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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Suraj Govindaraj, J.
M/s. Express Publications (Madurai) Private Limited Represented By Senior General Manager Mr. P. Suresh Kumar – Petitioner
Versus
Union Of India, Ministry Of Labour And Employment, Government Of India - Respondents
Writ Petition No. 362 of 2021 (L-PF)
Decided On : 21-10-2022
Employees Provident Fun and Miscellaneous Provisions Act - Section 7-A - Employee Provident Fund Scheme 1952 - Section 26-B - Petitioner is a company which is engaged in publication of newspapers - 3rd respondent, who is a Photographer, had approached the petitioner offering his services only on a contract basis to do some work on photography which was accepted by petitioner, and in order to formalise arrangement, a contract was entered into between petitioner and the 3rd respondent - 3rd respondent submitted a representation to Hon’ble Prime Minister of India stating that he was a contract employee of petitioner but was not enrolled under Provident fund and as such sought for Prime Minister’s intervention in release of provident fund amount - Petitioner entered appearance and filed a petition under Section 26-B of Employee Provident Fund Scheme 1952 to determine issue with regard to existence of employer-employee relationship between petitioner and respondent - Applications and objections having been filed, written arguments having been filed, after hearing parties, 2nd respondent vide its order dated held that 3rd respondent is an employee of petitioner and directed his enrolment to be made by petitioner under Scheme - It is aggrieved by same that petitioner is before Court seeking for aforesaid relief - Whether the scheme was adopted by the employer bona fide or not.
Finding of Court : It is on that basis that proceedings under Para 26B took place as is clearly seen from impugned order - It is only those submissions as relevant to Para 26B which were considered by respondent No.2 in its order - Consideration of the petition under Para 26B being at behest of petitioner, it is now impermissible for petitioner to contend that no one had approached respondent No.2 to deliver a finding under Para 26B and what was required to be considered was notice issued under Section 7A of EPF Act - Third contention that agreement has not been considered properly since respondent No.2 came to a conclusion that Evidence Act would not applicable and what is applicable is only principles of natural justice is again untenable since as can be seen from unnumbered para 2 of internal page 9 of impugned order - Contention raised that agreement has not been looked into is again bereft of merits and contrary to available records - While dealing with the said notice under Section 7A, concerned Authority would have to consider applicability of decision of Hon’ble Apex Court in Pawan Hans Ltd. And others, case, Court has not expressed any opinion as regards the applicability and not applicability of said decision to given facts - It would be for respondent No.2 to apply said decision and pass necessary orders, if necessary by recordal of evidence after hearing of parties. [Para 10 and 11]
Result : Petition stands dismissed.
ORDER :
1. The petitioner is before this Court seeking for the following reliefs:
ii. Pass such other and further orders as deemed fit in the facts and circumstances of the case in the interest of justice and equity.
2. The petitioner is a company which is engaged in the publication of newspapers. 3rd respondent, who is a Photographer, had approached the petitioner offering his services only on a contract basis to do some work on photography which was accepted by the petitioner, and in order to formalise the arrangement, a contract was entered into between the petitioner and the 3rd respondent.
3. 3rd respondent submitted a representation to the Hon’ble Prime Minister of India stating that he was a contract employee of the petitioner but was not enrolled under the Provident fund and as such sought for the Prime Minister’s intervention in release of the provident fund amount.
4. It appears that in pursuance thereof, the matter was referred to 2nd respondent and 2nd respondent issued a summons to the petitioner for enquiry under Section 7-A of the Employees Provident Fun and Miscellaneous Provisions Act [for short referred to as ‘EPF Act’].
5. The petitioner entered appearance and filed a petition under Section 26-B of the Employee Provident Fund Scheme 1952 [hereinafter referred to as ‘Scheme’] to determine the issue with regard to the existence of employer-employee relationship between the petitioner and the respondent. Applications and objections having been filed, written arguments having been filed, after hearing the parties, the 2nd respondent vide its order dated 29.10.2020 held that 3rd respondent is an employee of the petitioner and directed his enrolment to be made by the petitioner under the Scheme. It is aggrieved by the same that the petitioner is before this Court seeking for the aforesaid relief.
6. Sri. Ashok Haranahalli, learned Senior counsel appearing for the petitioner submitted that:
6.1. There is no employer-employee relationship between the petitioner and 3rd respondent. To make applicable the EPF Act and or the Scheme, it is required that there is a master-servant relationship established by the employee, and in the absence of the same, 2nd respondent could not have returned a finding on the issue raised by the petitioner under para 26-B of the Scheme holding that 3rd respondent was an employee of the petitioner.
6.2. One of the predominant tests for a person to be classified and/or treated as an employee, there has to be control and supervision by the employer. Insofar as a regular employee is concerned, the petitioner would excise control and supervision, as also disciplinary proceedings could be taken, but insofar as a contractual employee is concerned, the petitioner would not have control or supervision, let alone the right to initiate disciplinary proceedings.
6.3. There are various differences between regular employee and contractual person and refers to the table appended to para 5 of the petition, which is reproduced hereunder for easy reference:
| SL. NO. | REGULAR EMPLOYEE | CONTRACTUAL PERSON |
| 1 | Once regular employee is confirmed the person will continue till the age of superannuation. | Contract is for a limited period of 1 or 2 years |
| 2 | Regular employees are paid wages/salary | Contract person is paid a consolidated amount. |
| 3 | Regular employees are subjected to rules, regulations, standing orders and subjected to disciplinary proceedings. | Contract person is not subjected to rules, regulations, standing orders and are not subjected to disciplinary proceedings. |
| 4 | Regular employee cannot take any outside work or work for others. | Contract person is not restricted or |
Point of Law : There is no requirement for this Court to intercede in the matter - There are no grounds made out in the petition. [Para 11.1]
The central legal point established in the judgment is the inclusive definition of an 'employee' under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, covering any person engaged....
The employer must ensure EPF contributions for all employees, including those employed through contractors, and must comply with principles of natural justice in assessment proceedings.
Point of Law : Provident Fund is not a tax. It is an amount collectable to the benefit of an individual identified employee as a social welfare measure.
The main legal point established in the judgment is that the Labour Court has no jurisdiction to decide disputed facts under Section 33-C(2) of the ID Act when there is no employer-employee relations....
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