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1986 DIGILAW 421 (KER)

MOHANRAJ v. REGIONAL P. F. COMMISSIONER

1986-11-06

FATHIMA BEEVI

body1986
Judgment :- 1. Petitioner has challenged Exts. P2 and P5 proceedings of the Regional Provident Fund Commissioner and prays for appropriate directions setting aside the same. 2. The petitioner who has started a small scale unit to manufacture Household Utensils by letter dated 30-3-1983, evidenced by Ext. P1 intimated the 2nd respondent to introduce the Provident Fund scheme in the unit with retrospective effect from January 1983. The Regional Provident Fund Commissioner, by Ext. P2 dated 15-6-1983, replied that the scheme is applicable to the petitioner's establishment from 1980 onwards. By Ext. P3 letter dated 28-6-1983, the petitioner pointed out that he is liable to pay provident fund contribution only with effect from 1983. After remitting the contribution and dues for the year 1983 further intimation was given as evidenced by Ext. P4 dated 13-7-1983. The 1st respondent, by Ext. P5 proceedings dated 18-9-1985 informed that the petitioner is liable to pay the contribution from 1980 onwards. 3. The contention taken up by the petitioner is that the action of the 1st respondent in requiring the petitioner to pay contribution for the period anterior to Ext. P1 is illegal and contrary to statutory provisions and the 1st respondent is therefore to be restrained from enforcing such payment. It is stated that this small scale unit started in 1980 was a sick unit closed down due to recurring loss incurred by previous proprietor and it was at the petitioner's initiative that the authorities took steps to cover it under provident fund scheme. Placing reliance on the decisions of the Madras High Court in K. R. Subbaier v. Regional Provident Fund Commissioner, (1962-63) 23 FJR (Mad), and that of the Calcutta High Court in Aluminium Corporation of India Ltd., v. Regional Provident Fund Commissioner, (1958) 15 FJR 219, the counsel for the petitioner submitted that any demand for a back period would be illogical and oppressive and in so long as a statutory authority has not initiated action under the provisions of the Act against the prior employer and the undertaking remained undiscovered the petitioner cannot be saddled with the liability to pay contribution for any period anterior to the date of Ext. P1. 4. The Central Government has framed the Employees' Provident Fund Scheme in 1952 in exercise of the powers conferred by S.5 of the Employees' Provident Fund and Miscellaneous Act, 1952. P1. 4. The Central Government has framed the Employees' Provident Fund Scheme in 1952 in exercise of the powers conferred by S.5 of the Employees' Provident Fund and Miscellaneous Act, 1952. Though the Act came into force in 1952, and the Scheme under the Act came into operation on and from 1st November, 1952 and the small scale unit was started in 1980, no steps were taken by the statutory authority against the previous proprietor or the petitioner until the receipt of Ext.P1 intimation in 1983. It is true that existence of the factory was discovered only on receiving Ext. P1. According to the respondent enquiry thereafter revealed that the unit was started in 1975 and production started on 30-11-1980, and the factory had engaged more than 20 employees. It is on the basis of these facts that respondents have required the petitioner to pay the contribution for the period from 30-11-1980. 5. The question whether it is incumbent on the part of the Regional Provident Fund Commissioner to call upon the petitioner to fulfil the obligation under the Act for a period prior to the date of Ext. P1 intimation, does not depend upon the voluntary action of the petitioner. It is not open to the petitioner to contend that the Act and the Scheme, became operative only on and from the point of time, the authorities held that the unit is within the ambit of the Act and made a consequential demand in terms of the Act and the Scheme. The Act comes into operation by its own vigour. It applies if the conditions stated in the Act are satisfied. The operation of the statute does not depend on any decision being taken by the authorities under the statute. It depends on its own provisions. This view has been held by this Court in Kunhipaly v. Regional Provident Fund Commissioner, Trivandrum, (1966 I LLJ 642) following the Supreme Court decision in Associated Industries (P) Ltd., v. Regional Provident Fund Commissioner, Kerala (1963 II LLJ 652), and earlier decision in Kokkalai Rice and Oil Mills, Foundry, etc., v. Regional Provident Fund Commissioner, (1960 II LLJ 528). This view has been held by this Court in Kunhipaly v. Regional Provident Fund Commissioner, Trivandrum, (1966 I LLJ 642) following the Supreme Court decision in Associated Industries (P) Ltd., v. Regional Provident Fund Commissioner, Kerala (1963 II LLJ 652), and earlier decision in Kokkalai Rice and Oil Mills, Foundry, etc., v. Regional Provident Fund Commissioner, (1960 II LLJ 528). Supreme Court has in the Associate Industries (P) Ltd., v. The Regional Provident Fund Commissioner, Kerala, (1964 SC 314) pointed out: "If the factory carries on one industry which falls under Schedule.1 and satisfies the requirement as to the number of employees prescribed by the section, it clearly falls under S.1(3)(a)." In Nazeena Traders (P) Ltd., v. Regional Provident Fund Commissioner, Hyderabad, (AIR 1965 AP 200), the High Court of Andhra Pradesh held thus: "It is abundantly clear from these provisions that the liability to contribute to the provident fund is created the moment the scheme is applied to a particular establishment. It does not depend upon the vigilance of the Provident Fund Department and the issue of notice. The relevant paragraphs of the scheme call upon the employer to obtain particulars from the workmen and submit report to the Provident Fund Commissioner following the procedure prescribed therefor as also to remit monthly the contribution to the provident fund. These provisions also disclose that no option is left to the employee to become or not to become a member of the fund. It is a statutory mandate for the employer to require his employees to become members and for the employees to obey it." In Radhakrishnan v. Regional Provident Fund Commissioner, Madhya Pradesh, Indore, (AIR 1967 Madh. Pra.157), it has been held that the Act applies to the notified establishments with effect from the date from which the Notification states the Act applies and not from the point of time the competent authority holds the employer of such establishment liable and determines the amount payable by him. The Act comes into operation by its own vigour. It applies if the conditions stated in the Act are satisfied. The same view is expressed by Punjab & Haryana High Court in 1983 Labour and Industrial Cases 717. 6. The Act comes into operation by its own vigour. It applies if the conditions stated in the Act are satisfied. The same view is expressed by Punjab & Haryana High Court in 1983 Labour and Industrial Cases 717. 6. The earlier decisions of the Madras and Calcutta High Courts relied on by the learned counsel for the petitioner had been referred to in Kunhipaly v. Regional Provident Fund Commissioner, Trivandrum and others, (19661 LLJ 642), and not followed. The Madras High Court held that any demand for a back period would not merely be illogical and oppressive, but inconsistent. with the terms of the enactment which are manifestly prospective in their operation. The Calcutta High Court in Aluminium Corporation of India (Ltd.,) v. Regional Provident Fund Commissioner and others, (19591 LLJ 249), held that no retrospective operation could be granted to the scheme and as such the Corporation could not be directed to pay the contribution for the period from the date when the Act is sought to be applied. 7. The employer is to obtain particulars from the workmen and submit a report to the Provident Fund Commissioner and remit the monthly contribution to the provident fund even without any order from the authorities. There is, no question of a retrospective operation of the provisions. The decisions relied on are not of any assistance to the petitioner. The change of management has also no consequences, as the continuance of the unit as such attracts the provisions of the law and the scheme, once it is found that it falls within the ambit of the scheme. The contention taken up by the petitioner is, therefore, unsustainable and the action of the respondent is unassailable. The petition is only to be dismissed. Original Petition is accordingly dismissed.