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2017 DIGILAW 1046 (JK)

Suheel Ahmad Bhat v. Union of India

2017-12-02

ALI MOHD.MAGREY, MOHAMMAD YAQOOB MIR

body2017
JUDGMENT : ALI MOHD. MAGREY, J. 1. These two Letters Patent Appeals are filed against the final order/Judgment dated 15th May, 2017, for short impugned judgment, passed by the learned Single Bench in a bunch of writ petitions, being Nos. OWP No. 389/2016 titled Suheel Ahmad Bhat and Others vs. Union of India and Others and OWP No. 151/2016 titled Abdul Majeed Bhat and Others vs. Union of India and Others, whereby the Writ Petitions, have been disposed of by a common judgment by extending the ratio of the judgment delivered by Single Bench on 10th March, 2017, passed in case titled Ghulam Mohammad Baldar and Others vs. Union of India and Others (OWP No. 254/2017). The writ petitions have been disposed of with the following directions:- “Apparently, none of the petitioners/contractors have approached the competent Authority in terms of the provisions of the Employees Provident Funds Scheme, 1961, and instructions contained therein, therefore, the petitioners will be at liberty to approach the competent authority in terms of the Employees Provident Funds Scheme, 1961, and instructions contained therein, to seek exemption of a Class of employees. If such a request is made, the authority shall consider it on its main merits and decide the same expeditiously preferably within a period of four weeks from the date of receipt of copy of representation when placed along with this order. This will enable the petitioners/contractors to know their position viz-a-viz. the pending contracts and the ensuing contracts as well. Accordingly, all the writ petition, excepting OWP 113/2016, OWP No. 227/2016 and OWP No. 228/2016, which are segregated from the bunch of cases and kept on board for tomorrow, shall stand disposed of along with connected IAs in the above terms.” 2. It would be profitable to have the glance at the events leading to the filing of instant appeals. BRIEF FACTS 3. Before adverting to the facts, it would be apt to mention that since both the appeals are an outcome of one single judgment and raise the similar issues for consideration, therefore, facts of both petitions are taken note of conjointly and both shall be governed by this single judgment. 4. BRIEF FACTS 3. Before adverting to the facts, it would be apt to mention that since both the appeals are an outcome of one single judgment and raise the similar issues for consideration, therefore, facts of both petitions are taken note of conjointly and both shall be governed by this single judgment. 4. The appellants had filed two writ petitions, OWP No. 389/2016 and 151/2016 with the following prayers: “(i) Writ of Certiorari, quashing the following orders: Circular dated 15.07.2015 (Annexure-A) Order No. 66546/Manual/77/E8 dated 06.11.2015 (Annexure-B), Order No. 66546/Manual/488/E8 dated 03.12.2015 (Annexure-E), Order No. 42551/Cir/BAI/967/E8 dated 07.12.2015, (Annexure-F), Order No. 80200/Policy/187/E8 dated 08.12.2015 (Annexure-G), Order No. 66546/Manual/ 495/E8 dated 31.12.2015 (Annexure-H), as the said circular and orders are bad, unconstitutional and not applicable to the petitioners. (ii) Writ of Mandamus, this Hon'ble Court be pleased to command the respondents not to act upon the impugned circular and orders (Annexure A, B, E, F, G, H). The respondents be further commanded to allow the participation of the petitioners in the tender process without giving the provident fund code as prescribed in the impugned circular and orders. (iii) Writ of Mandamus, this Hon'ble Court be pleased to command the respondents to allow the petitioners to continue their business as contractors in the respondent department without causing any hindrance or obstacle in any manner whatsoever so that the earning of livelihood by the petitioners is ensures. (iv) The Hon'ble Court may pass any other writ, order or direction, which it deems just and proper under the facts and circumstances of the case in favour of the petitioners and against the respondents.” 5. The appellants are stated to be working as Military Engineering contractors with the respondents. The Ministry of Labour and Employment, Government of India, issued a circular dated 15th July, 2015, by virtue of which the Chief Secretaries of all the States have been directed to instruct the appropriate authorities in respect of the following: “(a) While awarding various contracts, it should be ensured that the contractors shall have Provident Fund Code Number and also a condition be included in the NIT that any subcontractor engaged should also have Provident Fund Code. (b) The contract conditions should stipulate that all the workers deployed by contractors or sub-contractors are enrolled as members of Provident Fund and should be given the Universal Account Number (UAN). (b) The contract conditions should stipulate that all the workers deployed by contractors or sub-contractors are enrolled as members of Provident Fund and should be given the Universal Account Number (UAN). (c) While clearing the bills of such contractor, certificate be obtained that all workers employing directly or indirectly by him are registered for EPF and the due contributions have been credited into their account.” 6. Thereafter, the respondents have issued the order dated 6th November, 2015, providing therein that the evaluation of T-Bid Cover-I of e-tendering, uploading of copy of Provident Fund Code number in addition to other documents required, shall be mandatory and the NIT should clearly mention that the contractor not in possession of this number shall be disqualified in T-Bid evaluation and his financial bid shall not be opened. 7. The appellants through their association, submitted representations before the respondents with the request that the stipulation of getting EPF code number by the bidders be waived off for all works to be executed in the State of Jammu and Kashmir, which did not find favour from the respondents. 8. Subsequent thereto, a Letter No. 42552/Cir/BAI/967/E8 dated 07.12.2015, was issued by the respondents with respect to inclusion of works, contracts under the trade list with reference to provisions of J&K Employees' Provident Funds and Miscellaneous Provisions Act, 1961. Accordingly in fulfillment of the relevant provisions of the Act, all the engineering branches of the department were directed to make suitable clauses in the tender documents of respondent department and it was compulsory for the contractors to mention EPF number in the tender bids and in terms of letter No. 80200/Policy/187/E8 dated 08.12.2015, it had been ordered that no tender will be opened without EPF number of the contractors. 9. The Circular dated 15.07.2015, Orders nos. 66546/Manual/77/E8, 66546/Manual/488/ E8, 42551/Cir/BAI/967/E8, 80200/Policy/187/E8 and 66546/Manual/495/E8 dated 15.07.2015; 06.11.2015; 03.12.2015; 07.12.2015; 08.12.2015 and 31.12.2015 respectively, were assailed in the batch of writ petitions which were disposed of by a single judgment, impugned herein. Some more aggrieved contractors had prior to the decision rendered in the batch of writ petitions impugned in these appeals filed writ petition (OWP No. 254/2017) titled Ghulam Mohammad Baldar and Others vs. Union of India and Others which stands disposed of in terms of final order passed by the learned Single Bench on 10.03.2017, relevant paragraphs whereof are taken note of and extracted in the impugned Judgment. 10. The challenge to the orders and circular was laid inter-alia on the grounds that the circular and the orders have been issued in furtherance of the Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1952, (for short Act of 1952), which is not applicable to the State of Jammu and Kashmir, therefore, these are illegal and arbitrary orders; that the circular and the subsequent orders are also not applicable to the petitioners/appellants being not qualified as a contractor to be termed as ‘employer’ and the same applies to factory owner, labour agency, organization and like other entities who are doing regular works through fixed number and kind of workers. 11. Learned Single Bench on consideration of the writ petitions filed by the appellants and in light of the decision rendered in OWP No. 254/2017, disposed of the writ petitions by applying the Judgment rendered in the said writ petition. In order to appreciate the controversy involved in the matter for the disposal of the present appeals, it has become necessary to refer the grounds of challenge to the orders and circulars made in the writ petitions, which has reference inter alia on the grounds that the circulars and the orders have been issued in furtherance of the Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1952, not applicable to the State of Jammu and Kashmir, therefore, are illegal and arbitrary orders, that the circulars and orders are not applicable to the appellants-petitioners being not qualified as contractors to be termed employer and the same applies factory owner, labour agency, organization and like other entities, who are doing regular works through fixed number and kind of workers. 12. The writ petitions, were disposed of by the Writ Court in terms of impugned judgment dated 15.5.2017, holding that the Act of 1952 is not applicable to the State of J&K and asked the appellants to approach the competent authority under the provisions of Employees Provident Fund Scheme, 1961 and instructions contained therein, to seek exemption and if such a request is made, the authority shall consider it on its own merits and decide the same expeditiously, preferably within a period of four weeks from the date of receipt of the representation. 13. Mr. 13. Mr. M.A. Qayoom, learned counsel for the appellants has while reiterating the grounds of challenge submitted that the writ Court erred in law by not quashing the circulars and the orders impugned in the writ petitions after holding that the Act of 1952 is not applicable to the State of Jammu and Kashmir, that the writ Court has not returned any finding, as regards the applicability of the Act of 1961 and the rules framed thereunder to the appellants; that the writ Court has not considered as to whether the appellants are running any establishment or a business concern, which can be notified by the Government to be an establishment for the purpose of the Act or direct the appellants to follow the Act of 1961, therefore, the impugned Judgment is bad in law; that the impugned Judgment has been passed in a slipshod manner and the controversy raised in the writ petitions has remained to be decided, therefore, the impugned Judgment is bad in law. 14. We have heard learned counsel for the parties, perused the records and considered the matter. 15. Mr. M.A. Qayoom, learned counsel for the appellants submits that the Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1961 cannot be made applicable to the appellants, as they do not constitute a firm, organization or establishment that is notified by the Government, as such. Therefore, he submits that the writ Court has erred in law by asking the appellants to approach the competent authority in terms of the provisions of the Act of 1961 to seek exemption of a class of employees. Learned counsel therefore, prayed that the impugned Judgment be set aside. Learned counsel while strengthening his grounds of challenge has made reference to relevant provisions of the 1961 Act to demonstrate that the appellants, contractors executing small contracts in the respondent department does not constitute an establishment, which is a factory engaged in any industry specified in Schedule-I of the Act, and in which ten or more persons are employed at any time and also to any other establishment or business, which the Government may by notification in the Government Gazette declare as such. Learned counsel submits that in terms of Sub-Section (2) of Section 1, the Act is extended to the whole of State of Jammu and Kashmir, the Act in terms of Sub-Section (3) of Section 1 does not apply to the contractors, as they do not constitute any establishment, which is factory engaged in any industry specified in Schedule-I. Mr. Qayoom, learned counsel for the appellants, has also referred to clause (c) of Section 2 defining Employer, Clause (g) of Sub-Section 2 defining factory, item 65 of Schedule-I of the Act and SRO No. 446 of 2015 dated 07.12.2015. The relevant provisions quoted by Mr. M.A. Qayoom, with the purpose that the same does not apply to the appellants are taken note of: “The Jammu and Kashmir Employees Provident Funds Act, 1961: ................ (2) It extends to the whole of the State of Jammu and Kashmir. (3) Subject to the provisions contained in Section 18, it applies: (a) to every establishment which is a factory engaged in any industry specified in Schedule-I and in which (ten or more) persons are employed at any time. (b) to any other establishment or business which the Government may, by notification in the Government Gazette, declare to be an establishment for the purposes of this Act. 2. Definitions - In this Act, unless the context otherwise requires: ................ (c) employer' means: (i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a Manager of the factory under clause (f) of Sub-Section (1) of section 7 of the Jammu and Kashmir Factories Act, 1957, the person so named. (ii) in relation to any other establishment, the person who is the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a Manager, Managing Director or Managing Agent, such manager, managing director or managing agent. ................ (g) ‘factory’ means any premises including the process thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether, with the aid of power or without the aid of power: Schedule-I 65. ................ (g) ‘factory’ means any premises including the process thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether, with the aid of power or without the aid of power: Schedule-I 65. Engineers, Architects and SRO No. 535 dated 24.09.1979 Engineering Contractors engaged in building and construction, designing and consultancy services. SRO No. 446 56. Sand queering/road/bridge/building construction by Departments or Corporations of State/Central Government private Companies.” 16. Mr. M.A. Qayoom, learned counsel for the appellants with reference to extracted provisions of the Act and the rules, submits that same are not applicable to the appellants, contractors executing small works. 17. Mr. T.M. Shamsi, learned ASGI appearing counsel for the respondents submits that the Act of 1961 is very much applicable to the appellants. He submits that in terms of notification SRO No. 446 dated 17.12.2015, the Act has been made applicable to building construction by Departments or Corporations of State/Central Government, with further application of notification SRO No. 533 of 1979 dated 24.09.1979, which declares the Engineers, Architects and Engineering Contractors engaged in building and construction, designing and consultancy services, as establishments for purpose of the Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1952. 18. This Court, in terms of order dated 3rd October, 2017, added Commissioner/Secretary to Government, Labour and Employment Department, Government of J&K as respondent No. 20, with a direction to take instructions with regard to applicability of the J&K Employees Provident Funds and Miscellaneous Provisions Act, 1961 and the Employees Provident Fund Scheme of 1961 to the MES contractors. 19. In compliance to the directions, the affidavit has been filed by respondent No. 20, stating therein that, the Central Provident Fund Act, 1952, is not applicable in the J&K State as the J&K State has its own J&K Employees Provident Fund Act, 1961. It is further stated therein that as per Item No. 56 of the schedule of J&K Employees Provident Fund Act, 1961 “Sand queering/road/bridge/building construction by Department or Corporation of State/Central Government/Private Companies” is also entitled for Provident Fund Act, 1961, under SRO No. 446 dated 17.12.2015. 20. It is further stated therein that as per Item No. 56 of the schedule of J&K Employees Provident Fund Act, 1961 “Sand queering/road/bridge/building construction by Department or Corporation of State/Central Government/Private Companies” is also entitled for Provident Fund Act, 1961, under SRO No. 446 dated 17.12.2015. 20. We have considered the submissions made, but we do not see any ground much less a plausible ground having been projected to make out a case for seeking quashment of the decision of the respondents for simple reason that the provisions of Jammu and Kashmir Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1961 and the rules are very much applicable to the appellants-contractors, as the Engineering Contractors engaged in building and construction, designing and consultancy services have been declared as establishments for the purpose of the Act in terms of SRO No. 535 of 1979 dated 24.09.1979. Needless to mention that the said notification has been issued by the Government of Jammu and Kashmir in exercise of powers conferred by clause (b) of Sub-Section (3) of Section 1 of the Jammu and Kashmir Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1961, therefore, contention raised by Mr. M.A. Qayoom, learned counsel for the appellants that the provisions of the Act does not apply to the appellants is not only misconceived but also misdirected. Not only that the further notification issued in terms of SRO No. 446 of 2015 dated 17.12.2015 by the Government of Jammu and Kashmir in exercise of powers conferred by Section 5 of the said Act, the Government added the establishments showing in Annexure to the said notification in Schedule-I of the said Act for the purpose of the Act and item 56 of the said notification added to the Schedule-I includes the departments involved in building construction including the Central Government Departments. Therefore, the works being executed by the appellants does qualify for the application of EPF Act 1961. 21. Therefore, the works being executed by the appellants does qualify for the application of EPF Act 1961. 21. Let's analyze the object behind the decision, which has reference to achieve the object as enshrined in the preamble of the Act, which aims to provide social security in the form of Provident Fund to workers who are employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who get wages directly or indirectly from the employer and which includes any person employed by or through a contractor in or in connection with the work of the establishment and apprentices engaged (other than the apprentice under the Apprentice Act, 1961). The Employees Provident Funds and Miscellaneous Provisions Act (EPF & MP) Act, 1961 is applicable to all establishments engaged in building and construction industry. This is imperative that all constructors who engage workers to carry out the construction activity get themselves registered with the Employees Provident Fund Organization and deposit the necessary contributions with EPFO. Further, it has been mandated that all construction workers should be provided universal Account Number by the contractor by appropriately registering them on EPFO Portal. It has been further observed that in spite of the legal provision, the actual coverage of construction workers under the social security net is an issue of concern to both the Central and State Governments. Due to non-availability of social security this vulnerable section of population are deprived of minimum social security required for a decent work system. It is further observed that a large number of civil constructions are carried out under the aegis of Central/State Governments or Local Bodies or Autonomous Undertakings/Authorities of the Government. Therefore, a large number of construction workers get engaged in such projects due to lack of monitoring, many of them did not get covered under the social security system. The Government on one hand pays for the necessary cost (including social security cost) to the contractors for engaging these workers, but unscrupulous contractors do not pass the same to the workers by failing to deposit the same to the Provident Fund Organization and with the intervention of the concern Ministry/agency awarding the work, it can be ensured that all such construction workers do get their entitled social security benefits, therefore, the decision taken by the respondents is well reasoned and social security oriented. 22. The issues raised in the writ petitions with reference to claim projected have been well registered and on the basis of reply filed by both Central and State Government as also on the basis of analyzing of provisions of the Act and the rules, we have reached to the conclusion that the writ Court has not erred in law and there is no legal infirmity in the Judgment impugned. 23. In view of what has been stated hereinabove, the instant appeals are held to be without merit, therefore, dismissed. 24. Registry to keep the copy of the order on each file.