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1995 Supreme(Pat) 161
HIGH COURT OF PATNA
Nagendra Rai & A. N. Trivedi, JJ.
Saharsa Zila Khadi Gramodyog Sangh & another. - Petitioners
vs.
Union of India through Secretary, Department of Industries, New Delhi and others. - Respondents
C.W.J.C. No. 10214 of 1993
Decided On : 13.3.1995
The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 applies to Khadi industries, and the workers who prepare Khadi at their homes are employees within the meaning of the Act.
Headnote:
EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 1(3), 2(F), 2(I), 4, 7-A, 16, 17 - Applicability of the Act to Khadi Industries - Interpretation of 'Textile' and 'Employee' - Whether Khadi is included in the definition of Textile - Whether home workers are covered under the Act - Applicability of the Act to Khadi Industries despite provisions under the Khadi and Village Industries Commission Act, 1956.
Fact of the Case:
The petitioner, a Khadi manufacturing establishment, challenged the applicability of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act) to its establishment. The petitioner argued that Khadi is not a textile and therefore the Act, which applies to textile industries, is not applicable to it. Additionally, the petitioner contended that the workers who prepare Khadi at their homes are not employees within the meaning of the Act and that the Act is not applicable to Khadi industries in light of the provisions under the Khadi and Village Industries Commission Act, 1956.
Finding of the Court:
The court held that Khadi is included in the definition of textile under the Act and that the Act applies to the petitioner establishment. The court also held that the workers who prepare Khadi at their homes are employees within the meaning of the Act and that the Act is applicable to Khadi industries despite the provisions under the Khadi and Village Industries Commission Act, 1956.
Issues: 1. Whether Khadi is included in the definition of textile under the Act? 2. Whether the workers who prepare Khadi at their homes are employees within the meaning of the Act? 3. Whether the Act is applicable to Khadi industries despite the provisions under the Khadi and Village Industries Commission Act, 1956?
Ratio Decidendi: 1. The court interpreted the term 'textile' under the Act to include all fabrics or clothes prepared by texture, giving it a wide meaning to benefit a large number of employees engaged in textile establishments. The court held that Khadi, being prepared by the process of weaving, is included in the definition of textile. 2. The court relied on the definition of 'employee' under the Act, which includes any person employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment. The court held that even if the workers are not employed in the factory itself, they are employed in connection with the work of the factory and are therefore covered under the Act. 3. The court held that the Act applies to all establishments engaged in industries specified in Schedule-I, and that the Central Government has the power to add industries to the schedule. Since Khadi industries are not exempted from the operation of the Act under Section 17, the court held that the Act is applicable to Khadi industries despite the provisions under the Khadi and Village Industries Commission Act, 1956.
Final Decision: The court dismissed the petition, holding that the Act is applicable to the petitioner establishment and that the workers who prepare Khadi at their homes are employees within the meaning of the Act.
The petitioners have filed the present application for quashing the order dated 5-12-1991, passed by the Regional Provident Fund Commissioner, Bihar, Patna (Respondent no. 5), in exercise of power u/s 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the' Act), determining Rs.1,90,378/-as amount due from the employer-petitioner no.1, towards Employees' Provident Fund Contribution, Family Pension Contribution, Employees Deposit Link Insurance Contribution and Administrative Charges for the period ranging from March, 1989 to March, 1990. A copy of the said order has been made Annexure-1 to the writ application. The petitioners have also challenged the letter dated 2-3-1993 (Annexure-1/A), by which Respondent no. 5 has directed the petitioners to deposit the assessed amount, otherwise legal action would be taken as well as the notice (Annexure-1/B) issued u/s 14 of the Act to show cause as to why. .criminal cases be not filed and the Bank account be not seized for non-payment of the aforesaid assessed amount.
2. According to the petitioners, petitioner no. 1 is a Sangh registered under the Societies Registration Act engaged in imparting training in moral and- spiritual values with economic self-sufficiency and self-reliance of the individual and the society under Gandhian concept and for giving practical training and shape to the Gandhian ideals. The main object of the Sangh is to inspire and to involve vast multitude of unemployed and under-employed people in self-employment programmes to sustain themselves. This Sangh is a decentralised unit of Bihar Khadi Gramodyog Sangh, earlier known as Bihar Khadi Samiti, which itself was a decentralised unit of All India Spinners Association (Akhil Bhartiya Charkha Sangh) founded by Mahatma Gandhi himself. The Sangh is a charitable and volunary organization based on common outlook and faith amongst its workers.
3. The Khadi and Village Industries Commission Act, 1956 (hereinafter referred to as the Khadi Act) has been enacted to provide for establishment of the Khadi and Village Industries Commission for the proper development of Khadi and Village Industries. The provisions of the Act, Rules and Regulations framed and instructions thereunder provide a self 'contained and elaborate provisions with regard to the matters including the welfare of the workers employed in the Khadi Industries. In accordance with the provisions of the Act and Rules framed thereunder the Khadi and Village Industries Commission has appointed a certification committee to grant certificates to the producers or dealers in Khadi or the products of any village industries. Elaborate instructions have been issued for grant of certificate for manufacturing Khadi (A copy of the same has been annexed as Annexure-3). Paragraph 10 of the instructions contains a provision for creation of Welfare Fund to be utilised for the welfare of the workers and their families. Paragraph 12 (A) of the instruction speaks of establishment of the workers deposit account in which the workers and the concerned establishment have to deposit their share in the scheme at the rate of 8% of the wages of the workers. Instruction no. 12 (A) contains a provision for withdrawal of the amount from• the said scheme by the workers. Thus elaborate provisions have been made under the Act and the instructions issued by the Commission with regard to the provident fund etc. of the workers employed in Khadi and Village Industries and in that view of the matter the provisions of the Act are not applicable. It is also asserted that the Khadi product is not a textile. as mentioned in Schedule-I and as such the petitioner-establishment is not a factory engaged in industry in manufacturing any item as mentioned in the schedule and in that view of the matter the Act is not applicable in the case .of the petitioners.
4. A notice u/s 7A of the Act was served upon the petitioners to deposit Provident Fund. Administ
