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Sundara Rao (B.) Vs. Regional Provident Fund Commissioner, Bangalore - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 1085 of 1965
Judge
Reported in(1968)ILLJ791Kant; (1967)2MysLJ439
ActsEmployees' Provident Funds Act, 1952 - Sections 14
AppellantSundara Rao (B.)
RespondentRegional Provident Fund Commissioner, Bangalore
Excerpt:
.....effectively controverted, it is stated that the bangalore bar association called for applications from persons who were willing to operate a canteen in the bar association premises for the supply of food and refreshments to its members on terms and conditions prescribed by the association for a period of one year commencing on 20 april, 1964. the allegation of the petitioner's affidavit which is undisputed is that he was one of those applicants who offered to operate his canteen and that his offer was accepted by the bar association......of the regional provident fund commissioner informed the petitioner that the provisions of the employees' provident funds act, 1952, and the scheme framed thereunder were applicable to the petitioner's establishment in which he had employed twenty or more persons and that he should therefore submit returns under the act. on 19 may, 1965, he was again informed that he should expedite dispatch of the returns and the remittance of the amounts which he was bound to contribute. again on 22 may, 1965, a show-cause notice was issued to him that since there was a failure to remit the provident fund contribution and administration charges and failure to submit revised returns for the period between january and april 1965 he should show cause why action should not be taken against him under s......
Judgment:

Somnath Ayyar, J.

1. During the period between 20 April, 1964 and 1965, the petitioner was conducting a canteen known as the bar association canteen in the premises of the bar association of Bangalore. It is undisputed that he operated that canteen under an agreement between the bar association and himself. On 15 January, 1965, the office of the Regional Provident Fund Commissioner informed the petitioner that the provisions of the Employees' Provident Funds Act, 1952, and the scheme framed thereunder were applicable to the petitioner's establishment in which he had employed twenty or more persons and that he should therefore submit returns under the Act. On 19 May, 1965, he was again informed that he should expedite dispatch of the returns and the remittance of the amounts which he was bound to contribute. Again on 22 May, 1965, a show-cause notice was issued to him that since there was a failure to remit the provident fund contribution and administration charges and failure to submit revised returns for the period between January and April 1965 he should show cause why action should not be taken against him under S. 14 of the Act and Para. 75 of the scheme framed thereunder.

2. In this writ petition which is a sequel to the application of the provisions of the Act to the petitioner's establishment in this way, there are at least two prayers. The first is that we should quash the communication addressed to the petitioner by the office of the Provident Fund Commissioner on 15 January, 1965, through which there was an application of the provisions of the Employees' Provident Funds Act and the scheme prepared thereunder to the petitioner's establishment. The second is that we should direct the Regional Provident Fund Commissioner to desist from enforcing the order made by him on 15 January, 1965 and the communications sent on 19 May, 1965 and 22 May, 1965, to which we have already referred.

3. Two submissions were made before us by Sri Krishnamurthi appearing for the petitioner. The first is that in his establishment there were not as many as twenty employees during the relevant period and so the provisions of the Employees' Provident Funds Act became inapplicable. The second is that in any event since a period of five years had not expired from the day on which the petitioner's establishment had been set up, that establishment was excepted from out of the Act by S. 16(1)(b) of the Act.

4. It is not necessary for us to discuss the first submission since, in our opinion the second is unanswerable. It is common ground that the petitioner commenced the canteen in the bar association premises on 20 April, 1964, under an agreement entered into between him and the bar association. In the affidavit of the petitioner the allegation in which is not effectively controverted, it is stated that the Bangalore Bar Association called for applications from persons who were willing to operate a canteen in the bar association premises for the supply of food and refreshments to its members on terms and conditions prescribed by the association for a period of one year commencing on 20 April, 1964. The allegation of the petitioner's affidavit which is undisputed is that he was one of those applicants who offered to operate his canteen and that his offer was accepted by the bar association.

5. What is again made clear by the petitioner's affidavit is that he employed his own labour when he commenced the canteen and his own materials for that purpose, and, that he was under an obligation to supply food and refreshments to the members of the bar association at the rates fixed by the agreement. In his representation he made to the Provident Fund Commissioner on 10 March, 1965, the petitioner asserted that he was conducting the canteen under a license granted by the Bangalore Bar Association and that there was no existing canteen of establishment when he started his canteen on 20 April, 1964.

6. It is quite plain that if the process by which the petitioner commenced conducting a canteen in the bar association premises is that specified in the affidavit of the petitioner, that canteen was a canteen established by him for the first time on 20 April, 1964. The fact that the members of the Bangalore Bar Association have been during a long period of time able to get food and refreshments from a canteen operated by someone or another in the association premises made available to him, does not support the postulate that the canteen established on the earliest occasion by the person who agreed to run it during the period of his agreement, was continued by another contractor when he ran one. The uninterrupted availability of canteen facilities for the members of the association does not, when one contractor winds up his canteen and another commences his, obliterate the distinctness between the two. The canteen operated by each contractor is established for the first time when he commences it, unless there is a devolution of the old. The unbroken enjoyment of canteen facilities by the members became possible not because the old establishment opened by the earliest of the contractors at some stage continued, but for the reason that on the cessation of one establishment, another was opened. That is the true position when, as in the case before us, the petitioner was asked to open his own canteen and not to work one which was existing.

7. Sri Keshava Ayyangar, the learned Central Government Pleader, advanced the argument that under the provisions of the Employees' Provident Funds Act an establishment does not cease to be an old establishment by reason of a mere change in the composition of the employees. That may be so. But the fact that there is no change in that way can have very little relevance in the case before us in which there is no ground at all for the supposition that the canteen, which the petitioner commenced, was an establishment which had been commenced by another which the petitioner continued. On the contrary, if, as the petitioner says, he employed his own employees and acquired his own material and other paraphernalia with which he could run the canteen, what in truth he did, was to found a new establishment for the supply of food and refreshments which he agreed to supply.

8. Our attention was asked to the explanation to S. 16(1) which says that an establishment shall not be deemed to be newly set up merely by reason of change in its location. From that explanation, it becomes equally clear that a new establishment cannot be deemed to be an old establishment merely by reason of its being housed in the same place in which an old establishment had been located.

9. The test is whether there was an existing establishment the operations in which were continued by the petitioner, or whether the petitioner erected a new establishment for the first time. We have no doubt in our mind that the agreement between the bar association and the petitioner makes it abundantly clear that the canteen which was commenced by the petitioner under the agreement, was set up by him for the first time since it had no manner of association whatsoever with an old canteen, which might have been established by someone else under some other agreement to which the bar association was a party.

10. In the view that we take, it should follow that the petitioner's canteen, which had worked only for about eight months after its establishment, fell within the exception created by S. 16(1)(b) of the Act and remained outside its other provisions.

11. So, we quash the impugned order made by the Regional Provident Fund Commissioner on 15 January, 1965, by which the provisions of the Act were made applicable to the petitioner's establishment. We also quash the impugned communications issued to the petitioner on 19 May, 1965 and 22 May, 1965. No costs.


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