IMPORTANT POINT
Coverage and application of EPF Act – In case two Institutions are interconnected, these can be clubbed for the purpose of coverage under EPF Act – Mere fact that two Institutes, managed and controlled by same management, offer different courses or were established at different times is not relevant for their clubbing under EPF Act.

JUDGMENT :

(Rajesh Bindal, J.)

1. The order dated 30.09.2011, passed by the Division Bench of the Gulbarga Bench of the Karnataka High Court in a Writ Appeal¹[Writ Appeal No. 10133 of 2011]. has been impugned by the appellant before this Court. Vide aforesaid order, the Division Bench has upheld the order dated 10.06.2011, passed by the learned Single Judge in Writ Petition²[Writ Petition No. 80995 of 2011]. The Single Judge upheld the order³ [In ATA No.03/06/2006], passed by the Tribunal⁴[Employee Provident Fund Appellate Tribunal], dated 24.12.2010 and also upheld the application of EPF Act⁵[The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952], to the appellant’s institution.

2. Briefly the facts, available on record, are that the Ideal Fine Arts Society⁶[For short, ‘Society], runs two institutions, namely, the ‘Ideal Institute of Fine Arts’⁷[For short, ‘Ideal Institute’] and ‘Mathosri Manikbai Kothari College of Visual Arts’⁸[For short, ‘Arts College’]. Both, the Ideal Institute as well as the Arts College are being run in the same campus. The Ideal Institute was set up way back in the year 1965, offering Diploma Course in drawing and painting, whereas the Arts College was set up in the year 1985-86, offering Degree and Post- Graduate Degree in drawing and painting. It was claimed that the Ideal Institute employed 8 persons, whereas the Arts College had 18 employees. The issue arose with reference to their coverage and application of the EPF Act. Based on the report of the Enforcement Officer dated 01.07.2003, it was reported that there being total 26 employees working in both the Institutes, which are managed by the same Society and within the same premises, the establishment would be covered under the provisions of the EPF Act w.e.f. 01.03.1988. Thereafter, a notice was issued to the establishment and after affording an opportunity of hearing, an order was passed by the Commissioner⁹[The Assistant Provident Fund Commissioner], on 23.09.2005, under Section 7-A of the EPF Act, assessing the amount of contributions to be made by the appellant under various schemes of the EPF Act. The aforesaid order was challenged by the appellant through statutory appeal before the Tribunal, which was dismissed vide order dated 24.12.2010. Thereafter, the appellant filed a Writ Petition challenging the order passed by the Tribunal before the High Court, which was dismissed by the learned Single Judge vide order dated 10.06.2011. In writ appeal, the order of the learned Single Judge was upheld by the Division Bench of the High Court.

3. Learned counsel for the appellant, submitted that the impugned orders passed by the Commissioner, the Tribunal, as well as the High Court are not legally sustainable. The appellant submitted that both the Institutes, namely, Ideal Institute and Arts College are independent from each other and are merely being managed by the same Society. There is no financial integrity between the two Institutes and both the Institutes are offering different courses, having permission/affiliation from different authorities. The Ideal Institute is getting 100% grant-in-aid, whereas the Arts College is getting 70% grant-in-aid from the Government of Karnataka. The Ideal Institute was set up in the year 1965, whereas the Arts College was set up in the year 1985-86. Furthermore, the appellant submitted that, since both the Institutes are independent from each other and are not employing 20 or more persons, their clubbing for coverage under the provisions of the EPF Act, is totally illegal and deserves to be set aside. In support of his arguments, reliance was placed by the appellant upon Management of Pratap Press, New Delhi v. Secretary, Delhi Press Workers’ Union Delhi etc., AIR 1960 SC 1213.

4. On the other hand, the learned counsel for the respondent submitted that, if the tests laid down by this Court in L.N. Gadodia & Sons v. Provident Fund Commissioner, (2011) 13 SCC 517, are applied in the present case, it w