Noor Niwas Nursery Public School Vs. Regional Provident Fund Commissioner & Ors.
EmailAppeal: Civil Appeal No. 3320 Of 1997
(From the Judgment and Order dated 30.10.96 of the Delhi High Court in C.W. No. 3742 of 1994)
(From the Judgment and Order dated 30.10.96 of the Delhi High Court in C.W. No. 3742 of 1994)
Petitioner: Noor Niwas Nursery Public School
Respondent: Regional Provident Fund Commissioner & Ors.
Apeal: Civil Appeal No. 3320 Of 1997
(From the Judgment and Order dated 30.10.96 of the Delhi High Court in C.W. No. 3742 of 1994)
(From the Judgment and Order dated 30.10.96 of the Delhi High Court in C.W. No. 3742 of 1994)
Judges: S. RAJENDRA BABU & S.N. VARIAVA, JJ.
Date of Judgment: Aug 12, 2000
Appearances:
Mr. H.S. Parihar, Mr. D.R. Thadani, Mr. A.C. David & Mr. Kuldeep S. Pari-har, Advocates for the Appellant.
Ms. B. Sunita Rao, Mr. Ajay Sharma, Mr. C. Radhakrishnan & Mr. B.K. Prasad, Advocates for the Respondents.
Head Note:
SERVICE LAWS
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
Section 2A – Covered establishment – Test of functional integrity- Society running serval schools-Two such schools run in adjacent buildings, one being senior secondary and the other nursery- Nursery having only four staff-PF Commissioner treating the two institutions as one establishment and thus bringing it under the scope of the Act – Contention of the nursery school (appellant ) that it was a separate establishment not ac-cepted- High Court on appeal, upholding the action of PF Commis-sioner. Held, facts clearly pointed out the factor that the two units constituted a single establishment- Link between the two having been established by facts, PF Commissioner justified in treating the two units as a single establishment for the purposes of coverage under the Act. High Court correct in confirming the order of PF Commissioner.
Held:
In the present case, when two units are located adjacent to one another and there are only two teachers with an Aaya, a Clerk and a Peon, it is difficult to believe that the Society which runs 30 schools would run a separate school consisting of such a small number of staff. If the unit of the appellant-school was not part of the unit of Francis Girls Higher Secondary School, the Head Clerk, Mrs. Wadhavan could not have been in possession of the particulars of the appellant-school and could not have furnished such particulars to the Inspector when he visited the school in connection with the grant of a code number. Indisputably, the two units are run by the same Society and they are located in one and the same address thereby establishing geographical proximity and nothing worthwhile has been elicited in the cross-examination of the Inspector in regard to inquiries made by him from Mrs. P.Wadhavan. Mrs. P.Wadhavan was not examined before the Provi-dent Fund Commissioner. All these facts clearly point out to one factor that the two units constitute one single establishment. After all appellant-school caters to nursery classes, while the higher classes are provided in Francis Girls Higher Secondary School. Thus, the link between the two cannot be ruled out. In the facts and circumstances of the case, we hold that the view taken by the provident Fund Commissioner as affirmed by the High Court in this regard is correct. (Para 5)
Cases Reffered:
1. Management of Pratap press. New Delhi v. Secretary, Delhi Press Workers’ Union, Delhi, (AIR 1960 SC 1213) (Para 4)
JUDGEMENT:
RAJENDRA BABU, J.
1. The appellant is aggrieved by the application of the Em-ployees’ Provident Funds and Miscellaneous Act, 1952 (hereinafter referred to as ‘the Act’). The appellant-institution is run by Baptist Union North India, a registered Society under the Regis-tration of Societies Act, 1860. The said Society runs two school at 17, Darya Ganj, Delhi, namely, Francis Girls Higher Secondary School which was established in 1916 and the appellant-school which runs nursery classes. The appellant-school was started in the year 1971. The claim of the appellant-school is that Francis Girls Higher Secondary School and the appellant-school, Noor Niwas Nursery Public School, are two different institutions having separate and independent accounts and are managed by two differ-ent Managing Committees. The appellant has four employees, name-ly, 1 Head Mistress, 1 Teacher, 1 Peon and 1 Aaya and it being a separate establishment is not covered by the provisions of the Act. Therefore, it is contended that Francis Girls Higher Second-ary School and the appellant-school cannot be treated as one establishment for the purpose of the Act.
2. The respondents’ contention is that an inspector of the de-partment visited Francis Girls Higher Secondary School when Mrs. P.Wadhavan, the Head Clerk in Francis Girls Higher Secondary School gave particulars not only in regard to Francis Girls High Court Secondary School but also in regard to the appellant-school. The said Inspector was examined as a witness before the Provident Fund Commissioner. He was thoroughly cross-examined suggesting that the letter seeking for a common number for depos-iting the contribution to the provident fund was obtained under duress. But while denying the same he clearly stated that this information had been furnished by Mrs. P. Wadhavan on 21.04.1982 voluntarily.
3. The Provident Fund Commissioner on this material held that the two institutions constitute one and the same establishment and, therefore, is covered by the Act. This order of the Provident Fund Commissioner was unsuccessfully challenged before the High Court. Hence, this appeal.
4. Whether two units are one or distinct will have to be consid-ered in the light of the provisions of Section 2-A of the Act which declares that where an establishment consists of different departments or has branches whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. In such cases, the court has to consider how far there is functional integrality between the two units, whether one unit cannot exist conveniently and reasonably without the other, and on the further question, in matters of finance and employment, the employer has actually kept the two units distinct or integrated. In fact, this Court set out certain tests in Management of Pratap Press, New Delhi v. Secre-tary, Delhi Press Workers’ Union, Delhi, (AIR 1960 SC 1213). Howev-er, we may point out that each case would depend upon its own peculiar facts and has to be decided accordingly.
5. In the present case, when two units are located adjacent to one another and there are only two Teachers with an Aaya, a Clerk and a Peon, it is difficult to believe that the Society which runs 30 schools would run a separate school consisting of such a small number of staff. If the unit of the appellant-school was not part of the unit of Francis Girls Higher Secondary School, the Head Clerk, Mrs. Wadhavan could not have been in possession of the particulars of the appellant-school and could not have furnished such particulars to the Inspector when he visited the school in connection with the grant of a code number. Indisputably, the two units are run by the same Society and they are located in one and the same address thereby establishing geo-graphical proximity and nothing worthwhile has been elicited in the cross-examination of the Inspector in regard to inquiries made by him from Mrs. P.Wadhavan. Mrs. P.Wadhavan was not examined before the Provident Fund Commissioner. All these facts clearly point out to one factor that the two units constitute one single estab-lishment. After all appellant-school caters to nursery classes, while the higher classes are provided in Francis Girls Higher Secondary School. Thus, the link between the two cannot be ruled out. In the facts and circumstances of the case, we hold that the view taken by the provident Fund Commissioner as affirmed by the High Court in this regard is correct.
6. However, the learned Counsel for the appellant drew our atten-tion to the letter sent to Francis Girls Higher Secondary School wherein the said school has been excluded from the purview of the Act in view of the fact that the provident fund in respect of all the employees is subscribed under another scheme. The learned Counsel submitted that if the two units were put together as a single establishment , the Act would be applicable and otherwise not, inasmuch as it falls short of the number of minimum of employees for the applicability of the Act under Section 1 (3)(b) of the Act. We are not impressed with this argument. The two establishments have more than 20 employees and the exemption granted under Section 17 of the Act is subject to the condition that such exclusion will not apply to the appellant’s unit be-cause the same would not be covered under another scheme for subscribing to the provident fund. When the entire establishment is covered by the Act, only part on the establishment is excluded and condition of exclusion being applicable only to a part, we fail to understands as to how the appellant can rely upon the said letter to claim non-applicability of the Act on the ground that it falls short of the number of employees.
7. We do not find any good reason to interfere with the order made by the High Court affirming the view taken by the provident Fund Commissioner. This appeal is, therefore, dismissed.
1. The appellant is aggrieved by the application of the Em-ployees’ Provident Funds and Miscellaneous Act, 1952 (hereinafter referred to as ‘the Act’). The appellant-institution is run by Baptist Union North India, a registered Society under the Regis-tration of Societies Act, 1860. The said Society runs two school at 17, Darya Ganj, Delhi, namely, Francis Girls Higher Secondary School which was established in 1916 and the appellant-school which runs nursery classes. The appellant-school was started in the year 1971. The claim of the appellant-school is that Francis Girls Higher Secondary School and the appellant-school, Noor Niwas Nursery Public School, are two different institutions having separate and independent accounts and are managed by two differ-ent Managing Committees. The appellant has four employees, name-ly, 1 Head Mistress, 1 Teacher, 1 Peon and 1 Aaya and it being a separate establishment is not covered by the provisions of the Act. Therefore, it is contended that Francis Girls Higher Second-ary School and the appellant-school cannot be treated as one establishment for the purpose of the Act.
2. The respondents’ contention is that an inspector of the de-partment visited Francis Girls Higher Secondary School when Mrs. P.Wadhavan, the Head Clerk in Francis Girls Higher Secondary School gave particulars not only in regard to Francis Girls High Court Secondary School but also in regard to the appellant-school. The said Inspector was examined as a witness before the Provident Fund Commissioner. He was thoroughly cross-examined suggesting that the letter seeking for a common number for depos-iting the contribution to the provident fund was obtained under duress. But while denying the same he clearly stated that this information had been furnished by Mrs. P. Wadhavan on 21.04.1982 voluntarily.
3. The Provident Fund Commissioner on this material held that the two institutions constitute one and the same establishment and, therefore, is covered by the Act. This order of the Provident Fund Commissioner was unsuccessfully challenged before the High Court. Hence, this appeal.
4. Whether two units are one or distinct will have to be consid-ered in the light of the provisions of Section 2-A of the Act which declares that where an establishment consists of different departments or has branches whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. In such cases, the court has to consider how far there is functional integrality between the two units, whether one unit cannot exist conveniently and reasonably without the other, and on the further question, in matters of finance and employment, the employer has actually kept the two units distinct or integrated. In fact, this Court set out certain tests in Management of Pratap Press, New Delhi v. Secre-tary, Delhi Press Workers’ Union, Delhi, (AIR 1960 SC 1213). Howev-er, we may point out that each case would depend upon its own peculiar facts and has to be decided accordingly.
5. In the present case, when two units are located adjacent to one another and there are only two Teachers with an Aaya, a Clerk and a Peon, it is difficult to believe that the Society which runs 30 schools would run a separate school consisting of such a small number of staff. If the unit of the appellant-school was not part of the unit of Francis Girls Higher Secondary School, the Head Clerk, Mrs. Wadhavan could not have been in possession of the particulars of the appellant-school and could not have furnished such particulars to the Inspector when he visited the school in connection with the grant of a code number. Indisputably, the two units are run by the same Society and they are located in one and the same address thereby establishing geo-graphical proximity and nothing worthwhile has been elicited in the cross-examination of the Inspector in regard to inquiries made by him from Mrs. P.Wadhavan. Mrs. P.Wadhavan was not examined before the Provident Fund Commissioner. All these facts clearly point out to one factor that the two units constitute one single estab-lishment. After all appellant-school caters to nursery classes, while the higher classes are provided in Francis Girls Higher Secondary School. Thus, the link between the two cannot be ruled out. In the facts and circumstances of the case, we hold that the view taken by the provident Fund Commissioner as affirmed by the High Court in this regard is correct.
6. However, the learned Counsel for the appellant drew our atten-tion to the letter sent to Francis Girls Higher Secondary School wherein the said school has been excluded from the purview of the Act in view of the fact that the provident fund in respect of all the employees is subscribed under another scheme. The learned Counsel submitted that if the two units were put together as a single establishment , the Act would be applicable and otherwise not, inasmuch as it falls short of the number of minimum of employees for the applicability of the Act under Section 1 (3)(b) of the Act. We are not impressed with this argument. The two establishments have more than 20 employees and the exemption granted under Section 17 of the Act is subject to the condition that such exclusion will not apply to the appellant’s unit be-cause the same would not be covered under another scheme for subscribing to the provident fund. When the entire establishment is covered by the Act, only part on the establishment is excluded and condition of exclusion being applicable only to a part, we fail to understands as to how the appellant can rely upon the said letter to claim non-applicability of the Act on the ground that it falls short of the number of employees.
7. We do not find any good reason to interfere with the order made by the High Court affirming the view taken by the provident Fund Commissioner. This appeal is, therefore, dismissed.
