An establishment is disqualified from the Section 16(1)(a) EPF Act exemption if it utilizes power for its core operations, as that constitutes 'working with the aid of power,' distinguishing it from incidental uses like lighting.

JUDGMENT

The petitioner is a Co-operative Society. The short issue arising for consideration in this writ petition is as to whether the petitioner qualifies for the benefits of exemption with reference to the provisions of Section 16(1)(a) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, (hereinafter referred to as ‘the EPF Act’).

2. The petitioner is a Co-operative Society, stated to have been established in the year 1946. The petitioner is stated to be formed with the objective of looking after the welfare and for protecting and enhancing the well-being of the workers engaged in the collection of ‘black-lime shells’, in the area of its operation. The petitioner states that its members collect black-lime shells from the Vembanad Backwaters, and after removing the flesh from the shells, the shells are sold to its customers. The petitioner was proceeded against under the EPF Act from 2013 onwards. The petitioner took up a contention that it need not be covered under the provisions of the statute, since it is entitled to the benefits of exemption under Section 16(1)(a). This was specifically pointed out before the original authority. The original authority by Ext.P2 dated 20.09.2016 found the afore issue against the petitioner. The petitioner took up the matter in further appeal before the Tribunal (3^rd respondent). The Tribunal disposed of the appeal by the order at Ext.P6 dated 20.05.2022, finding the issue against the petitioner. It is seeking to challenge the orders at Exts.P2 and P6 issued as above, that the petitioner has filed the captioned writ petition.

3. I have heard Sri. Rajesh Nair, the learned counsel for the petitioner, Sri. Sajeev Kumar K.Gopal, the learned Standing Counsel for the EPFO, as well as Sri. T.K.Rajeshkumar, the learned counsel for respondents 4 and 5.

4. The learned counsel for the petitioner would point out that the petitioner is entitled for the benefit under Section 16(1)(a), since, admittedly, the petitioner is covered by the first limb of Section 16(1)(a) - with respect to the number of employees. It is his submission that the dispute is only as regards the second limb with respect to the use of ‘power’ for the ‘working of the unit’. The learned counsel raises two contentions. The first contention is that the activity noticed by the original authority in Ext.P2 is, in reality, an activity which is taking place after the sale of black lime shell. Without prejudice, he would state that mere use of the power in the establishment, that too for the working of one motor pump having a capacity of 3.5 HP - for the purpose of washing of lime shell - would not amount to any manufacturing activity.

5. Per contra, Sri. Sajeev, as well as Sri. Rajeshkumar, the learned counsel for the respondents, would contend that the activity carried on by the petitioner is entirely with the aid of power and hence not entitled to the benefits of exemption under Section 16(1)(a).

6. I have considered the rival submissions as well as the connected records.

7. The provisions of Section 16(1) (a) of the EPF Act read as under: -

“16(1)(a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State relating to co-operative societies, employing less than fifty persons and working without the aid of power;

or”

(underlining supplied)

A reading of Section 16(1)(a) would show that it is only in a situation wherein a Co-operative Society is shown to be;

(i) employing less than 50 persons and

(ii) working without the aid of power

that the Society would be entitled to claim the benefits under Section 16. As regards the first li