the
individual in a democratic country. Therefore, it has been
carefully worded that wages paid either directly or indirectly,
the establishment will fall within the definition of the EPF
Act.
19. In view of the aforesaid discussion, the concurrent
judgment passed by the Courts below stand confirmed in all
respects and consequently, the appellant Society is directed to
deposit the amount along with the interest assessed by
respondents towards Provident Fund dues of the workers
within one month from the date of receipt of a copy of this
Judgment. Since the litigation has been pending for two
decades, the first respondent is directed to ensure that the
provident fund amount reaches to the retired workers/
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W.P.(MD)No.1593 of 2021
working class community within a period of two months
thereafter. In this regard, the appellant-Society is directed to
co-operate with the respondents to work out the EPF amount
as on date. Eventually, the Second Appeal is dismissed and
substantial and additional substantial questions of law are
answered as indicated above. All pending Applications, if
any, are accordingly dismissed. No costs. ”
7. The aforesaid extract is self-explanatory. Thus, it is clear that the
learned Judge had dealt with the issues involved in the present writ
petition in the judgment passed in Second Appeal and while placing
reliance on the various decisions of the Hon'ble Supreme Court and the
Division Bench of this Court, had held that the petitioner's Society is
covered under the provisions of the Act.
8. The only contention of the learned counsel for the petitioner to
assail the judgment passed in the Second Appeal is that, there is a
clarification issued by the Ministry of Textiles of the Central Government
which holds that, the functioning of the Co-operative Societies do not
fall under the ambit of the provisions of the Act nor are the members and
the Society is a “employer-employee” relationship. By referring to such
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W.P.(MD)No.1593 of 2021
clarification of the Ministry of Textiles, a learned Single Judge of the
Principal Bench of the Madras High Court, had interfered with the orders
passed by the Regional Provident Department in W.P.No.14028 of 2000
in the case of the Secretary vs. the Regional Provident Fund
Commissioner, Tirunelveli and others.
9. This Court is unable to appreciate the clarification issued by the
Development Commissioner of the Ministry of Textiles. Since the
learned Single Judge, while dealing with the issues involved in the
S.A.No.2120 of 2003, had also disregarded the notification of the Central
Government and upheld the view that the petitioner's Society does fall
within the ambit of the Act. The relevant portion of the Judgment in the
Second Appeal reads as follows;
“11. This Court has further noted that the weavers in
question do the work in connection with the work of the
appellant Society. They are also paid wages on the basis of
their work. The cloth woven by the weavers is sold by the
appellant Society. The yarn is supplied to the weavers by the
appellant Society. Thus, it would be seen that the weavers
are engaged for the work in connection with the work of the
appellant Society. Therefore, it is crystal clear that there is
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W.P.(MD)No.1593 of 2021
an employer and employee relationship between the
appellant Society and their weaver workers. Hence, the
decisions arrived at by respondents is correct and in order.
The weaver workers are entitled for provident fund benefits
and the appellant Society has to enrol them and remit the
provident fund contributions in respect of them. The Act
covers all types of employees employed directly and
indirectly, permanent or casual and the petitioner
establishment cannot absolve itself of its liability under the
Act in respect of their weaver workers. Even though the
appellant-Society has pleaded that a notification has been
issued exempting weavers cooperative society by the
Central Government and the same was recorded by this
Court in the docket order dated 17.04.2009, there is no
order of the Government of Tamil Nadu exempting the
appellant Society from payment of provident fund dues in
respect of their employees. The Act is a piece of social
legislation conferring certain benefits on the working class
of people. It is a beneficial enactment pursuant to
constitutional mandate keeping in view of the basic human
rights of individuals in a democratic country. Further, the
respondents gave opportunity to the appellant Society
regarding the liability and quantum and it has been
specifically determined. ” (emphasis added).
10. When a clarification of the Central Government has already
been dealt with by this Court in the Second Appeal, the petitioner's
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W.P.(MD)No.1593 of 2021
Society would be precluded from raising any other ground before this
Court. As a matter of fact, the sanctity of the communication by the
Development Commissioner, Ministry of Textiles and its binding nature
has not been put to test and the communication itself being a letter in
reply to some telephone conversation, may not be termed as a
'Regulation'. Furthermore, the consideration of these grounds in this writ
petition would amount to reviewing the judgment in the Second Appeal,
which is impermissible. When the petitioner's Society themselves have
suffered a Judgment in the Second Appeal, on the very same issue,
placing reliance on the order passed in W.P.No.14028 of 2000, in the case
of some other Society, is distinguishable on facts.
11. For the foregoing reasons, I do not find any merits in the
present writ petition. Accordingly, the writ petition stands dismissed.
However, there shall be no order as to costs. Consequently, connected
miscellaneous petitions are closed.
02.02.2021
Note: Issue Order Copy on 03.02.2021
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W.P.(MD)No.1593 of 2021
Index : Yes / No
Internet : Yes
sts
Note : In view of the present lock down owing to COVID-19
pandemic, a web copy of the order may be utilized for
official purposes, but, ensuring that the copy of the order
that is presented is the correct copy, shall be the
responsibility of the Advocate / litigant concerned.
To:
1. The Assistant Provident Fund Commissioner,
Employees Provident Fund Organization,
Sub-Regional Office,
43 P/1, Trivandrum Road,
Tirunelveli 627 002
2. The Assistant Provident Fund
Commissioner / Recovery Officer,
Employees Provident Fund Organization,
Regional Office,
65 A, Water Tank Road,
Nagercoil 629 001
Kanyakumari District.
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W.P.(MD)No.1593 of 2021
M.S.RAMESH, J.
Order made in
W.P.(MD)No.1593 of 2021
Dated:
02.02.2021
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