K V RAMAM Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) The question that arises in this case is whether it is competent for the Provident Fund authorities to reckon the employees working in two different establishments, though in the same building and carried on by two different persons as one and the same, to attract the application of the provisions enacted under the Employees Provident Funds & Miscellaneous Provisions Act, 1952. If the establishment comes within that definition 20 or more employees have to be engaged. The relevant facts may briefly be stated :

(2.) The petitioner originally established both 'Lodge' on the first floor of the building and also 'restaurant, on the ground floor till about 11-7-1980. Thereafter, on the said date, it was leased out to a different person. During the course of inspection by the Provident Fund authorities it transpired that upto 1J-7-1980 it was managed by petitioner herein, but from 11-7-1980 onwards it was leased out to a stranger nevertheless the provisions enacted under Provident Fund Act are applicable to such establishments as it should be treated as a common establishment within the meaning of Section 2 (f) of the Act. Inasmuch as the employees working in these two establishments, namely, lodge on one hand and restaurant on the other, being 9 and 13 as alleged, it would be 20 or more and hence the provisions of the Act made applicable. The question that, is, therefore, canvassed herein by the learned counsel for the petitioners Sri G. Ramachandra Rao is that from the definition, as laid down under Section 2(f) of the Employees Provident Fund Act, it is not at all competent for the authorities to pass the impugned order extending the provisions of the said Act to the establishments comprising lodge and restaurant, by taking into consideration the employees that are engaged in the restaurant section as the restaurant section is admittedly leased out and, therefore, they cannot be treated as an integrated unit for the purpose of the Employees Provident Fund Act.

(3.) The counter contentions of Sri K. Venkata Ramayya, the learned counsel for the respondents, based on the Judgment of the Supreme Court reported in Royal Talkies vs. ".5 /. Corporation, Hyderabad, AIR 1978 SC 1478'. are, that it makes very little difference whether restaurant is based out or not because that restaurant is established for the purpose of catering to the the needs of the lodgers as well and, therefore, both will have to be treated as single unit. The judgment cited supra did not pertain to the provisions of the Provident Fund Act, but it was with reference to the Insurance Act, and the definition under Section 2(9) of the Insurance Act does not bear analogy with the materia in Section 2(f) of the Employees Provident Fund Act. In fact this has been to a great extent conceded by the learned counsel for the respondents. The comparative terminology of immediate employer and primary employer which are employed under the Insurance Act are highly germane in considering whether in a Cinema Theatre owned by 'A' where in a cycle stand as well as a canteen leased out to independent agencies, wherein employees were engaged by the said contractors, could be taken into const- deration for the purpose of coverage of the Insurance Scheme treating the same as a single establishment. Krishna Ayyer, J (as he then was) while analysing the provisions of the Act juxtaposed with the spirit of social justice that permeated various Articles of the Constitution of India held, that the employees engaged in the canteen and cycle stand sections must also be said to be employed by the primary employer and, therefore, Insurance Act is applicable to this case.