Employees Provident Fund

and
Miscellaneous Provisions Act
1952
Case Presentation
Group MembersRoll No
1. Sharan Naik 14
2. Shilpa Shetty 20
3. Billy S Varghese
24

The Case
Akhanand KV Mandal
Vs
RPF Commissioner
Gujarat High Court

Facts of the Case

Appellant: Akhanand KV Mandal represented by
Adv. N.D.Nanavati, Nanavati Advocates
Respondent: Regional Provident Fund
Commissioner represented by Adv. Niral R Mehta
Court: Gujarat High Court
Judges: Hon. Mr. Justice K S Jhaveri & Hon. Mr.
Justice A G Uraizee
Case: Letter of Patents Appeal challenging the
judgement dated 25.6.1997 passed by a Single
Judge in Special Civil Application No. 878 of 1996
whereby the petition was dismissed by upholding
the action of the Regional Provident Fund
Commissioner

Facts of the Case

Appellant manages more than one
independent institution. Most of the
employees of these institutions are under
GPF Act so EPF is not applicable to them.
If all employees of all the independent
institutions are not clubbed they fall below
the minimum of 20 employees for the act to
be applicable.
RPF commissioner made inquiry u/s 7Aas
there was a dispute regarding the
applicability of the EPF Act toone of
appellants institutions, RPF Commissioner
decided by an order under Section 7A.

Facts of the Case

Matter of Contention: The action taken by RPF
Commissioner was clubbing all the independent
institutions managed by the appellant under the EPF
Act, though some of the employees were covered
under GPF Act. Based on this clubbing the EPF act
was held applicable u/s 1 (3)(b) since total no of
employees of the institutions managed by the
appellant are over minimum for act to be applicable.
Brief Case History: Appellant had filed a petition by
Special Civil Application No. 878 of 1996 challenging
the RPF Commissioners Action. The Single Judge on
Special Civil Application No. 878 of 1996 dismissed
the petition by upholding the action of the RPF
Commissioner, hence this letter of patents appeal.

EMPLOYEE PROVIDENT FUND ACT, 1952

The Act applies to:
every establishment in which 20 or more persons are
employed, and
any establishment employing 20 or more persons or class of
such establishments which the Central Government may, by
notification in the official gazette specify.
Cinema Theatres employing 5 or more persons.
The Act does not applies to:
16(1)(a) - The co-operative societies employing less than
50 persons and working without the aid of power.
16(1)(b) -Establishments under the control of State/Central
Govt. & employees who are getting benefits of contributory
P.F. or old age pension as per rules framed by the Govt.
16(1)(c)- Establishment set up under any central, provincial
or state act and the employees who are getting benefits in
the nature of contributory P.F. or old age pension as per

EMPLOYEE PROVIDENT FUND

ACT,
1952
Wage ceiling
The statutory wage ceiling limit has increased to
Rs. 15000 w.e.f. 01.09.2014
If any new employee joins after 1st September,
2014, whose basic salary + DA + retaining
allowance (if any) is above Rs. 15000 Employee
will not be a Pension Member however, if the
employee insist, then his contribution will be only
of Provident Fund.
Contributions
Employee - 12% of Basic + DA + retaining
allowance (if any).
Employer - 13.61% including admin charges.

EMPLOYEE PROVIDENT FUND

ACT,
1952
Employees Pension Scheme - 1995
Employees Pension Scheme (EPS) of 1995 offers pension
on disablement, widow pension, and pension for nominees.
It is financed by diverting 8.33% of employers monthly
contribution from the EPF, Governments contribution of
1.16%
An employee can start receiving the pension under EPS
only after rendering a minimum service of 10 years and
attaining the age of 58/50 years.
EMPLOYEES DEPOSIT LINKED INSURANCE - 1976
According to EDLI scheme,1976 in any organization
where group insurance scheme is not available to the
employeesthe employer / organisation has to contribute
0.5% of monthly basic pay (capped at maximum Rs.
15,000) as premium for the life insurance cover.

PROVISIONS Related to the

Case

Section 1 (3) (b)

This section defines the applicability of the act
extending beyond 1(3)(a) i.e., a factory engaged in
any industry specified in Schedule I and in which 20 or
more persons are employed. As per 1(3)(b) the act
applies as well to:
to any other establishment employing 20 or more
persons or class of such establishments which the
Central Government notifies via its official Gazette
Provided that the Central Government may, after
giving not less than 2 months notice of its intention
so to do, by notification, apply the provisions of this
Act to any establishment employing such number of
persons less than 20 as may be specified in the
notification.

PROVISIONS Related to the

Case
SECTION 7A
This section is on the Determination of moneys due from
employers.
Under this section where a dispute arises regarding the
applicability of this Act to an establishment, the Central
Provident Fund Commissioner, any Additional Central
Provident Fund Commissioner, any Deputy Provident Fund
Commissioner, any Regional Provident Fund Commissioner or
any Assistant Provident Fund Commissioner may, by order
decide such dispute; and determine the amount due from
any employer under any provision of this Act, the Scheme or
the Pension Scheme or the Insurance Scheme, as the case
may be, and for any of the aforesaid purposes may conduct
such inquiry as he may deem necessary.
It specifies that the powers vested in the officer conducting
the inquiries is same as a court under the code of Civil
Procedure, 1908 (5 of 1908) and any such inquiry shall be

PROVISIONS Related to the

Case
Section 17 specifies the power of exempt by Government from the
operation of all or any of the provisions of any Scheme:
Exemption under Section 17(1) (a) :
Considered where the rates of contribution are not less - favourable
than the statutory rates provided in Section-6 of the Act and the
employees are also in enjoyment of other PF benefits which are also
on the whole not less favourable than the benefits provided under
the Act / Scheme.
Exemption under Section 17(1) (b) :
Exemption under Section 17(1) (b) is granted where the employees in
an establishment are in enjoyment of benefits in the nature of P.F.,
Pension or gratuity which are separately or jointly are on the whole
not less favourable than the benefits provided under the
Act/Scheme. It is granted by the Appropriate Government, through
a notification in the official gazette.
The authority to grant this exemption is the Appropriate
Government as defined in Section 2 (a) of the Act (Central / State
Government, as the case may be) and notified in the Gazette.

Reasoning of the Appellant

1. sought representation u/s 17 and any other
provisions of the EPF Act ie exemption from the act
2. raised the contention that learned Single Judge
has committed error in upholding the decision of
the authority since basic inquiry u/s7A of the Act
was conducted was not in accordance with the Act
and therefore the action of the respondent is
required to be quashed and set aside.
3. Contented that the authority has committed error
in clubbing all the institutions though some of the
employees were covered under GPF Act and
therefore, they are wrongly included under the EPF
Act.

Reasoning of the Appellant

4.

5.

Contented that in view of the Govt

Notification dated 19.2.1982 at where the
words used in clause (iii) are that "any
school, whether or not recognized or aided
by the Central or State Government",
independent institutions are not required to
be clubbed.
Prayed that the respondent (RPF
Commissioner) be directed to hold fresh
inquiry may be granted and the order
passed by respondent No. 1 at page No. 22
may be quashed.

Reasoning of the
Respondent
1. Contended that inquiry under Section 7A of the
EPF Act was properly conducted
2. In view of the decision of the Hon'ble Supreme
Court in the case of Noor Niwas Nursery Public
School Vs. Regional Provident Fund Commissioner
reported in AIR 2001 SC 277, the Act u/s 1(3)(b) Minimum employees for applicability of Act Establishment having two units - Fact that one of
the units has been exempted under u/s17 from
purview of Act on ground that provident fund is
subscribed under another scheme - is no ground to
claim non-applicability of Act to the establishment
on ground of short fall of number of employees."

Reasoning of Gujarat High Court

Judges

1. Taking into consideration the view taken by the Single

Judge, Pg 4 of 7C/LPA/1078/1997 Judgment, the court
was of the opinion that inquiry under Section 7A of
the EPF Act was conducted properly. Therefore, the
contention of the appellant that the employees those
who are covered under GPF Act are required to be
clubbed and they are required to be excluded cannot
be accepted
2. The case of Dhoraji Engg. Works, Rajkot Vs.
Regional Provident Fund Commissioner
Ahmedabad laid down the PRINCIPLE - - When the
industries are ostensibly different three tests to
determine such industries as one establishment are
laid down by the Division Bench in the said case
which are as under:
i. Unity of ownership, management and control

Reasoning of Gujarat High Court

Judges
3. In the Courts view, the schools are run in the
same premises and controlled by the same
management and integrated part of the institution
as held by this Court in the case of Dhoraji Engg.
Works, Rajkot (supra).
4. Therefore, in Court took the view, the schools
Page 6 of 7 C/LPA/1078/1997 Judgment are under
control of the same appellant trust and the issue
will squarely be covered by the decision of the
Hon'ble Supreme Court in the case of Noor Niwas
Nursery Public School (supra)
5. Court is in complete agreement with the
conclusion reached by the Single Judge. No case is
made out to interfere with the same. The appeal
is devoid of any merit and deserves to be

Judgement
Appeal Stands Dismissed
Implications:
Independent Institutions run in the same premises and
controlled by the same management and integrated part
of the institution may be clubbed for purpose of the
applicability of the EPF Act
Fact that one or more of the institutions has been
exempted under u/s17 from purview of Act on ground
that provident fund is subscribed under another scheme is no ground to claim non-applicability of Act to the
establishment on ground of short fall of number of
employees.

The End