“Supreme Court Dismisses Plea: EPF Act Applicable to Factories Outside Schedule 1 Industries, Including Umbrella Making Unit”
Civil Appeal No. 4619 of 2010 and its counterpart, Civil Appeal No. 4620 of 2010, emerged as landmarks. Delivered on November 7, 2023, by the distinguished duo of Abhay S. Oka and Sanjay Karol, JJ., the judgment in these appeals unveiled a nuanced interpretation of clause (b) of sub-Section (3) of Section 1 of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. This article delves into the factual aspects, submissions, and the crux of the court’s considerations.
Factual Landscape
- Background of the Case: The appellant, Thankamma Baby, engaged in the manufacturing, assembling, and selling of umbrellas, found herself in the crosshairs of the Regional Provident Fund Commissioner, Kochi, Kerala. The bone of contention was the applicability of the 1952 Act to the appellant’s business.
- Allegations and Inquiry: The Commissioner alleged that the appellant’s business fell under the category of ‘trading and commercial establishments’ as per the 1952 Act. An inquiry ensued, leading to a series of legal proceedings, including a Writ Petition that reached the Kerala High Court.
Legal Arguments
- Appellant’s Stand: Mr. Joseph Kodianthara, Sr. Adv., representing the appellant, contended that establishments covered by clause (a) of sub-Section (3) of Section 1 pertain to factories engaged in industries specified in Schedule I. He argued that, by implication, clause (b) of sub-Section (3) excludes factories, and thus, the appellant’s umbrella-making unit should not fall under it.
- Respondent’s Counter: On the contrary, the respondent, represented by Mr. Siddharth, Adv., asserted that the appellant’s business, involving both manufacturing and selling umbrellas, fits the definition of ‘trading and commercial establishments.’ The respondent argued that the appellant should be covered by the notification issued by the Central Government.
Judicial Considerations
- Statutory Interpretation: To decipher the legislative intent, the court referred to Section 1 of the 1952 Act. The Constitution Bench’s ruling in Mohmedalli v. Union of India became pivotal, establishing the Act as a measure of social justice.
- Clause (a) vs. Clause (b): The court clarified that while clause (a) of sub-Section (3) applies to factories engaged in industries specified in Schedule I, clause (b) encompasses all other establishments notified by the Central Government. A purposive interpretation was emphasized to align with the legislative aim of social welfare.
- Applicability of Notification: The court upheld the finding that the appellant’s business, involving the assembly and sale of umbrellas, qualifies as a ‘trading and commercial establishment’ under the notification dated 7th March 1962.
Conclusion
In conclusion, the Supreme Court dismissed the appeals, affirming the decisions of the learned Single Judge and the Division Bench of the Kerala High Court. The appellant’s establishment, involved in the commercial activity of assembling and selling umbrellas, fell squarely within the ambit of the notification under clause (b) of sub-Section (3) of Section 1 of the 1952 Act.
