Popular Electric Works, New Delhi Pesitioners v. Union Of India

Dalip R. Kapur, J.:— M/s. Popular Electric Works is a partnership firm registered under the Indian Partnership Act, with its registered office at 19, Municipal Market Connaught Circus, New Delhi It is claimed that the firm is exclusively engaged in ‘building and construction industry and Us sole activity is to carry out electrical installation work in Government and semi-government buildings under construction. The Regional Provident Fund Commissioner, an authority under the Employees Provident Funds Act, 1952, sought to apply the Act to the said firm and also to other firms which, carry on business of a more or less similar’ character. This has led to the present Writ Petition which is Civil Writ Petition No. 290 D of 1965. The first petitioner is the aforementioned firm, M/s. Popular Electric Works, and the second petitioner is an Association of Electrical Contractors which is a registered trade organisation having as its members various electrical contractors carrying on business similar to the first petitioner There are four other Writ Petitions, which are numbered Civil Writ Petitions Nos. 289-D, 291-D, 292-D and 293-D of 1965, in which the first petitioner are firms similar to M/s. Popular Electrical Works and the second Petitioner is the Association of Electrical Contractors. This judgment will also govern those petitions because they involve exactly the same points as the present case.

2. The Employees Provident Funds Act, 1952 was enacted by Parliament in 1952 and provided that the Act shall apply to certain establishments mentioned in Section 1(3). This Section has two subclauses (a) and (b) which provide that the Act shall apply;—

“(a) to every establishment which is a factory engaged in any industry specified in Schedule 1 and in which twenty or more persons are employed, and (b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf;”

3. The first petitioner did not have an establishment covered by the Act initially, t ut on 17th September, 1964, a notification No. G.S.R 1398, was published in the Ggzetto of India specifying certain establishments to which the Act was to apply. The establishments mentioned in that notification were:—

“(i) attorneys, as defined in the Advocates Act, 1961 (25 of 1961);

(ii) Chartered or registered Accountants, as defined in the Chartered Accountants Act, 949 (38 of 1949);

(iii) Costs and Works Accountants within the meaning of the Costs and Works Accounants Act, 1959.

(iv) Engineers and engineering contractors not being exclusively engaged in building and construction industry;

(v) Architects;

(vi) Medical practitioners and medical specialists, in which twenty or more persons are employed, as the establishment to which the said Act shall apply with effect from the 31st day of October, 1964.”

4. The first petitioner can only be covered in the category (iv) mentioned above on the footing that it is an establishment of Engfneers and Engineering contractors who are not exclusively engaged in building and construction industry The case of the first petitioner and other petitioners was that although the first petitioner ran an establishment of electrical contractors nevertheless, the work done was exclusively confined to the building and construction industry. As stated In para No. 2 of the writ Petition, the sole activity of the petitioner was “to carry out electrical installation work in Government and semi-government buildings under construction.” It was further stated that there was no difference between the nature of work carried out by the petitioner-firm and a firm of building contractors employed by the C. P.W.D and the other Government authorities. The reason for this was also gives. It was stated:—

“The work carried out by the Petitioner firm is an essential adjunct of building and construction work inasmuch as it consists of installations intended for providing heat, light and power tn the buildings and is as such an Integral part of the building and construction industry.

Electrification of a modern building is carried out by means of in-laid system of wiring integrated with the cement, stone or brick structure and forms part of Its permanent fixtures.”

5. Thus, the case of the petitioner firm was that it was exclusively engaged in the building and construction industry. It is now necessary turn to the manner In which the controversy has come to fjrm the subject-matter of the Writ Petition before me. The regional Provident Fund Commissioner wrote to the Peti. tioner No. 1 on 16th December, 1964, that its establishment came in the category of Engineers and Engineering contractors and hence the Act and the Scheme applied to it with effect from November, 1964. This position was contested by the first petitioner on the ground that the firm was exclusively engaged in the building and construction industry. The second petitioner, which is an Association of Electrical Contractors also took up this matter and wrote to the Regional Provident Fund Commissioner on 6th January, 1965 stating that the workers employed by firms like the first petitioner were engaged purely on construction work and the length and terms of employment of the workers employed depended on the type of work required in any particular contract. The case of the Association apparently was that electrical contractors did not have permanent employees, but employees whose work depended on the nature of the contract secured and, hence the application of the Employees Provident Funds Act was not practicable. A copy of the letter was send to the Central Provident Fund Commissioner. The view of the Association was not accepted by the Regional Provident Fund Commissioner. The members of the Association also sought an interview with the Central Provident Fund Commissioner, respondent No. 2. However, the Regional Provident Fund Commissioner apparently did not accept the contentions of the petitioner and insisted that the act was applicable to the first petitioner and the Scheme of the Provident Fund Act, 1952 should be implemented and contributions should be made failing which action would be taken. This led to the institution of the present Writ Petition.

6. The case of the petitioner is that the Act does not apply to the establishment of petitioner No. I and the only ground for saying so is, because that petitioner is exclusively engaged in building and construction industry. The contention of the petitioner is that electrical instalation work carried out by the first petitioner is an integral part of the building into which it is incorporated, and, building and construction activity cannot be restricted to the mere provision of walls and roofs. A return has been filed by the respondents in the form of an affidavit of Shri K.S Sethi. Regional Provident Fund Commissioner, Delhi. It is contended in the reply that the petitioner's business is quite distinct and separate from building and construction industry It is also contended that the activity of the electrical contractors is not the same as that of building contractors According to the reply, the protest of the petitioner and other parsons similirly placed was not accepted—

“In view of the nature of work done by the members of petitioner No. 2 including the petitioner No. 1 it was found that they were electrical contractors engaged in electrical—installation in the building constructed by the building contractors and as such they were covered by the Act.”

7. A letter written by the Central Provident Fund Commissioner to the Fresident of the Association (Petitioner No. 2) has been annexed as Annexure ‘D-2’. That letter states, inter alia, that:—

“It is considered that electrical contractors engaged in the electrical installations in the buildings constructed by the building contractors would be covered as they can not be treated as construction contractors as such.”

8. From this reply, it is clear that the only dispute between the petitioners and the respondents is, whether this the petitioners can be classified as being building contractors excluded from the operation of the Act in terms of the aforementioned notification dated 17th September, 1964.

9. Before ascertainirg the meaning of the notification, it is necessary to refer to the respondents contention that the petition is premafure, because the petitioners should first approach the Central Government under section 19A of the Employees Provident Funds Act, 1952 That provision does provide that the Central Government may issue directions as appear, to it to be necessary and expedient for removal of any doubt or difficulty that might arise in certain circumstances. One of the difficulties visualisted by the Section is when there is a doubt or dispute as to whether a particular establishment is covered by the Act or not. Clearly, the Central Government could issue a direction regarding the applicability of the Act to the establishment of the first petitioner. The Regioral Provident Fund Commissioner could also-move the Central Government under the same provision. The question I have to ascertain is, whether moving the Central Government provides an adequate remedy to the petitioner which could debar the grant of a writ in the circu-mstarces of the present case. A number of authorities have been cited by learned counsel for the respondents to show that Section 19A is available even to tie petitioner. These are, Delhi Cloth and General Mills Co. Ltd. v. Regional Provident Fund Commissioner.1 T.R Raghva Iven-gar and Co. v. The Regional Provident Fund Commissioner, Madras,2 and Dhanalakshmi Weaving Works v. The Regional Provident Fund Commissioner . AIR 1963 Kerala 219, in none of these cases was it held that the failure to move the Central Government was fatal to the Writ Petition. On the other hand, the question involved in these cases was whether the Regional Provident Commissioner could act on his own, if there was a dispute raised concerning the applicability of the Act to a particular establishment. The petitioners had contended that the Regional Provident Commissioner had necessarily to get the orders of the Central Government under Section 19A of the Act before the Act was made applicable to the establishment concerned. This contention was rejected These authorities only show that it was not necessary for the Regional Provident Fund Commi-ssinrer, respondent No. 3 to get directions from the Central Government before seeking to apply the Act to the petitioner. It did not, however, mean that the petitioner could not challenge the applicability of the Act on undisputed facts. The learned counsel for the petitioners has referred to Kumar Brothers (Btdi) Private Ltd. v. The Regional Provident Fund Commissioner, Bihar,4 which is a decision of the Patna High Court, in which it was held that failure to move the Central Government under Section 19-A did not debar the grant of a writ petition. This point was elaborately dealt with and I reproduce the conclusions of that High Court with which I agree:—

“Mr. Sarwar Ali submitted that the writ petitions do not lie, as the petitioners have an equally efficacious and speedy remedy in Section 19-A of the Act, which empowers the Central Government to make an order for removal of any doubt or difficulty as to whether an establishment, which is a factory, is engaged in any industry, specified in Schedule I or whether any particular establishment is an establishment falling within the class of establishments covered by a notification under clause (b) of sub-section (3) of Section. 1. Ha further submitted that the petitioners ought to move the Central Government for the Removal of the difficulty as to whether their factories are covered by Schedule I or by any notification under clause (b) of subsection (3). A similar argument was rejected by a Bench of this Court in B.C Chakrovarty v. Regional Provident Fund Commissioner,5 in support of the submission made by Mr. Sarwar Ali, there is a decision of Rajgopalan J in Annamali Mudnliar Bros. v. Regional Provident Fund Commissioner . AIR 1966 Mad 187. But in the case of B C. Chakravarty this Court differed from the view taken by Rajgopalan J, and observed:

“The section, as already stated, does not contemplate of any dispute raised by the parties concerned, and in that view of the matter, there is no point in referring the matter to the Central Government for a direction unless the authority concerned feels a doubt or finds a dificulty as provided in the section.”

10. There are several decisions of the other High Courts in respect of Section 19-A; but none of them supports the contention that a writ petition may be dismissed on the ground that the petitioner ought to have, in this first instance, made an application to the Central Government for a decision under that section

“In A. I R. 1961, Bombay 157, it was held that it was not obligatory upon the Regional Provident Fund Commissioner to refer a dispute under Section 19-A and the omission of the Commissioner to move the Central Government in this regard does not, in any way, effect his powers under the Act, to realise the provident fund dues from the employer. In East Indian Induslries (Mad) Pvt. Ltd. v. Regional Provident Fund Commissioner,7 a bench of the Madras High Court overruled the aforesaid decision of Rajgopalan J. It was held in that case that though S. 19-A gives a right to the parties concerned to move the Central Government for their decision in case of difficulty, it is not obligatory upon either to do so The sime visw was taken by the full bench of the Andhra Pradesh High Court in the case of Naze3na Traders Ltd., A I.R 1965, Andhra Pradesh 200 and the aforesaid Patna case was referred to therein. In A I.R 1961 Bom. 157, it was held by bench that a reference under Section 19-A can be made only by the Regional Commissioner or o her appropriate authority to the Central Government and that it is not open to the factory or the establishment to do so. I do not see any reason to take a view different from the aforesaid view of this Court. Hence, the contention of Mr. Sarwar Ali must be rejected.”

11. That does not end the dispute. It only means that the petitioners cannot be defeated on the ground that there is an adequate remedy available to them. There still remains for consideration the question whether the case of the petitioners raises a contested question on facts. 1 would be disinclined to interfere with the conclusions of the Regional Provident Fund Commissioner if the dispute between the patties was one of fact. 1 think, in view of the letter annexed to the return showing that the petitioners have been treated as non-building contractors and, therefore, covered by the Act, shows that the ground for treating them as having been covered by the Act, is not because they carry on business unconnected with building and construction work, but on account of the fact that they are non-building contractors There can he many disputes as to the applicability of the Act to a given establishment. There can be a dispute regarding the nature of the business carried on by the establishment, i.e, there can be a dispute as to whether an establishment is one covered by the Act or not because of a dispute regarding the nature of the work carried on by that establishment. That would clearly raise a dispute on facts Similarly, there can be a dispute regarding the date on which the work of an establishment or factory commenced In this connection, the application of the Act would depend on Section 16 of the Act, and the infancy period provided therein, would have to be determined by an enquiry on facts. That again might be outside the scope of a writ petition unless the starting point could be satisfactorily determined without much dispute. Again, the facts there could be a dispute as to the number of workers employed in a factory or establishment. Here again, the facts might be disputed, or they might be admitted between the parties. In each case, it would depend on the nature of the dispute, and in some cases reference to the Central Government might be necessary under Section 19-A of the Act. In this a case in which there is a dispute, which requires a detemination on facts.

12. The case of the petitioner is that the establishment in question only does the work of electrical installation during the course of construction of a building. For the purpose of rejecting the petitioner's claim, this fact has been assumed by the respondents This is clear from the letter Annexure ‘D 2 ‘written to the President of the Association on 3rd April, 1965. 1 am, therefore, proceeding to decide the case on the basis that the petitioners in this case as well as in the other cases before me are carrying on a business, which is solely restricted to providing electrical installations in buildings under construct on, and they do not carry on any other business as Engineering contractors If they do any other business, the position would be quite different and I will deal with this situation subsequently in this judgment. I am first, therefore, dealing with this case on the assumption that the petitioners are only carrying on the work of providing electrical installations in buildings under construction.

13. The words used in the notification have already been quoted by me, but a repetition thereof may not be out of place here. The exact words are:—

“Engineers and engineering contractors not being exclusively engaged in building and construction industry.”

14. It is note-worthy that the establishments covered are the establishments of Engineers and Engineering contractors There is no dispute that the first petitioner is an Engineer or Engineering contractor. Hence, the petitioner's establishment is covered by the notification, unless this establishment is exclusively engaged in building and construction industry. The contention of the respondents to the effect that the petitioner firm cannot be covered because it is not a building contractor does not appear to be well-founded. That is not the wording of the provision at all The question that has to be decided is, whether the petitioner firm is engaged in building and construction industry. The word industry is of particular significance in this context. What is the meaning of ‘industry’? Obviously, the definition of Industry ‘in the Act which is in Section 2(i) cannot be applied because there Industry ‘is defined as an industry specified in Schedule I. We have, therefore, to determine the general meaning to be given to the words building and construction industry. I have been referred to various provisions of law in which the words building and construction have occurred. I have been referred to Strounds Judicial Dictionary where the word building has been given as many as 52 meanings on page 347, Volume I. The word has undoubtedly to be given different meanings in different circumstances. Again, the word construction and the word ‘constructed have been given several meanings in the aforementioned Dictionary None of these definitions are of any help in determining whether electrical installations in a building are also building’, or whether electrical installation work is part of construction activity. I think this question has to be determined on general principles. For example, when the cost of construction of a building has to be determined, say, under the Delhi Rent Control Act, 1958, for the purpose of ascertaining its standard rent. It can hardly be doubted that the cost of installing the electrical fittings in that building must be taken to be part of the cost of construction. It can hardly be doubted that if repairs to buildings are allowable under the provisions of the Income tax Act, then the words ‘current repairs’ to buildings would include the cost, of repairs of electrical fittings in that building. It is hardly possible to imagine a building being constructed without any electrical fittings.

15. The petitioners have stated in the petition, that the provision of electrical connections are an integral part of construction activity. I think it can hardly be doubted that a modern building of the type constructed by governmental and semi-governmental organisations cannot be constructed without making provisions for heat, light, etc. These electrical works, therefore, cannot but form an integral part of the building. In my view, a building starts from the point at which the foundations are laid and terminates when the building is complete in all respects Any activity concerned with the construction of such a building must be taken to be a part of building and construction industry. I cannot help noting that the word ‘industry’ as used in the clause: building and construction industry, is of wider connotation then mere construction of the building Anything done in respect of the building from the point of starting to the point when it is completed must be taken to be part and parcel of building and construction industry. There may be cases in which electrical installations are made in a building after the building is complete This may happen when some industry is set up in the building, or when changes are made in a building, or when repairs are effected to existing electrical installations. It would be a question of fact whether such activity is part of building or construction industry or not, and this would have to be decided by reference to the circumstances of the case. In the present case, I am confined to a case where electrical installations have been provided in the course of construction of buildings. In such a case I must take it that the work of electrical installation is a part of building and construction industry and, therefore, excluded by the exprerss words of the clause.

16. It is concented by learned counsel for the respondents, and rightly, that the Act is a beneficial Act and should be given a liberal construction. In applying the Act, the Government of India has per the notification in question, excluded the case of Engineers and Engineering contractors engaged in building and construction industry for reason which are clearly apparent. Some Engineers and Engineering contractors have regular establishments, but there are others whose work is of a temporary or periodical nature. I take it that the Government was aware that the construction of a building necessitated the employment of labour during the process of construction. Such employment would necessarily he dependent on the work being c rried on. For example, if a contactor has to construct a large building, he would require a large number of workers during the period of construction, but he would not require them after the building was over. To subject such employers and employees to the Employees Provident Funds Act would obviously entail hardship without any possible advantage. Hence, such contactors were excluded from the operation of the Act The reason for the exclusion being that the benefits of the Act would not be of advantage to employees of such contractors The same must hold true in the case of electrical engineers engaged in the self-same activity. Their employees would be as temporary as the employees of contractors engaged in merely laying the bricks in the building. The two cases are not at all distinguishable and the Government must have intended that Engineers and Engineering Contractors engaged in the building and construction industry should not be subjected to the Employees Provident Funds Act, 1952, because of the nature of the employment of the employees concerned. To my mind, building contractors engaged in constructing a building and electrical contractors participating in the selfsame construction to the extent of providing electrical fittings there in, are equally placed and the law should apply equally to them. Consistent with the provisions of Article 14 of the Constitution of India, I consider that the proper interpretation of the notification is that electrical engineers and other engineers engaged in building and construction industry are exactly similarly placed, and, therefore, an establishment of electrical engineers exclusively engaged in building and construction industry must also be excluded from the operation of the Act under the terms of the notification in question, in the same way as the establishments of other contractors Thus, I conclude that the grounds for applying the Act to the petitioners are not justified. I do not, however wish to lay down that the petitioners are necessarily excluded from the operation of the Act It is open to the Regional Provident Fund Commissioner or even the Central Government to determine whether the petitioners are not exclusively engaged in providing electrical installations in buildings and other constructions, in the course of making those buildings and constructions. If the petitioners carry on any other work as electrical engineers they will not be exclusively engaged in building and construction industry and will therefore, be subject to the application of the Employees’ Providents Funds Act, 1952.

17. I, therefore, grant a mandamus in favour of the petitioners directing the respondents not to apply the Act to them unless it is found that the petitioners are carrying on business as electrical contractors for purposes other than building and construction industry, or if they are carrying on any other works or business covered under some other provisions of law. The parties will beat their own costs.

18. Petition allowed.