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    Writ Petition 21357 of 1995

    Decided On, 27 March 1997

    At, High Court of Karnataka


    For the Appearing Parties: Harikrishna S.Holla, Raj And Reddy, Advocates.

Judgment Text


( 1 ) THE petitioner is an Engineering Company. It has established a club by name 'my Club' having a 'guest House' and a 'garden'. The controversy in this writ petition is whether the employees of this Establishment can be treated as employees of the petitioner-company and be covered by Employees' Provident fund Act. By notice Annexure-A, dated 4-1-1997 the respondent called upon the petitioner to cover these employees also under the Employees' Provident Fund Act and to make contribution. Annexure-B is the reply furnished by the petitioner. It is stated therein that the club is not exclusively for the benefit of the employees of the company and the public may also utilise the facilities available. After considering the respective contentions by the impugned order the respondent held that the employees of My Club, Guest House and Garden are the employees of the petitioner and are covered by the Employees' Provident Fund act and the petitioner is liable to make contribution. This order is impugned herein.

( 2 ) I have heard Mr. Gururajan, learned Counsel for the petitioner as also Mr. Harikrishna S. Holla, learned Counsel for the respondent.

( 3 ) THE main contention of the petitioner was that the Club, Guest House etc. , are not exclusively for the use of the employees but the public are allowed to use the facilities, because it is not meant exclusively for the use of the employees of the petitioner. He relied on the decisions of the Supreme Court in Royal talkies, Hyderabad and Others v Employees' State Insurance corporation and Calcutta Electricity Supply Corporation (India) limited v Subhash Chandra Bose and Others and 1984 FJR 543. These cases arise out of the interpretation of E. S.. Act. The supreme Court after considering the respective contentions came to the conclusion that the employees employed by the petitioner therein are employed for the purpose of establishment and therefore come within the ambit of the definition of the Act. Section 2 (f) of the Employees' Provident Fund Act defines an employee in the following manner :"2 (F): 'employee' means any person who is employed for wages in any kind of work manual or otherwise in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer, and includes any person, (i) employed by or through a contractor in or in connection with the work of the establishment; (ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961) or under the standing orders of the establishment)"; clauses (1), (2) and (3) of the Act has been considered by the supreme Court in the decisions referred to in Calcutta electricity Supply Corporation (India) Limited's case, supra. There was evidence to show that the employees therein had no nexus with the main establishment and the main establishment did not benefit in any manner. Their existence was not in aid of the main establishment. There was no supervision and control as well. Besides, in this case this question cannot be gone into because the petitioner had not produced before the authorities the contract of agreement between him and the contractor who runs the guest house or My Club to show that there is no ultimate supervision and that the staff is not to serve the company employees and that they exist on this account. If the establishment exists for the ancillary or incidental need of the factory, then it has to be held to be part of the factory itself.

( 4 ) THE Supreme Court in Regional Director, Employees' State Insurance Corporation Madras v South Indian Flour Mills (Private) Limited, at paragraph 15 has held as follows :"in our opinion, the work of construction of additional buildings required for the expansion of a factory must be held to be ancillary, incidental or having some relevance to or link with the object of the factory. It is not correct to say that such work must always have some direct connection with the manufacturing process that is carried on in the factory. The expression 'work of the factory' should also be understood in the sense of any work necessary for the expansion of the factory or establishment or for augmenting or increasing the work of the factory or establishment. Such work is incidental or preliminary to or connected with the work of the factory or establishment". Therefore any person employed by the employer for the purpose of providing better amenities or for needs of the employees should be treated as person employed in connection with the work or the establishment. Besides, when the authorities uphold that even the gardeners employed by the company ar

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e persons employed in connection with the establishment then certainly the employees working in the canteen, guest house and garden attached to the club, who exist for providing better amenities to the workers as customers of the petitioner company cannot be treated as employees not employed in connection with the establishment of the petitioner. They are coverable under the Employees' Provident Fund Act by the facts thereunder. I do not find any ground to interfere with the order impugned. The writ petition is dismissed.