M/s Gowri Shankar Theatre v. The Assistant Provident Fund Commissioner & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 20.04.2009CORAM;THE HONOURABLE MR.JUSTICE P.JYOTHIMANIANDTHE HONOURABLE MRS.JUSTICE ARUNA JAGADEESANW.A.NO.1155 OF 2007ANDM.P.NO.1 OF 2007M/s Gowri Shankar TheatreRepresented by its ProprietorN.Shivaji RaoMalang RoadVaniyambai,Vellore District..Appellantvs1.The Assistant Provident Fund CommissionerEmployee’ Provident Fund OrganizationSub-Regional OfficeNo.31, Filter Bed Road,Vellore 632 0012.The Enforcement OfficerEmployees’ Provident Fund OrganisationSub-Regional OfficeNo.31, Filter Bed RoadVellore 632 001..RespondentsWrit Appeal is filed against the order dated 24.07.2007 made inW.P.No.21503/2007. Praying to call for records of the secondrespondent in his letter dated 18.4.2007 in TN/VL/4018/EO/ DIVIII/2007 and quash the same.for appellant : Mr.K.Umarfor respondents : Mr.K.Ramu (for R1 and R2)JUDGMENT(Judgment of the Court was delivered by P.JYOTHIMANI,J.)The writ petition is filed against the order of the learnedsingle Judge dated 24.07.2007 in W.P.No.21503/2007 by which the https://hcservices.ecourts.gov.in/hcservices/ learned single Judge while dismissing the writ petition has held thatthe petitioner theatre would continue to be bound by Employees’Provident Funds and Miscellaneous Provisions Act, 1952(19 of 1952).2. The case of the appellant/writ petitioner is that theappellant has been running a theatre in Vaniyambadi and the number ofemployees employed in the said theatre was only 4. By mistake theappellant writ petitioner has been making contribution towardsEmployees’ Provident Fund. By order dated 18.4.2007 passed by thesecond respondent which is impugned in the writ petition, the secondrespondent has directed the contribution by the appellant saying thatwhen originally the contribution was made under the Employees’Provident Funds and Miscellaneous Provisions Act, 1952(19 of 1952)even if the number of employees has fallen below, the appellanttheatre is bound to contribute under the Employees’ Provident Fundsand Miscellaneous Provisions Act, 1952. 3.The learned counsel appearing for the appellant wouldvehemently contend that inasmuch as the appellant writ petitioner isbound by the provisions of the Cine Workers and Cinema TheatreWorkers (Regulation of Employment) Act, 1981 (50 of 1981) whichcontemplates an obligation on the part of the employer to makecontribution under the Employees Provident Funds and MiscellaneousProvisions Act, 1952(19 of 1952) only if the number of workmenemployed is 5 or more and if the petitioner by mistake hascontributed payment of Employees’ Provident Fund, that would not betaken as a contribution under the Employees' Provident Funds andMiscellaneous Provisions Act, 1952(19 of 1952) and his submission iswhen the number of workers has come down to 4, necessarily theEmployees' Provident Funds and Miscellaneous Provisions Act, 1952 (19of 1952) should not be made applicable. He would further contend thatSection 1 (5) of the Employees’ Provident Funds and MiscellaneousProvisions Act, 1952(19 of 1952) which contemplates that when anestablishment was originally covered under the Employees’ ProvidentFunds and Miscellaneous Provisions Act, 1952 (19 of 1952) andsubsequently if the number of persons comes down below 20,nevertheless the Employees’ Provident Funds and MiscellaneousProvisions Act, 1952(19 of 1952) would continue to apply and thatprovision is not applicable to the facts of the present case. TheCine Workers and Cinema Theatre Workers (Regulation of Employment)Act, 1981(50 of 1981)has not contained such clause. Therefore,according to him, the decision of the learned single Judge dismissingthe writ petition and thereby making an obligation on the appellantwrit petitioner to continue to contribute under the Employees’Provident Funds and Miscellaneous Provisions Act, 1952(19 of 1952) isnot sustainable in law.4.On the other hand, Mr.K.Ramu, learned counsel appearing forthe respondents would bring to the notice of this Court that underSection 1(3) of the Employees’ Provident Funds and Miscellaneous https://hcservices.ecourts.gov.in/hcservices/ Provisions Act, 1952(19 of 1952)it is open to the Central Governmentby notification in the Official Gazette to apply the provisions ofthe Employees' Provident Fund and Miscellaneous Provisions Act, 1952to any establishment and make them to contribute E.P.F. even in caseswhere less than 20 employees are employed and therefore the CineWorkers and Cinema Theatre Workers (Regulation of Employment) Act,1981(50 of 1981) which is deemed to be a notification, since it is astatutory provision, enables the authorities to impose the obligationof payment of contribution in cases where 5 or more persons areemployed in theatre. By harmoniously construing it means that theE.P.F.Act applies even if the number of employees is five. If itcomes down below 5, then section 1(5) of the Employees' ProvidentFund and Miscellaneous Provisions Act, 1952 has to be applied.5.We see great force in the submission made by the learnedcounsel for the respondents. Under the Cine Workers and CinemaTheatre Workers (Regulation of Employment)Act, 1981 (50 of 1981)which is applicable to the petitioner’s case, Section 24 of the saidAct makes it clear that the provisions of the Employees’ Providentfund and Miscellaneous Provisions Act (19 of 1952) is applicable toevery Cinema Theatres covered under the Cine Workers and CinemaTheatre Workers (Regulation of Employment) Act, 1981 (50 of 1981).Section 24 of the Cine Workers and Cinema Theatre Workers (Regulationof Employment) Act, 1981 is extracted hereunder:“The provisions of the Employees’ Provident Fund andMiscellaneous Provisions Act, 1952, as in force for thetime being, shall apply to every cinema theatre in whichfive or more workers are employed on any day, as if suchcinema theatre were an establishment to which theaforesaid Act had been applied by a notification of theCentral Government under the proviso to sub-section (3)of Section 1 thereof, and as if each such worker were anemployee within the meaning of that Act’.On the facts of the case, it is not in dispute that at the time whenthe writ petitioner has been making contribution under the Employees’Provident Fund and Miscellaneous Provisions Act, 1952, the number ofemployees was more than 5. The grievance of the appellant is thatthe theatre was closed for some time and thereafter, it was reopenedwith four new employees and therefore, there is reconstitution and insuch view of the matter the question of applicability of Section 24does not arise. A reference to the pleadings made in the affidavitfiled in support of the writ petition it is stated that due tofinancial disability the theatre was closed and thereafter it was re-opened and at the time of reopening, there were only four employees.It is not the case of the writ petitioner in the affidavit filed insupport of the writ petition as if the establishment was closed andthereafter it was reconstituted with new four employees, even thoughthat is the submission made by the learned counsel now before this https://hcservices.ecourts.gov.in/hcservices/ Court. In any event, whether there was a closure of the theatre andreopening of the same with the new employees is an immaterial fact.What is required is that the theatre which is run by the writpetitioner which has in fact made contribution under the EmployeesProvident Funds and Miscellaneous Provisions Act, 1952(19 of 1952)inrespect of its workers as per Section 24 of the Cine Workers andCinema Theatre Workers (Regulation of Employment) Act, 1981(50 of1981). Under Section 1(3)(b) of the Employees’ Provident Fund andMiscellaneous Provisions Act, 1952 which is as extracted hereunder,"(b)to any other establishment employing [twenty] ormore persons or class of such establishments which theCentral Government may, by notification in the OfficialGazette, specify in this behalf:Provided that the Central Government may, aftergiving not less than two months' notice or its intentionso to do, by notification in the Official Gazette, applythe provisions of this Act to any establishment employingsuch number of persons less than [twenty] as may bespecified in the notification.enables the Central Government by notification in the OfficialGazette to extend the applicability of the Employees’ Provident Fundand Miscellaneous Provisions Act, 1952, to any other establishmentwherein the number of employees are less than 20. The provision ismade in order to bring within the purview of the Employees’ ProvidentFund and Miscellaneous Provisions Act, 1952 even the establishmentswherein less than 20 numbers are employed as workers. The CineWorkers and Cinema Theatre Workers (Regulation of Employment) Act,1981 (50 of 1981) in respect of the Cinema Workers makes it clearthat in respect of the Cinema Theatres, the Employees’ Provident Fundand Miscellaneous Provisions Act 1952 is applicable in cases wherenumber of employees are 5 or more and therefore, the enactment shouldbe taken as a notification as per the provisions of Section 1(3)(b)to the Employees’ Provident Fund and Miscellaneous Provisions Act,1952. As per Section 1(5) of the Employees’ Provident Fund andMiscellaneous Provisions Act, 1952 which is extracted hereunder"(5)An establishment to which this Act applies shallcontinue to be governed by this Act notwithstanding thatthe number of persons employed therein at any time fallsbelow twenty"when once an establishment is covered under the Employees’ ProvidentFund and Miscellaneous Provisions Act, 1952, merely because thenumber of employees has come down, that will not take away theapplicability of that Act. The contention of the learned counsel forthe appellant that Section 1(5) of the Employees’ Provident Fund andMiscellaneous Provisions Act, 1952 speaks only 20, but as far as the https://hcservices.ecourts.gov.in/hcservices/ appellant’s case is concerned, the number of employees which was 5,came down to 4 and therefore Section 1(5)of the Employees’ ProvidentFund and Miscellaneous Provisions Act, 1952 cannot apply, has nomeaning. When once the applicability of the Employees’ ProvidentFund and Miscellaneous Provisions Act, 1952 has been extended to CineWorkers as per Section 24 of the Cine Workers and Cinema TheatreWorkers’(Regulation and Employment) Act 1981, necessarily allprovisions of the Employees Provident Funds and MiscellaneousProvisions Act, 1952 are to be applied by harmonious construction ofSection 1(5) of the Act in respect of Cine Theatre. Therefore, itshould be taken as 5 instead of 20 since under the Cine Workers andCinema Theatre Workers’(Regulation and Employment) Act 1981, theminimum requirement is 5. In this view of the matter, there is nodifficulty to come to the conclusion that Section 1(5) of theEmployees Provident Fund and Miscellaneous Provisions Act, 1952 isapplicable to the appellant’s establishment. 6.The further submission made by the learned counsel is thatunder Section 7-A of the Employees' Provident Funds and MiscellaneousProvisions Act, 1952, while determining the amounts due from theemployer, there is a duty on the part of the authority under this Actto decide about the applicability of the provision.A reading ofSection 7-A makes it clear that the said provision applies only whendispute is raised with regard to the applicability of the Act. On thepleading which has been made by way of affidavit filed in support ofthe writ petition, we see that there is no dispute raised by thepetitioner at all. The petitioner by his communication to the E.P.F.authorities has informed that the theatre was closed and reopened andtherefore the Act is not applicable. That cannot be the disputeunder Section 7-A of the Act. Further a reference to the circularissued by the Commercial Tax Officer makes it clear that the theatrewas closed for the period from 5.7.2004 to on 13.4.2005 andsubsequently it has been reopened. In such view of the matter, we donot see any reason to interfere with the order impugned. 7.Therefore, the Writ Appeal fails and the same is dismissed.No costs. Consequently, M.P.No.1 is also dismissed.8.The apprehension of the learned counsel for the appellantis that the respondents may impose the obligation on them for paymentof contribution for employees for the period of closure from 5.7.2004to 13.4.2005.9.Mr.Ramu, learned counsel appearing for the respondentswould submit even as per the impugned order, the obligation tocontribute the E.P.F. contribution as employer arose after thetheatre was reopened. 10.The apprehension is not based on sound principle. In suchview of the matter that the respondents shall consider the case of https://hcservices.ecourts.gov.in/hcservices/ the appellant not to impose the obligation to contribute during theperiod of closure in accordance with law. 11.The learned counsel for the appellant seeks permissionunder Article 134 A of the Constitution seeking leave to file appealto Supreme Court. We do not see any substantial question of lawinvolved in this case. Therefore, leave rejected. Sd/- Asst. Registrar / True Copy / Sub.Asst Registrar salTo1.The Assistant Provident Fund CommissionerEmployee’ Provident Fund OrganizationSub-Regional OfficeNo.31, Filter Bed Road,Vellore 632 0012.The Enforcement OfficerEmployees’ Provident Fund OrganisationSub-Regional OfficeNo.31, Filter Bed RoadVellore 632 001+ 1 cc to Mr.K.Umar,Advocate,SR.15582+ 1 cc to Mr.K.Ramu,Advocate,SR.15818W.A.No.1155/2007KU(CO)EM/15.6.09