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IN THE HIGH COURT OF JUDICATURE AT MADRAS
G.K. ILANTHIRAIYAN, J.
M/s.Gudiyatham Jeeva Handloom Weavers Co-operative Production and Sales Society Ltd., Rep. by its Special Officer, Gudiyatham – Appellant
Versus
The Employees` Provident Fund Appellate Tribunal, New Delhi & Others – Respondents
W.P.Nos. 27966 to 27972 of 2011 & 14875 to 14899 of 2012 & M.P.No. 1 of 2012 (32 Nos.)
Decided On : 18-08-2023
Employees Provident Fund - Co-operative Society - EPF & MP Act, 1952 - Section 7(A), Section 23 of the Tamil Nadu Co-operative Societies Act - The court discussed the applicability of the EPF & MP Act, 1952 to a co-operative society and its members, highlighting the absence of an employer-employee relationship and the provisions of the Act. The court referred to previous judgments and legal provisions to establish that the members of the co-operative society cannot be construed as employees.
Fact of the Case:
The petitioners, a society registered under the Tamil Nadu Co-operative Societies Act, challenged the order of the Employees' Provident Fund Appellate Tribunal, which directed the petitioners to comply with the provisions of the EPF & MP Act. The petitioners argued that the Act was not applicable to them as their members were not employees and there was no employer-employee relationship.
Finding of the Court:
The court found that there was no employer-employee relationship between the society and its members. It referred to previous judgments and legal provisions to establish that the members of the co-operative society cannot be construed as employees. The court concluded that the orders passed by the respondents were illegal and quashed them.
Issues: The main issue was the applicability of the EPF & MP Act to the co-operative society and its members, and the existence of an employer-employee relationship.
Ratio Decidendi: The court relied on previous judgments and legal provisions to establish that the members of the co-operative society cannot be construed as employees. It highlighted the absence of an employer-employee relationship and the provisions of the Act.
Final Decision: The court quashed the orders passed by the respondents and allowed all the Writ Petitions, with no order as to cost.
JUDGMENT
(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records pertaining to the impugned order dated 23.07.2010 of the first respondent Employees'' Providence Fund Appellate Tribunal passed in A.T.A.No.174(13) 2003 and quash the said order by issue of a Writ of Certiorari.)
Common Order:
These Writ Petitions have been filed challenging the order passed by the first respondent dated 23.07.2010, thereby dismissing the appeal filed by the petitioners as against the order passed by the third respondent under Section 7(A) of the Employees Provident Fund and Miscellaneous Provisions Act, thereby directing the petitioners societies to comply with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act (herein after referred to as “the EPF & MP Act”).
2. The petitioner in all the writ petitions (herein after called as “the petitioner/society”) is a society registered under the Tamil Nadu Co- operative Societies Act. The members of the petitioner/society are the handloom weavers residing at the place where the society is situated. They are the shareholders of the petitioner/society. The petitioner/society has less than 50 employees on its roll and is working without any aid of power. The principal object of the petitioner/society is to improve the handloom industry and the economic conditions of the weavers residing in the area of operation. It is an establishment under the control of the State Government. Formerly, it was being managed by a board of management whose members used to be elected from among the members of the society. By the government order in G.O.Ms.No.204, Cooperation, Food & Consumer Protection dated 25.05.2001, the Government of Tamil Nadu superseded the board of management of all the societies, including the petitioner/society.
3. Section 23 of the Tamil Nadu Co-operative Societies Act specifically prohibits a paid officer or servant (employee) of the registered society being admitted as its member and it also disqualifies a member from being a member, if he becomes a paid officer of servant (employee) of the registered society. Thus, it is clear that if the weaver members of the petitioner/society become its employees for any reason whatsoever, they will cease to be its members and the society in turn will cease to exist both as a matter of fact and in law.
4. The main object of the petitioner/society is to encourage thrift, self help and mutual aid among the persons with common socioeconomic needs. The weaver members of the petitioner/society have received yarn from it, without making any payment for its, convert them into cloths with the help of their family members and supply the same to the petitioner/society at their convenience. In fact, the members have liberty to sell the finished materials and remit the actual cost of the raw materials to the petitioner/society and keep the profit to themselves. The society cannot take any disciplinary action because, it has no jurisdiction to do so unlike as in the case of its employees. In the case of default in remittance, the society can initiate arbitration proceedings to recover the money from its members.
5. The members have installed handlooms of their own at home. The operation of handloom only by hands and they are not using electricity to weave the cloths. Further, the petitioner/society is not maintaining any attendance register of its members and they have no fixed working hours for its members. The weavers did not get monthly wages or daily wages from the petitioner/society as it is in the case of the employees. Therefore, there is no employer and employee relationship between the petitioner/society and its weavers members. That apart, the petitioner/society cannot take any disciplinary action as against its weaver members.
6. The handloom weavers are receiving substantial amount yearly by way of dividend from the petitioner/society under various beneficial s
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