High Court · 2025

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 31.01.2025CORAM:THE HONOURABLE MR. JUSTICE P.DHANABALW.P.No.30881 of 2013Assistant Provident Fund Commissioner,Employees Provident Fund OrganisationMinistry of Labour, Government of IndiaSub-Regional Office,Sri Venni Commercial Complex,No.101, 100 Feet Road, Cholan Nagar,Olandaikeerapalayam,Puducherry – 605 004. ... PetitionerVs1.Samtel India LimitedR.S.No.5/3, Vadamangal VillageVillanpur VillageVillanpur CommunePondicherry.2.The Presiding Officer,Employees Provident Funds Appellate Tribunal,7th Floor, No.60, Skylark Buildings,Nehru Palace, New Delhi – 110 019. ... RespondentsPRAYER: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records of the 2nd respondent relating to order passed in ATA.No.73(13)02 dated 18.08.2011 and quash the same.For Petitioner: M/s.K.Srinivasamurthy Senior CounselFor Respondents: M/s.D.Veda for R1 R2-Court1/9 https://www.mhc.tn.gov.in/judis O R D E RThis writ petition has been filed by the petitioner challenging the order passed by the second respondent in ATA.No.73(13)02 dated 18.08.2011 and to quash the same.2. The short facts of the case necessary to dispose of this Writ petition is as follows:- The first respondent company is engaged in the manufacture of computer monitors and is covered under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. During an inspection conducted by the Enforcement Officer, it was found that the petitioner department had failed to enrol its staff from the date of coverage of the said establishment, i.e. from 01.07.2000. Therefore, the petitioner issued a notice to the first respondent and summoned it for an enquiry under Section 7A of the Act on 10.09.2001. Thereafter, the first respondent filed a written submission that the trainees are not employees of the Establishment and that 123 trainees had been engaged. However, after considering the submissions, the writ petitioner passed an order under Section 7A of the Act by directing the first respondent to pay a sum of Rs.5,28,507/-. Aggrieved by the same, the first respondent preferred an appeal before the Appellate 2/9 https://www.mhc.tn.gov.in/judis Tribunal in ATA.No.73(13)02, and the same was allowed by holding that the trainees are not employees. Challenging the said order, the Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, has filed the present writ petition.3. The learned counsel appearing for the petitioner would submit that the first respondent company is incorporated under the Companies Act and engaged in the manufacture of computer monitors and was covered under the Act with effect from 01.07.2000. While so, on inspection they came to know that 123 persons were engaged as workers. But according to the first respondent they are trainees. In fact, the said persons cannot be treated as trainees because there are no trainers and no particulars of trainers and for what purpose they were appointed as trainees without any trainers. The first respondent does not have any certified standing orders. The first respondent continued with its illegal, unlawful and unfair labour practise of engaging all the workmen under the guise of trainees and thereby claimed an exemption provided under the Act. The very act of employing about 123 employees as trainees would go a long way to prove that the first respondent lacks bonafides. As per the inspection report dated 31.10.2001, the trainees alone were engaged for assembling the product, and the entire production was 3/9 https://www.mhc.tn.gov.in/judis carried out only by the so-called trainees. 3.1. He further submitted that the first respondent cannot claim exemption of the said workmen from the Provisions of Section 2(f) of the Act. The second respondent has passed a cryptic order without passing a speaking order. There are no certified standing orders or proper scheme under Apprentices Act for engaging apprentices as per the Provisions of Section 2(f) of Employees Provident Fund and Miscellaneous Provisions Act. Therefore, the order passed by the second respondent is not in accordance with law and the same is liable to be set aside by allowing this writ petition.4. The learned counsel appearing for the petitioner also relied upon the following judgments,1. Trambak Rubber Industries Ltd., Vs. Nashik Workers Union and Others, reported in (2003) 6 SCC 416.2. The Regional Provident Fund Commissioner, Mangalore Vs. M/s.Central Aercanut & Coca Marketing and Processing Co-op Ltd., Mangalore, reported in AIR 2006 SCC 971.4/9 https://www.mhc.tn.gov.in/judis

5. The learned counsel appearing for the first respondent would submit that the first respondent management had engaged the trainees, and as per Section 2(f) of the Act, the trainees do not come under the definition of “employee”. Therefore, the first respondent is not liable to pay any contribution in respect of those persons. The authorities, after inspection conducted an enquiry but failed to consider that the trainees would not fall within the purview of “employees” under Section 2(f) of the Act. Without considering the same, the authorities passed an order, and therefore, the first respondent preferred an appeal as against the said order. The Appellate Authority/second respondent, passed a reasoned order, rightly holding that the persons appointed under the certified standing orders or under Apprentices Act are not employees. In this case no certified standing orders were filed. Therefore, the persons who were appointed as trainees do not come under the purview of “employee”, and the appeal was rightly allowed. Hence, the order passed by the second respondent is a well reasoned order and the present petition is liable to be dismissed.6. This Court heard both sides and perused the materials available on record.5/9 https://www.mhc.tn.gov.in/judis

7. In this case, there is no dispute that the first respondent had engaged 123 persons for the purpose of production in the manufacture of computer monitors, and the establishment is also covered under the Employees Provident Funds and Miscellaneous Provisions Act. The number of persons engaged is also not in dispute. The only dispute in this case, according to the management, is that those persons, as per Section 2(f) of the Act, would not come under the definition of “employee”. According to the writ petitioner all the persons who were alleged to be trainees were, in fact, engaged in the manufacturing of computer monitors, and no trainers were appointed for the so called trainees. Without any trainers, all the persons cannot be treated as trainees. It is the duty of the management to establish who the trainees are, who the trainers are, and what specific training was assigned to each trainee. However, no particulars have been furnished regarding how many trainers were appointed and how many trainees were engaged to each trainer. Therefore, without any materials, merely the establishment stated that all the persons were trainees cannot be accepted. If such a contention is accepted, any establishment could conveniently appoint all its workers as trainees without any trainers, thereby evading the payment of provident fund contributions. Therefore, the contention of the second respondent that all the persons were trainees is not acceptable one, and they 6/9 https://www.mhc.tn.gov.in/judis are not entitled to the benefit or exemption under Section 2(f) of the Act. However, the second respondent has not passed a detailed or speaking order. The order merely refers to Section 2(f) of the Act and concludes that the trainees do not come under the definition of “employee”, without assigning any proper reasoning. Therefore, it would be appropriate to remand the matter back to the second respondent for fresh consideration and for passing a detailed order after properly examining the factual aspects, including whether those persons were, in fact, trainees or regular employees. The second respondent has not formed any opinion about the actual status of the persons engaged by the first respondent as to whether they were trainees or not, after referring the provision to Section 2(f) of the Act passed the order.8. In view of the said discussion, this Court is of the opinion that this writ petition has to be allowed for the aforesaid reasons.7/9 https://www.mhc.tn.gov.in/judis

9. In the result, this writ petition is allowed. The order passed by the second respondent in ATA.No.73(13)02 is set aside, and the matter is remitted back to the second respondent for passing a detailed order after affording opportunity of hearing to both sides. The second respondent is directed to dispose of the matter within a period of three months from the date of receipt of a copy of this order.10. With the above direction, this writ petition is allowed. No costs.31.01.2025drlSpeaking/Non SpeakingIndex: Yes / NoInternet : Yes / NoTo1.The Presiding Officer,Employees Provident Funds Appellate Tribunal,7th Floor, No.60, Skylark Buildings,Nehru Palace, New Delhi – 110 019. P.DHANABAL, J.,drl8/9 https://www.mhc.tn.gov.in/judis W.P.No.30881 of 201331.01.20259/9