VALLUVAR HANDLOOM TEXTILES Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) THE batch of writ petitions can be dealt with under a common judgment. It is enough if the facts in Writ Petition No. 1800 of 1978 alone are noted. The petitioner-establishment carried on business of manufacturing Jamakalams (carpets) otherwise know as Thari Carpets, which are manufactured by using 22 looms and 2 permanent employees. As such, according to it the Employees' Provident Funds Act, 1952 (hereinafter referred to as the Act) would not apply to the petitioner. Under the Act, the establishment should have at least 20 employees employed therein. This being so, the second respondent, viz. , the Regional Provident Fund Commissioner, Madras-14, issued a memo to the petitioner calling upon it to submit a return in Form 9 prescribed under the Employees' Provident Fund Schemes, 1952 and also a return in Form 3 (FPF) prescribed under paragraph 15 of the Employees' Family Pension Scheme, 1971. Since the petitioner was contending that the Act itself would not apply in view of the fact that there being two permanent employees, all the others were merely independent contractors, and as such they are not employees, a petition was filed on 11th February, 1977, before the Central Government under S. 19a of the Act. In that application it was prayed that Central Government might decide whether the Act would apply to the petitioner-establishment. This was duly informed to the second respondent. The first respondent, before whom this application was filed, passed the following order on 5th May, 1978 :<FRM>JUDGEMENT_88_TLMAD0_1980Html1.htm</FRM> It is under these circumstances the present writ petition has been preferred for certiorari.

(2.) LEARNED counsel for the petitioner urges that the jurisdiction to decide whether the provisions of the Act are applicable to the petitioner or not, in that excepting the two permanent employees whether the others are independent contractors or not, is vested only in the Central Government. The Central Government cannot abdicate its function and then direct the matter be remitted to the Regional Provident Fund Commissioner, under S. 7a of the Act. Section 7a is the section under which the Regional Provident Fund Commissioner determines the quantum of monies due to the employees. When the petitioner is disputing the applicability of the Act itself, there is on reason why he should be called upon to face an enquiry under S. 7a of the Act. Several decisions have taken the view that the Jurisdiction to determine about the applicability of the Act in spite of the presence of the hierarchy of the authorities, is entrusted only with the Central Government. For instance, in Annamalai Mudaliar and Brothers v. Regional Provident Fund Commissioner, [1955-I L. L. J. 674], this Court took the view that it is open to the department to invoke the aid of S. 19a of the Act and seek determination as to the applicability of the Act. However, that view came to be modified by a Division Bench of this Court in East India Industries v. Regional Provident Fund Commissioner, [1964-I L. L. J. 706], stating such an invocation could be done both by the employer as well as the department. Then again, a reading of the decision reported in Union of India and another v. Ogale Glass Works, [1971-II L. L. J. 513] and particularly paragraphs 20 to 23 will clearly go to show that it is the Central Government, which is required to determine this aspect. In so far as this procedure has not been followed and a finding has been rendered that the application is premature before the determination of the liability under S. 7a, it is clearly illegal and is, therefore, liable to be set aside. This in short, is the argument of Mr. P. Chindambaram, learned counsel for the petitioner.

(3.) MISS Radha Srinivasan, learned counsel for the department, vehemently contends that the interpretation placed by the various decisions of this Court as well as the other Courts on S. 19a of the Act, cannot at all be supported. The jurisdiction of the Central Government is only to give directions in the event of any difficulty arising in giving effect to the provisions of the Act. That does not mean the Central Government is obliged to give a finding as to the applicability of the Act. Therefore, those decisions require re-examination.