REGIONAL PROVIDENT FUND COMMISSIONER Vs. AMAR NATH

JUDGEMENT

(1.) This is an appeal under Clause X of the Letters Patent, as applicable to this court, against the judgment of a learned Single Judge who accepting the petition of the respondents, moved under Article 226 of the Constitution of India, made the rule absolute. The decision of the appellant dated April 21, 1971, communicated to the respondents by appellant's letter of June 1 1, 1971 was quashed and the appellant was also directed to refund the employer's contribution deposited with the appellant by the respondents for the period July 1965 to December, 1966.

(2.) As noticed by our learned brother) H.L. Anand,J. the short question arising in the case was the interpretation of Sub--section (5) of Section 1 of the Employees' Provident Funds Act, 1,952. The circumstances leading to the filing of the petition may briefly be noted.

(3.) The respondents' establishment was, admittedly, covered by the provisions of the aforesaid Act and the Scheme framed thereunder with effect from July 31, 1962. It seems that the number of employees in the respondents' establishment fell below 20, indeed below 15 in May/June, 1964. The respondents also admit, as noticed by our learned brother, that the respondents' establishment had employees less than 15 between June, 1964 and December, 1966. However, we find from a note recorded on September 10, 1965 by M.K. Bhatnagar, an official of the appellant, that the strength of employees in the respondents' establishment was less than 15 from August, 1964 to July, 1965. No challenge has been made before us to what has been noticed by the learned Single Judge that the strength of employees was less than 15 from June, 1964 to December, 1966. On July 26, 1965 the respondents wrote to the appellant that inasmuch as the number of employees in their establishment had fallen below 15, the provisions of the Act have ceased to apply to them. They enquired as to what formalities were required to be- done in this connection. It is after this letter that an inspection was made by M.K. Bhatnagar on September, 10, 1965 to which we have already adverted earlier. By a communication dated 12/13th October, 1965 the appellant informed the respondents that there were arrears of Rs. 537-52 in one account and Rs. 32-25 in another account which the respondents had not cleared and should clear forthwith. It was further pointed out from the monthly returns filed, the figures really were Rs. 578-04 and Rs. 34--53. The respondents were asked to pay the balance amount of Rs. 40-52 and Rs. 2-28 forthwith, being the difference of the earlier demands and the dues worked out on the basis of the returns. It was further stated by the appellant in the said letter that action on respondents' letter of July 26, 1965 for exemption under Section 1 (5) of the Act will be taken on compliance of the demand for deposit of money. On February 16, 1966 the respondents wrote to the appellant that the amount of Rs. 40-52 and Rs. 2-28 had also been deposited and action may now be taken immediately on their letter of July 26, 1965. There was no response from the appellant. On December 13, 1967 a registered notice with regard to the earlier submission made in the letter of July 26, 1965 was given by the respondents to the appellant. No action was taken even on this. A reminder was sent on April 27, 1970 with no result. Some more reminders were sent and finally a registered notice was given through counsel on September 5, 1970. On receipt of this a note was prepared in the office of the appellant on November 27, 1970 but that need not be discussed. By the impugned communication dated April 21, 1971 the respondents were informed that it cannot be allowed to opt out of the Act and the Scheme thereunder. This led the respondents to file a petition in this court challenging the action of the appellant. The relevant portion of Section I reads as under :-