w w w . L a w y e r S e r v i c e s . i n



Union Of India, Rep. by its General Manager, M/s. Heavy Alloy Penetrator Project (HAPP) v/s The Registrar, Employees Provident Fund Appellate Tribunal & Another


Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- M. P. ALLOY PRIVATE LIMITED [Strike Off] CIN = U28111UP1995PTC018405

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- B D K ALLOY PRIVATE LIMITED [Amalgamated] CIN = U27106KA1973PTC002355

    Writ Petition (MD).No.688 of 2011 & M.P.(MD).No.1 of 2011

    Decided On, 24 January 2011

    At, Before the Madurai Bench of Madras High Court

    By, THE HONOURABLE MR. JUSTICE V. DHANAPALAN

    For the Petitioner: G. Thalamutharasu, Advocate. For the Respondents: V.S. Karthik, Advocate.



Judgment Text

(Prayer: Writ petition is filed under Article 226 of the Constitution of India to issue a writ of Certiorari to call for the records on the file of the first respondent in connection with the impugned order passed in ATA NO.637(13)2002, dated 19.10.2010 and the order passed by the second respondent in B4/TN/TR/76172/SRO-TRY/2008-2009, dated 22.07.2008 and quash the both as illegal and ultravires.)

1. By consent the writ petition itself is taken up for disposal.

2. Heard Mr.G.Thalamutharasu, the learned counsel for the petitioner and Mr.V.S.Karthik, the learned counsel for the respondents.

3. In this petition, the petitioner challenged the order of the original authority, the second respondent, the Assistant Provident Fund Commissioner, Tiruchirappalli, passed in B4/TN/TR/76172/SRO-TRY/2008-2009, dated 22.07.2008 and the order of the appellate authority, the first respondent, passed in ATA NO.637(13)2002, dated 19.10.2010.

4. The petitioner is an Establishment under the Union of India called as M/s.Heavy Alloy Penetrator Project (in short referred as HAPP), which is a Central Government Industrial Establishment under the Ministry of Defence, primarily involved in manufacture of defence components. The main job of the unit is producing arms and ammunition and supplying it to the Ministry of Defence. According to them, for certain sundry works such as maintenance of building/premises, road maintenance work in township and cutting wild growth etc., are entrusted to independent contractors. Accordingly, contracts are awarded for specific period and the payments are made to the contractors for the satisfactory completion of the job done by them and their wages are paid by the contractor, as per the minimum wages fixed by the Tamil Nadu Government fixed from time to time. The contractors are also advised to adhere to all the statutory requirements.

5. While that being so, the petitioner has been allotted a code number by the second respondent for the charges of making compliance with the various provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred as the 'Act'). Thereafter, the establishment has sent a detailed explanation to the second respondent on 23.01.2008 requesting to drop all the proceedings initiated against it under the Act and revoke the letter of the second respondent dated 05.12.2007. Subsequently, the establishment was called for attending the proceedings initiated under Section 7(A) of the Act. Since the second respondent was proceeding further without going into the application of the Act, they have filed a writ petition in W.P.(MD).No.4380 of 2008 before this Court to quash the proceeding initiated against the petitioner. This Court by its judgment, dated 07.05.2008, has disposed of the said petition with a direction to the second respondent that the question of applicability should be considered before proceeding further. Based on the said direction, the second respondent has conducted a detailed enquiry and the establishment has also filed a written submission and raised objections in regard to the application of the Act vide his letter, dated 23.01.2008.

6. The main queries raised by the petitioner are as follows;

i) The notification issued by Ministry of Labour vide S.O.746, dated 22.03.2001 is applicable to an establishment engaged in rendering cleaning and sweeping services. HAPP, being a defence installation, engaged in manufacturing/production of arms and ammunition. In fact HAPP is availing certain sundry services of cleaning and sweeping etc., through contractors.

ii) Section 16(1)(b) makes it very clear that the Act shall not apply to "any other establishment belonging to or under the control of the Central Government or State Government and whose employees are entitled to the benefit of Contributory Provident Fund/ or old age pension in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits. HAPP being a Central Government establishment, the provisions of EPF & MP Act does not apply as per Section 16(1)(b).

iii) HAPP, being a Government Establishment is not specified under the Schedule I and hence, if it is to be brought under the ambit of EPF Act a separate Notification has to be issued by the Central Government under Clause (b) of Sub Section (3) of Section 1. Till issue of such notification, allotting of code Head to HAPP is not in order.

iv) As per letter of RPF Commissioner Letter No.B6/TN/TR/Coord Coverage of Contractors/04, dated 27.01.2004 EPF organization was exploring the feasibility of bringing the contractor establishment rendering services at Central/State Government Departments, under the purview of the Act.

7. All the above objections are overruled and the original authority, the second respondent passed the impugned order on 22.07.2008 by virtue of power conferred under Section 7A of the Act that Employees' Provident Funds and Miscellaneous Provisions Act, 1952 stating that it is applicable to M/s.HAPP, Trichy with effect from 01.04.2001 and further directed the employer to comply with the provisions of the Act and the Schemes framed thereunder with effect from 01.04.2001.

8. Aggrieved by the order of the original authority, the petitioner preferred an appeal to the first respondent, the appellate authority, in ATA No.637/13/02. The appellate authority, the Tribunal in its order, dated 19.10.2010, confirmed the order of the second respondent, in the absence of the counsel representing the Establishment and no opportunity was given to put forth the petitioner's case and the Tribunal simply relying on the appeal petition and giving weightage to the reply of the second respondent, confirmed the order. The operative portion of the order is as follows;-

"Thus in view of the discussion held above, no infirmity is noticed in the order of the EPF Authority. Hence, ordered, the appeal is dismissed. Copy of order be sent to the parties and the file be consigned to record rood."

9. The learned counsel for the petitioner in his submissions has strenuously contended that M/s.HAPP being a Central Government establishment is not specified under the schedule-I and unless a separate notification issued by the Central Government under clause (b) of Sub Section (3) of Section 1 of the Act, the EPF Act is not at all applicable to M/s.HAPP Establishment. Therefore, the proceedings initiated under Section 17 of the Act cannot be sustained. He has further contended that the petitioner is exempted under Section 16(1)(b) of the EPF Act, as it being a central Government establishment under the control of the Central Government. Therefore, they are not entitled to the benefit of EPF Act and the petitioner is governed under GPF Scheme and other pension schemes applicable to the Central Government Establishments.

10. On the other hand, the learned counsel for the respondents by pointing out the provisions of Section 15 of the Employees' Provident Funds Appellate Tribunal (Procedure) Rules, 1997 would contend that where on the date fixed for hearing on the appeal or on any other date to which such hearing may be adjourned, the appellant does not appeal when the appeal is called for hearing, the Tribunal may, in its discretion either dismiss the appeal for default or hear and decide it on merit. In that event, the only course available to the petitioner is by filing a proper review before the authority concerned. He would further contend that the petitioner has already allotted a code number and thereafter, there was no contribution by the petitioner and therefore, the action under Section 17(A) of the Act has been initiated and it is nothing wrong on the part of the respondents in initiating the proceedings in view of the allotment of the code number.

11. I have heard the learned counsel on either side and perused the material documents given in the typed set of papers and the relevant provisions of the Act and the Rules.

12. It is seen that the petitioner namely M/s.HAPP is a Central Government establishment under the Ministry of Defence primarily involved in manufacture of Defence components and in the production of arms and ammunition and supplying it to the defence. It is not in dispute that in respect of certain works, contract has been awarded for specific period and the payments are made to the contractor for the satisfactory completion of the job done by them. Wages for the contract workers are paid by the contractor as per the Minimum Wages fixed by Tamil Nadu Government from time to time. It is seen that the petitioner has been allotted a card number under the Act by the second respondent on 05.12.2007. Though certain objections were filed for the allotment of the said card number, the same was not challenged by the petitioner in any of the proceedings. Therefore, the allotment of the card number has become final and in the absence of any challenge earlier, the petitioner has approached this Court in W.P.(MD) No.4380 of 2008 and this Court after hearing the counsel on either side, disposed of the matter by observing that the grievance of the petitioner is that even though a question relating to the applicability of the Act has been raised, the respondent is proceeding in the matter without considering the question of applicability and it goes without saying that before passing any order, the respondent is required to consider all the objections raised by the petitioner. Thereafter, the petitioner on 23.01.2008 filed their objections. Based on the above objections, the original authority namely, the Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Tiruchy has proceeded and ultimately holding that as per the terms and conditions of a tender notice which is part and parcel of the work order point number 23(g) and (h), the contractor is required to make payment of EPF and also required to submit an undertaking in favour of the GM, M/s.HAPP every month to the effect that he has paid wages to the workers and complied with the provisions of the Act. Whereas, M/s.HAPP, Trichy has not insisted the same from the contribution until 04.09.2006 and only from the said date, all the contract employees are covered under the Act under the Contractor's Code number. Ultimately, it was held that by virtue of power conferred on the authority under Section 7A of the Act that the dispute raised by M/s.HAPP, Trichy that Employees Provident Fund and Miscellaneous Provisions Act, 1952 is applicable to M/s.HAPP, Trichy with effect from 01.04.2001. Accordingly, the original authority directed the employer to comply with the provisions of the Act and the Schemes framed thereunder with effect from 01.04.2001 as per the direction contained in Coverage memo No.Enf./B4/TN/TR/76172/SRO-TRY/07, dated 05.12.2007 and dispose of the matter as per the direction of this Court.

13. Aggrieved by the order of the original authority, the petitioner preferred an appeal under proceedings in ATA(13)02, wherein the appellate authority has taken up the matter on the date fixed for hearing and on 19.10.2010, disposed of the appeal on merits. It is necessary to reproduce Paragraph 4 of the appeal order hereunder;

"4. No argument was advanced by the appellant and the matter was reserved for order as per Rule 15 after hearing the counsel for respondent. The main ground taken in the appeal memo is that the persons engaged by the contractor are not the employees of the appellant and there is no identification of those persons."

Then the appellate authority proceeded further and decided the matter on merits and confirmed the order of the original authority.

14. A preliminary objection has been raised by the respondents on the maintainability of the writ petition, as the remedy open to the petitioner is only moving the authority concerned by way of a reviews since the order was made in the absence of the appellant in view of Rule 15 of the Employees' Provident Funds Appellate Tribunal (Procedure) Rules, 1997, which reads as follows;

Action on appeal for appellant's default -(1) Where on the date fixed for hearing of the appeal or on any other date to which such hearing may be adjourned, the appellant does not appeal when the appeal is called for hearing, the Tribunal may, in its discretion either dismiss the appeal for default or hear and decide it on merit.

(2) Where an appeal has been dismissed for default and the appellant files an appeal within thirty days from the date of dismissal and satisfied the Tribunal that there was sufficient cause for his non-appearance when the appeal was called for hearing, the Tribunal shall make an order setting aside the order dismissing the appeal and restore the same;

Provided, however, where the case was disposed of on the merits the decision shall not be re-opened except by way of review.

15. It is the ordained principle and consistent legal position that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction and therefore, it has been held in several decisions that the writ petition will be entertained only on the following contingencies, namely, if the writ petition is filed for enforcement of any of the fundamental rights, or when there has been violation of principles of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is p

Please Login To View The Full Judgment!

lethora of decisions held by the Hon'ble Supreme Court in this regard and one such case is reported in (1998) 8 SCC 1 (WHIRLPOOL CORPORATION V. REGISTRAR OF TRADE MARKS). In the absence of any contingency as mentioned above and when an effective and efficacious remedy is available, this writ petition cannot be entertained and it goes without saying that the petitioner has to avail the alternative remedy provided under the Act. In the case on hand, when there is an effective remedy available in the Rules itself, on the contrary, the petitioner has chosen to move this Court under Article 226 of the Constitution of India. As already pointed out, when the petitioner is having an effective alternative remedy, this Court will not exercise its power under Article 226 of the Constitution of India. The petitioner, instead of asking the authorities to re-open the case by way of a review, has filed this writ petition, which is prematured, misconceived and misconstrued. Therefore, the writ petition is rejected and the same is dismissed. However, the petitioner is at liberty to move the authority concerned by making an appropriate review under Rule 15 of the Employees' Provident Funds Appellate Tribunal (Procedure) Rules, 1997, within a period of four weeks from the date of receipt of a copy of this Order. If such a review is made, it is for the reviewing authority to consider the same in accordance with law and on merits and pass appropriate orders. No costs. Consequently, connected miscellaneous petition is closed.
O R