1988 Supreme(Raj) 766
RAJASTHAN HIGH COURT AT JAIPUR BENCH
M.B.Sharma, I.S.Israni, JJ.
M/s Mridang Cinema - Appellant
Versus
Union of India & ors - Respondent
D.B. Civil Writ Petition No. 617 of 1982 alongwith similar petitions No. 552 of 1982 and 1834 of 1981.
Decided On : 20-09-1988
Employees of an independent contractor engaged in work connected to the work of an establishment are 'employees' within the meaning of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
Headnote:
EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 2(F) - EMPLOYEES' STATE INSURANCE ACT, 1948 - SECTION 2(9) - DEFINITION OF EMPLOYEE - EMPLOYEES OF INDEPENDENT CONTRACTOR OF CYCLE STAND AND CANTEEN (RESTAURANT) ARE WITHIN THE SWEEP OF THE DEFINITION OF EMPLOYEE - PROVISIONS OF ACT APPLICABLE TO THEM.
Fact of the Case:
Petitioners, owners of a cinema hall, challenged an order holding them liable to pay provident fund dues for employees of a canteen and cycle stand operated by an independent contractor on the premises. They argued that the employees were not their employees and thus not covered by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act).
Finding of the Court:
The court held that the employees of the independent contractor were within the definition of 'employee' under Section 2(f) of the Act and thus covered by the Act. It reasoned that the canteen and cycle stand were amenities provided to cinemagoers and thus connected to the work of the cinema hall. The court also relied on Supreme Court precedent holding that employees of a canteen and cycle stand in a cinema hall were employees within the meaning of the Employees' State Insurance Act, 1948, which has a similar definition of 'employee'.
Issues: Whether the employees of an independent contractor operating a canteen and cycle stand in a cinema hall are 'employees' within the meaning of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
Ratio Decidendi: The definition of 'employee' in Section 2(f) of the Act is wide enough to include employees of an independent contractor who are engaged in work connected to the work of the establishment. In this case, the canteen and cycle stand were amenities provided to cinemagoers and thus connected to the work of the cinema hall. Therefore, the employees of the independent contractor were 'employees' within the meaning of the Act.
Final Decision: The court dismissed the petitions, holding that the petitioners were liable to pay provident fund dues for the employees of the canteen and cycle stand.
JUDGMENT
1. - This order will dispose of the above numbered writ petitions. For the disposal of the writ petitions, we will refer to the facts of D.B. (Civil Writ Petitions No. 617/1982, M/s Mridang Cinema and another v. Union of India and others. M/s Shakti Enterprises (Petitioner No. 2) is the owner of M/s Mridang Cinema (Petitioner No. 1) situated at Srinagar Read. Ajmer, Rajasthan. It is not disputed that a space being available for running canteen (restaurant) and cycle stand, the petitioners gave a licence to one Mr. M.K. Bhargava, for running the canteen and cycle stand. The petitioners are contributing their own contribution as well as the employees contribution under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, (for short the Act), but so far as the employees of the canteen and Cycle Stand are concerned, no contributions were being paid by the petitioners. A notice under Section 7A of the Act was issued by the non-petitioner no. 2 to the petitioner no. 1 to determine the issue regarding the dues payable by the petitioners in respect of the employees of the canteen (restaurant) and cycle stand Reply to the aforesaid show cause notice was filed by the petitioners wherein a plea was set up that the cycle stand and restaurant were separate establishments and the petitioners cannot be held liable to pay the contribution in respect of the employees of the cycle stand and the restaurant. A representation dated Nov. 3, 1980, was also filed through the counsel by the petitioners but according to the petitioners, objections submitted by them were ignored and non-petitioner no. 2 came to the conclusion that the cycle stand and the restaurant are not the separate establishments and the petitioners are liable to pay the Provident Fund dues in respect of the employees of the cycle stand and the restaurant. The petitioners challenge Annexure to dated Dec. 17, 1981 of non-petitioner no. 2 made under Section 7-A of the Act inter alia on the grounds that the employees of the licensee/contributor of the restaurant and the cycle stand were not their employees and they are not liable to pay any contribution under the Act for those employees Notice of the writ petition was given to the non-petitioners and reply has been filed. In the said reply a case has been set up that the provisions of Act are applicable to the employees of the restaurant as well as the cycle stand because they have been employed for wages by a contractor in or in connection with the work of establishment. The question which, therefore, arises for determination is as to whether and under the provisions of the Act, the principal employer is liable to pay the contribution in respect of the employees of the restaurant and the cycle stand even if they have been given on licence/contract ?
2. It has been said in the earlier part of this order that it is not disputed that so far as petitioner no. 1 is concerned it is governed by the provisions of the Act and is paying contributions in respect of the employees employed by it for wages. The case of the petitioners is that because the cycle stared and the restaurant have been given to a licensee, who is an independent contractor and has control over its employees and because the wages to them are not being paid by the petitioners, they do not come under the sweep of definition of employee' given under section 2(f) of the Act. Section 2(f) of the Act may now be read and is as under :
(f)"employee" means any person who is employed for wages in any kind of work. manual or otherwise, in or in connection with the work of STET establishment' and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the 'establishment.'
3. We may state that it can hardly be disputed that the cycle stand and the restaurant (canteen) are also in connection with the work of the 'establishments' and are amenities provided to the
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