KEDARMAL Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution by the partner of a firm, a trading and commercial establishment, for a writ in the nature of certiorari for the purpose of quashing an order of the Central Government under section 19-A of the Employees' Provident Funds Act, 1952 declaring the firm to be an establishment falling within the class of establishments to which the Act applies, by virtue of a notification issued under section 1 (3) (b) of the Act, and for a writ of mandamus directing the Central Government and the Regional Provident Fund Commissioner, Madhya Pradesh, to forbear from enforcing the provisions of the Act against the firm in any manner.

(2.) THE firm is engaged in storage and sale of cut betel nuts along with other articles such as cigarettes and general merchandise. THE establishment consists of 7 to 8 persons employed on a permanent basis, apart from 15 to 20 workers engaged on daily wages. That being the normal requirement of the establishment, the Regional Provident Fund Commissioner, who is charged with the duty administering the Act, was of the view that the firm being a "trading and commercial establishment" employing 20 or more persons, came within the purview of the Act. He, therefore, called upon the firm to implement the provisions of the Act and to institute a provident fund for its employees. THE firm contested its liability under the Act in respect of establishment of such a provident fund, on the ground that it only employed 7 to 8 persons on a permanent basis, as registered under the Shops and Establishments Act and was, therefore, exempt from the operation of the Act.

(3.) THE firm having raised a dispute under section 19-A of the Act as regards the applicability of the Act to its establishment, the Central Government took cognizance of the dispute under section 19-A (iii) of the Act and afforded the firm an opportunity to place its point of view in the matter vide letter No. 5 (IIl)/65-PF-II dated 16th September, 1967. By that letter, the Central Government disclosed to the firm the nature of the facts elicited by the provident fund authorities and pointed out that the definition of "employee" in section 2 (f) of the Act was wide enough to include the 15th to 20th workers engaged by the firm daily on daily wages, in addition to the 7 or 8 persons employed on a permanent basis. On these facts, the Central Government divulged that there was prima facie case for the coverage of the establishment under the Act. In response to the notice, the firm made a written submission dated 13th October, 1967 by which it reiterated that the 15 to 20 persons engaged on daily wages for the purpose of cutting betel nuts were only casual workers engaged on a contract basis, on a piece rate and were, therefore, not "employees" within the meaning of section 2 (f) of the Act, and that as there was no employment of these persons, they could not be taken into consideration, for determining the applicability of the Act. After setting out its case, the firm requested the Central Government to re-examine the facts for itself and to advise the Regional Fund Commissioner not to enforce so-called the liability under the Act against it.