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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. CHANDRU
Gudalur Taluk Muslim Orphanage Committee
Versus
The Regional Provident Fund Commissioner & Others
W.P.No.5579 of 2009 & M.P.No.1 of 2009
Decided On: 30-03-2012
EPF Act - Challenge to order under Section 7A - Section 7A, Section 1(3)(b), Section 14-B, Section 7Q, Section 7-I, Section 2-A, Section 17 - The court discussed the application of EPF Act provisions including the determination of establishment coverage, waiver of employees' share, damages, and interest. The court also referenced a Supreme Court judgment on the interpretation of 'establishment' under the EPF Act, emphasizing functional integrity and geographical proximity.
Fact of the Case:
The petitioner challenged an order under Section 7A of the EPF Act for non-payment of Provident Fund dues and subsequent damages and interest. The petitioner contended that the three schools run by the committee should be treated as separate entities.
Finding of the Court:
The court dismissed the writ petition, emphasizing that the three schools were considered a single establishment under the EPF Act. The court also noted the failure of the petitioner to file an appeal under Section 7-I of the EPF Act.
Issues: Challenge to order under Section 7A, determination of establishment coverage, treatment of multiple schools as separate entities.
Ratio Decidendi: The court relied on a Supreme Court judgment to determine that the three schools constituted a single establishment under the EPF Act, considering functional integrity and geographical proximity.
Final Decision: The writ petition was dismissed, and no costs were awarded. The connected miscellaneous petition was closed.
1. The petitioner is Gudalur Taluk Muslim Orphanage Committee, represented by its General Secretary. In this writ petition, they have come forward to challenge an order passed under Section 7A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for short EPF Act) by the second respondent.
2. By the impugned order, it was ascertained that the petitioner had not paid the Provident Fund dues from 3/06 to 10/08 and the amount was worked out to Rs.9,73,528/-. It was further stated if the amount was not paid in time, it will also attract damages and levy of interest and appropriate recovery action will be initiated for recovering the amount.
3. When the matter came upon 03.04.2009, notice was taken by the learned Standing Counsel appearing for the respondent PF organisation and an interim stay was granted.
4. On notice from this Court, a counter affidavit has been filed by the respondents dated 02.12.2009 and the petitioner has filed a reply affidavit dated 11.07.2011. Subsequently, an application was filed by the petitioner in M.P.No.1 of 2010 seeking to fix an early date for hearing of the writ petition. This Court by an order dated 05.04.2010 directed the writ petition to be listed on 10.06.2010. However, the matter was not listed.
5. It was agreed by the petitioner that M/s.Gudalur Taluk Muslim Orphanage Educational Institution run by the Gudalur Taluk Muslim Orphanage Committee, Gudalur was brought under the purview of the EPF Act with effect from 01.12.2003 and they have also been allotted a separate code number. The Committee is running three schools namely GTMO Primary School, GTMO Matriculation School, GTMO Higher Secondary School. Therefore, Section 1(3)(b) of the Act squarely applies to the entire establishment. Since they had failed to pay the dues in respect of three institutions, an order under Section 7A of the EPF Act was passed vide proceedings dated 23.05.2006.
6. Considering the financial difficulties expressed by the petitioner and accepting the recommendation of the Area Enforcement Officer, waiver of employees' share for the period from 12/03 to 8/05 was accepted. But however, as the petitioner had defaulted in making contribution, damages were levied under Section 14-B and interest under Section 7Q. The area Enforcement Officer after inspecting the institution filed a report dated 10.11.2008 and 19.11.2008 and found that 19 to 75 employees were not enrolled from 01.06.2006 to 01.10.2008. A statement in respect of non-enrolled staff were prepared and handed over to the Administrative Officer of the petitioner. On behalf of the petitioner, one K.A.Mohammed Kutty Hajee, Correspondent appeared on 05.01.2009 before the second respondent during enquiry under Section 7A. The non-enrolment of the employees were brought to the notice and it was admitted that several employees were not covered.
7. The petitioner Association originally started a primary school in the year 1984. Subsequently, the same institution was upgraded as Matriculation School in the year 1994. Thereafter, higher secondary school was started in the year 2001. Therefore, it satisfied the coverage initially when they had 20 employees. Subsequently, employees strength was raised to 75 and in that view of the matter after enquiry assessment was made.
8. The contention of the petitioner was that all the three wings of the schools are different and they cannot be clubbed together. It is a trust run for the welfare of orphan children and is not funded by government. They agreed that there are 10 teachers and 1 staff working in the primary school, 16 teachers and 2 staff working in the matriculation school and 17 teachers and 1 staff working in the Higher Secondary School. Hence, none of the three schools were having the minimum strength required for coverage.
9. It is not clear as to how the petitioner never filed any appeal against the order passed by the respondent in terms of Section 7-I of the EFF Act. In normal circum
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