Back
IN THE HIGH COURT OF ALLAHABAD
J. Sahai, J.
N.K.INDUSTRIES (PRIVATE) LTD., KANPUR - Appellant
Versus
REGIONAL PROVIDENT FUND COMMISSIONER, U.P. - Respondents
Civil Misc. Writ 2095 Of 1957
Decided On : 12/19/1957
EMPLOYEES PROVIDENT FUNDS ACT, 1952 - Applicability - Factory employing more than 50 persons - Industry specified in Schedule I - Whether applies to department in which industry carried on - Whether applies to industry started after 3 years from establishment of factory - Whether demand for contribution can be made after 3 years - Whether employer can be made liable to make contribution in absence of contribution from employees.
Fact of the Case:
The petitioner, Messrs. N. K. Industries (Private) Ltd., was carrying on the business of manufacturing oil under the name and style of Messrs. Rajendra Prasad Oil Mills. With effect from June 1, 1954, a separate department for the manufacture of tins was established in the said mills. The petitioner received a circular on August 2, 1956, informing them that the provisions of the Employees Provident Funds Act, 1952, had been extended to thirteen additional industries including edible oils and fats. The petitioner claimed that the manufacture of tins was separate from the manufacture of oils and could not come within the definition of "electrical, mechanical or general engineering products" as mentioned in Schedule I of the Act. The petitioner also contended that the provisions of the Act could not be made applicable to the tin manufacturing department prior to June 1, 1957, as it was started on June 1, 1954.
Finding of the Court:
The court held that the provisions of the Employees Provident Funds Act, 1952, applied to the petitioner's case. The court found that the expression "in which fifty or more persons are employed" in Section 1(3) of the Act related to factories and not to industry. The court also held that the provisions of the Act would be applicable to the petitioner's case even though the tin containers were manufactured for the purpose of filling oil manufactured by the petitioner and not for sale. The court further held that the Act applied to the oil industry on June 1, 1954, and that the demand for the employer's contribution or any other dues in respect of workers engaged in the oil industry on that date was not illegal. The court also held that the demand for contribution was not waived by the Regional Provident Fund Commissioner and that the employer could be made liable to make their contributions even in the absence of contributions from the employees.
Issues: 1. Whether the provisions of the Employees Provident Funds Act, 1952, applied to the petitioner's case. 2. Whether the provisions of the Act could be made applicable to the tin manufacturing department prior to June 1, 1957. 3. Whether the demand for contribution was waived by the Regional Provident Fund Commissioner. 4. Whether the employer could be made liable to make their contributions even in the absence of contributions from the employees.
Ratio Decidendi: 1. The expression "in which fifty or more persons are employed" in Section 1(3) of the Act relates to factories and not to industry. 2. The provisions of the Act apply to factories employing fifty or more persons though in the particular department in which that particular industry is carried on the number of persons may be less than fifty. 3. The manufacturing process of scheduled article need not go on in the entire premises of the factory but it may go on in any portion of it. 4. The words "unless three years have elapsed from its establishment" in Section 16(1)(b) of the Act refer to the establishment of the factory and not of the industry. 5. The employer is liable to make both the employer's share and the employee's share of contribution to the provident fund.
Final Decision: The court dismissed the petition.
( 1 ) THE petitioner Messrs. N. K. Industries (Private) Ltd. are carrying on the business of manufacturing oil under the name and style of Messrs. Rajendra Prasad Oil Mills. With effect from June 1, 1954, a separate department for the manufacture of tins was established in the said mills. This department employs ten persons only. Messrs. Rajendra Oil Mills were informed by circular No. 168 dated August 2, 1956, by the Regional Provident Fund Commissioner, that the provisions of the Employees Provident Funds Act, 1952, had been extended to thirteen additional industries including edible oils and fats by means of notification No. S. R. O. 1956 dated 4th July, 1956. It is alleged by the petitioner that this letter was received sometime in the first week of August 1956. The Rajendra Oil Mills were dosed for indefinite period with effect from 4th August, 1956 and the factory was not working at the time when the circular was received. The factory resumed work in February 1957. and it is alleged that the Provident Fund scheme was made applicable by messrs. Rajendra Oil Mills to the workers having a continuous service of more than 240 days with effect from 1st March, 1957. On 2nd April, 1957 Sri B. B. Singh, Provident Fund Inspector visited the factory and thereafter a letter was received from opposite party by which Messrs. Rajendra Prasad Oil Mills were required to implement the Employees Provident Fund scheme with effect from 1st July, 1954 and thereafter to deposit employers share of contribution for the period 1st July, 1954 to 28th february, 1957 and to pay 3 per cent, administrative charges on both employers and employees contribution. Messrs. Rajendra Prasad Oil Mills were further asked to pay damages on the said alleged dues under Section 14-B of the Act from the date on which according to them the payment fell due to the date of the actual payment. The basis of demand was that on 1st June, 1954 Messrs. Rajendra Prasad Oil Mills employed more than 50 persons and that they were engaged in the manufacture of tins from the said date which according to the opposite party was the industry included in Schedule I of the Act on that date. The petitioner alleges that the manufacture of tins was separate from the manufacture of oils and it could not come within the definition of "electrical, mechanical or general engineering products" as mentioned in schedule I of the Act. Even if it did the manufacture of tins having been started on opposite partys own showing with effect from 1st June, 1954, the provisions of the Provident Funds Act and the Employees provident Fund Scheme cannot be made applicable to it by virtue of the provisions of section 16 of the Act prior to 1st June, 1957. The petitioner took up that position with opposite party and sent a reply on behalf of Rajendra Prasad Oil Mills on 22/26th May, 1957. A reply to the aforesaid letter was received on 24th July, 1957 in which it was contended that the manufacture of tins was covered by the expression electrical, mechanical and general engineering products occurring in schedule I of the Act and as the factory was engaged in the manufacture of oil and tins simultaneously on 1st June, 1954 employing more than 50 persons as a composite unit, it became subject to the provisions of the Act with effect from 1st June 1954. By this letter the opposite party demanded from the petitioner the employers share of contribution, administrative charges for the period 1st July, 1954 to the 28th February, 1957 and the petitioner was threatened in case of non-compliance with action under Section 14-B of the act. The opposite party by his letter no. 7926/uo/ III/s. R. O. dated 13-8-57 which was received by the petitioner on 27-8-1957 has threatened to take legal action against the petitioner for non-compliance with the aforesaid orders. On these facts the present writ petition has been filed. The grounds taken in the petition are that the manufacture of tins was not covered by schedu
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
