DODDAKALE GOWDA, J. ( 1 ) PETITIONER has challenged the validity of the order dated 28-1-1986 of the Commissioner of Provident Fund, declaring that 147 persons, particulars of which are set out in annexure, as employees within the meaning of Section 2 (f) of the Employees Provident fund Act, 1952, and/are entitled for provident fund membership from October 1984 to july 1985, and demanding a sum of rs. 33,686. 95 as contribution etc. ( 2 ) CONTENTION of the petitioner is that it has established a textile mill in chamarajanagara Taluk, an industrially backward area in the State of Karnataka, with a view to avail of facilities and concessions announced by the State of Karnataka. Averment is that population in this area is predominantly agriculturists and unless and until they are trained for a sufficient number of years, they will not be in a position to discharge their functions as workers and to the satisfaction of the management. Hence, to achieve this object petitioner-company has started an apprentice scheme under which persons are taken on training to be imparted in the factory. Settlement dated 8-7-1983 provides for recruitment, absorption, remuneration etc. , The certified standing order of the company defines apprentice. The terms of settlement dated 23-6-1984 (Annexure-C) supplement the terms of earlier settlement dated 8-3-1983. Hence, the apprentices are not eligible to be enrolled as members of the Trust. Petitioner-Company is undisputedly covered under the provisions of the Act and the code number allotted is kn/10032. ( 3 ) THE Regional Provident Fund Commissioner, through notice dated 10-5-1985, called upon the petitioner to furnish information in respect of 150 employees and their eligibility regarding the coverage under the scheme. Petitioner replied that they are only apprentices and not employees within the definition of "employee" as defined in the act, consequently, they are not eligible for coverage under the scheme. The Regional provident Fund Commissioner, providing an opportunity of hearing and holding an enquiry, has concluded that about 131 employees are eligible for coverage excluding 16 employees. Petitioner replied that they are only apprentices and not employees within the definition of "employee" as defined in the act, consequently, they are not eligible for coverage under the scheme. The Regional provident Fund Commissioner, providing an opportunity of hearing and holding an enquiry, has concluded that about 131 employees are eligible for coverage excluding 16 employees. Petitioner mainly resisted his conclusion on terms and conditions of the settlement incorporated under Annexures-A and C. ( 4 ) RELEVANT terms of the settlement read thus :terms OF SETTLEMENT 1) It is hereby agreed by both the parties that the existing apprentices shall be on training for further periods as noted hereunder : group I: Those who have undergone training for not less than two years in the establishment as on 1-7-1983 shall be continued as apprentices for one more year from 1-7-1983; group II : Those who have undergone training between two and one- and-half years as on 1-7-1983 shall be continued as apprentices for one-and-half years from 1-7-1983; group III : Those who have undergone training less than one-and- half years, but more than one year as on 1-7-1983 shall be continued as apprentices for further period of two years from 1-7-1983; group IV : Those who have undergone training from six months to one year as on 1-7-1983 shall be continued as apprentices for two-and-half years from 1-7-1983; group V: Those who have undergone training less than six months as on 1-7-1983 shall be continued as apprentices for a period of three years from 1-7-1983. These apprentices shall also be governed by the Scheme under ANNEXURE 'a'. 2) It is agreed between the parties that the present daily stipends of the existing apprentices shall be raised periodically with effect from 2-7-1983, except Group 'b' and to Cone Winders who shall be given with effect from 1- 1-1984, as indicated below: group I: Group I apprentices shall be given a stipend increase of Rs. 1. 25 (Rupee one and paise twenty five only) each six months; group II : Group II apprentices shall be given a stipend increase of Re. 1/- (Rupee one only) each six months; group III : Group III apprentices shall be given a stipend increase of Rs. 1. 75 (Rupee one and paise seventy five only) each twelve months at the rate of Re. 1/- in the first six months and Rs. 0. 1/- (Rupee one only) each six months; group III : Group III apprentices shall be given a stipend increase of Rs. 1. 75 (Rupee one and paise seventy five only) each twelve months at the rate of Re. 1/- in the first six months and Rs. 0. 75 in the second six months. GROUP IV: Group IV apprentices shall be given a stipend increase of Rs. 0. 75 (Paise seventy five only) each six months. GROUP V : Group V apprentices shall be given stipend increase of Rs. 0. 75 (Paise seventy five only) every six months with effect from 1-1-1984. 3) It is agreed that on satisfactory completion of the training period mentioned, the present apprentices will be categorised as per ANNEXURE 'c' appended hereto and made permanent as per requirement. . . . . . . . . . . 4) It is agreed by both the parties that those apprentices who complete the apprenticeship training satisfactorily and are made permanent shall be given wage increases as per ANNEXURE 'c' appended hereto ( 5 ) RELEVANT clauses of the scheme annexed to the settlement dated 8-7-1983 read thus :"4. PERIOD OF LEARNING OR training : a) The period of learning or training shall be three years divided into six stages of six months each. During this period the apprentices will be given theoritical and practical learning/training in the department or section to which he is attached. b) Any apprentice picking up work quickly in any stage may be allowed to go to the next stage, while those who are not able to pick up the work expected of him/her in any particular stage may be retained in that stage for an extended period. 5. PROGRESS IN LEARNING OR training : to assess the progress made by the apprentice in learning appropriate tests shall be given to them once in every six months. 6. TERMINATION OF LEARNING OR training : the Management may terminate the learning/or training of any apprentice at any time without notice if it is found that the learner has not made any or sufficient progress in his/her learning/training or that his/her character and/or conduct is not satisfactory or that his/her attendance is not satisfactory or for any other reasonable cause. 6. 6. RULES OF CONDUCT AND discipline : a) He/she shall attend the mills punctually at the specified hours, learn the work assigned in a thorough and diligent manner and always remain faithful to the management of the mills. b) He/she shall not absent himself/herself from work. Any learned who absents himself/herself for three or more days will be deemed to have abandoned his/her learning or training voluntarily of his/her own accord. c) He/she shall be governed by the Standing Orders applicable to the Establishment. 8. STIPENDS DURING TRAINING period : it is made clear to all apprentices admitted to the Scheme that they are not entitled for any remuneration during the learning period. However, they will be paid stipends at the following rates : each apprentices shall be paid a stipend of Rs. 5. 25 (Rupees Five and paise twenty five only) a work day. The stipend increase shall be Rs. 0. 75 (Paise seventy five only) at the end of every six months during the apprenticeship period. 9. (a) No apprentice after completion of his/her training period can claim employment in the mills as a matter of right. However, subject to availability of vacancies and at the discretion of the management, apprentices who satisfactorily complete the three years period of training may be employed permanent/probationary workers. (b) The period of training shall not count as period of service in the mills. " (emphasis supplied) from these terms, the Commissioner has concluded that these workmen are engaged in the productivity of the establishment and are receiving remuneration. According to him, designation of these persons as apprentices engaged in the production activity of the establishment is only a camouflage and there exists relationship of master and servant. Accordingly, calculating the contribution due towards their membership under the scheme, called upon the petitioner to pay a sum of Rs. 33,686,95. ( 6 ) THIS Court in S. P. Kamath and A. B. Kamath v The Regional Provident Fund Commissioner in Karnataka and others (1985 (1) karnataka Law Journal, 27) has stated thus :"in the Act an 'exempted employee' has been defined but not an 'excluded employee'. An 'exempted employee' is an employee who is covered by a Scheme which is exempt from the provisions of section 17 of the Act. An 'exempted employee' is an employee who is covered by a Scheme which is exempt from the provisions of section 17 of the Act. The words 'excluded employee' are not found in the definition provisions of the Act but it is only found in the definition provisions of the Scheme. If this aspect is kept-in-view, it is clear that a determination under section 7a primarily relates to the applicability or otherwise of the Act to the establishment in question and the determination under paragraph-26b of the scheme relates to the right or eligibility of a particular employee to be covered by the provisions of the Scheme. The Act may be applicable to the establishment but a particular employee may not be entitled to become a member of the Scheme or the management in a particular case may not be liable to make him a member of the scheme. That is the very reason the 'excluded employee' does not figure under the 'definition' provisions of the Act but he appears in the 'definition' provisions of the Scheme. In my view paragraph- 26b must also be read with the provisions of paragraph-26 which gives an indication as to the doubt that may arise under paragraph-26b. Paragraphs 27 (l) (a), (b) and (c) deal with the applicability of the provisions of the Scheme. Paragraph 26 (1) (a) refers to an employee other than an Excluded employee. Paragraph-26 (b) also refers to an employee other than the excluded employee. Paragraph 26 (ii) also refers to an employee other than the excluded employee. Paragraph-26 (iii) refers to an excluded employee and his right to become a member of the Scheme or ceasing to be such a member. Therefore, paragraph 26 B which relates to resolution of doubts on the question whether an employee is entitled or required to become or continue as a member or as regards the date from which he is so entitled or required to become a member, necessarily take in its sweep a determination of the incidental question whether an employee is an 'excluded employee' or not. " (emphasis supplied) ( 7 ) THE object of Apprentices Act, 1961, is to meet the increasing demand for skilled craftsmen and utilise facilities available for training apprentices and to ensure their training in accordance with the planned programme. " (emphasis supplied) ( 7 ) THE object of Apprentices Act, 1961, is to meet the increasing demand for skilled craftsmen and utilise facilities available for training apprentices and to ensure their training in accordance with the planned programme. As explained by the supreme court in The Employees State Insurance corporation v The Tata Engineering and Co. , locomotive Co. , Ltd. (A. I. R. 1976 S. C. 66) , there is no element of employment in the word 'apprentices', as such in a trade or industry. As per explanation appended to sub-Section (3a) of Section 8 of the apprentices Act, which reads thus :"in this sub-section the expression "management trainee" means a person who is engaged by an employer for undergoing a course of training in the establishment of the employer (not being apprenticeship training under this Act) subject to the condition that on successful completion of such training, such person shall be employed by the employer on a regular basis. "they may at best be management trainees and ot apprentices under the Apprentices Act. Moreover, it is not the case of the petitioner that it is imparting a course (related instructions as approved by the Advisory council) of practical training to every apprentice engaged by it in accordance with the programme and is bound to impart basic training having required number of employees or having a separate work-shop or building for the said purpose as required under sub-sections (1) and (4) of Section 9 of the Act. The distinction that exists in the nature of relationship of master and servant with other relationship is elucidated in Halsbury's Laws of England, Third Edition, Volume 25 thus:-"by a contract of apprenticeship a person is bound to another for the purpose of learning a trade or calling, the apprentice undertaking to serve the master for the purpose of being taught, and the master undertaking to teach the apprentice. Where teaching on the part of the master or learning on the part of the other person is not the primary but only an incidental object, the contract is one of service rather than of apprenticeship; but, if the right of receiving instruction exists, a contract does not become one of service because, to some extent, the person to whom it refers does the kind of work, that is done by a servant, or because he receives pecuniary remuneration for his work. " (emphasis supplied) ( 8 ) SUPREME Court in E. S. I. Corporation v tata Engineering and Co. (A. I. R. 1976 SC 66) negatived the plea that the employees therein were employees within the meaning of the e. S. I. Act having due regard to their nature of employment. Supreme Court, in the said case, held that employer was not bound to employ them after the period of training was over which in the normal course an employee would be entitled to. It also held, the purpose of engagement under the particular scheme was only to train them under certain terms and conditions, apprentice therein were not given wages within the meaning of the term under the Act; in case, they were regular employees under the Act, they should have been paid additional remuneration such as daily allowance and other allowances which were available to regular employees, under the Act they should have been paid additional remuneration such as daily allowance and other allowances which were available to regular employees. ( 9 ) IN contradiction of the terms found in the agreement referred to in Tata engineering case and definition of 'excluded employees' as defined in paragraph 2 (f) (iv) of the Employees Provident Fund Scheme, 1952, all these employees can conclusively be held to be employees. The definition of 'excluded employees' reads thus:-"i) an employee, who having been a member of the Fund, withdrew the full amount of his accumulation in the fund under clause (a) or (c) of sub-paragraph (c) of sub-paragraph 69. ii) an employee whose pay at the time he is otherwise entitled to become a member of the Fund. , exceeds one thousand and six hundred rupees per month. Explanation:- 'pay' includes basic wages with dearness allowance, retaining allowance (if any) and cash value of food concession admissible thereon, iii ). . . . . . . . . . . . . . iv) an apprentice. The explanation to para-2 (f) (iv) of the scheme reads : 'explanation' - An apprentice means a person who, according to the certified standing orders applicable to the factory or establishment, is an apprentice, or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government. "these employees are not declared as 'apprentice' by an authority specified by the appropriate Government. "these employees are not declared as 'apprentice' by an authority specified by the appropriate Government. Under the terms of settlement extracted above, they are not merely entitled to absorption subject to the satisfaction as prescribed therein, but are also paid wages and allowances etc. , in the same way as regular employees are paid. Their wages are co-related to the productivity. ( 10 ) THIS Court in Thungabhadra Sugar works v The Regional Provident Fund commissioner and Another (Writ Petition no. 4916 of 1974 : DD : 1st June 1976) has repelled the contention that they are employees within the meaning of the certified standing orders of the Government and it reads thus:-"it is too hard to accept the contention. The definition of an apprentice found in the said scheme cannot be understood in any other manner. The conception of an apprentice, under the said Model standing Orders, cannot also be imported while considering the meaning of that word in the Scheme. The provision or definition relating to exclusion from the operation of the Act or the Scheme, should be strictly construed. While so construed, it must be said that those 30 employees, since they do not fall within the definition of the 'apprentice' under paragraph 2 (f) (iv), the Commissioner was right in forming an opinion that they should not be excluded. " ( 11 ) THE Provident Fund Commissioner on an examination of the Scheme, definition of 'wages' and 'excluded employees' and the incidence of service conditions as incorporated in the Deed of Settlement has held that those employees are entitled to membership and not apprentice engaged to impart training in trade or craft or to acquire theoretical or practical knowledge that may be offered in a planned programme. The construction placed by the Commissioner cannot be said to be arbitrary or illegal or suffer from error apparent on the face of the record so as to warrant interference in exercise of power under Article 226 of the constitution of India. ( 12 ) LASTLY, relying on clause 26 (B) of the scheme it was contended that an order made without notice to employees is illegal and void. So long as the petitioner has been provided with an opportunity of hearing, he cannot ventilate the grievance of his employees regarding non-issue of notice and it was only they that can make grievance of non-compliance of cl. So long as the petitioner has been provided with an opportunity of hearing, he cannot ventilate the grievance of his employees regarding non-issue of notice and it was only they that can make grievance of non-compliance of cl. 26 (b), if any, and not the petitioner and has not even demonstrated the prejudice caused by non-issue of notices to employees. Hence, I find no merit. Writ petition is dismissed. Petition dismissed --- *** --- .