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2011 DIGILAW 26 (CAL)

Satyabrata Chakraborti v. UNION OF INDIA

2011-01-07

ANIRUDDHA BOSE

body2011
JUDGMENT ANIRUDDHA BOSE, J. 1. THE petitioner in both these petitions, being W.P. 17148(W) of 2006 and W.P. 4706(W) of 2007 is the manager and secretary of a school, being "Atreyee English Medium School" and he primarily seeks to avoid coverage of the said school from the provisions of the Employees Provident Fund and Miscellaneous Provisions Act 1952 (the Act in short). THE school in question is affiliated with the Central Board of Secondary Education (CBSE) and was established in the year 1984. THE grounds on which the petitioner, representing the management of the school wants to be excluded from the coverage of the Act is that the majority of their employees are opposing entry into the statutory provident scheme as according to them, the benefits they are getting at present from the school is superior to the benefits granted under the statutory scheme. It has also been contended that in view of the provisions of Section 16(1)(b) of the Act, the provisions of the statute is not applicable to the said institute, as the employees of the said school are covered by the West Bengal Non-Government Educational Institutions and Local Authorities (Control of Provident Fund) Act, 1983 and the West Bengal Recognised Non-Government Educational Institution Employees (Death-cum-Retirement Benefit) Scheme, 1981. I shall refer to the said Act and the scheme as the 1983 Act and the 1981 Scheme respectively in later part of this judgment. 2. THE dispute over coverage of the subject institute appears to have had risen originally in the year 1990. It appears that at the initial stage, the management of the said school had deposited the employer’s share of the contribution to provident fund with the Provident Fund Commissioner. But the employees had refused to participate in the statutory provident fund scheme. THE case of the petitioner is that since then, certain sums of money as the contribution of the employer and the employees are being deposited by the management of the school towards Provident Fund and Pension account with the State Bank of India. A proceeding was initiated under the provisions of section 7A of the Act in the month of June that year and an F.I.R was lodged with the Balurghat Police Station under Sections 406 and 409 of the India Penal Code, on the ground that the establishment was not depositing its provident fund dues. A proceeding was initiated under the provisions of section 7A of the Act in the month of June that year and an F.I.R was lodged with the Balurghat Police Station under Sections 406 and 409 of the India Penal Code, on the ground that the establishment was not depositing its provident fund dues. In W.P. No. 17148(W) of 2006, under challenge is certain steps initiated against the management of the school under Sections 8 and 8B of the Act, upon initiation of certificate proceedings. In this writ petition, the petitioner has also sought a declaration to the effect that the application of the establishment for exemption from the provisions of the Act under Section 17(1) shall be deemed to have been granted. The application for exemption was made before the Central Government on or about 15 February 2005 in pursuance of liberty given to the school authorities by an Hon’ble Division Bench of this Court. I shall refer to this decision of the Hon’ble Division Bench in the later part of this judgment. By a communication dated 29 May 2006, the petitioner was informed by the provident fund authorities that the application for exemption of the establishment stood rejected. 3. THE grounds for such rejection were disclosed in a later communication dated 18 October 2006, issued by one S. D. Xavier, Under Secretary to the Government of India, bearing memorandum no. S35015/11/06-SS-II, a copy of which has been made Annexure P16 to W.P. 4706(W) of 2007. THE legality of this memorandum has been challenged in the said writ petition, being W.P. 4706(W) of 2007, which I shall henceforth describe as the second writ petition. THE school authorities sought exemption under Section 17(1) of the Act on the ground that they had introduced West Bengal Non-Government Institutions (Death-cum- Retirement) Benefits Scheme, 1981. It was also represented before the designated officer of the Central Government, before whom the exemption application was filed, that the majority of the employees had accepted the scheme adopted by the school authorities as the said scheme was more beneficial than the statutory scheme. 4. THE management of the school had challenged the proceeding initiated under Section 7A of the Act by filing a writ petition before this Court being C.R. No. 8970(W) of 1990. 4. THE management of the school had challenged the proceeding initiated under Section 7A of the Act by filing a writ petition before this Court being C.R. No. 8970(W) of 1990. THE main case of the school authorities in the writ petition was that the provisions of the said Act was not applicable to the subject establishment. THE school authorities were successful before an Hon’ble single Judge, and it was held in the judgment delivered in that case on 28 February 2002 that the 1952 Act would not be applicable in the case of the institute in question. So far as the criminal proceeding was concerned, the petitioner therein representing the establishment was given liberty to initiate appropriate proceeding for quashing of the proceeding initiated against the establishment. It has been pleaded in the second writ petition that a Criminal Revision application (C.R.R. 1226 of 2005) has been filed before this Court, and by an interim order, the entire criminal proceeding has been stayed. The Provident Fund authorities preferred an appeal against this judgment of the Hon’ble Single Judge in C.R. No. 8970(W) of 1990 before an Hon’ble Division Bench of this Court. The Hon’ble Division Bench rejected the claim of the school authorities for being exempted from the coverage under the 1952 Act. It was specifically held that the death-cum-retirement benefit scheme of 1981 and the West Bengal Act of 1983 would not be applicable in the case of the school in question and by reason of Section 16(1) of the Act the school could not be excluded from the application of the 1952 Act. The Hon’ble Division Bench in the judgment delivered on 7 February 2005 in MAT No. 817 of 2002 (Regional Provident Fund Commissioner and Ors. Vs. Atreyee Welfare Trust and Ors.) held: "8. If it appears that the benefits available under the 1981 Scheme and 1983 Act are more beneficial than those available under the 1952 Act, it would be open to the Institution to apply before the appropriate Government for exemption under Section 17(1). If it is so advised, the Institution may apply before the appropriate Government, which, in our view, would be the Central Government, within a period of fortnight. If it is so advised, the Institution may apply before the appropriate Government, which, in our view, would be the Central Government, within a period of fortnight. If such an application is made, the appropriate Government shall consider the same and dispose of the application within a period of two months from the date of receipt of such application and communicate the decision within a period of fortnight from the date of such decision."(emphasis added). 5. Thereafter the school authorities had made the application for exemption from operation of the Act under Section 17(1). It is claimed that application was made for exemption under Section 17(2A) of the Act also. It appears that during pendency of the said application for exemption, certain coercive measures were sought to be initiated for recovery of dues under the aforesaid Act against the petitioner. To prevent such coercive measures, a writ petition being W.P. 23089(W) of 2005 was filed before this Court being Atreyee English Medium School and Anr. Vs. Union of India and Ors. An Hon’ble Single Judge of this Court was pleased to issue the following direction in that writ petition. "Let affidavit in opposition be filed within three weeks from date. Reply thereto, if any, shall be filed two weeks thereafter and the matter will appear six weeks hence, for hearing. Meanwhile, there shall be stay of the impugned order, until disposal of the application under Section 17(1) and provided again, the petitioners shall go on depositing in terms of the order of the Division Bench. In default of making deposit by the petitioners, in terms of the Division Bench order, this order of stay will stand vacated." 6. ANOTHER writ petition was filed on behalf of the establishment challenging the legality of the order passed on 29 May 2006 by which the prayer for exemption of the establishment of the petitioner under Section 17(1) of the Act was rejected. This writ petition was registered as W.P. 15421(W) of 2006, and on 7 July 2006, an Hon’ble Single Judge of this Court was pleased to pass an interim order staying the operation of the said notice dated 29 May 2006 for a period of twelve weeks. Directions for affidavit was given in the said proceeding, and the petitioner was required to comply with the direction given by the Hon’ble Division Bench for depositing contribution in terms of the Scheme of 1981. Directions for affidavit was given in the said proceeding, and the petitioner was required to comply with the direction given by the Hon’ble Division Bench for depositing contribution in terms of the Scheme of 1981. A further notice was issued on 4 July 2006 for recovery of provident fund dues, and the writ petition, being W.P. No. 17148(W) of 2006 was filed by the petitioner challenging the legality of the said notice. I shall refer to this writ petition as the first writ petition. An interim order was passed by an Hon’ble Single Judge of this Court in that writ petition staying the operation of the impugned notice dated 4 July 2006. 7. IN the first writ petition the demand notice and the proceeding initiated under Section 8 and 8B of the 1952 Act by issuing certificate against the petitioner is under challenge. During the subsistence of this writ petition the petitioner appears to have had received an order issued by the Central Government rejecting request for exemption of the establishment disclosing therein the grounds of rejection. This Order is dated 18/23 October 2006. This order was brought on record by the petitioner by way of filing of a supplementary affidavit in the first writ petition. 8. IN the second writ petition, being W.P. No. 4706(W) of 2007, the writ petitioner has applied for quashing of this order of the Central Government mainly on the ground that the appropriate government in the case of the institution in question was the State Government and hence the Central Government did not have any jurisdiction to entertain or decide upon the application for exemption. It has also been contended that the impugned order had been passed without serving any notice or affording opportunity of hearing to the petitioner or the majority of the employees and the same constituted violation of the principles of natural justice. Further contention of the petitioner in this writ petition is that application was filed by the petitioner for exemption on two heads, one for exemption from the provisions of Section 17(1) of the Act and the other one under Section 17(1C) of the Act for exemption from payment of pension under the 1995 scheme. But the Order of rejection was passed under Section 17(1) of the Act. But the Order of rejection was passed under Section 17(1) of the Act. It was further argued that in view of the provisions of Section 16(1)(b) of the Act of 1952 the provisions of the said Act were not applicable to the petitioner’s school. The other ground on which this writ petition was founded is that authorities concerned had failed to take into consideration the fact that the employees of the petitioner enjoyed better benefits under the prevailing scheme and the impugned order of rejection was passed without considering that aspect of the controversy. The case of the provident fund authorities is that all the points raised in the writ petition stand answered in the judgment of the Hon’ble Division Bench, and these issues cannot be reopened in these two proceedings. It has also been submitted by the learned Advocate for the provident fund authorities that the order of rejection of the prayer for exemption of the petitioner’s establishment was valid. 9. There are two connected applications in respect of the two writ petitions. An application being CAN 8998 of 2006 has been taken out by the staff council of the school, verified by one Alpana Bhattacharya and applicants therein seek vacation of the interim order passed in the first writ petition by which the operation of the notice dated 4th April 2006 was stayed. The staff association of the school has taken out another application for addition of party in the first writ petition. There is controversy as to whether the deponent in the application, registered as can 8998 of 2006 can maintain the application or not. An affidavit has been filed by one Shekar Biswas claiming to be the secretary of the staff council who has questioned the authority of said Alpana Bhattacharya to apply on behalf of the staff council. In this affidavit affirmed by Shekar Biswas on 9 January 2007 prayer has been made for dismissal of the application being CAN 8998 of 2006. So far as the second writ petition is concerned, the staff association of the school has filed an application which has been registered as CAN 6062 of 2007. The prayer in this application is for permitting the association to be added as party respondents to the said writ petition. So far as the second writ petition is concerned, the staff association of the school has filed an application which has been registered as CAN 6062 of 2007. The prayer in this application is for permitting the association to be added as party respondents to the said writ petition. In this application, it has been claimed that 35 members of the staff of the school want to be covered by the 1952 Act. The same association claims to have filed the application for being added as a party respondent in the first writ petition, being CAN No. 804 of 2007. 10. ON behalf of the petitioner, substantial argument has been advanced on the point that the Central Government is not the appropriate government for the purpose of determining the question of exemption of the school in question under the provisions of Section 17 of the Act. Various authorities were cited in support of such submission, and this has been the main thrust of the petitioner’s submissions. The ground on which the authority of the Central Government to determine the question of exemption was challenged was that it would be the State Government which had granted no objection certificate for being affiliated to the Central Board of Secondary Education and two conditions were imposed for granting no objection. The school authorities were required to provide service benefits to the teaching and non-teaching staff which were available to the schools recognised by the West Bengal Board of Secondary Education and the tution fees could not be enhanced without prior approval of the State Government. ON this count it has been argued by the learned Advocate for the petitioner that the State Government exercise substantial control over the school and hence would be the appropriate government having control over the operation of the said institution. In MAT No. 817 of 2002 however, the Hon’ble Division Bench had examined this question and had opined that the Central Government is the appropriate government in the case of the petitioner. In MAT No. 817 of 2002 however, the Hon’ble Division Bench had examined this question and had opined that the Central Government is the appropriate government in the case of the petitioner. Learned Advocate for the petitioner, however, sought to persuade this Court not to be guided by such finding and it was argued that at the time of hearing of the said writ petition out of which the said appeal arose, there was no issue before the Court as to who would be the appropriate government and no argument was advanced on behalf of any of the parties on that question before the Hon’ble Division Bench also. So far as finding of the Hon’ble Division Bench is concerned to the effect that the Central Government is the appropriate government, learned Advocate for the petitioner submitted that finding of the Hon’ble Division Bench on this issue per incuriam. He relied on a decision of the Hon’ble Supreme Court in the case of RPF Commr. Vs. Sanatan Dharam Girls Secondary School reported in 2007(1) SCC 268 to demonstrate that the State Government is appropriate government so far as the subject establishment is concerned. He relied on three authorities, being i.e. Good Year India Ltd. Vs. State of Haryana reported in AIR 1990 SC 781 , Mehboob Dawood Shaikh Vs. State of Maharashtra [ (2004) 2 SCC 362 and Rekha Mukherjee Vs. Ashis Kumar Das [ (2005) 3 SCC 427 ] in support of the proposition that a decision is an authority for what it decides in relation to the lis before the Court, and mere observations in a judgment on an aspect which was not in lis before it would not operate as binding precedent. It was argued that the finding of the Hon’ble Division Bench was given without considering the provisions of the statute and the decision of the Hon’ble Division Bench would not constitute a binding precedent on the question as to whether the Central Government or the State Government would be the appropriate Government for examining the petitioner’s claim for exemption. On the same proposition of law reliance was placed on certain other authorities, but as these were on the same point of law, I do not consider it necessary to refer to all these authorities in this judgment. 11. THE ratio of these judgments lay down well-established principles of law. On the same proposition of law reliance was placed on certain other authorities, but as these were on the same point of law, I do not consider it necessary to refer to all these authorities in this judgment. 11. THE ratio of these judgments lay down well-established principles of law. But relying on these authorities, I cannot come to the conclusion that the finding of the Hon’ble Division Bench that the Central Government is the appropriate Government is not binding on me, and I ought to re-examine that issue all over again. THE observation of the Hon’ble Division Bench that the "institution may apply before the appropriate government, which, in our view, would be the Central Government" clearly reflects application of mind by the Division Bench on that aspect. THE scope of application of the State statutes vis-vis the 1952 Act in respect of the subject school petitioner was elaborately discussed in the judgment of the Hon’ble Division Bench and thereafter the Division Bench came to its finding. Liberty was given to the writ petitioner to apply before the appropriate government only after the Bench took the view that the Central Government was the appropriate Government. Under these circumstances, I do not think I can ignore this finding, which was recorded not as a passing remark in the judgment but as a specific finding. THE ratio of the decisions cited on behalf of the petitioner are not applicable in the facts of this case. If it is the case of the petitioner that the Hon’ble Division Bench decided on an issue which was not argued before the Bench, then the proper course for the petitioner would have been filing of an application before the same Bench to have such finding reversed or negated. So far as this Court is concerned, it is not possible to accept the submission of the petitioner that the Hon’ble Division Bench has adjudicated on an issue not raised before it. 12. ON behalf of the petitioner, it was argued at length that in view of the provisions of Section 16(1)(b) of the Statue, the school in question would not come under the purview of the Act. In support of such submissions, my attention was drawn to the provisions of the 1983 Act and the 1981 Scheme. 12. ON behalf of the petitioner, it was argued at length that in view of the provisions of Section 16(1)(b) of the Statue, the school in question would not come under the purview of the Act. In support of such submissions, my attention was drawn to the provisions of the 1983 Act and the 1981 Scheme. But this aspect of the controversy was also examined by the Hon’ble Division Bench, and it was held that the provisions of the said scheme of 1981 and the Act of 1983 would not be applicable in respect of the school of the petitioner. Thus, this question having been already settled, the petitioner cannot reagitate this issue in this proceeding, representing the management of the same school. The next point urged before me was the legality of the order by which the application for exemption of the institution was rejected by the Central Government. It was contended that such order was passed in violation of the principles of natural justice, as no opportunity of hearing was given. Argument was also advanced that relevant materials were not addressed to by the concerned authority, and proper reason for rejection was not disclosed. The order is also impugned on the ground of having been passed without application of mind. 13. UNDER normal circumstances, in my opinion, opportunity of hearing ought to be given to an establishment by the appropriate Government before rejecting the application of such establishment for exemption from the statutory schemes under Section 17(1) of the Act. But in the present case, the matter was argued at length and the petitioner could not demonstrate that the scheme of the school management was more favourable to the employees in comparison to the benefits provided under the Act as per the statutory scheme. In fact, in course of hearing, the main argument of the petitioner has been that the Central Government is not the appropriate Government for examining the petitioner’s claim for exemption. The petitioner sought to be excluded from the provisions of the Act on the ground that the school in question was covered by the 1981 scheme and the 1983 Act. 14. BOTH these contentions are untenable, and the reason as to why they are untenable I have discussed in the earlier part of this judgment. The petitioner sought to be excluded from the provisions of the Act on the ground that the school in question was covered by the 1981 scheme and the 1983 Act. 14. BOTH these contentions are untenable, and the reason as to why they are untenable I have discussed in the earlier part of this judgment. It was specifically argued on behalf of the provident fund authorities that the money invested by the school authorities was fetching a very low rate of interest. In the application of the school authorities before the appropriate Government for exemption also the advantage of the subsisting scheme of the school authorities over the statutory scheme was not clearly spelt out. Under these circumstances, I do not think any effective purpose would be served in directing rehearing of the matter by the appropriate government. I do not find any fundamental error in the decision of the Central Government. In these circumstances, I am of the opinion that the establishment ought to come under the purview of the Employees" Provident Fund and Miscellaneous Provisions Act 1952. Considering the fact, however, that due to various litigations the management of the school did not deposit the respective contributions with the Provident Fund authorities, and so far specified sum of money was being paid with an account of State Bank of India. I am of the view that there no intention to evade payment by the petitioner. There is also no allegation that the petitioner was not depositing the respective contribution as per direction of the Hon’ble Division Bench. I am accordingly of the opinion that for the period the petitioner or the school management was not depositing the contribution with the provident fund authorities and was depositing the respective contribution in the account of the State Bank of India, no further penal or criminal action should be brought against the petitioner. As regards the F.I.R. already lodged with the concerned police station, since that is the subject of a subsisting criminal revisional application, I am not making any observation. That proceeding would follow its own course. The sum already deposited with the State Bank of India shall be transferred to the Provident Fund Authorities within a period of 12 weeks from date. That proceeding would follow its own course. The sum already deposited with the State Bank of India shall be transferred to the Provident Fund Authorities within a period of 12 weeks from date. If there is any delay in transfer of fund beyond that period, then it shall be open to the respondent authorities to initiate legal action against the petitioner. Moreover, if there is any shortfall in payment in comparison to deposit under the statutory scheme, the same shall be realised by the provident fund authorities in accordance with law. These two writ petitions shall stand disposed in the above terms. 15. SO far as the connected applications are concerned, though no formal order was passed adding the applicants therein as parties to this proceeding, learned counsel appearing on behalf of the applicants therein was heard, and these applications also shall disposed of in the above terms. 16. IN the pleadings, point was also taken about deemed exemption of the pension scheme, but this point was not seriously pressed in course of hearing. As such, that issue has not been addressed to in this judgment, practically no argument having been advanced on that count. There shall, however, be no order as to costs. 17. URGENT Photostat certified copy of this judgment be supplied to the learned Advocates for the parties if applied for with necessary formalities as expeditiously as possible.