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High Court Of Calcutta
P.C. Borooah, J.
Visva Bharati – Appellant
Versus
Regional Provident Fund Commissioner – Respondent
Decided On: March 24, 1982
VISVA BHARATI UNIVERSITY - EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - S. 1 (3) (B), 2 (A) (I), 4, 6 (E), 16 (2) - VISVA BHARATI ACT, 1951 - S. 4 - WHETHER THE PROVISIONS OF THE ACT ARE APPLICABLE TO THE UNIVERSITY AND ITS DEPARTMENTS. - HELD, NO.
Fact of the Case:
Visva Bharati University, a residential university incorporated under the Visva Bharati Act, 1951, maintained an agricultural farm, a woodcraft wing called "Silpa Sadan", and a hospital called "Pearson Memorial Hospital" for the benefit of its students and employees. The Provident Fund authorities sought to apply the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act) to these departments, claiming that they were covered under the Act by virtue of notifications issued under S. 1 (3) (b) of the Act.
Finding of the Court:
The court held that the provisions of the Act could not be applied to the university or its departments. It reasoned that the university was a single entity and that its departments were not separate establishments under the Act. The court also held that the financial position of an establishment was not the only criterion for granting exemption under S. 16 (2) of the Act and that other circumstances could also be considered.
Issues: Whether the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, are applicable to Visva Bharati University and its departments.
Ratio Decidendi: The court interpreted the definition of "establishment" under the Act and held that the university was a single entity and that its departments were not separate establishments. The court also interpreted S. 16 (2) of the Act and held that the financial position of an establishment was not the only criterion for granting exemption under that provision.
Final Decision: The court quashed the notices of demand issued by the Provident Fund authorities and directed them to refund the amounts already paid by the university, along with interest accrued thereon, within eight weeks.
1. THE petitioner, Visva Bharati, is a University incorporated by an Act of Parliament being the visva Bharati Act, 1951 (hereinafter referred to as "the Act") and is situated at Santiniketan in the District of Birbhum in West Bengal. The university imparts education in the Humanities and Science streams and also gives practical training in various faculties, such as agriculture, carpentry, etc. For the purpose of imparting education in agriculture the University has an agricultural College which prepares students for the Degrees of B. Sc. and M. Sc. in Agriculture. For experimental pruposes and practical training of the students the University maintains an agricultural farm, the basic purpose of which is to carry on experimental research and impart practical training to the students of Agriculture. There is also experimental sowing of fodder and crops, such as paddy and wheat, and some so of the products of the said farm are sold to the employees of the University.
2. AS a part of its activities, the University also trains villagers in woodcraft and for this purpose it has a woodcraft wing constituted under the Institute of Rural Education known as "silpa Sadan". The basic purpose of this "silpa sadan" is to train villagers of the surrounding villages in woodcraft and carpentry. The products made by the trainees are used in the different departments of the University.
The University being a residential one has to maintain a Hospital known as the Pearson memorial Hospital. No outsider is entitled to any benefit from this Hospital.
3. SINCE the Provident Fund authorities sought to apply the provisions of the Employees' provident Funds and Miscellaneous Provisions act, 1952 (hereinafter referred to as "the Act")to the University, the latter wrote a letter on july 17, 1979 to the Ministry of Education and Social Welfare, Department of Education, asking for clarification as to whether the provisions of the Act had any application to the university or any of its departments, and if so, praying for an exemption under S. 16 (2) of the act. A copy of this letter is Annexure "a" to the petition.
4. THE University received a reply dated may 31/june 3, 1980 enclosing a letter of the Central Provident Fund Commissioner to the Secretary, Ministry of Labour. It was contended in the said letter that whilst the University was not covered by the Act, the "silpa Sadan", the Hospital and the Agricultural Farm were covered from the various dates as mentioned in said letter. It was also stated that the exemption contemplated under S. 16 (2) of the Act was only given on financial grounds. A copy of this letter is annexed to the petition and marked with the letter "b".
Thereafter the Provident Fund authorities inspected the books of the University and a notice of demand dated June 24, 1981 was received claiming a total sum of Rs. 76,479. 96 P. under various heads for the period from January 1975 to June 1981 in respect of the agricultural farm maintained by the University. A copy of this notice of demand is Annexure "c" to the petition. On being verbally directed by respondent 1 that the same should be paid, the petitioner paid the said sum under protest on July 14, 1981.
5. THEREAFTER the University received another notice of demand dated 6th August, 1981 claiming a total sum of Rs. 51,914. 75 p. for period from september 1973 to January 1981 in respect of the Pearson Memorial Hospital. A copy of this notice of demand is Annexure E to the petition.
6. IN this writ petition the petitioner has prayed that the notices of demand referred to above be quashed and the Provident Fund authorities be directed to exempt the University from the application of the Act under the provi-sions of S. 16 (2) of the Act.
Mr. P. P. Gin walla, appearing on behalf of the petitioner, has submitted that the University which was incorporated under the Visva-Bharati act, 1951 was constituted as a body corporate as a unitary teaching and residential University as laid
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