SREEKANTA SAHA Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The short point involved in this case is, whether the workers, employed at their homes for manufacturing beedis by the contractor, with whom the Petitioner -company had entered into agreements for supply of rolled beedis, are employees of the Petitioner company and are entitled to the benefits of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, being employees of the Petitioner -company and the schemes framed thereunder and whether the impugned assessment made by the Provident Fund authorities is valid or not.

(2.) The main contentions as raised by Mr. Dutta, the learned Senior Counsel, for the Petitioner -company in this Civil Order, inter alia, are that the Petitioner -company is engaged in the trade of manufacturing and sale of beedis and it is carrying on business of manufacturing beedis at different centres in the State of West Bengal. The Petitioner -company directly employs labourers in its factories situated in several districts in West Bengal, for the purpose of toasting, lebelling and packing beedis etc., but it does not engage any home worker for rolling beedis at its industrial premises or at any other place or places and for that purpose it merely engages independent contractors who have their own separate business and those contractors employ labourers including home workers for such purpose and pay them wages. The Petitioner -company merely supplies raw materials, viz., tobacco, beedi leaves and thread to the independent contractors, who engage workers including home workers of their own choice to roll beedis and to supply such rolled beedis to the Petitioner -company, and after the said contractors supply the rolled beedis at the Petitioner -company's industrial establishments, the Petitioner -company makes the beedis marketable by toasting, lebelling and packing the same. The Petitioner -company has no right of rejection in respect of the beedis rolled by the workers including home workers engaged by the independent contractors, and as such, the Petitioner -company has got no relation with the workers including home workers engaged by such independent contractors, and such workers or home workers are not the employees of the Petitioner -company under any circumstances, as there is no relationship of master and servant between the Petitioner -company and such workers and home workers, who are directly engaged by the independent contractors and who pay them their salaries, and hence, such workers or home workers are not entitled to get any provident fund benefits under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, and the Schemes framed thereunder from the Petitioner -company. According to Mr. Dutta, therefore, the impugned determination by the Provident Fund authorities, holding the Petitioner -company liable to pay provident fund to the tune of Rs. 5,01,960 on account of arrear provident fund dues for the home workers employed by the independent contractors as employees engaged by the Petitioner -company for supply of rolled beedis to the Petitioner -company, is wholly illegal, arbitrary, mala fide and made in colourable exercise of powers.

(3.) Mr. Biswas, learned Counsel appearing on behalf of the Respondents, however, opposes the said contentions of Mr. Dutta and submits that home workers employed by the contractors for rolling beedis, which such contractors supply to the Petitioner -company should be deemed to be employees of the Petitioner -company under the aforesaid Act and refers to the definition of 'employee' as stated in Sec. 2(f) of the said Act and further contends that the impugned order and notice do not suffer from any illegality because the Provident Fund authorities had rightly passed the order and assessed the amount payable by the Petitioner -company as provident fund dues for the home workers employed by the contractors, who in term are engaged by the Petitioner -company for the supply of rolled beedis to the Petitioner -company, because of the inclusion of such home workers within the meaning of 'employee' under the aforesaid Act, and also because of the fact that the Petitioner -company has got the right to reject the rolled beedis supplied to it by its contractors if the same are not to the specification or standard and these Tacts would be sufficient to conclude that some sort of control is being enjoyed by the Petitioner -company over the works of the home workers employed by the contractors engaged by the Petitioner -company for supply of rolled beedis to it and there is thus relationship of master and servant or employer and employee between the Petitioner -company and such home workers. Several decisions have been cited at the Bar, viz., Chintainan Rao v/s. State of Madhya Pradesh : A.I.R. 1958 S.C. 388. Birdhichand v/s. First Civil Judge, Nagpur AI.R. 1961 S.C. 644. Orissa Cement v/s. Union of India : A.I.R. 1962 S.C. 1402, Shankar Balaji Waje v/s. State of Maharastra : AI.R. 1962 S.C. 517. Management of D.C. Dewan v/s. Secretary, United Beedi Workers' Union, Salem, AI.R. 1966 S.C. 370, The Delhi Cloth and General Mills v/s. The Workmen : A.I.R. 1970 S.C. 919. The Provident Fund Inspector, Guntur v/s. T. S. Hariharan : A.I.R. 1971 S.C. 1519. Mangalore Ganesh Beedi Works v/s. Union of India : A.I.R. 1974 S.C. 1832, Silver Jubilee Tailoring House v/s. Chief Shop and Establishment : A.I.R. 1974 S.C. 37, P.M. Patel v/s. Union of India : A.I.R. 1987 S.C. 447 and Hussain Bhai, Calicut v/s. Alath Factory Thozhilali Union, Calicut : 1978 (II) L.L.J. 397.