COSMOPOLITAN CLUB Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THE petitioner is the Cosmopolitan Club, Madras, The respondent, the Regional Provident Fund Commissioner, Madras, issued a notice, dated 29 July 1963, to the petitioner informing the petitioner that with effect from 1 July 1963, the Employees' Provident Funds Act had been made applicable to the petitioner-club and called upon the petitioner to submit the necessary return in order to give effect to the provident fund scheme. The petitioner has come to Court claiming that the club, which is a body corporate registered under the Indian Companies Act, is a social recreational association formed for the purpose of affording to its members the privileges, advantages and conveniences of a club. It is claimed that the notification Issued by the Government under Section 1, Sub-section (3) (b), of the Act, which purported to bring within the scope of the Employees' Provident Funds Act institutions like the petitioner-club, is beyond the ambit of that provision and is ultra vires and illegal, It is principally contended that the Act is Intended to apply only to commercial organizations and not to non-proprietary associations such as the petitioner-club, which provides certain amenities and facilities to its own members.

(2.) ON behalf of the respondent, the complaint that the notification is in excess of the provision referred to is resisted.

(3.) THE Employees' Provident Funds Act, 1952, by Section 1, Subsection (3) (a), makes it applicable (subject to what may be termed the infancy protection outlined in Section 16 of the Act) to every establishment which is a factory engaged in any industry specified in Sch. I and in which twenty or more persons are employed. Schedule I contains a list of industries. Section 4 of the Act empowers the Central Government to add any other industry to Sch. I. We are not, however, concerned in the present case with an establishment which is a factory, engaged in a specified industry. Sub-section (3) (b) of the Act makes the Act applicable to any other establishment employing twenty or more persons, or class of such establishments, which the Central Government may, by notification in the official gazette, specify in this behalf. There is a proviso to this section which confers a further power upon the Central Government to apply the Act to establishments employing even less than twenty persons. The plain language of this provision, Sub-section (3) (b) contrasted with Sub-section (3) (a) of Section 1 of the Act, indicates two broad classifications. One is an establishment which is a factory engaged in any scheduled Industry and the other is " any other" establishment, which would mean one which may not be of the nature of a factory engaged in any specified industry. The requirement which is common to both sub-clauses of Sub-section (3) is that the establishment to which the Act applies or is made applicable should employ twenty or more persons. The power conferred by Subsection (3) (6) accordingly enables the Government to apply the Act to any establishment, though it is not a factory and is not engaged in any scheduled industry, but which employs twenty or more persons. The term " establishment" is not defined in the Act and must, to my mind, take its meaning from the context in which it appears, that is to say, the purpose underlying the Act. The Act itself was made for the purpose of providing for the institution of provident fund for employees in factories and other establishments. The dominant intention expressed both by the title as well as the contents of the Act would thus appear to be that it is enacted in the interests of employees in establishments not below a particular size. The question is whether, as contended by the petitioner, the Act cannot be made applicable to institutions like the petitioner-club.