The Mattachery Mahajenic Co-Operative Urban Bank Ltd v Union of India and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR MONDAY, THE 4TH DAY OF AUGUST 2014/13TH SRAVANA, 1936 WP(C).No. 31302 of 2013 (K) ---------------------------- PETITIONER: ---------- THE MATTACHERY MAHAJENIC CO-OPERATIVE URBAN BANK LTD NO. 665, PALLARKAVU ROAD, MATTANCHERY, KOCHI 682 002 REPRESENTED BY ITS GENERAL MANAGER SRI.E.B.RADHAKRISHNAN, S/O.BHASKARAN NAIR AGED 54 YEARS, NOW RESIDING AT HOUSE NO.XII/264, PANDIKKUDY, KOCHI 682 002, ERNAKULAM DISTRICT. BY ADVS.SRI.N.HARIDAS SRI.ANTONY MATHEW SMT.RENJITHA PETER RESPONDENT: ----------- 1. UNION OF INDIA REPRESENTED BY ITS PRINCIPAL SECRETARY FINANCE GOVERNMENT OF INDIA, NEW DELHI 110 001. 2. THE ASSISTANT PROVIDENT COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANIZATION SUB REGIONAL OFFICE, 36/685A, BHAVISHYANIDHI BHAVAN P.B NO. 1895, KALOOR, ERNAKULAM DISTRICT KOCHI 682 017. 3. ERNAKULAM DISTRICT SECURITY GUARDS SAHAKARANA SANGHAM LTD NO.1117 CC XXIII/1974, PALLURUTHY, KOCHI 682 006 ERNAKULAM DISTRICT, REPRESENTED BY ITS SECRETARY. R1 TO R2 BY ADVS. DR.S.GOPAKUMARAN NAIR (SR.) SRI.A.RAJASIMHAN,SC,EPF ORGANISATION R1TO R3 BY ADV. SRI.M.N.SASIDHARAN R1 BY ADVS. SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL SRI.P.PARAMESWARAN NAIR,ASG OF INDIA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 31302 of 2013 (K) ---------------------------- ## APPENDIX PETITIONER'S EXHIBITS: --------------------- EXHIBIT P1 - COPY OF THE AGREEMENT DATED 1.4.11 EXECUTED BETWEEN THE PETITIONER AND THE 3RD RESPONDENT. EXHIBIT P2 - COPY OF THE LETTER BEARING NO.KR/KC/13038/ENF.1 (1)/ 2011 DATED 21.3.11 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P3 - COPY OF THE WRITTEN STATEMENT DATED 10.6.11 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P4 - COPY OF THE DETERMINATION ORDER NO.KR/KC 15058/ENF 1(1) 2011/3598 DATED 4.7.11 OF THE 2ND RESPONDENT. EXHIBIT P5 - COPY OF THE APPEAL MEMORANDUM DATED 28.7.11 FILED BY THE PETITIONER BEFORE THE EMPLOYEES' PROVIDENT FUND APPELLATE TRIBUNAL, NEW DELHI. EXHIBIT P6 - COPY OF THE ORDER DATED 17.5.13 PASSED BY EMPLOYEES' PROVIDENT FUND APPELLATE TRIBUNAL, NEW DELHI WHICH WAS SEND TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P6(A)- COPY OF THE COVERING LETTER DATED 1.10.13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. RESPONDENTS' EXHIBITS: --------------------- R2(a) - TRUE COPY OF EPT ACT ORDER DATED 18/01/2011. //TRUE COPY// P.A. TO JUDGE ## **P.B.SURESH KUMAR, J.** ## **-----------------------------------------------** **W.P.(C).No.31302 of 2013 ----------------------------------------------Dated this the 4[th] day of August, 2014** ## **J U D G M E N T** Petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act and engaged in banking business. An Inspector designated under Section 13 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, hereinafter referred to as “the Act”, visited the establishment of the petitioner and reported to the second respondent that the petitioner has not enrolled the Security Guards employed by them through contractors, as members of the Fund and thereby committed default in remitting contributions in respect of the said employees. Pursuant to the said report, proceedings under Section 7A of the W.P(C) No. 31302 of 2013 2 Act was initiated against the petitioner. On receipt of the summons from the second respondent, the petitioner appeared and contended that the Security Guards employed by the Society are not working in connection with the work of the establishment and therefore, not liable to be enrolled as members of the Fund. It was also contended by the petitioner that they are availing the service of the third respondent Cooperative Society in the matter of engaging the Security Guards and therefore, the liability in respect of the security guards are to be borne by the said Society. 2. The second respondent has considered the contentions of the petitioner and passed Ext.P4 order holding that the Security Guards employed by the petitioner through the contractor are working in connection with the establishment of the petitioner and therefore, they are entitled to be enrolled as members of the Fund. Ext.P4 order was challenged by the petitioner before the Employees' Provident Fund W.P(C) No. 31302 of 2013 3 Appellate Tribunal and the Tribunal, on an elaborate consideration of the contentions raised by the petitioner, confirmed Ext.P4 order, by Ext.P6 order. 3. Even though, it is stated in the writ petition that both Exts.P4 and P6 are bad in law, there is no prayer in the writ petition to quash Ext.P6 order. The prayer in the writ petition is only to quash Ext.P4 order, which is merged in Ext.P6 order. Nevertheless, I propose to decide the contentions raised in the writ petition. 4. The learned counsel for the petitioner, relying on Section 16(1) (a) of the Act contended that the establishment of the petitioner being a Co-operative Society employing less than 50 persons and working without the aid of power, the provisions of the Act would not apply to them and Exts.P4 and P6 orders are, therefore, without jurisdiction. It was also contended by the learned counsel, relying on the definition of 'employee' in Section 2(f) of the Act, that W.P(C) No. 31302 of 2013 4 the Security Guards are not employed in connection with the work of the establishment of the petitioner and therefore, they are not entitled to be enrolled as members of the Fund. It was further contended by the learned counsel that in so for as the third respondent Society is providing services of Security Guards to the petitioner, the petitioner has no liability to pay contributions in respect of the said employees. 5. The contention that the petitioner is a Cooperative Society employing less than 50 persons and working without the aid of power and therefore, the provisions of the Act would not apply to them, is not a contention raised before the second respondent in the proceedings under Section 7A of the Act or before the Tribunal. The said contention is not seen raised in the writ petition also by incorporating the necessary averments as to the number of persons employed in the establishment of the petitioner. This being a contention to be raised after pleading the requisite W.P(C) No. 31302 of 2013 5 facts, the same cannot be raised in the writ petition, without the factual basis in the pleadings, especially when the said contention was not raised before the authorities below. 6. The contention that the Security Guards are not persons employed in connection with the establishment is also without substance. It is now settled that the ‘employee’ defined under the Act would include employees engaged in an establishment for watch and ward etc. (See **Delhi Cloth and General Mills Company Ltd. v. Regional Provident Fund Commissioner, Uttar Pradesh** (1961(2) LLJ 444)). 7. The contention that the Security Guards are employees of the third respondent Society and therefore, the liability to make contributions in respect of the said employees is on the third respondent, is also without any substance. Section 8A of the Act categorically provides that the amount of contribution payable by an employer in respect of an employee W.P(C) No. 31302 of 2013 6 engaged through a contractor may be recovered by such employer from the contractor and the contractor from whom amounts are recovered may, in turn recover from such employee, the employee's contribution. The said provision makes the position abundantly clear that even employees engaged through contractors are also liable to be enrolled as members of the Fund and contribution in respect of the same shall be paid. For the reasons stated above, the writ petition is devoid of any merit and it is, accordingly, dismissed. Sd/- **P.B.SURESH KUMAR, JUDGE** smv