SUPREME COURT OF INDIA
Regional Provident Fund Commissioner
Vs
Sanatan Dharam Girls Secondary School and Others
Appeal (Civil) 7016 of 2004 With Civil Appeal Nos. 7738/2004, 7740/2004, 7739/2004, 715- 737/2005, 739/2005, 742/2004, 741/2005, 746/2004, 745/2005, 738/2004, 747/2004, 748/2005, 740/2005, 750/2005, 749/2005, 752/2005, 751/2005, 743/2005, 744/2005 and 753/2005
(Dr. Ar. Lakshmanan and Tarun Chatterjee, JJ)
30.10.2006
DR. AR. LAKSHMANAN, J.
In the present matter, the appellant is the Regional Provident Fund Commissioner (RPFC) and the respondents are Sanathan Dharam Girls Secondary School, a Non- Governmental Educational Institution and the State of Rajasthan among others.
Brief facts in the matter are as follows:
The Employees Provident Fund and Misc. Provisions Act (in short 'the EPF Act')
came into force in 1952. In 1982, vide Gazette notification by the Government,
Educational Institutions were added in the Schedule of the Act under section 1
(3). The schedule reads thus:
"(I ) Any University;
(ii) Any college whether or not affiliated to a University
(iii) Any school, whether or not recognized or Aided by the Central or State
Government
(iv) Any scientific institution
(v) Any institution in which research in respect of any matter is carried on.
(vi) any other institution in which the activity of imparting knowledge or
training is systematically carried on."
Further in 1988, clause (b) of section 16(1) of the EPF Act, 1952 was substituted
by new clauses (b) (c) and (d). The amended provisions read as under:
" 16 (1) (b): to any other establishment belonging to or under the
control of the Central Government or a State Government and whose employees are
entitled to the benefits of contributory provident fund or old age person in
accordance with any scheme or rule framed by the Central Government or the
State Government governing such benefits;
(c) to any other establishment set up under any Central Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed under that Act governing such benefits;
(d) To any other establishment newly set up until the expiry of a period of three
years from the date on which such establishment is has been set up"
The State Government had framed rules known as 'The Rules for payment of
Grant-in-Aid to non-governmental educational, cultural and physical educational
institutions in Rajasthan, 1963'. Later in 1989 the Rajasthan Legislative
Assembly passed
"The Rajasthan Non-Government Educational Institutions Act, 1989"
which came into force from 01.01.1993.
On 05.08.1997, the State Government (Finance Department) issued an order to
implement the provisions of the EPF Act, 1952 on Non-Governmental aided
educational institutions employing 20 or more persons.
On 24.01.1998, the State Government (Educational Department) passed an order by
which it transferred the existing Provident Fund amount from the State treasury
to the office of Regional Provident Fund Commissioner. Later on 24.08.1998, the
State Government (Finance Department) passed an order about transfer of
Provident Fund amount from State treasury to the Provident Fund Commissioner. Various
Educational Institutions filed 21 writ petitions in the High Court of
Rajasthan, challenging the orders and circulars of the State Government issued
on 05.08.1997, 24.01.1998 and 24.08.1998. The Regional Provident Fund
Commissioner also filed 2 writ petitions in the High Court. The learned Single
Judge dismissed the writ petitions filed by the Regional Provident Fund
Commissioner and allowed the 21 writ petitions filed by different Educational
Institutions by an order dated 16.01.2001 stating that the state Act would
override the provisions of EPF Act, 1952 and also observed that the educational
institutions before him would fall under the exception under the amended
section 16 (1) (b) of the EPF Act.
Against this order of the learned Single Judge, the RPFC went on appeal before
the Division Bench of the Rajasthan High Court. However, the Division Bench
also observed that the EPF Act will not apply to the Educational Institutions
before the Court and dismissed the appeals filed by the RPFC. Further on 23.02.2003,
the respondent, Educational Institution filed the S.B. Civil Writ Petition
before the High Court challenging the order of the State Government directing
the Non-Governmental aided Educational Institution employing 20 or more persons
to deposit its contribution with the RPFC. The High Court disposed off the
matter in favour of the Educational Institution in line with the decision in
the matter of Balbari Vidya Mandir Churu v. State of Rajasthan & others
(S.B. Civil Writ Petition No. 1085/2000). Against this decision of the High
Court, the RPFC went on appeal to the Division Bench of the High Court which in
turn by an order dated 16.09.2002, dismissed the appeal. Being aggrieved by
this order of the High Court of Rajasthan, the appellant, RPFC has approached
this Court. As we understand, the issue before this court is:
Whether the provisions of EPF Act, 1952 are applicable to the Non- Governmental
Educational Institutions or not in view of the provisions contained in Section
16 of the EPF Act. and whether the respondents Institutions will fall under the
exceptions stated in section 16(1) (b) of the EPF Act.
We heard Mr. H.L. Aggarwala, learned senior counsel appearing for the
appellant, Mr. Aruneshwar Gupta, learned Additional Advocate General appearing
for the respondent and Mr. S.K. Dubey, learned senior counsel, Mr. Sushil Kumar
Jain and Manish Singhi, learned counsel appearing for the interveners. We have
also perused all the documents filed before us.
Learned senior counsel appearing for the appellant, the RPFC stated that, the
Central Act that is the EPF Act came into force in 1952, the same was made
applicable to all Educational Institutions from 06.03.1982 and there were no
State Acts or rules in place which dealt with the matters relating to Provident
Fund in Educational Institutions. Later in 1989 the Rajasthan Legislative
Assembly passed "The Rajasthan Non-Government Educational Institutions
Act, 1989 which came into force from 01.01.1993. Therefore, during the period
from 06.03.1982 to 31.12.1992, the Central Act, that is the EPF Act, 1952 will
be applicable on all Educational Institutions employing more than 20 employees.
To establish this, the learned counsel invited our attention to M.P. Shikshak
Congress and Ors. Vs. R.P.F. Commissioner, Jabalpur and Ors , case, where
this Court observed that:
"However, after the application of the Employees' Provident Fund and
Miscellaneous Provisions Act, 1952 to education institutions, in 1983 new Rules
were framed by the State of Madhya Pradesh under Act 20 of 1978. These are
referred to as the State Rules of 1983. Under the State Rules of 1983, for the
first time a scheme was set out for Contributory Provident Fund covering the
teachers and employees of aided schools. The State Government, however, was
conscious of the fact that the Employees' Provident Fund and Miscellaneous
Provisions Act, 1952 was applicable in the State of Madhya Pradesh. Therefore,
by Rule 10(6) of the State Rules of 1983, it was provided that the scheme as
set out in State Rules of 1983 would not apply where the provisions of the
Employees' Provident Fund and Miscellaneous Provisions Act, 1952 apply.
Clearly, therefore, far from there being any conflict between the State and the
Central Legislation, the State Legislation by Rules framed in 1983 has excluded
from the operation of the State scheme as framed under the 1983 Rules, those
employees to whom the Central Act applies.
16. In this view of the matter, there can be no doubt that for the period 1st
August, 1982 to 1st August, 1988 the Employees' Provident Fund and
Miscellaneous Provisions Act, 1952 was applicable to such teachers and
employees of the aided schools in the State of Madhya Pradesh who are covered
by the provisions of the scheme framed thereunder. The orders of the Regional
Provident Fund Commissioner, therefore, in so far as the orders cover the
period 1st August, 1982 to 1st August, 1988 are valid"
Further the learned senior counsel submitted that, the Educational
Establishment covered or coverable under EPF Act, 1952 during the period from
06.03.1982 to 31.12.1992 will remain covered or coverable under Central Act of
1952 itself even after the coming into force of the State Act of 1989 or the
State Rules of 1993, as RPFC has already settled the PF Accounts of their
employees on retirement and has settled their pension cases, family pension
cases, children and parents pension cases and monthly pension cases and paying
monthly pension/family pension regularly for number of years.
It was submitted by the learned counsel appearing for the appellant that, the
learned single Judge and the Division Bench of the Rajasthan High Court have
not correctly appreciated and interpreted Section 16 (1) (b) of the EPF Act,
1952 and have wrongly recorded that all Educational Institutions are under the
control of the State Government as they are recognized by the State Act of
1989. He pointed out that these Educational Institutions were running and are
managed by registered societies and none of them are owned or managed by the State
Government. Merely on the basis of recognition under the State Act of 1989 it
could not have been held that these Educational Institutions are under the
control of the State Government as required under section 16 (1) (b) of the EPF
Act, 1952.
Further, the counsel stated that, only the Educational Institutions whose
management has been taken over by the State Government under section 10 of the
State Act, 1989 shall fall within the exception under section 16 (1) (b) of the
State Act of 1989. Section 10 reads as follows:
"10. Powers of the State Government to take over management-(1)
notwithstanding anything contained in any law for the time being in force,
whenever it appears to the State Government that the managing committee of any
recognized institution has neglected to perform any of the duties assigned to
it by or under this Act or the rules made there under or has failed to manage
the institution properly and that it has become necessary in the public
interest to take over the management of such institution, it may after giving
to such managing committee a reasonable opportunity of showing cause against
the proposed action, take over such management and appoint an administrator to
exercise control over the assets of the Institution and to run the institution
for such period as the State Government may from time to time fix.
(2) Where, before the expiry of the period fixed under sub- section (1) the
State Government is of opinion that it is not necessary to continue the
management of the institution by an administrator, such management shall be
resorted to the managing committee".
While concluding his submissions, the learned senior counsel stated that the
High Court did not take into consideration that the Central Act is more
beneficial for the employees than the State Act as there is compulsory pension
scheme, called "The Employees Pension Scheme, 1995" under the Central
Act.
Mr. Aruneshwar Gupta, learned Additional Advocate General, appearing for the
State of Rajasthan, respondent herein submitted that, in the year 1989 the
Government of Rajasthan enacted the Rajasthan Non-government Educational
Institutions Act, 1989. The Act came into force on 01.01.1993. The State
Government after the enactment of the said Act has clearly occupied the field concerning
the deposit of PF of the employees of Non-Government Institutions and it
clearly overrides the provisions of the EPF Act, 1952. He submitted that, it is
relevant to mention that the contribution to the PF pertains to Entry 24 of
List III of the Schedule 7 of the Constitution of India,
1950. Therefore, as far as post 1993 period is concerned, the RPFC do
not have any subsisting legal right as that Act of 1989 of Rajasthan shall
prevail and to this extent the issuance of orders dated 05.08.1997, 28.01.1998
and 24.08.1998 by the Government of Rajasthan amounted to incorrect application
of law and the AG appearing for the state of Rajasthan clearly conceded to the
same before the High Court of Rajasthan. Thus it is clear that the Educational
Institutions are outside the purview of the EPF Act. Besides, the Central Act
itself contemplates non- application of the Central Act in certain situations
especially enumerated under section 16 of the Act of 1952. Section 16 (1) (b)
clearly mentions that the establishments which are under the control of state
government will not fall within the purview of the Central Act, 1952. Moreover,
there is a scheme framed for contributory PF under the chapter VIII of the
Rules of 1993.
In conclusion it was submitted by the learned counsel for the respondent State
that in the present fact scenario, the provisions of section 16(1) (b) of the
Central Act, 1952 are attracted and therefore, the appellant cannot claim any
right over the contributory provident fund of the employees of the Educational
Institutions covered by the Act of 1989.
Mr. S.K. Dubey and Sushil Kumar Jain, learned counsel appearing for the
interveners, submitted as follows:
1) That their institutions are governed under the provisions of the Rajasthan
Non-Government Educational Institutions Act, 1989. The said Act was enacted in
the year 1989 and was reserved for and received Presidential assent on 4.6.1992
in terms of Article 254(2) of the Constitution Of India,
1950. The said Act came into force with effect from 4.7.1992.
2) That Entry 24 of List III of the VII Schedule read with Article 246(2) of
the Constitution Of India, 1950 allows concurrent
power to the Center and the State Governments to legislate with regard to
Provident Funds. The said entry provides as under: "Welfare of labour
including conditions of work, provident funds, Employer's liability, workman's
compensation, invalidity and old age pension and maternal benefits."
3) That the Union had enacted the Employees Provident Fund Act, 1952 in exercise
of the said powers. The State Government of Rajasthan has, thereafter, enacted
the Rajasthan Non-Government Educational Institutions Act, 1989, which also
includes a power to make a provident fund scheme. It was also submitted that
the State Government has, thereafter, framed the scheme under the rules and the
respondent- institutions are governed by the said scheme. Since the State Act
has received Presidential assent, the said Act would prevail over the Central
Act in the State of Rajasthan as per the provisions of Article 254(2) of the Constitution Of India, 1950. The said Article provides as
under:
"254. Inconsistency between the laws made by Parliament and Laws made
by Legislatures of States:-
(1)
(2) Where a law made by the legislature of the State with respect to one of the
matters enumerated in the concurrent list contains any provisions repugnant to
the provisions of an earlier law made by the Parliament or any existing law
with respect to that matter, then, the law so made by the Legislature of such
State shall, if it has been reserved for the consideration of the President and
has received his assent, prevail in that State.
Provided that nothing in this clause shall prevent Parliament from enacting at
any time any law with respect to the same matter including a law adding to,
amending, varying or repealing the law so made by the legislature of the
State."
4) that the State Act would "eclipse" the Central Act within the
State of Rajasthan and therefore, the Central Act (i.e. the EPF Act) would not
apply to the educational institutions in the State of Rajasthan which are
governed by the State Act. Undoubtedly, the respondent- institutions are
covered under the State Act and as such the provisions of the said Act would be
applicable on the respondent-institutions.
In support of his submission, he relied on the judgment of this Court in State
of Bihar vs. Bhabapritananda Ojha, In this case, this Court dealt with
the provisions of the Bihar Hindu Religious Trusts Act, 1950(Bihar 1 of 1951),
which received the president's assent on February 21, 1951 and came into force
on August 15, 1951. The said Act established the Bihar State Board of Religious
Trusts to discharge the functions assigned to the Board by the Act. The said
Act was challenged on the grounds that it was ultra vires of the Bihar
Legislature and in the alternative, it was contended that even if it was
construed that the Act was intra vires, it did not apply to the Baidyanath
Temple and the properties appertaining thereto by reason of the circumstance
that the said temple and its properties were administered under a Scheme made
by the Court of the District Judge of Burdwan and approved by the Calcutta High
Court, both of which are situated outside the territorial limits of Bihar.
After considering the matter, this Court held as under:
".If, as we have held, it is open to the Bihar Legislature to legislate
in respect of religious trusts situate in Bihar, then that Legislature can make
a law which says, as in sub-s. (5) of s. 4 of the Act, that s. 92 of the Code
of Civil Procedure shall not apply to any religious trust in the State of
Bihar. If sub-s. (5) of s. 4 of the Act is valid as we hold it is, then no
question really arises of interfering with the jurisdiction of the District
Judge of Burdwan or of the Calcutta High Court in respect of the Baidyanath
temple, inasmuch as those courts exercised that jurisdiction under s. 92, Code
of Civil Procedure, which no longer applies to the Baidyanath temple and the
properties appertaining thereto, after the commencement of the Act. It is true
that the Act does put an end to the jurisdiction under s. 92, Code of Civil
Procedure, of all courts with regard to religious trusts situate in Bihar, but
that it does by taking these trusts out of the purview of s. 92. In other
words, the Act does not take away the jurisdiction of any court outside Bihar
but takes the religious trusts in Bihar out of the operation of s. 92 so that a
court outside Bihar in exercise of its jurisdiction under s. 92 will decline to
deal with a religious trust situate in Bihar just as it will decline to
entertain a suit under that section regarding a private trust of religious or
charitable nature. Civil Procedure, including all matters included in the Code
of Civil Procedure at the commencement of the Constitution, is item 13 of the
Concurrent List. It has not been disputed before us that it is open to the
Bihar Legislature to amend the Code of Civil Procedure while legislating in
respect of religious endowments and religious institutions in Bihar, and the
President's assent having been received to the Act, the law made by the Bihar
Legislature shall prevail in that State, under Art. 254(2) of the Constitution,
in respect of all religious trusts situate in Bihar."
In the case of Bhagwat Singh vs. State of Rajasthan, , with regard to the
applicability of the provisions of the Rajasthan Industrial Tribunal
(Constitution & Proceedings) Validating Act, 1959, this Court held as under:
"14. It is unnecessary however to consider the merits of these
contentions because the Legislature has remedied the defects, if any, in the
constitution of the Tribunal, by enacting the Rajasthan Industrial Tribunal
(Constitution and Proceedings) Validating Act, 1959, which was reserved for the
consideration of the President of India and has received his assent. By s. 2(1)
of that Act, notwithstanding any judgment, decision or order of any court and
notwithstanding any defect or want of form or jurisdiction, the Industrial
Tribunal for Rajasthan, constituted under s. 7 of the Industrial
Disputes Act, 1947, by Government notification dated the 2nd June, 1953,
as amended by order dated the 9th March, 1956, shall, as respects the period
commencing on the 10th day of March 1957 and ending with the 15th day of April,
1959, be deemed to have been duly constituted under s. 7A of the said Act. By
sub-s. (2) it is provided that notwithstanding any judgment, decision or order
of any court all references made to and all proceedings taken and orders passed
by the Industrial Tribunal constituted in sub-s. (1) between the period 10th
March, 1957 and 15th April, 1959, shall be deemed respectively to have been
made, taken and passed as if the said Tribunal were constituted under s. 7A of
the Act. It is clear from the validating provisions that the Tribunal
originally constituted under s. 7 of the Industrial
Disputes Act, 1947, before it was amended by Act 36 of 1956 is to be
deemed to have been duly constituted under s. 7A, and the reference made on
December 18, 1957 is to be deemed to have been made as if the Tribunal were
constituted under s. 7A of the amended Act. The Validating Act is, because of
Item 22, List III of the Seventh Schedule to the Constitution, within the
competence of the State Legislature, and it was reserved for the consideration
of the President and has received his assent. It must by virtue of Art. 254(2)
prevail in the State of Rajasthan."
5) That in the present case, the provisions of the said Act and the Rules made
thereunder apply and prevail over the provisions of the Employees Provident
Fund Act, 1952. It was further submitted that there is a clear conflict among
the provisions in respect of the Provident Fund Scheme and the resultant effects
thereto between the State and the Central Act and as the State Act has received
Presidential assent, the provisions of the said Act would apply.
6) That no arguments have been advanced by the appellants in the present case
with regard to the present submissions before the High Court nor were any
arguments raised by the appellant before this Court. It was also submitted that
in the absence of any rebuttal by the respondent, it is clear that the
provisions of the State Act would prevail over the Central Act. Institution
fall under exception contained under Section 16(1)(b) of the EPF Act, 1952.
Section 16(1)(b) of the EPF Act, 1952 provides as under:
"16(1) This Act shall not apply-
(a)....................
(b) to any other establishment belonging to or under the control of the Central
Government or a State Government and whose employees are entitled to the
benefit of contributory provident fund or old age pension in accordance with
any scheme or rule framed by the Central Government or the State Government
governing such benefits; or
(c) To (e) "
In order to be covered under the exception to the EPF Act, 1952 stated above,
following two conditions have to be satisfied by the establishment seeking to
be exempted from the provisions of the EPF Act, 1952:
1) It must be an establishment belonging to or under the control of the Central
Government or a State Government, and
2) It must be an establishment whose employees are entitled to the benefit of
contributory provident fund or old age pension in accordance with any scheme or
rule framed by the Central Government or the State Government governing such
benefits.
We heard the parties in detail. The submissions made by the learned counsel
appearing for the respondents merit acceptance. It is not in dispute that the
respondent- institutions have been paying the provident fund dues to the State
Government in accordance with the Scheme framed by the State Government under
the State Act and thus the employees of the respondent-institutions are
entitled to the benefit of the provident fund. By the orders impugned by the
respondent-institutions, the State Government has sought to transfer the
balance standing to its credit to the Regional Provident Fund Commissioner.
Thus it is clear that the respondent-institutions have been paying in
accordance with the Scheme and there is no grievance with regard to the same.
In respect to the contention of the respondent that the establishment belonging
to or under the control of the Central Government or a State Government, it was
submitted that the establishments must either be (a) belonging to or (b) under
the control of the Central Government or the State Government. In our view, the
two words used in the said Section have different connotations. The words
"belonging to" signifies ownership i.e. the Government owned
institutions would be covered under the said part and the words "under the
control of" signifies control other than ownership since ownership has
already been covered under the words "belonging to". It must be also
noted that the two words are separated by the word "OR" and therefore
these two words refer to two mutually exclusive categories of institutions.
While the institutions "belonging" to the Central or the State
Government would imply the control of the State but the privately owned
institutions can be "under the control of" the Government in various
ways.
Under the State Act itself, the "Control" by the State is in the
following ways:
(a) Under Section 3 of the State Act, the State Government grants recognition
to the "Non-government educational institutions". It was submitted
that recognition by the State is of prime importance for running and operating
an educational institution. The said recognition can be withdrawn on the
failure of the institution to abide by the terms and the conditions of the
grant of recognition.
(b) Under Section 7 of the State Act, the State Government grants aid to only
recognized educational institutions. The aid given by the State can be used
only for the purpose for which the aid has been given. Under Section 8, the
institutions are thereafter required to keep accounts in the manner prescribed
by the State. It was submitted that in such manner, the State exercises
Financial Control over the institutions.
(c) Under Section 9, it has been prescribed that the institutions shall be
governed by a managing committee and Section 10 of the Act empowers the State
to take over management of the institutions "whatever it appears to the
State that the Managing Committee has neglected to perform the duties assigned
to it by or under the Act or the Rules made thereunder.
(d) Chapter V of the Act relates to properties of the institutions and the
manner in which the institutions can manage the properties of the institution.
It was submitted that under Section 13 of the Act, the institutions have to
apply and get the approval of the competent authority set up under the said Act
before transferring the management of the institution. Under Section 15,
restrictions have been placed on the transfer of immovable properties of the
institutions.
(e) Section 14 of the Act prohibits closure of any institution or its class or
the teaching of any subject therein without notice in writing to the competent
authority. It was submitted that the government thus has Functional control
over the institution.
(f) Chapter VI of the State Act deals with recruitment and removal etc. of
employees. Their salary, conditions of service, provident fund, code of conduct
are all prescribed under the Act. The Act further prescribes setting up of a
Tribunal for resolution of the disputes whose decision is final and binding on
the parties. The State Government also exercises Administrative Control over
the institution. Section 17 deals with the manner of recruitment and Section 18
deals with the procedure in which the employees may be removed or dismissed or
reduced in rank. Section 28 permits the State Government to prescribe the code
of conduct of the employees and Section 29 enjoins upon the institutions not to
give to its employees a pay lesser than the scales of pay and the allowances
paid to similar categories of the State Government. In our view, the State Act
is a complete code in itself with regard to the educational institutions and
the State Government exercises substantive control over the institutions even
though the institutions are not "owned" by it. The word
"control" has not been defined under the EPF Act, 1952.
However, this Court in Shamrao Vithal Coop. Bank Ltd. vs. Kasargode Panduranga
Maliya, at page 604 has cited with approval the meaning of the word
"control" as it appears at page 442 of Words & Phrases Vol.9,
Permanent Edition as under:
"The word "control" is synonymous with superintendence,
management or authority to direct, restrict or regulate."
In the case of State of Mysore vs. Allum karibasappa, at page 501, this
Court defined the words "word control" as under:
"The word "control" suggests check, restraint or influence
Control is intended to regulate and hold in check and restrain from
action."
We further observe that the State Government has the power of Superintendent or
the authority to direct, restrict or regulate the working of the educational
institutions. It was, therefore, submitted that the institutions had satisfied
both the conditions (i) and (ii) mentioned above and as such they would fall
within the exception contained under Section 16(1)(B) of the EPF Act, 1952.
In this context we may refer to the decision cited by the appellant in the case
of M.P. Shikshak Congress vs. R.P.F. Commnr., , in which it was stated
that the provisions of the E.P.F. Act apply in supersession of the State Act.
This contention is not correct; the said case is clearly distinguishable on
facts as has been noted in the judgment itself. The State Act did not provide
for establishment of any Scheme as has been provided under the provisions of
the State Act in the State of Rajasthan. In this regard, this Court noted as
under:
"12 The Act did not even provide for any scheme for setting up a
provident fund. The Act incidentally required that the institutional
contribution to any existing provident fund scheme should be paid into the
institutional fund set up under the said Act."
In addition to the above, the said case is also distinguishable with regard to the
contention of repugnancy and Article 254(2) of the Constitution
Of India, 1950. In the said case, the Act in relation to the State of
Madhya Pradesh came into force prior to the application of the provisions of
the EPF Act, 1952 on educational institutions and therefore the benefit of Art.
254(2) was not available to it. In the present case, however, admittedly the
State Act has been enacted and has received the assent of the president
subsequent to the applicability of the EPF Act, 1952 on the educational
institutions. In this regard, this Court in the said case noted as under:
"13. It was by reason of the notification of 06.03.1982 that the
Central Act was extended to educational institutions. The Employees'
Provident Funds and Miscellaneous Provisions Act, 1952 therefore, became
applicable to educational institutions in the State of Madhya Pradesh for the
first time on 6-3-1982. This was much later than the enactment of the State Act
20 of 1978. The parliamentary enactment, therefore, would prevail over the
State Act 20 of 1978, assuming that the State Act of 1978 created or effected
any scheme for provident fund. Article 254(2), therefore, has no application in
the present case."
Mr. Manish Singhvi, learned counsel appearing for respondent No.1 in Civil
Appeal No. 748 of 2005 reiterated the submissions made by them in the counter
affidavit filed in the special leave petition No. 2625 of 2003. He submitted
that the demand issued by the Regional Provident Fund Commissioner at Udaipur
was ultra vires and beyond jurisdiction because there was already an exemption
under law for the purposes of application of this Act and, therefore, the order
dated 23.05.1997 was a nullity. It was further submitted that the exemption was
withdrawn from October, 1993 onwards and, therefore, the exemption notification
granted under this Act was prevalent between January, 1983 to September, 1992.
He has also given the details in regard to the details of payment of Provident
Fund/Pension scheme in accordance with the directions issued by the State
Government/Central Government in the counter affidavit filed by them. He also
invited our attention to the notification dated 14.02.1983 issued by the
Government of Rajasthan in exercise of the power conferred by sub-section 17 of
the EPF and Misc. Provisions Act, 1952 exempting schools added by the State
Government from the operation of the said Act subject to the condition that the
scheme of the Provident Fund applicable the employees of educational
institutions vide No. F7(13) Education GR 74 dated 12.11.1974 shall be reviewed
by the Committee which shall be constituted by the Education Department with
representatives of the Finance Department and Labour Department to review the
existing schemes so as to bring inconformity with the central scheme if needed.
It is beneficial to refer to the notifications dated 23.12.1988 and 26.12.1993
in this context. The said two notifications read thus:
"GOVERNMENT OF RAJASTHAN
Labour Department
No.F.13(9)Shram/82-Pt.II, Jaipur
Dtd.23.12.1988
NOTIFICATION
In exercise of Powers conferred by Sub-section (1) of Section 17 of the
Employees Provident Fund & Miscellaneous Provisions Act, 1952 (Central Act
19 of 1952) and in supersession of this department notification
No.F.13(9)Shram/82-Pt.II dated 14.2.83 the State Government hereby exempts all
schools and educational institutions aided by the State Government from the
operation of all the provisions of the Provident Fund Scheme only.
This shall have immediate effect.
BY ORDER OF THE GOVERNOR
Sd/-
K.L.KOCHAR SPECIAL SECRETARY TO THE GOVERNMENT"
"GOVERNMENT OF RAJASTHAN Labour Department
No.F.13(9)Shram/82-Pt.II, Jaipur
Dtd.26.10.1993
NOTIFICATION
Notification No.F.13(9)Shram/82-Pt.II dated 14.02.1983 and even notification
dated 23.12.1988 issued by this department under Sub-section (1) of Section 17
of the Employees Provident Fund & Miscellaneous Provisions Act, 1952
(Central Act 19 of 1952) is hereby nullified with immediate effect.
In this regard, it is hereby clarified that if the relief- granted educational
institutions want to seek exemption for their employees, for whom they get
relief, under the provisions of Employees Provident fund Scheme 1952 then such
educational institutions can seek exemption from Regional Provident Fund Commissioner,
Rajasthan, Jaipur as per para 27 of Employees Provident Fund Scheme 1952, after
obtaining applications from their such employees.
By the Order of Governor
Sd/-
Ramveer Singh Bhanwar Labour Commissioner and Deputy Secretary to the
Government"
Learned counsel appearing for the respondent in C.A. Nos. 715-737 of 2005 also
drew our attention to the counter affidavit filed on behalf of the State of
Rajasthan and the educational institutions. It is submitted that the order of
recovery is patently illegal and unjustified because of the fact that the
respondent institution does not come under the purview of the Act of 1952. He
would further submit that after the amendment was made in Section 16 of the Act
by the EPF and Miscellaneous Provisions Amendment Act (33 of 1988) all
establishments belonging to or under the control of the Central Government or
State Government have been exempted from the provisions of the Act. Arguing
further, he submitted that the words in Section 2(b) and 2(a) are so clear and unambiguous
that no further interpretation need be made to amplify the same and that the
provisions made in the enactment of 1989 make it clearer that the respondent
institution is a recognized educational institution managed by the private
management and is within the effective management of the State Government and,
therefore, it is entitled to be excluded from the applicability of the Central
Act, 1952. Learned counsel appearing for the respondents in all the other
appeals adopted the arguments of Mr. Sushil Kumar Jain.
For the foregoing reasons, all the civil appeals filed by the Regional Provident Fund Commissioner stand dismissed and the judgment and order passed by the Division Bench of the High Court dated 16.09.2002 and all the judgments on different dates by different Division Benches stand affirmed. No costs.