Balraj Tuli, J. - (1.) The Appellant is a firm carrying on the business of manufacture of durries. On May 24, 1967, Shri B.D. Sharma Provident Fund Inspector, inspected the factory of the appellant -firm and found that there were 21 persons employed by the firm in the process of manufacturing durries. He accordingly asked the firm to submit the coverage proforma. In that proforma, the names of the partners were mentioned as Ram Murti, Gopal Krishan, Shyam Sunder and Suraj Marain Kapoor, Suraj Narain Kapoor signed the proforma on behalf of the firm and in this proforma the maximum number of persons employed in the office as in March, 1967, was stated as 21. On receipt of this proforma, the Regional Provident Fund Commissioner sent letter dated May 31, 1967, covering the appellant -firm under the Employees Provident Funds Act, 1952 (hereinafter referred to as the Act) and the Scheme framed thereunder. In reply to that letter, the appellant -firm informed the Regional Provident Fund Commissioner that 20 or more persons had never been employed by it and mostly the strength was that of independent contractors who did not fall within the meaning of the word "employees". It was pointed out that the definition of "persons employed", according to the Act, WAS that a person must be employed on wages and because the strength of the persons so employed fell short of the strength required by the Act, the Act was not applicable and that independent contractors do not fall within the meaning of the word "employees". On February 17, 1969, the Regional Provident Fund Commissioner wrote a letter to the appellant -firm standing that it had been brought under the ambit of the Act and the Scheme with effect from March 1967, vide office letter dated May 31, 1967, and it was required to start the Provident Fund scheme from April, 1967. The appellant firm had, however, failed to comply with the provisions of the Act and it was required to comply with those provisions within seven days of the receipt of the letter failing which action would be taken under Ss. 8 and 14 of the Act In reply to that letter, the appellant firm, through Suraj Narain Kapoor partner, again submitted that the strength of the employees' of the concern had never been 20 or more and there were 16 to 17 persons employed in the concern and that too on contract. Thereafter on November 9, 1970 the Regional Provident Fund Commissioner sent a notice to the appellant -firm to appear before him either in person or through an authorised representative on November 21, 1970, to give evidence and to produce all the records including those mentioned in the said notice. It was further stated that in case the appellant -firm failed to attend the said enquiry, he would proceed to hold the enquiry in the matters on merits and an order would be passed determining the amount due from the firm under the provisions, of the Employees Provident Fund Scheme, 1952, on receipt of this notice, the appellant firm filed an appeal under Sec. 19 -A of the Act to the Central Government on November 13, 1970, wherein the only point taken was that the firm never employed 20 or more workers ever since its inception and that the Regional Provident Fund Commissioner had no jurisdiction to cover the factory with retrospective effect. In relation to that appeal, which was considered as a representation by the Central Government, the appellant -firm was informed by letter dated February 10, 1971, signed by Shri Daljit Singh, Under Secretary, Ministry of Labour, Employment and Rehabilitation (Department of Labour and Employment), Government of India, that the Provident Fund Authorities had reported the following facts : - - 1. The establishment was set up on 1st July, 1960. 2. The establishment is engaged in the manufacture of durries. 3. 21 persons were employed in March, 1957, in the establishment. This figure has been shown in the coverage proforma which has been signed on the 24th May, 1967, by Shri Suraj Narain Kapoor on behalf of the management. 4. In an application dated the 29th June, 1965, to the Chief Inspector of Factories, Chandigarh, for registration of the factory, it was, stated that you ordinarily employed above 80 persons. It was further stated that : - - In the light of the facts reported by the Provident Fund Authorities there seems to be prima facie case for coverage of your factory under the Employees' Provident Funds Act, 1932, from March, 1967. Before the Central Government issues a direction under Sec. 19 -A of the said Act, your further view in the matter may kindly be furnished to this Ministry within a month of the receipt of this communication. The appellant firm sent a reply to that letter on May 12, 1971. Thereafter, a personal hearing was afforded to the representative of the appellant -firm. The record produced by the respondent shows that the following order was passed by the competent officer of the Central Government on February 15, 1972, in the presence of Shri Gopal Krishan, a partner of the firm, and Shri D.S. Rekhi, Labour law Adviser of the appellant -firm. This order reads as under : - - This is an appeal under Sec. 19A of the E.P.F. and Family Pension Funds Act, 1952, by M/s. Hindustan Durrie Factory, Ambala City, challenging the coverage of their factory by the Regional Provident Fund Commissioner, Chandigarh, on the ground that they were not employing 20 or more than 20 persons at any time on, before or after March 1967 from, which date the said factory is sought to be covered by the R.F.F.C. In support of the appeal, I have heard Shri D.S. Rekhi, Labour Law Adviser of the factory, as also Shri B.L. Chopra, Head Clerk of the R.P.F.C's office. Shri Gopal Krishan, a partner of the Hindustan Durrie Factory was also present. After giving my considered thought I have come to the following findings.
(2.) The facts giving rise to this appeal are that the factory of the appellant was inspected by Shri B.D. Sharma, Provident Fund Inspector, on 24th May, 1967, and he reported that 21 persons were employed by the petitioner in the proceeds manufacturing durries and as such the said factory was (sic) w.e.f. 1st March, 1967. Thereupon, a coverage notice was (sic) the appellant on 31st May, 1967, against which a (sic) by the said factory on 4th August, 1967, but after (sic) said (sic) also, the appellant was directed to (sic) the directions the coverage notice dated 31st May, 1967, issued by the office of the R.P.F.C. vide its notice dated 21st August, 1967. The (sic) lingered on until this appeal was filed by M/s. Hindustan Durries Factory.
(3.) Shri B.L. Chopra, Head Clerk of the R.P.F.Cs office, has drawn my attention to the coverage preforma signed by Shri Suraj Narain Kapoor, a partner of the said factory, and from a perusal thereof I find that it is stated against item No. 6 thereof that 21 persons were employed as on 1st March, 1967. In fact it is on the basis of this coverage proforma, coupled with his personal observations by the P.F. Inspector, Shri D.D. Sharma that it was decided to cover the said factory and it might be how late for the factory to represent that it did not employ 21 persons on that date. Shri Rekhi has sought to derive benefit from the attendance register, cash book and the ledger but from the perusal thereof I find that none of them bears initials or signatures of any Inspector, either Shop Inspector or the Labour Inspector or the Factory Inspector or the P.F. Inspector, prior (sic). It may also be mentioned here that from the perusal of the report, paragraph 3, that Wage Inspector had in his register ability report dated 27th July, 1965 indicated that (sic) workers were on roll of M/s. Hindustan Durries Factory. In this (sic) para of the report I find that persecution had also been launched against Hindustan Durrie Factory by the Inspector of Factories because muster rolls were not maintained on 19th June, 1967, in respect of the 21 workers who were found working at the time of inspection. All these facts go to suggest that no reliance can be placed on account books and attendance register produced by M/s. Hindustan Durries Factory before the R.P.F.C. In view of these circumstances, it cannot be said that the coverage of the Hindustan Durrie Factory with effect from 1st March, 1967, is not in order and, therefore, 1 do not find any merit in this representation, which is accordingly rejected.;