GAIN FINANCIAL CONSULTANTS PRIVATE LIMITED Vs. REGIONAL PROVIDENT FUND COMMISSIONER MAHARASHTRA AND GOA

JUDGEMENT

(1.) THE petitioners have challenged three orders passed by the respondent, Provident Fund Commissioner dated 16th April, 1992, 4th July, 1995 and 13th October, 1995. The order dated 16th April, 1992 passed by the competent authority pertains to an enquiry under section 7 (A) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short the Act), after issuing due notice to the petitioners. The enquiry was started after the visit by the enforcement inspector to the establishment of the petitioner, between the period 1985 to 1986. From the report submitted by the enforcement inspector, it appeared to the authorities that the establishment had employed more than 19 employees in the month of April 1982 i. e. 17 regular employees and three retainers. On the basis of the aforesaid report of the enforcement inspector, the petitioners were summoned to appear before the competent authority on 12th February, 1987 for enquiry under section 7 (A) of the Act. It appears from the affidavit and record that several opportunities were given to the petitioners establishment and it also appears that the petitioners had appeared and produced documents in support of their case. Finally on the basis of the record, the petitioners establishment was held to be covered by the Act from 1st May, 1982 to January 1986. It may be clarified at this stage that the petitioners have voluntarily accepted the coverage from February 1986 onwards but they have disputed the coverage from 1st May, 1982 till January, 1986.

(2.) THE main contention of the petitioners is that in all there were 17 employees employed by them during the relevant period and therefore, they were not liable to be covered. There is no dispute that during that period there were four persons making or working for the petitioners as "retainers" viz. , Shri R. C. Pres, Shri D. Bhatt and Ms. C. Shroff and Ms. B. Gazder. Shri Naik, the learned Counsel for the petitioners, has fairly conceded the position that during the relevant disputed period of coverage, there were 17 regular employees and four persons who were appointed as retainers or consultants to work for the company. The learned Authority has given the details of such employment in its order in paragraph 3. 4. 3. It is revealed from the said undisputed record that all the aforesaid four persons were in fact doing the work of the company for reward or wages. They were paid monthly remuneration on vouchers. The period of such work by them is from April 1981 to March 1983, from April 1982 to March 1983, from October 1982 to March 1983 and from July 1981 to March 1983 respectively. According to Shri Naik, though the aforesaid persons were working for the petitioner company, they were not regular employees employed by the company but they were only working as consultants to render expert services of interviewing the persons to be recruited by the petitioners. Shri Naik has further submitted that these four retainers were not paid any other benefits which were paid to the other regular employees and therefore, according to Shri Naik, they cannot be excluded as regular employees of the petitioners company to cover its establishment under the Act.

(3.) ON the other hand, Shri Mehta, the learned Counsel for the respondents has submitted that the petitioners were given sufficient opportunity and hearing before they were covered under the Act. Shri Mehta has pointed out from the record that the petitioners had attended the hearing before the authority and had also produced documents which were considered by the competent authority. Shri Mehta has further pointed out that being aggrieved by the first order dated 16th April, 1992 the petitioners had filed a review application. The authority reviewed its order once again and dismissed the review by its order dated 4th July, 1995 after considering the record afresh. The third impugned order appears to be the demand notice dated 13th October, 1995 which is as a result of the order passed under section 7 (A) of the Act. Shri Mehta has, therefore, submitted that the grievance of the petitioner that no hearing was given to them is totally baseless. Shri Mehta has further submitted that the so called retainers were included as the employees of the petitioner company as they were employed by the petitioner company for its regular work and therefore, under the definition of the employee they could not be included from the coverage of the Act. Shri Mehta has further relied upon a judgment of the Division Bench of Gujarat High Court in the case of (M/s. Satish Plastics and R. P. F. Commissioner), reported in 1981 (2) L. L. J. 277. Justice Thakar (as he then was) analysed the definition of the employee and has held that the definition is wide enough to keep within its sweep a person permitted to work at his own residence as well and that there was no bar under the definition to work outside the premises of the establishment. The Division Bench has disregarded the label put by the employer and has laid down the following tests to be applied to answer the question whether the person employed was an employee or not as follows :---