Sister Mary M.M., Headmistress, St. Mary's School, Puliyarakonam & Fr. Joseph Gnayalloor, Manager, St. Mary's School, Puliyarakonam v. The Assistant Provident Fund Commissioner, EPFO Appellate Tribunal (WP(C) No.11006 of 2011)

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE GOPINATH P.`** ``` THURSDAY, THE 14[TH] DAY OF MARCH 2024 / 24TH PHALGUNA, 1945 ``` ## **`WP(C) NO. 11006 OF 2011`** ## **`PETITIONER/S:`** - **`1 SISTER MARY.M.M HEADMISTRESS ST.MARY'S SCHOOL, PULIYARAKONAM, THIRUVANANTHAPURAM, PIN 695073.`** - **`2 FR.JOSEPH GNAYALLOOR, MANAGER, ST.MARY'S SCHOOL, PULIYARAKONAM, THIRUVANANTHAPURAM, PIN 695073. BY ADVS. SRI.GOPAKUMAR R.THALIYAL SRI.P.R.PRATEESH SRI.M.S.VIJAYACHANDRAN BABU`** ## **`RESPONDENT/S:`** - **`1 THE ASSISTANT PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANIZATION, PATTOM, THIRUVANANTHAPURAM-695004.`** - **`2 EMPLOYEES PROVIDENT FUND APPELLATE TRIBUNAL, NEW DELHI- 110001.`** - **`BY ADVS. NITA.N.S. SRI.N.N. SUGUNAPALAN, SC, P.F.`** ## **`OTHER PRESENT:`** ## **`NITA N.S.-SC`** ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C)No.11006 of 2011 2 ## **J U D G M E N T** The petitioners have approached this Court challenging Ext.P13 order issued in a review petition filed under Section 7B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and Ext.P15 order of the Employees Provident Fund Appellate Tribunal in ATA No.131(7)2007 through which, Ext.P13 order has been affirmed by the Appellate Tribunal. 2. The first petitioner is the Headmistress of the St.Mary’s School, Puliyarakonam, Thiruvananthapurm. The second petitioner is the Manager of the said school. When the number of employees of the school reached the statutory limit of twenty, the employees of the school were covered under the provisions of the EPF Act, 1952 with effect from 01.06.2004 (See Ext.P1). This is not in dispute. Thereafter, proceedings were WP(C)No.11006 of 2011 3 initiated under Section 7A of the EPF Act, 1952 on the premise that the St.Mary’s School was part of the Malankara Syrian Catholic Corporate Educational Agency of the Archdiocese of Thiruvananthapuram, which goes by the name ‘MSC Corporate Management’. In proceedings under Section 7A of the EPF Act, it was concluded that, since the school was part of the aforesaid management, which comprises of several other institutions also, the coverage will commence from June 1993. Accordingly, the contributions payable from June 1993 to May 2004 were determined by Ext.P4 order dated 18.08.2005. The petitioners, therefore, approached the first respondent by filing a review petition under Section 7B of the EPF Act, 1952, which was rejected by Ext.P13 order. The appeal filed against the order rejecting the application for review before the Appellate Tribunal was rejected by Ext.P15 order. It is thus that the petitioners are before this Court. WP(C)No.11006 of 2011 4 3. The learned counsel appearing for the petitioners would submit that, while deciding the review petition under Section 7B of the 1952 Act and the Appellate Tribunal while deciding the appeal against that order did not consider Exts.P6 to P12 documents, which would categorically establish that the St.Mary’s School, Puliyarakonam, Thiruvananthapurm was not part of the MSC Corporate Management. It is submitted that, even the authorities of the MSC Corporate Management had given a certificate stating that the St.Mary’s School is not part of the Corporate Management. It is submitted that the appointing authority insofar as the St.Mary’s School is concerned is the second respondent, who is the Manager and the Parish Priest of the St.Mary’s Church, Puliyarakonam, Thiruvananthapurm. It is submitted that without any just reason or basis and without considering the documents produced, the first respondent had WP(C)No.11006 of 2011 5 mechanically concluded that the St.Mary’s School was part of the MSC Corporate Management and thus shifted the date of coverage from 01.06.2004 to 02.06.1993. It is submitted that the Appellate Tribunal also did not consider the contentions raised in a proper manner and without any basis found that there is managerial control, financial inter-dependency etc. It is submitted that the impugned orders are, therefore, illegal and liable to be set aside. 4. The learned Standing Counsel appearing for the Provident Fund Organization would submit, with reference to the provisions of Section 2A of EPF Act, 1952, that an establishment includes all departments and branches whether situated in a same place or different places. It is submitted that there was substantial material before the authorities to conclude that the St.Mary’s School was part of the MSC Corporate Management, which is running several other WP(C)No.11006 of 2011 6 institutions including schools, colleges etc. It is submitted that, in such circumstances, the coverage of the St.Mary’s School was rightly shifted from from 01.06.2004 to 02.06.1993. It is submitted that, no ground has been made out for interference in the factual findings of the first respondent, as affirmed by the Appellate Tribunal under Article 226 of the Constitution of India. 5. Having heard the learned counsel for the petitioners and the learned Standing Counsel appearing for the Provident Fund Department, I am of the view that Ext.P15 order of the Provident Fund Appellate Tribunal is liable to be set aside. The learned counsel for the petitioners is right in contending that, without considering the effect of Exts.P6 to P12 documents, the Tribunal has mechanically concluded that there is financial inter-dependence and commonality of management over ‘both’ establishments, which are to WP(C)No.11006 of 2011 7 be clubbed with the St.Mary’s School for the purposes of determining that they are part of the same establishment. Which is the other establishment to be clubbed is not even mentioned in either Ext.P13 or in Ext.P15. The test to be applied for determining whether two or more establishments are part of one establishment was recently considered by the Supreme Court in **Mathosri Manikbai Kothari College of Visual Arts (M/s) v. Assistant Provident Fund Commissioner;** [2023 (6) KHC SN 45]. It was held as follows; “10. In Pratap Press's case (supra), this Court referred to the earlier judgment of this Court in Associated Cement Co. v. Workmen, AIR 1960 SC 56, wherein it was opined that it is impossible to lay down any one test as absolute and invariable for all cases to determine the issue regarding clubbing of two establishments for the purpose of coverage under the EPF Act. The real purpose is to find out true relations between the two establishments and finally opine thereon. In one case, 'unity of ownership, management and control' may be an important test whereas in another ‘functional WP(C)No.11006 of 2011 8 integrity' or 'general unity’ may be important. There can also be a case where the test can be of the ‘unity of employment’. Relevant para 5 thereof is extracted below: "5. In Associated Cement Co. v Workmen [AIR 1960 SC 56] this Court had to consider the question whether the employer's defence to a claim for lay - off compensation by the workers of the Chaibasa Cement Works that the laying off was due to a strike in another part of the establishment viz. limestone quarry at Rajanka was good. In other words the question was whether the limestone quarry of Rajanka formed part of the establishment known as the Chaibasa Cement Works within the meaning of S. 25 - E(iii) of the Industrial Disputes Act. While pointing out that it was impossible to lay down any one test as an absolute and invariable test for all cases it observed that the real purpose of these tests would be to find out the true relation between the parts, branches, units etc. This Court however mentioned certain tests which might be useful in deciding whether two units form part of the same establishment. Unity of ownership, unity of management and control, unity of finance and unity of labour, unity of employment and unity of functional "integrity" were the tests which the Court applied in that case. It is obvious there is an essential difference between the question whether the two units form part of one establishment for the purposes of S.25 E(iii) and the question whether they form part of one single industry for the purposes of WP(C)No.11006 of 2011 9 calculation of the surplus profits for distribution of bonus to workmen in one of the units. Some assistance can still nevertheless be obtained from the enumeration of the tests in that case. Of all these tests the most important appears to us to be that of functional "integrity" and the question of unity of finance and employment and of labour. Unity of ownership exists ex hypothesie. Where two units belong to a proprietor there is almost always likelihood also of unity of management. In all such cases therefore the Court has to consider with care how far there is "functional integrity" meaning thereby such functional interdependence that one unit cannot exist conveniently and reasonably without the other and on the further question whether in matters of finance an employment the employer has actually kept the two units distinct or integrated." (emphasis supplied) The test to be applied in such cases as explained by the Supreme Court in the aforesaid case does not appear to have been applied to consider the case of the petitioners. Therefore, I have no hesitation to quash Ext.P15 order of the Appellate Tribunal. Since the Central Government Industrial Tribunal at Ernakulam is WP(C)No.11006 of 2011 10 now functioning as the Appellate Tribunal under the provisions of the EPF Act and exercises of jurisdiction with the State of Kerala it is only appropriate that the appeal namely ATA No.131(7)2007 is now heard and disposed of by the Central Government Industrial Tribunal, Ernakulam. 6. In the light of the above findings, Ext.P15 is quashed. ATA No.131(7)2007 will stand restored to the file of the Central Government Industrial Tribunal, Ernakulam. The said Tribunal shall consider the said appeal in accordance with the law and having regard to the judgment of the Supreme Court in **Mathosri** s case **Manikbai Kothari College of Visual Arts’** (supra) as also to Exts.P6 to P12 documents produced by the petitioners along with this writ petition. The petitioners and the first respondent will enter appearance before the Central Government Industrial Tribunal, Ernakulam at 11.00 on 26.03.2024 through WP(C)No.11006 of 2011 11 their authorized representative along with a copy of this writ petition and a copy of this judgment. The Tribunal shall thereafter consider ATA No.131(7)2007, if necessary by reconstructing the appeal file and it shall dispose of the same in accordance with the law, after affording an opportunity of hearing to the petitioners and to the first respondent. The petitioners shall produce a copy of ATA No.131(7)2007 before the Tribunal for the aforesaid purpose. The writ petition is disposed of as above. Sd/- **GOPINATH P., JUDGE** rkj WP(C)No.11006 of 2011 12 ## **`APPENDIX OF WP(C) 11006/2011`** - **`PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE COVERAGE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 20.07. 2004.`** - **`Exhibit P2 TRUE COPY OF THE LETTER ISSUED BY 1ST RESPONDENT DATED 02.02.2005.`** - **`Exhibit P3 TRUE COPY OF THE SUMMONS ISSUED BY THE 1ST RESPONDENT DATED 23.06.2005.`** - **`Exhibit P4 TRUE COPY OF THE ORDER ISSUED BY THE 1ST RESPONDENT DATED 18.08.2005.`** - **`Exhibit P5 TRUE COPY OF THE REVIEW PETITION FILED BY THE PETITIONERS DATED 04.11.2005.`** - **`Exhibit P6 THE DETAILS OF THE CONSTITUTION OF MSC CORPORATE EDUCATIONAL AGENCY WITH THE LIST OF MSC SCHOOLS.`** - **`Exhibit P7 TRUE COPY OF THE LETTER DATED 25.07.2005.`** - **`Exhibit P8 TRUE COPY OF THE LETTER DATED 26.07.2005.`** - **`Exhibit P9 TRUE COPY OF THE CERTIFICATE DATED 31.10.2005.`** - **`Exhibit P10 TRUE COPY OF THE PROCEEDINGS ISSUED BY THE DEPUTY DIRECTOR OF EDUCATION DATED 31.03.2003.`** - **`Exhibit P11 TRUE COPIES OF THE PROPERTY TAX RECEIPTS DATED 25.06.2005 & 04.07.2005.`** - **`Exhibit P12 TRUE COPY OF THE CERTIFICATE DATED 11.01.2006.`** - **`Exhibit P13 TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 22/01/2007.`** - **`Exhibit P14 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 31.01.2007.`** - **`Exhibit P15 TRUE COPY OF THE ORDER DATED 07.02.2011.`**