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Kerala High Court · body

2012 DIGILAW 707 (KER)

T. T. Kuruvilla v. Union of India

2012-07-25

C.T.RAVIKUMAR

body2012
JUDGMENT 1. Petitioner is the proprietor of M/s. Aleppey Parcel Service, a proprietary concern having branches in different parts in the state of Kerala. Hereinafter, the said proprietary concern is referred to as the ‘establishment”. The establishment is registered under the Motor Transport Workers Act (for short the ‘Act’) with No.LBR-04-08-2/2000. There are 311 employees working in the establishment in different categories such as office staff, booking clerk, cash clear, depot clerk, watch man, attendant, drivers and cleaners of the motor vehicles belonging to the establishment, according to the petitioner. The further contentions of the petitioner are as hereunder:- M/s. Aleppey Parcel service is a Motor Transport Undertaking as defined under section 2(g) of the Act. The drivers and cleaners working in the lorries owned by the establishment were enrolled under the provisions of the Kerala Motor Transport Workers’ Welfare Fund Act (for short ‘Welfare Fund Act’) and the other employees like office staff, booking clerk, cash clerk, depot clerk, watch man, attendant etc. were enrolled under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short ‘EPF Act’) Ext.P2 is the list of motor transport workers for whom contributions are paid under the Welfare Fund Act and Ext.P3 is the list of motor transport workers for whom contributions are paid under the EPF Act. The petitioner received Ext.P5 notice from the second respondent stating that its Area Enforcement Officer had reported that the petitioner had not enrolled the employees enlisted hereunder in the Annexure thereto in the Employees Provident Fund. In fact, the direction thereunder was to enroll the drivers and cleaners of the lorries owned by the establishment under the EPF Act. On its receipt, Ext.P6 explanation was submitted whilst, without considering it on its real perspective, in accordance with the relevant law, the second respondent issued Ext.P7 letter to enroll those employees under the EPF Act. Ext.P8 representation was again submitted requesting the Regional Provident Und Commissioner to transfer the accrued amount in respect of employees under Ext.P3 list under the provident fund of EPF Act to the State Welfare Fund Act. Welfare Fund Act, which is a State Act, is a specific Act embracing the motor transport workers alone and various benefits are vouchsafed to the said workers thereunder. EPF Act is a general Act. The criteria and object to achieve under the said Acts are different and distinct. Welfare Fund Act, which is a State Act, is a specific Act embracing the motor transport workers alone and various benefits are vouchsafed to the said workers thereunder. EPF Act is a general Act. The criteria and object to achieve under the said Acts are different and distinct. Hence, inter alia, it is contended that Welfare Fund Act would prevail over EPF Act. Since the petitioner opted to comply with the provisions under the Welfare Fund Act, the provisions under the EPF Act cannot be made applicable to the employees under the establishment. In view of sections 16(1)(c)and 17(1) of the EPF Act, the provisions of EPF Act cannot be made applicable when the Welfare fund Act is adopted and as based on adoption of Welfare Fund Act, applicability of EPF act shall be deemed to have been exempted. The Welfare Fund Act and Scheme provide for constitution of a fund to promote the welfare of the motor transport workers in Kerala and it is made applicable to all establishments falling under the definition of ‘Motor Transport Undertaking’ and it is more beneficial to the employees. At any rate, the employees are not entitled to dual welfare fund benefits of similar nature available under the provisions of two different statutes. The authorities also, in the circumstances, cannot compel the petitioner to enroll those who were already enrolled as members under one of the Acts as members for the purpose of getting benefits under other Act. Section 24 of the Welfare Fund Act read with Clause 44 of the State Scheme permits transfer of the established funds standing to the credit of the employees to the welfare fund under section 3 of the Welfare Fund Act. By virtue of the aforesaid provisions, the petitioner is entitled to get the funds standing in the credit of the employees of the establishment enlisted in Ext.P3, under the EPF Act transferred to the Welfare Fund Act. It was in the circumstances that Ext.P8 was submitted. However, without acting upon Ext.P8, the authorities under the EPF Act are insisting for compliance with Exts.p5 and P7 and threatening coercive actions upon its failure. It was in the circumstances that Ext.P8 was submitted. However, without acting upon Ext.P8, the authorities under the EPF Act are insisting for compliance with Exts.p5 and P7 and threatening coercive actions upon its failure. It was in the aforesaid circumstances that this writ petition has been filed raising the above contentions and seeking mainly the relief to quash Exts.P5 and P7 inasmuch they require the petitioner to enroll the employees enlisted in the Annexure thereto as members of the EPF Act and for the following reliefs:- II) declare that the provisions under Employees’ Provident funds and Miscellaneous Provisions Act, 1952 and the Scheme made thereunder are not applicable to the petitioner’s establishment and his workers since provisions under the Kerala Motor Transport Workers Welfare Fund Act, 1985 and Scheme made thereunder are applicable to them. III) issue a writ of mandamus or appropriate writ or order or direction directing the respondents 1 and 2 to consider and pass appropriate order on Ext.P8 and transfer the accrued funds of the workers of the petitioner (referred under Ext.P3) from Employees Provident Fund account to the Worker’s Welfare Fund account constituted under the Kerala Motor Transport Worker’s Welfare Fund Act and the Scheme made thereunder.” 2. A statement has been filed in this writ petition on behalf of the second respondent. It is stated therein that the bona fide intention behind the issuance of Exts.P5 and P7 is only to ensure that the employees of the petitioner who are eligible for the benefits envisaged under Employees’ Provident Fund Act and Scheme should be brought within the fold of the Act and the scheme. It is further stated thereunder that once the Act is made applicable to an establishment on satisfying the prescribed conditions for coverage under the EPF Act, the concerned employee is under an obligation coupled with duty to ensure that various benevolent schemes envisaged under the EPF Act are available to all the eligible employees under that establishment by enrolling the employees as provident fund members. Indisputably, the establishment of the petitioner herein is covered under the EPF Act with EPF code No.KR/21099. The establishment engaged in road motor transport was brought under the purview of the EPF Act with effect from 21.05.2004 vide coverage notice dated 14.2.2005 as the establishment satisfied all the conditions prescribed for coverage under section 1(3) (b) of the EPF Act. Indisputably, the establishment of the petitioner herein is covered under the EPF Act with EPF code No.KR/21099. The establishment engaged in road motor transport was brought under the purview of the EPF Act with effect from 21.05.2004 vide coverage notice dated 14.2.2005 as the establishment satisfied all the conditions prescribed for coverage under section 1(3) (b) of the EPF Act. The provisions of the EPF Act was made applicable to the establishment under the head “Road Motor Transport”, a schedule head notified under GSR No.399 dated 24.3.1959. The establishment was employing 20 employees at the time of coverage. Earlier, the petitioner took up the contention that the provisions under EPF Act could not be made applicable to the establishment as it is already covered by the Welfare Fund Scheme under the Welfare fund Act from 1993 onwards. In view of the dispute thus raised by the petitioner, on enquiry under section 7A of the EPF Act was decided to be initiated and in tune with the said decision, Ext.R2(a)summons dated 4.4.2005 was issued to the petitioner. The petitioner was so directed to appear to determine the applicability of the EPF Act to his establishment and also to determine the dues that may be payable if the EPF Act found was applicable to the Establishment. On 10.5.2005, the petitioner appeared for enquiry with relevant records pertaining to the establishment viz., the Wage Register and Muster Roll. It is the specific contention of the second respondent that during that enquiry, the petitioner withdrew his challenge against the covering the establishment under the EPF Act and agreed to comply with the provisions of the EPF Act and the Scheme framed thereunder, in terms of the directions issued through the coverage notice. Accordingly, the petitioner submitted letter dated 10.5.2005 along with a request signed by all the 20 employees requesting to waive the employees’ share of contribution for the period from 5/04 stating that the employees had expressed their difficulty for payment of the same due to financial difficulties. Ext.R2(b) is the copy of the daily order pertaining to the enquiry held on 10.5.2005. Ext.R2(b) is the copy of the daily order pertaining to the enquiry held on 10.5.2005. The said inquiry under section 7A of the Act was concluded on 10.5.2005 in view of the full compliance of the establishment in the matter of submission of returns and remittance of dues and also withdrawal of the dispute regarding applicability of the EPF Act to the establishment by the petitioner. Ext.P5 coverage notice dated 14.02.2005 covering the establishment under the EPF Act with effect from 21.5.2004 was then made absolute. As per the request of the employer and the employees and also the submission recorded at the time of enquiry, the employees’ share of contribution for the pre-discovery period of 5/04 to 1/05 was waived after confirming that no amount had been deducted from the employees towards the provident fund during the pre-discovery period. These facts are duly communicated to the petitioner as per Ext.R2(c) letter dated 17.5.2005, it is specifically stated in the said statement. Later, a complaint was received to the effect that the establishment is having 167 branches all over Kerala and 113 drivers,120 cleaners and 118 loading and unloading workers, 65 office staff and 25 workshop staff working permanently and that those employees were not getting provident fund benefits. Pursuant to its receipt, the Enforcement Officer of the EPF organization was instructed to conduct an inspection of the establishment and to submit a report on the compliance position after verification/scrutiny of the records. After such inspection, a report dated 1.4.2009 was submitted to the effect that 162 employees comprising drivers and cleaners in the establishment were not enrolled as provident fund members. It was in the said circumstances that Ext.P5 dated 23.6.2009 was issued to the petitioner along with the list of non-enrolled employees with the further instruction to enroll those employees as members of the Employees provident Fund and to submit supplementary returns and chalans in token of remittance. It is contended by the second respondent that in terms of paragraph 26 of the EPF Scheme, all eligible employees of an establishment covered by the EPF Act are to be enrolled as members of the Employees Provident Fund with effect from the date of their joining in the establishment. It is contended by the second respondent that in terms of paragraph 26 of the EPF Scheme, all eligible employees of an establishment covered by the EPF Act are to be enrolled as members of the Employees Provident Fund with effect from the date of their joining in the establishment. Ext.P6 representation submitted by the petitioner in response to Ext.P5 would reveal that the petitioner himself admitted that those employees named in the list appended to it were not enrolled as members of the provident fund, it is stated therein. Further it is contended by the second respondent that the request of the petitioner for withdrawal of Ext.P5 notice on the ground of the registration of the establishment with the Kerala Motor Transport Workers Welfare Fund was examined by the competent authority and it was such consideration that resulted in the issuance of Ext.P7. As per Ext.P7, the request for enrolment of such employees as members of the provident fund was repeated. In fact, the specific contention of the second respondent is that the establishment was already covered under the EPF Act with effect from 21.5.2004 and it is complying with the provisions of the Act in terms of paragraph 26 of the Scheme that Ext.P5 and P7 were issued. It is contended that the petitioner who had earlier withdrawn his challenge against the coverage of the establishment under the EPF Act during the statutory enquiry under section 7A of the EPF Act is not justified in raking up the issue once again when violations of the statutory provisions were detected and proceedings were initiated by the second respondent. The second respondent further contended that in view of the fact that the establishment was already brought under the coverage of the EPF Act, all the employees on its roll who are employed in connection with the activities/business of the establishment are to be treated as employees in terms of the definition of employee under section 2(f) of the EPF Act. It is in this context that the second respondent relies on paragraph 26 of the EPF Scheme to contend that all the employees of the establishment who fall under section 2(f) of the Act (other than excluded employee)are entitled to and mandatorily required to become members of the Provident Fund from the date of joining the establishment. It is in this context that the second respondent relies on paragraph 26 of the EPF Scheme to contend that all the employees of the establishment who fall under section 2(f) of the Act (other than excluded employee)are entitled to and mandatorily required to become members of the Provident Fund from the date of joining the establishment. Section 17 of the EPF Act empowers the Government, by notification in the official gazette, to grant exemption from operation of all or any of the provisions of the scheme to any establishment to which the EPF Act applies, if in the opinion of the Government the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under the EPF Act. Such exemption can also be extended in the same manner to any establishment if the employees of such establishment are in enjoyment of benefits in the nature of provident fund, pension or gratuity which on the whole are not less favourable to such employees. The proviso to section 17 enjoins that no such exemption shall be made except after consultation with the Central Board of Trustees, Employees Provident Fund organization which on such consultation shall forward its views on the exemption to the appropriate Government within such time as may be specified in the scheme. After adverting to such provisions, the second respondent asserted that hitherto the petitioner had not submitted any such application for exemption under section 17 of the EPF Act and therefore, the Central Board of Trustees had no occasion to consider any such request. In the facts and circumstances thus emerged in this case, the learned counsel for the second respondent relied on Division Bench decision of this Court in Hymavathi v. Special Deputy Tahsildar reported in 2008 (3) KLT 807. It is contended that in the light of Hymavathi’s case (supra), the petitioner is not entitled to any of the reliefs sought for in this writ petition. 3. I have heard the learned counsel for the petitioner, the learned Central Government counsel, the learned Government Pleader, the learned standing counsel appearing for the second respondent and the learned standing counsel for respondents 4 and 5. 4. 3. I have heard the learned counsel for the petitioner, the learned Central Government counsel, the learned Government Pleader, the learned standing counsel appearing for the second respondent and the learned standing counsel for respondents 4 and 5. 4. The rival pleadings adverted to hereinbefore would bring forth certain incontrovertible factual position. The establishment is already covered under the EPF Act with Code No.KR/21099 with effect from 21.5.2004. The workers who are directly connected with the operation of the road motor transport service under the petitioner’s establishment were brought under the purview of Kerala Motor Transport Workers Welfare Fund as per Ext.P2 and at the same time, the other staff belonging to different categories not directly connected with it were brought under the purview of EPF Act as per Ext.P3. Though the petitioner had challenged the coverage of the establishment under the EPF Act on receipt of coverage notice dated 14.2.2005, he gave up the challenge during the enquiry under section 7A and later, it was made absolute. In this context, it is to be noted that even after obtain ting time for filing a reply affidavit to the statement filed by the second respondent, on request, the petitioner has not chosen to refute the specific statements of the second respondent adverted to her hereinbefore. Now, the stand taken by the petitioner is that both the Welfare Fund Act and EPF Act are applicable to petitioner’s establishment and therefore, selection of one Act for the workers directly connected with the operation of road motor transport service and the other Act for the rest of the employed unconnected with it, is permissible. It is to be noted that the specific contentions raised by the second respondent in the light of Ext.R2 (b) and R2(c) are not at all disputed by the petitioner. As already noticed hereinbefore, going by the specific contentions raised by the second respondent which are supported by the documents, the petitioner had actually withdrawn his challenge against coverage under the EPF Act but, yet to comply with the provision of that Act inasmuch as by not enrolling all its permanent employees who fall under the definition 2 (f) of the EPF Act in terms of paragraph 26 of the Scheme which makes such enrollment, as member of the provident fund inevitable from the respective dates of their joining in the service of the establishment. In such circumstances, the question is whether a selective option in respect of certain categories of employees is permissible? It is to be noted that it is not the individual employee under an establishment or proprietary concern who is brought under the purview of the EPF Act through a coverage notice. Indisputably, it is the concern or the establishment is brought under the EPF Act subject to the satisfaction of the conditions of coverage under section 1 (3) (b) of the EPF Act. The said section reads thus:- “1(3)(b) –to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf.” 5. Evidently, in this case, the establishment of the petitioner on satisfying all the conditions prescribed for coverage under section 1(3)(b) of the EPF Act was already brought under the purview of the Act with effect from 21.5.2004 as per coverage notice dated 14.2.2005 and it was assigned the EPF Code No.KR/21099. An establishment engaged in ‘road motor transport’ business can be brought under the head of ‘Road Motor Transport’, a schedule head notified under GSR No.399 dated 24.3.1959. The petitioner also did not dispute regarding the enquiry conducted under section 7A of the EPF Act taking into account the dispute raised by him earlier, on receipt of coverage notice dated 14.2.2005. Admittedly, he had participated in the enquiry on 10.5.2005 and gave up his challenge against the coverage of the establishment under the EPF Act and on its conclusion, Ext.R2(c) was served on him. Under such circumstances, the petitioner cannot be heard to contend that the very establishment was not brought under the purview of EPF Act making the coverage notice dated 14.2.2005 absolute with effect from 21.5.2004. The question to be answered in the said circumstances, taking note of the rival contentions is whether the contention of the petitioner for selective option as regards the category of employees in question enlisted in the annexure appended to Ext.P5 is permissible or possible in view of the relevant provisions of law. It is in that context that the position in Hymavathi’s case (supra) assumes relevance. It is in that context that the position in Hymavathi’s case (supra) assumes relevance. After taking into account the scope and applicability of the various provisions under the Welfare Fund Act and also the EPF Act, this Court held that the Motor Transport undertaking covered by the EPF Act is kept out of the Welfare Fund Act. The Division Bench in the said decision held thus:- “Therefore, the question would be, did the legislature intend to collect the contribution under provisions of Motor Transport Workers Welfare Fund Act from an employer whose motor transport undertaking is covered by the provisions of the Employees Provident Funds and Miscellaneous Provisions Act? We must remember that we are construing a welfare legislation meant for employees. But that does not mean an employer who is specifically excluded from the purview of the Act would still come within the net of the provision, though his motor transport undertaking as argued by the learned counsel for the respondent that, both the Central Act as well as the State Act, can be made applicable to their respective areas of operation. If the effect of the proviso, as contended by the learned counsel for the respondent, is accepted, it would be reading into the provision the employer/motor transport undertaking which is covered under the Provident Fund Act to come under the net of Welfare Fund Act and in our considered view, this is not the intention of the legislature and this Court certainly while considering the validity of S.4 of the Act, in the case of Unni Mamma Haji v. State of Kerala (1989 (1) KLT 729) did not subscribe to the view as contended by the learned counsel for the respondent. What the legislature specifically prohibits is the inclusion of an establishment covered by the Central Act for the purposes of the Motor Transport Workers Welfare Act and therefore, by interpretation, we cannot subject the motor transport undertaking covered by the Provident Fund Act to come under the purview of Motor Transport Workers Welfare Fund Act. Hence, when the proviso says that section 4 (1) of the Act shall not apply to motor transport undertaking which is covered under Provident Fund Act, the one and the only interpretation that is possible is, that a motor transport undertaking which is covered by Provident Fund Act is kept out of Motor Transport Workers Welfare Fund Act. (emphasis added) 6. (emphasis added) 6. Section 4(1) of the Motor Transport Workers Welfare Fund Act, 1985 (Kerala) deals with the contributions to the said welfare fund, both by the employer and the employee. Section 4(1) and its proviso read thus:- “4(1). Contribution to the Fund-The contribution payable by the employee to the fund shall be such quantum for each type of motor transport undertaking as may be specified in the Scheme. Provided that nothing in this section shall apply to motor transport undertaking to which the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (Central Act 19 of 1952) or the Payment of Gratuity Act, 1972 (Central Act 39 of 1972), apply.’’ 7. It is after taking into account section 4 (1) of the Welfare Fund Act and its proviso that the Division Bench held as above. That apart, it was specifically held by the Division Bench in the said decision as hereunder:- S.4 of the Act, Once an establishment viz,. Motor Transport Undertaking, is covered by the provisions of the Provident Fund Act, 1952, either under sub-s.(3) or under sub-s.(4) of the Act, those motor transport undertakings are kept out of S.4 of the Kerala Motor Transport Workers Welfare Fund Act,1985.” “Our view, to the question posed by the petitioner is, in view of the proviso appended to 8. In Unni Mammu Haji v. State of Kerala reported in 1989 (1) KLT 729, a Division Bench of this Court held that the Welfare Fund Act passed by the State Legislature applies only to such establishments to which the Central Act does not apply. The Central Act referred to thereunder was the EPF Act. 9. Admittedly, the establishment of the petitioner was already been brought under the purview of EPF Act as per coverage notice dated 14.2.2005 with the EPF code No.KR/21099 with effect from 21.5.2009. When that be so, the contention of the petitioner that it is a ‘Motor Transport Undertaking’ as defined under section 2(g) of the Motor Transport Workers Act and registered as LBR-04-08-2/2000 by the Assistant Labor Officer, First Circle Alappuzha cannot take it outside the purview of the EPF Act in view of the proviso to section 4 (1) of the Welfare Fund Act and also in the light of the decision in Hymvathi’s case (supra) and also Unni Mammu Haji’s case (supra). There is no case for the petitioner that he has submitted an application under section 17 of the EPF Act for exemption and had, in fact, obtained an exemption from the applicability of all or any of the provisions of the EPF Act. The upshot of the discussions is that when once an establishment viz., a ‘motor transport undertaking’ is brought under the coverage of the EPF Act, either under sub-section 3 or under sub-section 4 of the Act, the said motor transport undertaking is kept out of section 4 of the Welfare Fund Act. In that view of the matter, I have to uphold that Exts.P5 and P7 and resultantly, the petitioner’s challenge against them has to fail. Consequently, the petitioner is not entitled to the declaration as sought for under prayer Nos.2 and 3. The learned counsel for the petitioner made submission that respondents 4 and 5 may, in the circumstances, be directed to transfer the contributions made in respect of the workers whose names were given in Ext.P5 towards Welfare Fund under the Welfare Fund Act to the employees provident fund account under the EPF Act. When once Exts.P5 and P7 are upheld, the petitioner is bound to comply with the direction to take steps for enrolling the employed whose names were given in Ext.P5 as members of the employees provident fund. Under no provision of law, the employees can be permitted to enjoy dual benefits of similar nature under the provisions of two different statutes. In the said circumstances, I am of the view that the request of the petitioner is a reasonable one. But, at the same time, it can be given effect to only after such employees are enrolled as member of the Employees Provident Fund, in compliance with Exts.P5 and P7. At the same time, for the purpose of remittance to be made towards the fund in respect of such employees, the petitioner has to be permitted to apply for transfer of accumulated fund in respect of such employees to the Employees’ Provident Fund. At the same time, for the purpose of remittance to be made towards the fund in respect of such employees, the petitioner has to be permitted to apply for transfer of accumulated fund in respect of such employees to the Employees’ Provident Fund. The petitioner is, therefore, given liberty to make a proper application to the competent authority under the Kerala Motor Transport Workers Welfare Fund Board to transfer the contributions hitherto effected in respect of the employees who are now to be enrolled as members of the employees provident fund, to the Employees Provident Fund account on their enrolment as members of the employees provident fund. If such a an application is submitted by the petitioner in that regard, the same shall be acted upon, in accordance with law, for the purpose of transferring the contributions made towards their account with welfare fund under the Welfare Fund Act towards the employees provident fund account, by the competent authority under the Kerala Motor Transport Workers Welfare Fund Board. To enable that authority to take appropriate action, the petitioner shall furnish a copy of this judgment to such authority along with application for the submission of which liberty was granted. On receipt of such application, appropriate steps in that regard, shall be taken by that authority under the Kerala Motor Transport Workers Welfare Fund Board, expeditiously, at any rate, within period of three months. This writ petition is disposed of as above.