Diamond Shipping Agencies, Rep. by its Managing Director vs Employees Provident Fund Appellate Tribunal, New Delhi

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2019 Supreme(Mad) 657

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
ABDUL QUDDHOSE, J.
M/s. Diamond Shipping Agencies, Rep. by its Managing Director – Appellant
Versus
The Employees Provident Fund Appellate Tribunal, New Delhi & Another – Respondents
W.P.(MD).No. 6788 of 2010 & M.P.(MD) No. 1 of 2010
Decided on : 15-04-2019

Advocates:
Advocate Appeared:
For the Petitioner:K. Hemakarthikeyan, Advocate.
For the Respondents:N. Muralishankar, Advocate.

Headnote:
Constitution of India, 1950 - Article 226 - Employees Provident Fund Act, 1952 – Section 2(f)(ii) - Tamil Nadu Industrial Employment (Standing Orders) rule, 1947 - Tamil Nadu Industrial Employment (Standing Orders) rule, 1947 - Rule 2(g) - Industrial Employment (Standing Orders) Central Rules 1946- Rule 3(1) - Employees - EPF contributions - According to petitioner, their establishment is doing business of stewarding, transporting and other connected works by employing 136 employees and all the employees have been covered under provisions of Employees Provident Fund Act, 1952 (herein after referred to as” E.P.F Act, 1952”). It is their case that they have been prompt in making EPF contributions for all their employees without committing any default - They have been shocked and surprised to receive a notice dated from second respondent, wherein second respondent has alleged that 9 persons were petitioners employees for whom EPF contributions were not made by petitioner/Management - Petitioner sent a detailed reply dated stating that out of nine persons only three persons were recruited as apprentice/trainees as per Model Standing Orders applicable to petitioner establishment and remaining 6 persons were total stranger –Held, Standing Orders were not at relevant point of time certified - Therefore in terms of S.12A of Standing Orders are deemed to be applicable - Section 2(f) of Act defines an employee to include an apprentice but at the same time makes an exclusion in case of an apprentice engaged under Apprentices Act or under the Standing Orders - Under Model Standing Order an apprentice is described as a learner who is paid allowance during period of training - learned counsel for petitioner, Model Standing Order issued under Tamil Nadu Industrial Employment (Standing Orders) rule, 1947, Schedule -I are applicable to facts of instant case and therefore being apprentices, even for three persons, petitioner/Management is not liable to make E.P.F contributions - Authorities below have not considered all these aspects before coming to conclusion, but instead have blindly accepted the Enforcement Officers report that petitioner/Management has not paid E.P.F contributions for alleged nine persons - Therefore, this Court is of the considered view that authorities below have passed an erroneous order which requires to be set aside by this Court - Writ petition is allowed- Consequently connected miscellaneous petition is closed.

JUDGMENT :

(Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of a writ of Certiorari to call for the records in the order passed by the first respondent herein in A.T.A.No. 651(13)/2009 dt. 15.03.2010, which was received by the petitioner on 03.05.2010 and quash the same.)

1. The instant writ petition has been filed challenging the order dated 15.03.2010 passed by the first respondent in A.T.A.No. 651(13)/2009.

2. According to the petitioner, their establishment is doing the business of stewarding, transporting and other connected works by employing 136 employees and all the employees have been covered under the provisions of Employees Provident Fund Act, 1952 (herein after referred to as” E.P.F Act, 1952”). It is their case that they have been prompt in making EPF contributions for all their employees without committing any default.

3. They would further submit that they have been shocked and surprised to receive a notice dated 30.12.2008 from the second respondent, wherein the second respondent has alleged that 9 persons were the petitioner's employees for whom EPF contributions were not made by the petitioner/Management. The petitioner sent a detailed reply dated 16.02.2009 stating that out of the nine persons only three persons namely T.Vijayan, B.Senthil and K.Chadrakanth were recruited as apprentice/trainees as per the Model Standing Orders applicable to the petitioner establishment and remaining 6 persons were total strangers. According to the petitioner/Management in the said reply, the petitioner has also enclosed application forms from the apprentices, appointment orders, attendance/stipend register in respect of apprentices, copies of general ledger and profit and loss account statement to the second respondent.

4. According to the petitioner/Management inspite of accepting the contentions of the petitioner, the second respondent without applying his mind passed an order dated 28.08.2009 directing the petitioner to pay the contributions for the apprentices and the strangers. Aggrieved by the order dated 28.08.2009 passed by the second respondent, the petitioner/Management preferred an appeal before the first respondent. The first respondent dismissed the appeal by its order dated 15.03.2010. Aggrieved by the said dismissal, the petitioner/Management has preferred this instant writ petition.

5. A counter affidavit has also been filed by the respondent before this Court, wherein they have stated that only after inspection of the business premises by the Enforcement Officers, it came to the knowledge that for nine employees, EPF contributions were not made by the petitioner/Management. According to them, despite giving several opportunities to the petitioner/Management to produce records like trial balance, draft profit and loss account, balance sheet, date book, ledger cash book including cash payment vouchers, the petitioner/Management failed to produce the same. According to them, the impugned orders passed by the second respondent and confirmed by the first respondent is in accordance with law and the petitioner/Management is liable to pay E.P.F contributions for the named nine employees employed by the petitioner/Management.

6. It is also their case that even three employees named by the petitioner/Management are not apprentices but they are their regular employees. According to them, no documentary evidence has been produced by the petitioner/Management to prove that the said employees were infact only apprentices. Further, according to them, any standing orders to claim exemption for apprentices under Section 2(f)(ii) of the E.P.F. Act 1952 will have to be proved by the competent authority i.e., Labour Department. In the instant case, the Model Standing Orders for the petitioner/Management has not been approved by the Labour Department.

7. Heard Mr.K.Hemakarthikeyan, learned counsel for the petitioner and Mr. N.Murali Shankar, learned Standing Counsel for the respondents.

8. It has

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