High Court of KeralaSingle Judge2015-03-17Writ petition allowed; Ext.P5 set aside; Costs ...

Biju T.M. v. Assistant Provident Fund Commissioner, EPFO & Indian Oil Corporation Limited

Case / Petition Number:WP(C).No. 13742 of 2011 (P)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Vinod Chandran
Judgment Date: 2015-03-17
Court Decision / Holding: Ext.P5 stands set aside. The writ petition is allowed. Costs to be borne by the parties.
Final Disposition: Writ petition allowed; Ext.P5 set aside; Costs awarded to the petitioner/parties.

Parties to the Case

Appellants / Petitioners

Biju T.M., M/S. TR Petroleum, T.C. Road, Kuthuparamba, Kannur

Respondents

Assistant Provident Fund Commissioner, Employees' Provident Fund Organization, Sub Regional Office, Fort Building, VK Complex, Fort Road, Kannur
Indian Oil Corporation Limited

Legal Representation & Advocates

Counsels for Petitioners

• Sri M. Ramesh Chander
• Smt. K.A. Sanjeetha

Counsels for Respondents

• Dr. Abraham P. Meachinkara
• Sri E.K. Nandakumar

Case Synopsis & Summary

This writ petition challenges Ext.P5 issued under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (EPF & MP Act) which purported to impose provident fund contributions for the period 9/2009 to 10/2010 on a petrol bunk operated by the petitioner as a dealer under Indian Oil Corporation (IOC). The bunk licensee, Biju T.M., commenced operations on 11.03.2009 (Ext.P1) after IOC granted a dealership; earlier operations had been under IBP Company Ltd., which was amalgamated with IOC in 2007. The petitioner argues that the retail bunk operated on a dealership model (not a Company Owned Company Operated, COCO, unit) and thus cannot continue the prior coverage under the EPF Act, especially since the six employees claimed to be covered are well below the statutory threshold of 20. The contractor who operated the bunk earlier remitted contributions only up to 30.07.2009, and the petitioner asserts that the establishment itself did not operate beyond 01.02.2007, so there is no continuity of the previous employer–employee relationship. Respondents contend the establishment continued in substance and that IOC, on amalgamation, took over liabilities (as per Ext.P3). The court notes no automatic extension of coverage merely by continued business and, invoking Article 226 citing State of HP v. Gujarat Ambuja Cement Ltd., sets aside Ext.P5 and allows the petition, leaving parties to bear costs.

Provisions of Law Cited

Section 7A, Employees' Provident Fund and Miscellaneous Provisions Act, 1952Section 7B, Employees' Provident Fund and Miscellaneous Provisions Act, 1952Article 226, Constitution of India

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the petrol bunk operates under IOC on a dealership basis, not as a COCO unit, and therefore cannot be brought under EPF coverage for the period in question. The dealership commenced on 11.03.2009 (Ext.P1). The earlier operation by IBP, amalgamated with IOC in 2007, ended on 01.02.2007; there is no continuous employment relationship or transfer of liabilities to the petitioner. The six employees fall far short of the statutory threshold of 20, and there is no indication of continuity of the previous establishment under the current licensee. The remedy under 7B was not timely pursued, and the court should not construe a dealership as automatically triggering EPF liability without statutory support. The petition challenges Ext.P5 on jurisdictional grounds and invokes Article 226 to set aside the order.

Contentions of Respondents

The respondents rely on continuity of business and the takeover of liabilities by IOC on amalgamation, as evidenced by Ext.P3, arguing that contributions could be demanded for the ongoing establishment. Though the establishment is a dealership, the same business continued under IOC with a different operator, and the contractor’s remittance history and unresolved disputes indicate continuing liability. The appeal/review avenues were not pursued in time, but the central issue is the statutory obligation to contribute when a continuing establishment operates with six employees. The respondents contend the 7A regime applies where Liabilities continue after amalgamation and that the writ petition seeks to relieve statutory duty without proper remedy.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
State of H.P v. Gujarat Ambuja Cement Ltd.	STC (2005) 142, Pg.1	Positive	Cited to justify exercising jurisdiction under Article 226 and to validate the court's approach in reviewing Ext.P5.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY, THE 17TH DAY OF MARCH 2015/26TH PHALGUNA, 1936 WP(C).No. 13742 of 2011 (P) ---------------------------- PETITIONER(S): -------------------------- BIJU T.M. M/S. T.R.PETROLEUM, T.C.ROAD, KUTHUPARAMBA KANNUR BY ADVS.SRI.M.RAMESH CHANDER SMT.K.A.SANJEETHA RESPONDENT(S): ---------------------------- 1. ASST. PROVIDENT FUND COMMISSIONER , EMPLOYEES' PROVIDENT FUND ORGANIZATION SUB REGIONAL OFFICE, FORT BUILDING, V.K.COMPLEX FORT ROAD, KANNUR - 670 001. 2. INDIAN OIL CORPORATION LIMITED, KOZHIKODE DIVISIONAL OFFICE, IIND FLOOR, P.M.K.TOWERS CIVIL STATION POST, WAYANAD ROAD KOZHIKODE - 673 020 - REPRESENTED BY SALES MANAGER BY DR.ABRAHAM P.MEACHINKARA, SC, EPF ORG. BY SRI.E.K.NANDAKUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17-03-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 13742 of 2011 (P) ## APPENDIX ## EXHIBITS P1TRUE COPY OF THE APPOINTMENT ORDER ISSUED BY R2 TO THE PETITIONER DATED 16.3.09 P2TRUE COPY OF THE NOTICE ISSUED BY R1 DATED 23.6.2010 P3TRUE COPY OF THE COMMUNICATION ISSUED BY R2 TO R1 DATED 16.8.10 P4PHOTOSTAT COPY OF THE COMMUNICATION ISSUED BY PETITIONER TO R1 DATED 23.7.10 P5PHOTOSTAT COPY OF THE ORDER ISSUED BY R1 DATED 8.12.10 P6PHOTOSTAT COPY OF THE COMMUNICATION ISSUED BY R2 TO R1 DATED 24.1.11 P7PHOTOSTAT COPY OF THE ORDER ISSUED BY R1 DATED 18.2.11 P8PHOTOSTAT COPY OF THE ORDER ISSUED BY R1 DATED 16.3.11 //True Copy// P.S. To Judge ## **K.VINOD CHANDRAN, J** - - - - - - - - - - - - - - - - - - - - W.P.(C).No. 13742 of 2011 - - - - - - - - - - - - - - - - Dated 17[th] March, 2015 - - - - - - - - - - - - - - - - - - - - - - - - ## **JUDGMENT** The petitioner is aggrieved with Ext.P5, an order passed under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (EPF & MP Act) for the period 9/2009 to 10/2010. The petitioner is the licensee of a retail petrol bunk which licence has been granted by the 2[nd] respondent and the liability now imposed under Section 7A is with respect to the employees of the said petrol bunk. Admittedly, there are six employees in the said Organization and the minimum required for coverage under the EPF & MP Act, is 20. 2. The petitioner is a licensee of the 1[st] respondent from 16.3.2009 the appointment of which is evidenced by Ext.P1. The Petrol bunk was earlier under the IBP Company Ltd., another **WP(C).13742/11** 2 petroleum Company which has been amalgamated with the Indian Oil Corporation (IOC) w.e.f. 02.05.2007. The petrol bunk when it was under the IBP Company Ltd., was run on a 'Company Owned Company Operated' basis. In such circumstances, the person who was appointed for carrying on the operations voluntarily sought coverage under the EPF & MP Act as per Ext.R1(a) and the same was granted and was continued. 3. Subsequently, IBP itself is said to have discontinued the operations of the Bunk from 01.02.2007. It was thereafter, that the IBP Company Ltd., was amalgamated with the IOC. The IBP Auto services which was a contractor under the IBP continued remittance upto 30.07.2009. Despite the payment, it is the specific contention of the petitioner that, the retail bunk was never operated beyond 01.02.2007. The contractor is said to have paid the **WP(C).13742/11** 3 contributions since there were disputes pending between the said contractor and the IBP Company Ltd., and he was merely attempting to create evidence that the retail bunk was continued even after discontinuance. 4. In any event, the dealership of the petitioner came into effect from 11.03.2009 as is evidenced by Ext.P1. The petitioner is not employing the very same employees of the earlier contractor. Hence, the said establishment is one which was commenced on the dealership being granted and there could be no continuance of the earlier coverage under the EPF & MP Act. 5. The learned Standing Counsel submits that the petitioner had an appellate remedy and even the review filed under Section 7B was delayed. It is also contended that the very same business was carried on. **WP(C).13742/11** 4 6. It is to be noticed that, the establishment itself being one of a dealership as distinguished from a 'Company Owned Company Operated' establishment, would not be covered under the EPF & MP Act. The mere fact that the same business was continued by a different person would not also enable coverage under the EPF & MP Act since there is no specific provision to that count. It is also not the earlier employer who registered under the EPF & MP Act who transferred the establishment to the petitioner herein. 7. The learned Standing Counsel would contend that even as per the letter of IOC, Ext.P3, on amalgamation, all continuing liabilities are taken over. However, IBP did not seek coverage of the six employees. Even going by the evidence produced by the **WP(C).13742/11** 5 respondent/Organization, it was the contractor who sought coverage. The contractor has admittedly, closed down the establishment. One another person has obtained dealership from the IOC under a licence and is carrying on an establishment where there are less than six employees. It cannot be said that the principle of an establishment once covered not being taken out of coverage by reason of reduction of employees or otherwise, cannot be imported to the facts of the case. Obviously, earlier IBP had been carrying on the same under a contractor as a 'Company Owned Company Operated' retail bunk; while now, the IOC has given the said retail operations on licence to the petitioner herein. 8. True, the petitioner had an Appellate remedy and also did not avail of the review remedy within the time stipulated. However, the **WP(C).13742/11** 6 contention raised herein is with respect to the lack of jurisdiction of the respondent/Organization to proceed with under the Act. The same having been found to be sustainable, this Court would invoke its jurisdiction under Article 226 of the Constitution of India, as has been stated in **State of H.P v. Gujarat Ambuja Cement Ltd. [STC (2005) 142, Pg.1 ].** Hence, Ext.P5 stands set aside. The writ petition is allowed. Parties are left to suffer their respective costs. SD/- **K.VINOD CHANDRAN Judge** Mrcs //True Copy//