BATA INDIA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition has been preferred with the prayer to quash the impugned orders dated July 8, 1988 (Annexure 1), issued by the respondent-authorities to petitioner Nos. 3 to 5, and dated August 25, 1988 (Annexure 2), from the respondent-authorities to petitioner Nos. I and 2. Petitioner Nos. 1 and 2 are engaged in the manufacture and sale of footwear, and petitioner Nos. 3 to 5 are contractors who provide labourers to the former.

(2.) Petitioner No. 1 is a public limited company having its registered office at Calcutta and one of its factories is at Mokama. Petitioner No. 2 is a functionary of the company at Mokama. Petitioner Nos. 3 to 5 are contractors who supply labourers to petitioner Nos. 1 and. 2 for the Mokama unit. Petitioner Nos. 1 and 2 were initially governed by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act'), and the Employees' Provident Fund Scheme, 1952 (hereinafter referred to as 'the Scheme'). By its notification dated February 8, 1965, published in the Gazette of India of February 20, 1965 (Annexure 3), Government of India in the Department of Social Security had, in exercise of the powers conferred by clause (b) of sub-section (1) of Section 17 of the Act, exempted the Mokama unit and other units of the petitioner-company mentioned therein from the operation of the Scheme with effect from the dates mentioned in the notification with respect to the different units. The petitioner-Company has set up a Trust for managing the accounts of provident fund of its employees. It took the stand that in view of the exemption granted by the respondent- authorities, the petitioner was completely exempted from the provisions of the Act and the Scheme which would mean that the trust shall maintain the accounts of its direct employees only, and is no longer obliged to maintain the provident fund accounts of contractors' labourers. The Company and the Contractors have been acting in tandem. It appears that there was exchange of letters between the petitioners and the respondent- authorities who did not agree with the stand taken by the petitioners. Petitioner Nos. 1 and 2 wrote to petitioners 3 to 5 vide letter dated June 8, 1988 (Annexure 5 series) that the latter should extend the benefit of provident fund to their employees. Consistent with the same, petitioner Nos. 3 to 5 wrote to the respondent- authorities to allot separate code numbers to them. The same has been rejected by the impugned order vide letter dated July 8, 1988 (Annexure 1), from the respondent-authorities to petitioner Nos. 3 to 5, informing that fresh code numbers cannot be allotted to the contractors. By letter dated August 25, 1988 (Annexure 2), and impugned herein, the respondent authorities have written to the petitioner-Company to submit the wanting reports with respect to the contractors, employees. In other words, the petitioners have taken the stand that consequent upon exemption granted under the Act, the petitioner-Company is no longer obliged to maintain the accounts of provident fund of the employees of contractors, whereas the respondent-authorities have taken the stand that in view of the exemption, the Trust set up by the petitioner-Company shall also cover the employees of the contractors. Petitioner Nos. 3 to 5 have further prayed that they should be allotted separate code numbers.

(3.) While assailing the validity of the impugned action of the respondent-authorities, learned Counsel for the petitioners has submitted that literal construction on the wordings of Section 17 of the Act would lead to the conclusion that once exemption is granted to the petitioner-Company from the operation of the Scheme, it is no longer within the purview of the Act and the Scheme which were applicable to it during the pre-exemption stage obliging it to maintain the accounts of the employees of the contractors, no longer holds good. No such exemption has been granted to the contractors and, therefore, they are still within the purview of the Act. He has relied on various authorities.