CASE DETAILS v. THE ASSISTANT PROVIDENT FUND COMMISSIONER

The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – Coverage under the EPF Act by clubbing of two Institutes run by the same Society – Society ran two institutions including the appellant, in the same campus – One had 8 employees and the other had 18 – Report of the Enforcement Offi cer that there being total 26 employees working in both the Institutes, managed by the same Society and within the same premises, the establishment would be covered under the provisions of the EPF Act – Order passed by the Commissioner u/s.7-A of the EPF Act – Challenged by the appellant – Appeal dismissed by the Tribunal – Writ Petition fi led by the appellant also dismissed – Order upheld in writ appeal: Held: Appellant had taken the case very casually – Material on record suffi cient to non-suit the appellant – Even the documents produced by the appellant themselves show that it is not an independent establishment but an arm of the Society – Under the provisions of the EPF Act, if any establishment employs 20 or more persons, the same shall be covered under the provisions of the EPF Act for grant of various benefi ts thereunder to the employees working there, the EPF Act being a welfare legislation – The mere fact that two Institutes, managed and controlled by the same management, off er diff erent courses or were established at diff erent times is not relevant for their clubbing under the 538 M/s MATHOSRI MANIKBAI KOTHARI COLLEGE OF VISUAL ARTS v.

THE ASSISTANT PROVIDENT FUND COMMISSIONER 539 EPF Act – The fact that one of the institutes receives 100% grant-in-aid from the government while the other is receiving to the extent of 70%, is also not relevant – After coverage of the establishments, the benefi ts, as determined for the purpose of assessing dues under the EPF Act, was already assessed by the Commissioner – Both the Institutes are being run by the same Society – The Ideal Institute was set up in the year 1965, whereas the appellant was set up in the year 1985-86 – If the employees employed in both the institutes are added, the total number of employees would be 26, which will be suffi cient for coverage in terms of s.1(3) (b) of the EPF Act, stipulating that an institute employing 20 or more persons is liable to be covered under the provisions of the EPF Act – It is also not in dispute that both the institutes are being run in the same campus – There is fi nancial integrity between the Society of the appellant as well as the other Institute as substantial funds were advanced to the Institutes by the Society – Further, both the Institutes are functioning from the same premises. [Paras 15, 16, 19, 21-23] LIST OF CITATIONS AND OTHER REFERENCES Management of Pratap Press, New Delhi v.

Secretary, Delhi Press Workers’ Union Delhi etc., AIR 1960 SC 1213; L.N. Gadodia & Sons v. Provident Fund Commissioner, [2011] 11 SCR 508 : (2011) 13 SCC 517; Noor Niwas Nursery Public School v. Regional Provident Fund Commissioner and others, [2000] 5 Suppl. SCR 478: (2001) 1 SCC 1; Shree Vishal Printers Limited, Jaipur v. Regional Provident Fund Commissioner, Jaipur and another, [2019] 12 SCR 146 : (2019) 9 SCC 508; Associated Cement Co. v. Workmen, [1960] SCR 703 : AIR 1960 SC 56; Regional Provident Fund Commissioner v. Naraini Udyog, [1996] 3 Suppl. SCR 202 : (1996) 5 SCC 522 – referred to. OTHER CASE DETAILS INCLUDING IMPUGNED ORDER AND APPEARANCES CIVIL APPELLATE JURISDICTION : Civil Appeal No.4188 of 2013. From the Judgment and Order dated 30.09.2011 of the High Court of Karnataka at Gulbarga in WA No.10133 of 2011. 540 SUPREME COURT REPORTS [2023] 16 S.C.R. Appearances: Basava Prabhu S Patil, Shailesh Madiyal, Mr./Ms. Geet Ratan Ahuja, Vinayaka S. Pandit, Samarth Kashyap, V. N. Raghupathy, Advs. for the Appellant. Nachiketa Joshi, Ms. Himadri Haksar, Ms. Sucheta Joshi, Yash Singh, Narayan Dev Parashar, Advs. for the Respondent. JUDGMENT / ORDER OF THE SUPREME COURT JUDGMENT RAJESH BINDAL, J.

The order dated 30.09.2011, passed by the Division Bench of the Gulbarga Bench of the Karnataka High Court in a Writ Appeal1 has been impugned by the appellant before this Court. Vide aforesaid order, the Division Bench has upheld the order dated 10.06.2011, passed by the learned Single Judge in Writ Petition2. The Single Judge upheld the order3 passed by the Tribunal4 dated 24.12.2010 and also upheld the application of EPF Act5 to the appellant’s institution.

Briefl y the facts, available on record, arethat the Ideal Fine Arts Society6 runs two institutions, namely, the ‘Ideal Institute of Fine Arts’7 and ‘Mathosri Manikbai Kothari College of Visual Arts’8. Both, the Ideal Institute as well as the Arts College are being run in the same campus. The Ideal Institute was set up way back in the year 1965, off ering Diploma Course in drawing and painting, whereas the ArtsCollege was set up in the year 1985-86, off ering Degree and Post-Graduate Degree in drawing and painting. It was claimed that the Ideal Institute employed 8 persons, whereas the Arts College had 18 employees. The issue arose In ATA No.03/06/2006 1 Writ Appeal No. 10133 of 2011. 2 Writ Petition No. 80995 of 2011. 3 4 Employee Provident Fund Appellate Tribunal. 5 The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. 6 7 8 For short, ‘Society. For short, ‘Ideal Institute’. For short, ‘Arts College’. M/s MATHOSRI MANIKBAI KOTHARI COLLEGE OF VISUAL ARTS v. THE ASSISTANT PROVIDENT FUND COMMISSIONER [RAJESH BINDAL, J.] 541 with reference to their coverage and application of the EPF Act. Based on the report of the Enforcement Offi cer dated 01.07.2003, it was reported that there being total 26 employees working in both the Institutes, which are managed by the same Society and within the same premises, the establishment would be covered under the provisions of the EPF Act w.e.f. 01.03.1988. Thereafter, a notice was issued to the establishment and after aff ording an opportunity of hearing, an order was passed by the Commissioner9 on 23.09.2005, under Section 7-A of the EPF Act, assessing the amount of contributions to be made by the appellant under various schemes of the EPF Act. The aforesaid order was challenged by the appellant through statutory appeal before the Tribunal, which was dismissed vide order dated 24.12.2010. Thereafter, the appellant fi led a Writ Petition challenging the order passed by the Tribunal before the High Court, which was dismissed by the learned Single Judge vide order dated 10.06.2011. In writ appeal, the order of the learned Single Judge was upheld by the Division Bench of the High Court.

Learned counsel for the appellant, submitted that the impugned orders passed by the Commissioner, the Tribunal, as well as the High Court are not legally sustainable. The appellant submitted that both the Institutes, namely, Ideal Institute and Arts College are independent from each other and are merely being managed by the same Society. There is no fi nancial integrity between the two Institutes and both the Institutes are off ering diff erent courses, having permission/affi liation from diff erent authorities. The Ideal Institute is getting 100% grant-in-aid, whereas the Arts College is getting 70% grant-in-aid from the Government of Karnataka. The Ideal Institute was set up in the year 1965, whereas the Arts College was set up in the year 1985-86. Furthermore, the appellant submitted that, since both the Institutes are independent from each other and are not employing 20 or more persons, their clubbing for coverage under the provisions of the EPF Act, is totally illegal and deserves to be set aside. In support of his arguments, reliance was placed by the appellant upon Management of Pratap Press, New Delhi v. Secretary, Delhi Press Workers’ Union Delhi etc., AIR 1960 SC 1213. 9 The Assistant Provident Fund Commissioner. 542 SUPREME COURT REPORTS [2023] 16 S.C.R.

On the other hand, the learned counsel for the respondent submitted that, if the tests laid down by this Court in L.N. Gadodia& Sons v. Provident Fund Commissioner, (2011) 13 SCC 517,are applied in the present case, it will be evident that there is no error in the orders passed by the Commissioner, the Tribunal or the High Court, directing coverage of both the Institutes run by the Society, under the EPF Act. The respondent submitted that it is a case in which neither the appellant nor the Ideal Institute or the Society, which is managing the aff airs of the Institutes, had placed any material before the Commissioner, the Tribunal or even the High Court to dislodge the facts found by the Enforcement Offi cer and established that both the Institutes are independent and have no common management. The audit report which has been placed on record before this Court is for the year ending March 2011, which was fi nalised on 16.08.2011. The same was not even placed on record before the High Court, though the appeal was decided on 30.09.2011. No argument referring to the audit report was raised before the High Court.

The learned counsel for the respondent further submitted that, once the notice was issued to the establishment regarding application and coverage under the provisions of the EPF Act by clubbing the two Institutes being run by the Society, the onus was on the establishment to controvert the same, by placing relevant material on record. In fact, even before the Commissioner, the appellant failed to produce any record and appear regularly. The Tribunal also adjudicated the appellant’s appeal in its absence. The Single Judge of the High Court had also noted that the appellant had failed to produce any material to support the claim that there is no common supervisory or fi nancial management and that the two Institutes were distinct with separate management and not interconnected. The fact remained that both are being run by the same Society. The respondent further submitted that copy of the statement of bank account, placed on record by the appellant before this Court, shows that the account was opened on 07.07.2004. Thus, the same will not establish that both the Institutes are not being run by the same Society and are independent. The respondent also submitted that just because the two Institutes are off ering diff erent courses, having permission from diff erent authorities, will not exclude the coverage under the EPF Act. Even the fact that one of the Institutes is getting 100% grant-in-aid whereas the other is getting 70%, is also not relevant. The respondent submitted that there is no M/s MATHOSRI MANIKBAI KOTHARI COLLEGE OF VISUAL ARTS v. THE ASSISTANT PROVIDENT FUND COMMISSIONER [RAJESH BINDAL, J.] 543