RAGHURAM TEXTILES Vs. THE REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The Petitioner seeks a writ of prohibition or any other appropriate writ to prohibit the Respondent from proceeding with an enquiry initiated by him under Sec. 7 -A of the Employees' Provident Funds and Family Pension Fund Act, 1952 (herein -after referred to as the Act) till the disposal of the Petitioner's application under Sec. 19 -A of the Act to the Central Government.

(2.) The Petitioner is engaged in the manufacture of hand -woven textiles of various varieties. The Petitioner wanted to cover its employees under the Act and, for that purpose, had a dialogue with the Provident Fund Inspector, Tirupur, who visited its factory. The said officer noticed that the regular employees engaged by the Petitioner were less than the minimum number prescribed by the Act for coverage and opined that the Petitioner can opt for coverage of its employees under the Act on a voluntary basis. In accordance with that advice the Petitioner has been making contributions under the Act for its employees on a voluntary basis with effect from 1st August, 1972. While so, the Provident Fund Inspector, Tirupur, informed the Petitioner on 8th April 1976 that weavers engaged in producing hand -woven textiles for the Petitioner should also be considered as employees and they should also be covered under the Act. In spite of the Petitioner pointing out that the weavers were not employees within the meaning of the Act and this position had all along been accepted by the Department the Respondent, to whom the matter was referred, issued summons to the Petitioner to produce the records and attend an enquiry under Sec. 7 -A of the Act. At once the Petitioner submitted a petition to the Central Government under Sec. 19 -A of the Act to give a finding that the Petitioner has not employed the requisite number of employees to attract the operation of the Act. In view of the petition under Sec. 19 -A, the Petitioner requested the Respondent to postpone the enquiry under Sec. 7 -A till the finding of the Central Government is received, but the Respondent has not accepted the representation and, as such, the Petitioner apprehended the possibility of the Respondent proceeding ex parte with the enquiry under Sec. 7 -A and passing adverse orders. It is in that state of affairs, the Petitioner has invoked the jurisdiction of this Court under Article 226 of the Constitution of India, for a writ of prohibition.

(3.) A detailed counter -affidavit has been filed by the Respondent and therein, the various averments of the Petitioner are controverted. According to the Respondent, the Provident Fund Inspector, Tirupur, inspected the Petitioners' establishment on 8th April, 1976 and found that weavers working therein had not been enrolled as Employees' Provident Fund members and therefore, he wanted the Petitioner to produce the relevant records for his inspection. Since the Petitioner did not produce the records but raised a contention that the weavers were not employees within the meaning of the Act and as such, they were not entitled to coverage under the Act, the Provident Fund Inspector referred the matter to the Respondent and it was in terms of the reference, the Respondent had called upon the Petitioner to attend an enquiry under Sec. 7 -A of the Act. The enquiry under Sec. 7 -A would take within its ambit the question of liability of the Petitioner under the Act in respect of weavers and as such, the pendency of a petition under Sec. 19 -A to the Central Government will not be a bar for determining their dues under Sec. 7 -A of the Act. The counter then proceeds to say that according to the ratio laid down in New Street Textiles v/s. Union of India : (1976) I L.L.J. 238 and Hindustan Durry Factory, Ambala City v/s. Regional Provident Fund Commissioner, Chandigarh Civil Writ No. 3005 of 1972 High Court of Punjab & Haryana, the term employee as defined in Sec. 2(f) the Act is wide enough to embrace even casual and piece -rated employees. Reference is also made in the counter to the dictum of the Supreme Court in Silver Jubilee Tailoring House v/s. The Chief Inspector of Shops and Establishments : (1974) I L.L.J. 367 as to the criteria to be applied to find out the existence of an employee -employer relationship in an establishment. It is then stated that the Respondent has no doubt or difficulty whatever in treating the weavers as employees of the Petitioner establishment and, as such, the Respondent feels no necessity to approach the Central Government for a decision under Sec. 19 -A of the Act. The Respondent has also quoted the decision in Bajranglal Padia v/s. State of Orissa, (1975) L.I.C. 830 to support his stand. Lastly, it is stated that the holding of an enquiry under Sec. 7 -A during the pendency of a petition under Sec. 19 -A is not interdicted in any manner and, further more, as laid down in Chockan Palani Vilas Snuff Factory v/s. Regional Provident Fund Commissioner : (1973) I. L.L.J. 139 in an enquiry under Sec. 7 -A, there can not only be determination of dues payable by the employer, but there can also be a determination of the basic question of the applicability of the Act to the particular employer or particular industry. The Respondent has therefore prayed for the dismissal of the writ petition and the enquiry proceedings being continued.