IMPORTANT POINT
The Rajasthan Non-Government Educational Institutions Act, 1989 is a complete code in itself with regard to the educational institutions and the State Government exercises substantive control over the institutions even though the institutions are not ‘owned’ by it.

JUDGMENT

Dr. AR. Lakshmanan, J.—In the present matter, the appellant is the Regional Provident Fund Commissioner (RPFC) and the respondents are Sanathan Dharam Girls Secondary School, a Non-Governmental Educational Institution and the State of Rajasthan among others.

2. Brief facts in the matter are as follows:

The Employees Provident Fund and Misc. Provisions Act (in short ‘the EPF Act’) came into force in 1952. In 1982, vide Gazette notification by the Government, Educational Institutions were added in the Schedule of the Act under section 1(3). The schedule reads thus:

“(i)any University;

(ii)any college whether or not affiliated to a University

(iii)any school, whether or not recognized or Aided by the Central or State Government

(iv)any scientific institution

(v)any institution in which research in respect of any matter is carried on.

(vi)any other institution in which the activity of imparting knowledge or training is systematically carried on.”

Further in 1988, clause (b) of section 16(1) of the EPF Act, 1952 was substituted by new clauses (b) (c) and (d). The amended provisions read as under:

“16(1)(b): to any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits;

(c) to any other establishment set up under any Central Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed under that Act governing such benefits;

(d) to any other establishment newly set up until the expiry of a period of three years from the date on which such establishment is has been set up”

The State Government had framed rules known as ‘The Rules for payment of Grant-in-Aid to non-governmental educational, cultural and physical educational institutions in Rajasthan, 1963’.

Later in 1989 the Rajasthan Legislative Assembly passed “The Rajasthan Non-Government Educational Institutions Act, 1989” which came into force from 01.01.1993.

3. On 05.08.1997, the State Government (Finance Department) issued an order to implement the provisions of the EPF Act, 1952 on Non-Governmental aided educational institutions employing 20 or more persons.

On 24.01.1998, the State Government (Educational Department) passed an order by which it transferred the existing Provident Fund amount from the State treasury to the office of Regional Provident Fund Commissioner.

Later on 24.08.1998, the State Government (Finance Department) passed an order about transfer of Provident Fund amount from State treasury to the Provident Fund Commissioner.

4. Various Educational Institutions filed 21 writ petitions in the High Court of Rajasthan, challenging the orders and circulars of the State Government issued on 05.08.1997, 24.01.1998 and 24.08.1998. The Regional Provident Fund Commissioner also filed 2 writ petitions in the High Court.

5. The learned Single Judge dismissed the writ petitions filed by the Regional Provident Fund Commissioner and allowed the 21 writ petitions filed by different Educational Institutions by an order dated 16.01.2001 stating that the state Act would override the provisions of EPF Act, 1952 and also observed that the educational institutions before him would fall under the exception under the amended section 16(1)(b) of the EPF Act.

6. Against this order of the learned Single Judge, the RPFC went on appeal before the Division Bench of the Rajasthan High Court. However, the Division Bench also observed that the EPF Act will not apply to the Educational Institutions before the Court and dismissed the appeals filed by the RPFC.

Further on 23.02.2003, the respondent, Educational Institution filed the S.B. Civil Writ Petition before the High Court challenging the order of the State Government dir