M/S.VENUS BAKERY BELLARD ROAD, KANNUR (Petitioner) v. Assistant Provident Fund Commissioner, Employees Provident Fund Organization; EPFO Appellate Tribunal; Recovery Officer, EPFO (Respondents)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** ## **THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P. FRIDAY, THE 2[ND] DAY OF SEPTEMBER 2022 / 11TH BHADRA, 1944 WP(C) NO. 18922 OF 2011** ## **PETITIONER:** M/S.VENUS BAKERY BELLARD ROAD, KANNUR,, REP. BY ITS MANAGING PARTNER,, SMT.P.K.SARASWATHY. BY ADVS. SRI.C.ANIL KUMAR SMT.A.K.PREETHA ## **RESPONDENTS:** 1 THE ASSISTANT PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION,, SUB REGIONAL OFFICE, V.K.COMPLEX,, FORT ROAD, KANNUR-1. 2 THE EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL, (MINISTRY OF LABOUR AND EMPLOYMENT),, CORE-2, 4TH FLOOR, SCOPE MINAR DISTRICT CENTRE,, NEW DELHI-110092, REP. BY ITS REGISTRAR. 3 THE RECOVERY OFFICER EMPLOYEES PROVIDENT FUND ORGANISATION,, SUB REGIONAL OFFICE, KANNUR-670002. BY SRI.K.C.SANTHOSH KUMAR, SC, EMPLOYEES PROVIDENT FUND ORGANISATION THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 18922 of 2011 2 ## **MOHAMMED NIAS. C.P.,J** - - - - - - - - - - - - - - - - - - - - - - - - WP(C).No. 18922 of 2011 - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 2[nd] day of September, 2022 ## **JUDGMENT** Exts.P1 and P3 orders covering the petitioner establishment under the purview of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, (for short 'the Act') are under challenge in this writ petition. The petitioner is stated to be a partnership firm carrying on business in the name M/s.Venus Bakery' as per the first deed of partnership of 26[th] October 1983. The firm had seven partners who were all the legal heirs of late Sri.U.Kumaran, who was originally conducting the bakery business as a sole proprietor. It is stated that there are two sales depots where the finished bakery products are sold. It is the further allegation that the petitioner is employing six employees and one employee each in the sales depot mentioned above. During the festival season, casual/temporary/daily rates workers are taken for doing the work in addition to the permanent workers. Pursuant to an inspection on 6.11.2003 by the Enforcement Inspectors under the Act, a list of workers was prepared and proceedings were initiated under Section 7A of the Act against the petitioner. It is the specific case of the petitioner that they do not engage more than twenty workers at any time and therefore the provisions of the Act will not apply to them. It WP(C).No. 18922 of 2011 3 is also urged that proper accounts under the various enactments were also maintained. An order Section 7A was passed on 8.2.2006 against which the petitioner preferred statutory appeal before the second respondent-Tribunal. It is submitted that though detailed argument note was submitted at the time of hearing of the appeal and documents produced to substantiate their case, the appellate authority did not consider the arguments made and had clubbed all the separate establishments as one on the ground of functional integrity. 2. The learned counsel for the petitioner, Smt.A.K.Preetha argues that there are contradictory findings entered in as much as the Tribunal found that the case of the petitioner is that all the establishments were owned by one family and has 34 employees and therefore they were rightly covered under the Act while noticing the contention of the petitioner that all the establishments are separate and there is no relationship between them and its staff strength of the petitioner never reached 20. The petitioner alleges that the said findings are without appreciating the arguments made on behalf of the petitioner. 3. The learned standing counsel for the Employees Provident Fund Organization, Sri.K.C.Santhosh Kumar argues that the impugned orders cannot be faulted as the petitioner had not produced the relevant documents. Though the petitioner contended WP(C).No. 18922 of 2011 4 that other establishments are owned by the partners individually or collectively in different names and different premises engaging other workers, the petitioner has not produced the copies of the partnership deed or the relevant registers of the other establishments. The report from Enforcement Inspectors clearly showed that the petitioner's establishment was having more than 20 employees and in the absence of the petitioner producing the accurate books of account, wage registers and muster rolls reflecting the actual employment strength of the establishments, the conclusion drawn in Exts.P1 and P3 orders cannot be faulted. It is also his arguments that it is immaterial whether the employees are permanently or daily rated wage workers and only criteria is whether these employees are engaged in or in connection with the work of the establishments and they are getting their wages from the establishments and since all these conditions are satisfied the orders impugned are only to be sustained. The factual findings entered in Ext.P1 cannot be said to be wrong and no indulgence can be shown to the petitioner as they failed to produce the documents sought for by the respondents. 4. After hearing the learned counsel for the petitioner and the learned standing counsel for the respondents, I find that the relevant records were not before the authorities while passing the orders impugned. The petitioner has not produced the documents to substantiate their contention that the actual strength of the WP(C).No. 18922 of 2011 5 employees is less than 20 or that there is no commonality between the other establishments and that all of them are to be treated as separate units. 5. The learned counsel for the petitioner argued on the basis of the judgment in **Assistant Provident Fund Commissioner, Kottayam v. K.M.Eapen and others** [2017 (5) KHC 892] that the test of functional integrity has not been applied property. These are all matters which could have been proved by producing the documents which would show whether there has been an integrity functional or otherwise between the separate establishments. In the instant case in the light of the specific contention taken by the writ petitioner that the petitioner is a separate legal entity as a partnership firm and that its business is unconnected with other establishments in which the partners of the partnership firm are interested as partners or otherwise and that the petitioner is separately assessed to sales tax and income tax with a separate and distinct liability and there is no clubbing of the separate establishments as one single establishment, I feel that a chance must be given to the petitioner to substantiate their case by producing all the relevant documents. In that view of the matter without any expression of merits I set aside Ext.P3 order and direct the second respondent to consider the appeal afresh, in accordance with law, after giving a reasonable opportunity to the petitioner to produce the relevant documents to substantiate their contentions. It is made clear WP(C).No. 18922 of 2011 6 that the petitioner will have to produce all the relevant documents to substantiate their case and no further opportunity would be granted to them. The second respondent-Tribunal will pass fresh order on the appeal as aforesaid within an outer limit of five months from the date of receipt of a copy of this judgment. The parties will appear before the Tribunal on 11.10.2022. The writ petition is disposed as above. Sd/- **MOHAMMED NIAS. C.P.,JUDGE** dlk 14.9.2022 WP(C).No. 18922 of 2011 7 ## **APPENDIX OF WP(C) 18922/2011** ## **PETITIONER'S EXHIBITS** Exhibit P1 TRUE COPY OF ORDER NO.KR/KNR/18233/ENF.1(2)/2005-06/3546 DATED 08.02.2006 ISSUED BY THE 1ST RESPONDENT. Exhibit P2 TRUE COPY OF THE MEMORANDUM OF APPEAL IN APPENDIX FORM-1 ALONG WITH AFFIDAVIT AND PETITION FOR WAIVER OF PRE-DEPOSIT AND STAY DATED 08.04.2006 FILED BY THE PETITIONER BEFORE THE SECOND RESPONDENT. Exhibit P3 TRUE COPY OF ORDER IN ATA NO.274(7)/2006 DATED 19.01.2011 PASSED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE NOTE DATED 19.01.2011 SUBMITTED ALONG WITH THE ENCLOSURES THERE TO SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT AT THE TIME OF HEARING. Exhibit P5 TRUE COPY OF JUDGEMENT DATED 7TH FEBRUARY, 2011 IN WRIT PETITION NO.70 OF 2011 OF THE HIGH COURT OF BOMBAY. ## **RESPONDENTS EXHIBITS** Exhibit R1A TRUE COPY OF THE LETTER DATED 26.11.2003 ISSUED BY THE IST RESPONDENT. Exhibit R1B TRUE COPY OF THE LETTER DATED 10.12.2003 ISSUED BY THE IST RESPONDENT. Exhibit R1C TRUE COPY OF THE COMMUNICATION DATED 10.02.2004 WITH ENCLOSURES SUBMITTED BY THE SQUAD OF ENFORCEMENT OFFICERS. Exhibit R1D TRUE COPY OF THE MAHAZAR DATED 19.11.2003 SUBMITTED BY THE SQUAD OF ENFORCEMENT OFFICERS Exhibit R1E TRUE COPY OF THE COVERAGE LETTER DATED 13.02.2004 ISSUED BY THE IST RESPONDENT. WP(C).No. 18922 of 2011 8 |Exhibit R1F|TRUE COPY OF THE IDENTITY CARD ISSUED BY| |---|---| ||HEALTH OFFICER KANNUR MUNICIPALITY TO| ||MR.VISHWA MOHANAN| |Exhibit R1G|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.V.RAVINDRAN| |Exhibit R1H|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.MANATTU NANU| |Exhibit R1I|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION K.P.GANGADHARAN| |Exhibit R1J|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.SURESH BABU| |Exhibit R1K|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.K.P.RADHAKRISHNAN| |Exhibit R1L|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.SRI.SURESH| |Exhibit R1M|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.RAJESH.P.K.| |Exhibit R1N|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.PRAMOD.K.| |Exhibit R1O|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.VIJAYAKUMAR| |Exhibit R1P|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.K.RAGHAVAN| |Exhibit R1Q|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.LAKSHMANAN| |Exhibit R1R|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.BHARATHAN| |Exhibit R1S|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.M.JITHESH| |Exhibit R1T|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.DASAN| |Exhibit R1U|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.AJITHAN| |Exhibit R1V|TRUE COPY OF THE EVIDENCE AND CROSS| ||EXAMINATION SRI.RAMAKRISHNAN| WP(C).No. 18922 of 2011 9 Exhibit R1W TRUE COPY OF THE EVIDENCE AND CROSS EXAMINATION SRI.VISWAMOHAN Exhibit R1X TRUE COPY OF THE EVIDENCE AND CROSS EXAMINATION SRI.MUNEER Exhibit R1Y TRUE COPY OF THE EVIDENCE AND CROSS EXAMINATION SRI.LATHEESH Exhibit R1Z TRUE COPY OF THE LETTER DATED 06.02.2004 ISSUED BY THE SECRETARY, KANNUR MUNICIPALITY