RATAN LAL Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THIS is a writ petition under Art. 226 of the constitution arising in somewhat unusual circumstances. There is a proprietary concern run by Ratan Lal in Chandni Chowk, delhi, under the name of Ratan Lal and Company, to carry on business as chemists and druggists. This firm received an intimation from the office of the Regional Provident Fund commissioner stating that the Employees' provident Funds and Family Pension Fund act, 1952 (hereinafter referred as the Act), was applicable as more than nineteen persons were employed in the establishment; the letter was dated 8 August 1962, and was based on an inspection made on 27 June 1962. The petitioner contested this position saying that there were only sixteen employees because the other four employees were a chowkidar and sweeper and who were paid by way of bakshish and one employee Ved Parkash who was temporary and another employee Sri S. K. Jain had already submitted his resignation effective from the end of April 1962. It was pointed out that the crucial day was 30 April 1962, for the application of the Act. On 5 December 1962, the Regional Provident Fund Commissioner intimated that he accepted the fact that the establishment was not covered by the employees' Provident Funds Act. A true copy of that letter is Annexure F.

(2.) ABOUT three years later on 30 June 1965, the Regional Provident Fund Commissioner without any apparent power under the statute to act as an appellate authority over his predecessor, issued another letter cancelling the previous order and stating now that the Act applied to the petitioner with effect from 30 April 1962. In fact this Tetter was issued on the basis of some report made by an inspector on 19 February 1964. The letter is entirely based on the findings of that Provident Fund Inspector. The petitioner replied to this letter on 27 July 1965 (Annexure H), in which it was pointed out that the previous order could not be reversed and the Act could not be applied after so many years. I may mention that in the return to the writ petition, the respondent has taken the stand that the Regional Provident Fund Commissioner never received this letter.

(3.) IN any case, nothing happened for many years; the petitioner did not deposit any amounts towards provident fund contributions, nor did the authorities take any action. It seems, that somebody must have decided that there was something wrong because after an interval of about fifteen years, the Regional provident Fund Commissioner suddenly issued a notice, dated 18 February 1976, stating that there had been non-compliance with the direction to deposit provident fund contributions under the Act from May 1962, and pointing out that monthly returns had not been filed, and further stating that offences had been committed under Ss. 14 and 14a of the Act, etc. There was also another notice under s. 7 A of the Employees' Provident Funds act directing the petitioner to appear for the purpose of determining the provident fund dues. This notice was objected to by the petitioner per letter, dated 27 February 1976, in which it was stated that the establishment was not covered by the Act. It was also objected that as less than twenty persons were employed in the establishment, therefore, the Regional provident Fund Commissioner was not competent to unilaterally determine the application of the Act. It was also said that most of the old employees were not in service now (after fourteen years ).