The Trivandrum Medical College Hospital Development Society v Regional Provident Fund Commissioner, Pattom, Thiruvananthapuram, Kerala & Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 4TH NOVEMBER 2008 / 13TH KARTHIKA 1930 OP.No. 7464 of 2000(L) ---------------------- PETITIONER(S): - --------------- 1. THE TRIVANDRUM MEDICAL COLLEGE HOSPITAL DEVELOPMENT SOCIETY, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM, REP. BY ITS SECRETARY, THE SUPERINTENDENT, TRIVANDRUM MEDICAL COLLEGE, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM. 2. THE SECRETARY, THE TRIVANDRUM MEDICAL COLLEGE HOSPITAL DEVELOPMENT SOCIETY, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM (THE SUPERINTENDENT, TRIVANDRUM MEDICAL COLLEGE) BY ADV. SRI.GOPAKUMAR R.THALIYAL RESPONDENT(S): - --------------- 1. THE REGIONAL PROVIDENT FUND COMMISSIONER, PATTOM, TRIVANDRUM, KERALA. 2. THE STATE TREASURER, KERALA GOVERNMENT HOSPITAL DEVELOPMENT SOCIETY/COMMITTEE, EMPLOYEES' UNION, MEDICAL COLLEGE P.O., TRIVANDRUM. 3. THE UNION OF INDIA, REP. BY THE SECRETARY TO GOVERNMENT, LABOUR, CENTRAL SECRETARIAT, NEW DELHI. 4. THE STATE OF KERALA, REP. BY ITS CHIEF SECRETARY, GOVT. SECRETARIAT, THIRUVANANTHAPURAM. 5. KERALA HOSPITAL COMMUNITY PHARMACY EMPLOYEES ASSOCIATION, REP. BY GENERAL SECRETARY, SHISHI PALAKURY, REG. NO. 01-27/2000, PAYING COUNTER, MEDICAL COLLEGE, TRIVANDRUM. R5 IS IMPLEADED AS PER ORDER IN I.A. NO. 7501/2004 DT. 29-6-2004. ADV. SRI.N.N.SUGUNAPALAN (SR.) FOR R1 SRI.P.K.RAMKUMAR, ADDL.CGSC FOR R3 SRI.BLAZE K.JOSE FOR R2 SRI.JOE JOSEPH KOCHIKUNNEL FOR R2 GOVERNMENT PLEADER SMT. K.R. DEEPA SRI.S.D.ASOKAN FOR ADDL.R5 SRI. AJITH KRISHNAN, ADDL.CGSC FOR R3 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 15/10/2008, ALONG WITH OP NO. 4616 OF 2002 THE COURT ON 04/11/2008, DELIVERED THE FOLLOWING: PETITIONERS' EXHIBITS: O.P.NO. 7464/2000. ---------------------------------------------------------------EXT.P1 TRUE COPY OF ORDER DT. 8-4-1997. EXT.P2 ORDER DT. 2-6-1997. EXT.P3 TRUE COPY OF ORDERS AND CIRCULARS. EXT.P4 GOVT. ORDER DT. 23-5-1997. EXT.P5 LETTER DT. 23-4-1998. EXT.P6 OBJECTION DT. 5-5-1998. EXT.P7 ORDER DT. 12-2-1999. EXT.P8 ORDER DT. 4-10-1999. EXT.P9 NOTIFICATION DT. 17-9-1964. EXT.P10 NOTIFICATION DT. 17-5-1971. EXT.P11 NOTIFICATION DT. 17-5-1991. RESPONDENTS' EXHIBITS: -------------------------------------EXT.R1(a) GOVT. ORDER DT. 6-3-1998. EXT.R1(b) ORDER DT. 4-10-1999. EXT.R2(a) TRUE COPY OF REPORT. EXT.R2(b) STAFF DETAILS ISSUED BY THE SECRETARY OF THE SOCIETY. EXT.R2(c) GOVT. ORDER DT. 6-3-1998. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. Nos. 7464/2000 & 4616/2002 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 4[th] November, 2008. **==> picture [102 x 12] intentionally omitted <==** These original petitions are filed by two identical Societies owned by the Government of Kerala, registered under the TravancoreCochin Literary, Scientific and Charitable Societies Registration Act, challenging orders of the original and appellate authorities under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, by which these Societies were held to be liable to be covered under the said Act, as establishments rendering expert services of supplying personnel. 2. For the development of the Medical College hospitals, District hospitals and Taluk hospitals, Hospital Advisory Committees consisting of members nominated by the Government of Kerala from the public at large and representatives of the staff had been in existence in the State for a long time. The Government found that these committees were functionally ineffective and seldom used to meet. No constructive developmental activities were taken by them. Hence, the Government replaced these committees by Hospital Welfare and Advisory Committees. A High Power Committee headed by Dr. K.N. Pai recommended that people's involvement can be achieved only by democratically constituted bodies and envisaged the concept of Hospital Development Committees in the place of Hospital Welfare and Advisory Committees. The recommendations of the said High Power Committee were accepted by the Government and with the object of keeping constant vigil on the working of the hospitals concerned, to render whatever assistance is necessary by way of voluntary service or financial contribution so as to meet exigencies, to ensure steady development of the institution and to take up certain responsibilities for the better functioning and improvement of the institution, by G.O. (Ms) 26/83/HD dated 29-1-1983, the Government O.P Nos. 7464/00 & 4616/02 -: 2 :- framed rules and procedure relating to the Constitution and working of Hospital Development Committees. These committees consisted of official and non-official members headed by the District Collector nominated by the Government. The rights and responsibilities of the committee were defined thus: “(C) Rights and responsibilities of the Committee. (a) To find out defects; if any, in the amenities and functioning of the institutions and devise ways of remedying them. (b) To strive to maintain orderliness and cleanliness in the institutions and their surroundings. (c) To assess monetary requirements for improvements and organise ways and means to collect funds. (d) To exercise proper control and keep up vigilance in preventing malpractices. (e) To help organise Health Education and Mass Medical Campaigns. (f) To organise voluntary Blood Banks and Drugs Banks, public comfort stations and by-standers dormitories. (g) To run canteens and medical shops to provide supplies at fair prices. (h) To initiate welfare and development activities and to mobilise donations from individuals/voluntary organisations. (i) To maintain social discipline in hospitals. (j) To take up construction and repair works not exceeding Rs.10,000 and supply of diet. Note:- Regarding the details and conditions of construction works and supply of dies separate orders will be issued.” Later, these committees of various Medical College hospitals were registered as Societies under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act. The petitioners are the Hospital Development Societies for Trivandrum and Kottayam O.P Nos. 7464/00 & 4616/02 -: 3 :- Medical College Hospitals. These Societies are looking after the security of the hospitals by employing security personnel also apart from rendering other services as contemplated in the Government Order for the development of the Medical College Hospitals. 3. The concerned Regional Provident Fund Commissioner initiated proceedings under Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 against the petitioners on the ground that by virtue of Notification No. 731 dated 17-5-1971 and GSR No. 805 dated 17-5-1971, the petitioners are liable to be covered under the Act. Despite objections raised by the petitioners, the concerned Regional Provident Fund Commissioners passed orders under Section 7A, holding that the petitioners are liable to be covered under the Act, which are produced as Ext. P7 in both original petitions. Appeals filed by the petitioner in O.P.No. 7464/2000 before the Employees Provident Fund Appellate Tribunal were dismissed by Ext. P8 order. They are challenging Exts. P7 and P8 orders in their original petition. The petitioner in O.P.No. 4616/2002 challenges the order of the Provident Fund Commissioner directly, without availing of the appellate remedy since at the relevant time, the office of the presiding officer of the Tribunal was remaining vacant. Since both the original petitions raise the same issue, these two original petitions are heard together and disposed of by this common judgment. 4. The first issue to be considered in these original petitions is as to whether the petitioners are liable to be covered under the Act by virtue of any of the notifications issued under Section 1(3)(b) of the Act, since it is the admitted case of all, that but for such notification the petitioners' establishment is not liable to be covered under the Act. Three notifications are referred to by the respondents O.P Nos. 7464/00 & 4616/02 -: 4 :- in support of their case of which Notification No. GSR 731 dated 175-1971 is a notification amending the Employees Provident Fund Scheme, 1952 itself adding the following sub-clause in clause (b) of sub-paragraph of paragraph 1: “(lxvii) as respects establishment rendering expert service come into force on the 31[st] day of May 1971.” In fact, this is only prescribing the date of enforcement of the basic notification under Section 1(3)(b) of the Act, namely, GSR No. 805 dated 17-5-1971 which is produced as Ext. P11 in O.P.No. 7464/2000 and reads thus: “G.S.R. 805:- In exercise of the powers conferred by clause (b) of sub-section (3) of section 1 of the Employees' Provident Funds and Family Pension Fund Act, 1952 (19 of 1952), the Central Government hereby specifies that with effect from the 31[st] May, 1971, the said Act, shall apply to every establishment rendering expert services such as supplying of personnel, advice on domestic or departmental enquiries, special services in rectifying pilferage, thefts and pay roll irregularities to factories and establishments on certain terms and conditions as may be agreed upon between the establishment and the establishment rendering expert services, and employing twenty or more persons.” (Emp hasis supplied) In Ext. P5 notice issued to the petitioner in O.P. No. 7464/2000 another notification also is referred to which is G.S.R.No. 1398 dated 17-9-1964 which is produced as Ext. P9 which reads thus: “G.S.R. 1398:- In exercise of powers conferred by clause (b) of sub-section (3) of section 1 of the Employees' Provident Funds Act, 1952 (19 of 1952), the Central Government hereby specifies every establishment of-- (i) attorneys, as defined in the Advocates Act, 1961 (25 of 1961), (ii) chartered or registered accountants, as defined in the Chartered Accountants Act, 1949 (38 of 1949), (iii) cost and works accountants within the meaning of the O.P Nos. 7464/00 & 4616/02 -: 5 :- Cost and Works accountants Act, 1959 (23 of 1959), (iv) engineers and engineering contractors, not being exclusively engaged in building and construction industry. (v) architects, (vi) medical practitioners and medical specialists, in which twenty or more persons are employed, as the establishment to which the said Act shall apply with effect from the 31[st] day of October, 1964.” (Emphasis supplied) 5. I shall first deal with the applicability of GSR Nos. 805 and 731 since they deal with the same subject. What is argued before me is that by virtue of these notifications, the Act becomes applicable to “every establishment rendering expert services such as supplying personnel, advice on domestic or departmental enquiries, special services in rectifying pilferage, thefts and pay roll irregularities on certain terms and conditions as may be agreed upon between the establishment and the establishment rendering expert services” which the petitioners' establishments are. The argument is that by supplying security personnel to the Medical Colleges, the petitioners are rendering expert services of supplying of personnel to the Medical Colleges. The notifications essentially postulate the following ingredients for applicability of the notifications viz. (a) The establishment is capable of rendering expert services of supplying personnel to other establishments. (b) Such establishment is engaged in the business of supplying personnel to other establishments. (c) The supply should be on certain terms and conditions agreed upon between the two establishments, meaning thereby that the supply should be as per an agreement executed for that purpose. 6. I am not at all satisfied that any of these ingredients are O.P Nos. 7464/00 & 4616/02 -: 6 :- satisfied in the two cases before me. The two hospitals are owned by the Government of Kerala. The Government constituted the petitioners “as bodies which would keep constant vigil on the working of the hospitals and rendering whatever assistance is necessary by way of voluntary service or financial contributions so as to meet exigencies and to ensure steady development of the hospitals,” as is clear from the Government order, Ext. P1 in O.P.No. 4616/2002. As such, there is no supply of personnel either as expert services or otherwise in this case. As directed by the Government, the petitioners themselves have taken upon themselves and are performing the duties expected of them by the Government by employing employees paying salary by themselves. There is no agreement between the hospitals and the petitioners for rendering expert services of supply of personnel. There is no request from the hospitals for any expert service of supply of personnel pursuant to which personnel are supplied and a corresponding obligation to pay for such service. The petitioners are also not engaged in the business of rendering expert services or supplying personnel of any kind. They are on their own performing certain duties and functions entrusted to them by the Government by employing their own employees. Therefore, the petitioners are not establishments which are offering expert services to anybody on contract. The petitioners do not also have any personnel with them who are experts in their field as such. Any able bodied man can work as a security personnel. No particular qualification or training is called for, for doing duties as security personnel. Therefore, what is provided by the petitioners is not expert service. Further, for coming within the purview of the notifications, the establishment should be engaged in the business of supplying personnel and capable of rendering expert services to other O.P Nos. 7464/00 & 4616/02 -: 7 :- establishments who seek such services. For the same the establishment should have specially qualified or trained personnel who are capable of providing expert services. The respondents have no case that the petitioners have any specially qualified or trained experts in any field, who can be deputed to perform any expert services. The petitioners are also not engaged in the business of supplying personnel to other establishments on demand. Therefore, none of the ingredients of the two notifications referred to above are satisfied so as to bring the petitioners within the purview of “establishments rendering expert services such as supply of personnel which only are covered by the notifications.” As such, the petitioners cannot be sought to be covered under the Act on the basis of notification nos. GSR 805 and GSR 731. 7. The next question is whether the petitioners can be covered under the Act by virtue of GSR 1398 dated 17-9-1964. For application of that notification, the establishment must be of any of the six classes of professionals enumerated therein. For that, the establishment itself should consist of the professionals so enumerated. The contention raised is that the petitioners come within clause (vi) of the notification namely “medical practitioners and medical specialists.” The petitioners are not establishments of medical practitioners or medical specialists although they employ some doctors on contract basis for performing the duties and functions assigned to them by the Government. That does not make the petitioners' establishment one of medical practitioners and medical specialists. The employees' unions who are also respondents in one of the original petitions would raise a contention that since the petitioners are running medical shops and rendering hospital services, they are medical specialists. First of all, running of medical shops and rendering hospital services O.P Nos. 7464/00 & 4616/02 -: 8 :- of pharmacists and lab technicians do not make the petitioners' establishments those of medical specialists. The term 'medical specialists' should be read esjudem generis with the other expressions in the notification. The expression medical specialists essentially means specialist doctors in various branches of medicine as distinct from general medical practitioners. Counsel refers to two decisions of this Court namely, **K.B. Jacob** v. **Regional Commissioner** , 1986 KLT 954 and **E.P.F. Inspector** v. **The Poly Clinic (P) Ltd.** , 1988 (2) KLT 41, both of which have no application to the facts of this case. 8. Another contention raised is that since the petitioners are engaged in running medical shops also, which is a trading and commercial activity, they are liable to be covered under the Act. For that also the petitioners should be establishments coming within Sections 1(3)(a) and 1(3)(b) of the Act. Nobody has any case that the petitioners are factories engaged in any industry specified in Schedule I, and therefore the petitioners are not liable to be covered under Section 1(3)(a) of the Act. The provident Fund Organisation has no case that the petitioners are liable to be covered under any notification issued under Section 1(3)(b) other than the three notifications referred to above, the applicability of which are clearly excluded in view of the above findings. Even otherwise, running of medical shops is only a very minor function of the petitioners based on which other employees not employed in medical shops cannot be covered under the Act. 9. In view of my above findings, I quash the orders impugned in these two original petitions and declare that the petitioners are not establishments liable to be covered under the Employees Provident Funds and Miscellaneous Provisions Act. O.P Nos. 7464/00 & 4616/02 -: 9 :- 10. However, since the Government should be interested in the welfare of the employees employed by the petitioners, it is only appropriate that the Government considers whether the petitioners should voluntarily cover their employees under the Act, since the petitioners are Societies owned by the Government. Therefore, the Secretary to the Government, Health (M) Department, shall consider the question as to whether the petitioners' establishment needs to be voluntarily covered under the Act, after affording an opportunity of being heard to the employees' unions/organisations of the two Societies as expeditiously as possible, at any rate, within three months from the date of receipt of a copy of this judgment. The two original petitions are disposed of as above. Sd/- S. Siri Jagan, Judge. Tds/ O.P Nos. 7464/00 & 4616/02 -: 10 :- S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. Nos. 7464/2000 & 4616/2002 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= J U D G M E N T 4[th] November, 2008.