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Synopsis

The Supreme Court has recently said the central government has been vested with the power of specifying such establishments or class of establishments as it might determine to be brought within the purview of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. 

A bench of Justices Abhay S Oka and Sanjay Karol thus rejected the contention that clause (a) of sub-Section (3) of Section 1 is applicable to the factories engaged in the industries specified in Schedule I of the Act. Therefore, those factories not specified in Schedule I cannot be covered by clause (b) of sub-Section (3) of Section 1 of the 1952 Act. He submits that clause (b) of sub-Section (3) does not refer to the factories. 

Appellant Thankamma Baby claimed her umbrella making unit was not an industry specified in Schedule I.

The Regional Provident Fund Commissioner, Kochi, on the contrary, said the business of the appellant is admittedly not only of assembling or manufacturing the umbrellas but also of selling, thus, it will be covered by the category of trading and commercial establishments incorporated in the notification.

Court referred to the Constitution Bench decision in the case of 'Mohmedalli and others V Union of India and another' (1963), that held in so far as establishments which do not come within the description of the factories engaged in industries enumerated in Schedule I are concerned, the central government has been vested with the power of specifying such establishments or class of establishments as it might determine to be brought within the purview of the 1952 Act.

"The argument that a notification cannot be issued under clause (b) of sub-Section (3) regarding a factory engaged in an industry not covered by Schedule I cannot be accepted. We are dealing with a social welfare legislation described by the Constitution Bench as a measure of social justice. Therefore, to give effect to the legislature's intention, the court will have to give purposive interpretation," the bench said.

The bench also noted it is not the case of the appellant that her establishment has been exempted under Section 16 of the 1952 Act. 

"Under the notification dated 7th March 1962, there is a category of ‘trading and commercial establishments’. Admittedly, the appellant is carrying on the business of assembling/manufacturing umbrellas and selling the same," the bench said.

The court noted a finding has recorded that the business of establishment of the appellant was of assembling umbrellas and selling the same in her own outlet. Thus, it is a commercial establishment. Therefore, it cannot be denied that the business of the appellant will fall in the category of ‘trading and commercial establishments’. 

"In the circumstances, the case of the appellant will be governed by the said notification issued under clause (b) of sub-Section (3) of Section 1," it held. The apex court found absolutely no error in the judgments of the single as well as division bench of the Kerala High Court.

It, however, granted three months' time to the appellant to deposit the money since the appeal was of year 2010.

Case Title: THANKAMMA BABY vs. THE REGIONAL PROVIDENT FUND COMMISSIONER, KOCHI, KERALA