High Court of KeralaSingle Judge2022-10-11Writ petitions allowed; impugned orders quashed...

Lisie Hospital, Ernakulam & M/S Holy Ghost Mission Hospital, Muttuchira, Kottayam v. Employees Provident Fund Organization Sub Regional Office, Kaloor, Cochin; Regional Provident Fund Commissioner, Ernakulam; Assistant Provident Fund Commissioner, Kochi; Registrar Kerala Nurses' and Midwives' Council; and related matters

Case / Petition Number:W.P.(C).Nos.14016/2010 & 14040/2010

Neutral Citation:/

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. V. Kunhikrishnan
Judgment Date: 2022-10-11
Court Decision / Holding: Writ petitions allowed; Exts.P8 and P9 in WP(C).14016/2010 and Ext.P3 in WP(C).14040/2010 are quashed.
Final Disposition: Writ petitions allowed; impugned orders quashed (Exts. P8, P9 in 14016/2010 and Ext.P3 in 14040/2010).

Parties to the Case

Appellants / Petitioners

LISIE HOSPITAL, ERNAKULAM
M/S. HOLY GHOST MISSION HOSPITAL, MUTTUCHIRA, KOTTAYAM

Respondents

Employees Provident Fund Organization Sub Regional Office, BOUSHI NIDI BHAVAN,, KALOOR, COCHIN
Regional Provident Fund Commissioner ERNAKULAM
Assistant Provident Fund Commissioner KOCHI
Registrar Kerala Nurses' and Midwives' Council, RED CROSS ROAD, THIRUVANANTHAPURAM - 695 037

Legal Representation & Advocates

Counsels for Petitioners

• Lisie Hospital, Ernakulam — Sri. K. Anand; Sri. Hussain Koya Valiyaveedakath
• M/S Holy Ghost Mission Hospital — Paul Jacob

Counsels for Respondents

• Sri N. ReghuraJ
• Sri M. Chandra Bose
• Sri S. Gopakumaran Nair
• Sri S. Prasanth (Senior Counsel)

Case Synopsis & Summary

These are two connected writ petitions (W.P.(C).Nos.14016/2010 and 14040/2010) challenging orders of the Employees Provident Fund Organization (EPFO) demanding provident fund contributions from nurses undergoing bond or training programmes. The petitioners contend that such trainees are not “employees” under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, particularly under Section 2(f), as they are apprentices paid stipends during training and have no right or obligation to be employed. They rely on the decision in Sivagiri Sree Narayana Medical Mission Hospital v. Regional Provident Fund Commissioner (2018 (4) KLT 352) and on Apex Court Appeal (Civil) No.978/2000, which held that apprentices engaged under the Apprentices Act or Standing Orders fall outside the definition of employee. The EPFO and its authorities oppose this interpretation, noting pending Division Bench appeals against Sivagiri’s view and citing earlier judgments of this Court (e.g., 2011 and 2017 rulings) supporting the contrary. After considering these authorities, the learned judge, P. V. Kunhikrishnan, J., reasons that the earlier supportive authorities do not bind this case and ultimately quashes the impugned orders (Exts. P8, P9 in 14016/2010 and Ext. P3 in 14040/2010), allowing the petitions. The decision aligns with the broader theory that trainees on stipend are not employees under the EPF Act.

Provisions of Law Cited

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 - Section 2(f)Apprentices ActStanding Orders (as applicable to establishments)

Legal Doctrines & Maxims

Apprentice not an employee under Section 2(f) of the EPF Act; Apprentices engaged under the Apprentices Act or Standing Orders are excluded from the employee definition.
Definition of 'employee' under EPF Act excludes apprentices and trainees when they are under training and not employed.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners submit that nurses undergoing bond training are apprentices who are paid stipends and do not have a right to employment; under Apprentices Act or Standing Orders they are excluded from the definition of 'employee' under Section 2(f) of the EPF Act. They rely on Sivagiri Sree Narayana Medical Mission Hospital v. Regional Provident Fund Commissioner (2018 (4) KLT 352) and Apex Court Appeal No.978/2000 to argue that contributions cannot be demanded from such trainees. They request quashing Ext. P8, Ext. P9 (in 14016/2010) and Ext. P3 (in 14040/2010).

Contentions of Respondents

The EPFO authorities contend Sivagiri’s case is being challenged in the Division Bench and that earlier judgments of this Court (including 2011 and 2017 decisions) validate EPF contributions; they rely on the Apex Court decision in Appeal No.978/2000 which states that apprentices are not employees, and caution that the matter requires a cautious, binding interpretation pending appellate determination.

Cited Precedents (5)

Case Name	Citation	Treatment	Explanation
Sivagiri Sree Narayana Medical Mission Hospital v. Regional Provident Fund Commissioner	2018 (4) KLT 352	Distinguished	Court notes Sivagiri’s view but distinguishes it, stating that the present case requires a different application of the law in light of Apex Court precedent and other decisions.
Appeal (Civil) No.978/2000	Appeal (Civil) No.978/2000	Positive	Apex Court decision cited as supporting the petitioners’ position that trainees are apprentices and not ‘employees’ under Section 2(f) of the EPF Act.
W.P.(C).No.10644/2007	(Judgment dated 29.09.2011)	Positive	Earlier decision in this Court adopting a similar view in recognizing that trainees/ apprentices may not be covered as employees under the EPF Act.
W.P.(C).No.18692/2014	(Judgment dated 07.06.2017)	Positive	Same view as above; court had previously held in similar terms that trainees are not employees for EPF purposes.
OP(LC) No.2/2021	(Judgment dated 04.12.2021)	Mentioned Only	Not considered as binding authority for the present decision; the court notes it did not form the basis of the final outcome.

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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 P.V.KUNHIKRISHNAN TUESDAY, THE 11[TH] DAY OF OCTOBER 2022 / 19TH ASWINA, 1944 ``` ## **`WP(C) NO. 14016 OF 2010`** ## **`PETITIONER:`** ``` LISIE HOSPITAL,ERNAKULAM REPRESENTED BY ITS DIRECTOR, FR.MATHEW MUTTAMTHOTTY. BY ADVS. SRI.K.ANAND SRI.HUSSAIN KOYA VALIYAVEEDAKATH ``` ## **`RESPONDENTS:`** - `1 EMPLOYEES PROVIDENT FUND ORGANIZATION SUB REGIONAL OFFICE, BOUSHI NIDI BHAVAN,, KALOOR, COCHIN.` - `2 REGIONAL PROVIDENT FUND COMMISSIONER ERNAKULAM.` - `3 ASSISTANT PROVIDENT FUND COMMISSIONER KOCHI.` - `4 REGISTRAR KERALA NURSES' AND MIDWIVES' COUNCIL, RED CROSS ROAD, THIRUVANANTHAPURAM - 695 037. BY ADVS.SRI.N.REGHURAJ SRI.M.CHANDRA BOSE SRI.S.GOPAKUMARAN NAIR SR. SRI.S.PRASANTH -SC` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.10.2022, ALONG WITH WP(C).14040/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **WPC.Nos.14016 & 14040 of 2010** **2** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN ``` ``` TUESDAY, THE 11[TH] DAY OF OCTOBER 2022 / 19TH ASWINA, 1944 WP(C) NO. 14040 OF 2010 ``` ## **`PETITIONER:`** ``` M/S.HOLY GHOST MISSION HOSPITAL MUTTUCHIRA, KOTTAYAM, REPRESENTED BY ITS DIRECTOR, FR.MATHEW MADATHIKUNNEL. BY ADV.PAUL JACOB ``` ## **`RESPONDENT/S:`** - `1 EMPLOYEES PROVIDENT FUND ORGANIZATION SUB REGIONAL OFFICE, BOUSHI NIDI BHAVAN,, KALOOR, COCHIN.` - `2 REGIONAL PROVIDENT FUND COMMISSIONER ERNAKULAM.` - `3 ASSISTANT PROVIDENT FUND COMMISSIONER SUB REGIONAL OFFICE, KOTTAYAM.` - `4 REGISTRAR KERALA NURSES' AND MIDWIVES' COUNCIL,, RED CROSS ROAD, THIRUVANANTHAPURAM-695 037. BY ADVS.SRI.N.REGHURAJ SRI.S.PRASANTH, SC SRI.M.CHANDRA BOSE SRI.S.GOPAKUMARAN NAIR SR.` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.10.2022, ALONG WITH WP(C).14016/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **WPC.Nos.14016 & 14040 of 2010** **3** ## **P.V.KUNHIKRISHNAN, J.** **-------------------------------W.P.(C).Nos.14016 & 14040 of 2010 ---------------------------------------------Dated this the 11[th] day of October, 2022** ## **JUDGMENT** These two writ petitions are connected and therefore, I am disposing these two writ petitions by a common judgment. 2. W.P.(C).No.14016/2010 is filed with following ## prayers: - i. Issue a writ of certiorari or other appropriate writ, order or direction, quashing Ext.P8. - ii. Issue a writ of certiorari or other appropriate writ, order or direction, quashing Ext. P3 and Ext.P5. - iii. Issue such other appropriate writ, order or direction that may be deemed to be just and equitable in the facts and circumstances of the case. ## (SIC) 3. W.P.(C).No.14040/2010 is filed with following ## prayers: - i. Issue a writ of certiorari or other appropriate **WPC.Nos.14016 & 14040 of 2010** **4** writ, order or direction, quashing Ext.P3. ii. Issue a writ of certiorari or other appropriate writ, order or direction, quashing Ext.P1. iii. Issue such other appropriate writ, order or direction that may be deemed to be just and equitable in the facts and circumstances of the case. (SIC) 4. The point raised in these writ petitions is that nurses who are undergoing bond training are not liable to contribute to Provident Fund. The petitioners are challenging the orders passed by the Provident Fund Authorities. 5. Heard the learned counsel for the petitioners and the learned Standing Counsel for EPF Organization. I also heard the learned Standing Counsel for the 4[th] respondent. 6. The counsel for the petitioners submitted that the point raised in these writ petitions are covered in favour of the petitioners in **Sivagiri Sree Narayana Medical Mission Hospital v. Regional Provident Fund Commissioner [2018 (4) KLT 352]** and also in the judgment of the Apex Court in Appeal (Civil) No.978/2000. The Standing Counsel for EPF Organization submitted that **Sivagiri Sree Narayana Medical Mission Hospital’s case** (supra) is challenged **WPC.Nos.14016 & 14040 of 2010** **5** before the Division Bench and the appeal is pending. The Standing Counsel also submitted that another learned Single Judge of this Court, in judgment dated 04.12.2021 in OP(LC) No.2/2021, has taken a different view. 7. After perusal of the judgment in **Sivagiri Sree Narayana Medical Mission Hospital’s case** (supra) and the judgment of the Apex Court in Appeal (Civil) No.978/2000, I think nothing survives in these cases and the writ petitions are to be allowed. Relevant portion of the judgment of the Apex Court in Appeal (Civil) No.978/2000 is extracted hereunder: “In the case at hand, trainees were paid stipend during the period of training. They had no right to employment, nor any obligation to accept any employment, if offered by the employer. Therefore, the trainees were 'apprentices' engaged under the 'Standing Orders' of the establishment. Above being the position, it cannot be said that the concerned 45 trainees were employee in terms of Section 2(f) of the Act. In other words, an apprentice engaged under the Apprentices Act or under the Standing Orders is excluded from the definition of an 'employee' as per Section 2(f) of the Act. **WPC.Nos.14016 & 14040 of 2010** **6** That being so, the view of the learned Single Judge as affirmed by the Division Bench of the High Court cannot be faulted.” 8. Moreover, in the judgment dated 29.09.2011 in WP(C). No.10644/2007 and in the judgment dated 07.06.2017 in W.P.(C). No.18692/2014 also, the same view was taken by this Court. The judgment produced by the Standing Counsel for the EPF Organization in OP(LC) No.2/2021 is not a judgment after considering the judgment of the Apex Court and the judgment in **Sivagiri Sree Narayana Medical Mission Hospital’s case** (supra). In the light of the above submissions, I think the impugned orders are to be quashed. Therefore, these writ petitions are allowed. Exts.P8 and P9 in W.P.(C).No.14016/2010 and Ext.P3 in W.P.(C). No.14040/2010 are quashed. sd/- **P.V.KUNHIKRISHNAN JUDGE** JV **WPC.Nos.14016 & 14040 of 2010** **7** ## **`APPENDIX OF WP(C) 14016/2010`** - `PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE CERTIFICATE ISSUED BY THE TAHASILDAR, ERNAKULAM.` - `EXHIBIT P2 TRUE COPY OF THE ORDER ISSUED BY THE KERALA NURSES AND MIDWIFE COUNCIL DATED 8-4-1997` - `EXHIBIT P3 TRUE COPY OF THE ORDER DATED 24-092003 ISSUED BY THE 2ND RESPONDENT.` - `EXHIBIT P4 TRUE COPY OF THE MEMO OF APPEAL ALONG WITH THE COPY OF THE POSTAL RECEIPT DATED 3-4-2004` - `EXHIBIT P5 TRUE COPY OF THE ORDER DATED 22-4-2004 ISSUED BY THE 3RD RESPONDENT.` - `EXHIBIT P6 TRUE COPY OF THE JUDGMENT DTD.31-05-05 IN w.a.no.2148/04 on the files of this Hon'ble court.` - `EXHIBIT P7 TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE 3RD RESPONDENT` - `EXHIBIT P8 TRUE COPY OF THE ORDER DTD. 12-04-2010 IN ATA NO.239(7) 2004 ON THE FILES OF THE EMPLOYEES PROVIDENT FUND APPELLATE AUTHORITY` - `EXHIBIT P9 TRUE COPY OF THE NOTICE NO.KR/KCH/0003278/000/ENF 503/DAMAGES DATED 19.03.2014` ``` RESPONDENT EXHIBITS ``` ``` EXHIBIT R2 (A)TRUE COPY OF DAILY ORDER OF ENQUIRY HELD ON 19-2-2004 EXHIBIT R2 (B)TRUE COPY OF JUDGMENT IN WP(C) 14398/04 DATED 2-11-04 ``` **WPC.Nos.14016 & 14040 of 2010** **8** ## **`APPENDIX OF WP(C)14040/2010`** ``` PETITIONER EXHIBITS EXHIBIT P1COPY OF THE ORDER DATED 19.03.2009 NO.KR/KTM/3319/ENF.i(1)/2009 EXHIBIT P2COPY OF THE MEMORANDUM OF APPEAL DATED 14.04.2009 FILED BEFORE TEH EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL ALONG WITH ALL DOCUMENTS EXHIBIT P3TRUE COPY OF THE ORDER DTD. 06-04-2010 IN ATA NO.203(7) 2009 ON THE FILES OF THE EMPLOYEES PROVIDENT FUND APPELLATE AUTHORITY ```