AVG MOTORS LTD Vs. REGIONAL PROVIDENT COMMISSIONER

JUDGEMENT

(1.) The petitioner is a company engaged in the sales and service of vehicles and is an authorised dealer for Maruti Suzuki Ltd. It is submitted that the company is duly covered under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "EPF Act") with EPF Code No. KR/15951, and has been regularly remitting contributions for all eligible employees without default. The present dispute arises concerning the liability to pay contributions in respect of certain individuals described by the petitioner as "trainees" who were engaged from January 2009 to January 2010.

(2.) Proceedings under Sec. 7A of the EPF Act were initiated by the 1st respondent, culminating in Ext.P2 order dtd. 4/7/2011, whereby the petitioner was directed to remit contributions in respect of 161 such trainees for the said period. The petitioner submits that this order was passed without proper application of mind and in complete disregard of the legal submissions, statutory provisions, and the documents produced, and pending certification of the standing orders. Aggrieved by the said order, the petitioner filed a statutory appeal before the 2nd respondent Tribunal. However, the Tribunal, too, by Ext. P3 order dtd. 15/3/2021, dismissed the appeal.

(3.) The petitioner argues that the trainees do not qualify as employees under Sec. 2(f) of the EPF Act, as they were engaged purely for training and not for wages. Any stipend paid was merely ex gratia to assist with basic expenses, rather than a wage as defined under the EPF Act, thus negating any employer-employee relationship. Despite the certification of the petitioner's standing orders in 2013, the petitioner claims that the Model Standing Orders applied until that time, reiterating that the stipend does not constitute wages and no contributions are due. Under Sec. 7A of the EPF Act, the 1st respondent issued an order, Ext. P2 on 4/7/2011 requiring contributions for 161 trainees, which the petitioner contends is illegal. An appeal to the 2nd respondent Tribunal was dismissed through Ext.P3 on 15/3/2021, without regard to the exclusion of apprentices under Sec. 2(f)(ii) of the EPF Act. The petitioner also relies on the Industrial Employment (Standing Orders) Act, 1946, to contend that until standing orders are certified, Model Standing Orders apply, and asserts that the trainees were not performing regular employee duties, had no binding obligations, and lacked contracts of employment or disciplinary control. Consequently, the petitioner maintains there is no assumption of an employer-employee relationship.