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2009 DIGILAW 211 (KER)

A. v. Joseph VS Asst. Provident Fund Commissioner

2009-02-27

P.R.RAMACHANDRA MENON

body2009
Judgment: Sustainability of Ext.P8 order passed by the first respondent under Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the Act) fixing the liability to effect contribution on the petitioner in respect of the workers of the Canteen attached to the hospital of the petitioner and determining the due amounts, followed by the consequential order passed by the first respondent freezing the bank account of the petitioner vide Ext. P11 is the subject matter of challenge in this Original Petition 2. The case of the petitioner is that, he is the Director of the Medical Trust Hospital, Nedumkandom and that the Canteen attached to the said Hospital is being run on contract basis, as evidenced from Ext.P1 agreement. It is stated that the petitioner has no control over the workers engaged by the contractor in the Canteen, despite which, the first respondent issued Ext.P2 show cause-notice in connection with the enquiry proceedings contemplated under Section 7A of the Act. 3. Thepetitioner filed Ext. P3 reply in response to Ext. P2 show-cause notice asserting that he is not liable to effect any contribution as he cannot be considered as the employer under the relevant provisions of law. Pursuant to the further steps, the first respondent, after considering the materials brought to light passed Ext.P8 order holding that the petitioner was very much liable to effect the contributions in respect of the workers engaged in the Canteen (though they were engaged by/through the contractor) and the amount payable by way of contributions was quantified and conveyed to the petitioner. Aggrieved by the said order, the petitioner filed a review petition (Ext.P9) along with Ext.P10 petition to condone the delay, before the first respondent, invoking the provisions under Section 7B of the Act. According to the petitioner, it was during the pendency of the above review petition that the first respondent passed Ext.P11 order freezing the account of the petitioner with the second respondent-Bank, which hence is assailed by filing the above Original Petition. 4. The first respondent has filed a counter affidavit disputing the claim and reliefs prayed for in the Original Petition. The averment/allegation of the petitioner that the first respondent had proceeded to pass the coercive order by way of Ext.P11 during the pendency of the review petition, has also been categorically denied, referring to the relevant dates. 4. The first respondent has filed a counter affidavit disputing the claim and reliefs prayed for in the Original Petition. The averment/allegation of the petitioner that the first respondent had proceeded to pass the coercive order by way of Ext.P11 during the pendency of the review petition, has also been categorically denied, referring to the relevant dates. According to the said respondent, the above review petition was filed only on 23.04.2003, whereas the present Original Petition was filed much before the same, i.e. on 10.04.2003 and thus it is contended that there is manifest misrepresentation. Obviously, Ext. P9 review petition is not dated and so also is the case with Ext. P10 affidavit and the petition seeking to condone the delay in filing the same. However, there is an averment in paragraph No.2 as well as in paragraph No.4 of the affidavit filed in support of the petition to condone the delay in filing the review petition, that the review petition was "being filed on 10.04.2003". The Original Petition is seen filed on 10.04.2003. As such, no wilful mis-representation can be attributed on the petitioner in this regard, though the review petition, due to some or other unavoidable reasons would have been presented before the first respondent on a subsequent date. 5. With regard to the merits of the case, particularly as to the disputed liability of the petitioner in respect of the workers engaged in the Canteen attached to the Hospital and run by/through a contractor, it is worthwhile to go through the definition of the term employee as provided under Section 2(f) of the Act, which is extracted below for convenience of reference: "(f)"employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets, his wages directly or indirectly from the employer and includes any person,- (i) employed by or through a contractor in or in connection with the work of the establishment; (ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), or under the standing orders of the establishment. " 6. " 6. It is explicitly clear from the above definition that the term employee takes within its sweep, any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who gets his wages directly or indirectly from the employer. It has been further made clear that the term employee includes any person employed by or through a contractor, in or in connection with the work of the establishment. This is more so discernible from the word used under Section 6 of the Act as well ( dealing with regard to the contributions and matters which may be provided for in schemes) where also, the term employee has been clarified as whether employed by the employer directly or by or through a contractor. 7. With regard to the status of the Canteen attached to the Hospital, it is pointed out by the learned counsel for the petitioner, on the basis of the contention taken before the first respondent, that it is not a statutory canteen and that it cannot be treated as a part of the establishment-Hospital. Referring to Section 2A of the Act, the learned counsel for the first respondent submits that the term establishment will include all departments and branches and hence it will definitely take the Canteen admittedly attached to the petitioners establishment as well, ( though run through an independent contractor) within the purview of the term establishment. Learned counsel for the first respondent places reliance on the decision rendered by a Division Bench of the High Court of Rajasthan (Jaipur Bench) in Santokba Durlabhji Memorial Hospital, Jaipur vs. Assistant Provident Funds Commissioner, Jaipur. (2001 (1) LLN 435)] where the issue involved was whether the employees of the cycle stand attached to the concerned hospital and engaged by the contractor, were covered as "employees" as defined under section 2(f) of the Act, which was answered in the positive. 8. (2001 (1) LLN 435)] where the issue involved was whether the employees of the cycle stand attached to the concerned hospital and engaged by the contractor, were covered as "employees" as defined under section 2(f) of the Act, which was answered in the positive. 8. The Apex Court had occasion to consider the above issue in Royal Talkies, Hyderabad and others vs. Employees State Insurance Corporation [1978 (1) L.L.N. 556] wherein also the factual situation was exactly similar, in so far as the question was whether the employees in the cycle stand attached to the concerned theatre would come within the purview of the Act ( ESI Act therein) and it was held in favour of of the ESI Corporation. 9. Section 2(f) of the Act contains two substantive parts and that the expression "in connection with the work of an establishment" ropes in a wide variety of workmen who may not be employed in the establishment but may be engaged only in connection with the work of the establishment and that some nexus must exist between the establishment and the work of the employees. The Supreme Court also held that it is enough if the employee does some work which is ancillary, incidental or has relevance to or link with the object of the establishment. It was accordingly that the Rajasthan High Court held that the facility of providing a cycle-stand is an amenity for the persons visiting the hospital and, therefore, has connection with the work of the establishment. Applying the same logic, it can be safely concluded that the facility of providing a Canteen in the petitioners establishment is an amenity for the persons visiting the Hospital, for the patients and staff of the Hospital and therefore, has definitely a connection with the work of the establishment. The definition of the term employee under Section 2(f) of the Act is very much different from the definition of worker and workman respectively in the Factories Act and the Industrial Disputes Act and it is wide enough to include a person permitted to work for someone else, if it is in connection with the work of the establishment. The definition of the term employee under Section 2(f) of the Act is very much different from the definition of worker and workman respectively in the Factories Act and the Industrial Disputes Act and it is wide enough to include a person permitted to work for someone else, if it is in connection with the work of the establishment. Explaining the scope and ambit of the provision, the Apex Court has held in P.M. Patel and sons vs. Union of India [1986(1) L.L.N. 54] that even a home worker rolling beedies at home will satisfy the definition of the term employee under Section 2(f) of the Act, though he is not working in the factory. As such, the main contention raised by the petitioner challenging the correctness and sustainability of Ext.P8 order is devoid of any merit at all. 10. In the course of hearing, the learned counsel for the petitioner sought for a declaration, reserving the right of the petitioner to pursue his remedy by way of an "appeal" as provided under Section 7-I of the statute, notwithstanding the fate of the review petition already preferred with a petition to condone the delay before the first respondent. This submission was made by the learned counsel for the petitioner, pointing out that the petition for review happened to be filed with a petition to condone the delay on a wrong notion of the party; especially when the review, if at all to be filed, had to be preferred within a period of 45 days as provided under Section 79A of the Employees Provident Funds Scheme, 1952 and that no provision is available enabling the reviewing authority to condone the delay. While considering the said request, it is very much necessary to note the relevant provisions dealing with the appellate rights of the petitioner as well. 11. Section 7-I(2) of the Act provides that every Appeal under sub-section(1) shall be filed in such form and manner, within such time and be accompanied by such fees, as may be prescribed. Rule 7 (2) of the Employees Provident Funds Appellate Tribunal (Procedure) Rules 1997 states that any person aggrieved by a notification issued by the Central Government or an order passed by the Central Government or any other authority under the Act, may within 60 days from the date of issue of the notification/order, prefer an appeal to the Tribunal. Rule 7 (2) of the Employees Provident Funds Appellate Tribunal (Procedure) Rules 1997 states that any person aggrieved by a notification issued by the Central Government or an order passed by the Central Government or any other authority under the Act, may within 60 days from the date of issue of the notification/order, prefer an appeal to the Tribunal. The first proviso thereunder further stipulates that the Tribunal may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the Appeal within the prescribed period, extend the said period by a further period of 60 days. In short, the maximum period for filing the Appeal is only 120 days from the date of the impugned proceedings/order (60 + 60). When the statute confers the power on the Authority to condone the delay only to a limited extent, it can never be widened by any court contrary to the intention of the law makers. This being the position, there is absolutely no scope for reserving any right of Appeal to the petitioner, Ext.P8 order having been passed by the first respondent as early as on 29.08.2002. In the above facts and circumstances, this court does not find any tenable ground warranting interference. The Original Petition is dismissed accordingly.