GLAMOUR Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THIS writ petition is directed against the order of the Central Government dated 26th August, 1966, by which it has rejected the reference of the petitioner under Section 19a of the Employees' Provident Fund Act as well as the order of the Regional Provident Fund Commissioner dated 2nd March, 1966, calling upon the petitioner to enroll the employees in dispute and to pay all arrears of provident fund dues in their respect.

(2.) THE Materials facts of the case are that the "petitioner (which is owned by a private limited company), deals in sales of sarees under its name and style "glamour" at Connaught Place New Delhi. There is scarcely any dispute with regard to its being covered under the scheme of Employees' Provident Fund, and Family Pension Fund Act, 1952, and its own employees appear to have been enrolled under the scheme. The main dispute between the parties briefly stated, however, is that there is one V. S. Kartar Chand, respondent No. 3, who, at the material time, was employing about six persons and had been carrying on the tailoring business at the premises of the petitioner. The contention of the department is that they are employees of the petitioner and so must be subjected to enrolment under the Act for purposes of the Provident Funds Scheme. The petitioner disputes the said position and contends that respondent No. 3 has an independent business and his employees cannot be enrolled along with the employees of the petitioner.

(3.) THIS controversy has arisen under the circumstances that on 30th December, 1963, respondent No. 1, Regional Provident Fund Commissioner,' wrote a letter to a number of factories/establishments, including the petitioner, in which be stated that an amendment had been made in the Act, as a result employees employed by or through a contractor in any factory/establishment had been brought at par With the employees employed directly for the benefit of the Employees' Provident Fund with effect from 30th November, 1963. He, therefore; requested that the procedure for enrolment according to law indicated by him be adopted. On 18th January, 1964, the petitioner gave a reply to the said circular letter stating that its tailoring order wag being executed by respondent No. 3 and that he gave commission to the petitioner for the orders booked but the workers were exclusively his employees on monthly wages and a tegular attendance register was maintained by him under the Shops and Establishments Act and it was contended that the amendment was riot applicable to the petitioner, Subsequently, there was further correspondence exchanged on 13th February and 18th February, 1964. Thereafter, on 16th February, 1965, respondent No. 1 again wrote to the petitioner to the effect that inspection of the accounts of the petitioner-firm made on 7th January, 1965, had disclosed that it was employing workers in its establishment through a contractor, namely, respondent No. 3 and that they must be enrolled as eligible employees for purposes of the provident fund and their contributions and administrative charges thereon should be deposited. To this, a reply was sent on 3rd April, 1965, on behalf of the petitioner by which the petitioner maintained its stand that respondent No. 3 had an independent business and he was not a contractor of the employees of the petitioner, nor did he work under the petitioner's supervision and control and he was a separate entity and that his workers were exclusively (sic ). On 2nd March, 1966, a reply was sent by respondent No. 1 to the aforesaid letter of the petitioner. It was observed that the establishment of the petitioner bad been inspected on 24th May, 1965, by the officer himself and he had found that six persons were being employed in the establishment of the petitioner through the contractor, respondent No. 3 who were working in connection with work of the establishment and they were getting their wages indirectly from the petitioner through the contractor. It was stated that these six persons would be considered as employees of the petitioner employed through contractor and the petitioner was called upon to enroll all the eligible employees as members of the fund from the due date and deposit their contributions and administrative charges thereon. The petitioner feeling dissatisfied with the said communication, filed a reference under Section 19a of the Act before the Central Government in which it set out its case as stated above. This was disposed of by the impugned order of the Central Government dated 26th August, 1966. The order is to the effect that "the point of reference to the Government in the said letter is not attracted by Section 19a of the Act. Further, under paragraph 26b of the Employees' Provident Fund Scheme, 1952, the decision of the Regional Commissioner as regards any question whether an employee is entitled or required to become a member of the Employees' Provident Fund is final. In the circumstances, Government regrets its inability to issue a direction under Section 19a of the Act. " In other words, the reference of the petitioner was turned down without any decision. Thereafter, respondent No. I issued the demand for payment of arrears of provident fund dues by letter dated 2nd November, 1966. Aggrieved by these sections and orders, the petitioner has filed the present writ petition on 7th November, 1966, on the grounds mentioned in the writ petition. A counter-affidavit to the writ petition has been filed by the Regional Provident Fund Commissioner. After adverting to the correspondence mentioned above, he has in paragraph 11 given detailed reasons as to why he considers that these workmen in dispute were really employees of the petitioner for purposes of the provident fund. In the counter-affidavit, it has been mentioned that the petitioner had been given ample time and all opportunities to lead evidence in the matter and its written representation had been duly considered. Along with the counter-affidavit, a copy of the report of the Provident Fund Inspector has also been filed. The comments of respondent No. 1 made on the query of the Central Government has also been filed. A rejoinder to the counter-affidavit has been filed on behalf of the petitioner in which the assertion made in paragraph II of the counter-affidavit has been controverted. It has also been denied that the petitioner had been given any opportunity to establish its contentions by production of relevant evidence.