TaxTMI 
TaxTMI 
2006 (10) TMI 509
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....S. Suri, Shivendra Dwivedi, Anjali Bhandari Doshi and Ruchi Kohli, Advs JUDGMENT A.R. Lakshmanan, J. 1. In the present matter, the appellant is the Regional Provident Fund Commissioner (RPFC) and the respondents are Sanathan Dharam Girls Secondary School, a Non- Governmental Educational Institution and the State of Rajasthan among others. 2. Brief facts in the matter are as follows: The Employees Provident Fund and Misc. Provisions Act (in short 'the EPF Act') came into force in 1952. In 1982, vide Gazette notification by the Government, Educational Institutions were added in the Schedule of the Act under Section 1 (3). The schedule reads thus: (i) any University; (ii) any college whether or not affiliated to a University (iii) any school, whether or not recognized or Aided by the Central or State Government (iv) any scientific institution (v) any institution in which research in respect of any matter is carried on. (vi) any other institution in which the activity of imparting knowledge or training is systematically carried on. 3. Further in 1988, Clause (b) of Section 16(1) of the EPF Act, 1952 w....
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....also observed that the educational institutions before him would fall under the exception under the amended Section 16 (b) of the EPF Act. Against this order of the learned Single Judge, the RPFC went on appeal before the Division Bench of the Rajasthan High Court. However, the Division Bench also observed that the EPF Act will not apply to the Educational Institutions before the Court and dismissed the appeals filed by the RPFC. Further on 23.02.2003, the respondent, Educational Institution filed the S.B. Civil Writ Petition before the High Court challenging the order of the State Government directing the Non-Governmental aided Educational Institution employing 20 or more persons to deposit its contribution with the RPFC. The High Court disposed off the matter in favour of the Educational Institution in line with the decision in the matter of Balbari Vidya Mandir Churu v. State of Rajasthan and Ors. S.B. Civil Writ Petition No. 1085/2000. Against this decision of the High Court, the RPFC went on appeal to the Division Bench of the High Court which in turn by an order dated 16.09.2002, dismissed the appeal. Being aggrieved by this order of the High Court of Rajasthan, the appell....
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.... provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 apply. Clearly, therefore, far from there being any conflict between the State and the Central Legislation, the State Legislation by Rules framed in 1983 has excluded from the operation of the State scheme as framed under the 1983 Rules, those employees to whom the Central Act applies. 16. In this view of the matter, there can be no doubt that for the period 1st August, 1982 to 1st August, 1988 the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 was applicable to such teachers and employees of the aided schools in the State of Madhya Pradesh who are covered by the provisions of the scheme framed thereunder. The orders of the Regional Provident Fund Commissioner, therefore, in so far as the orders cover the period 1st August, 1982 to 1st August, 1988 are valid 8. Further the learned senior counsel submitted that, the Educational Establishment covered or coverable under EPF Act, 1952 during the period from 06.03.1982 to 31.12.1992 will remain covered or coverable under Central Act of 1952 itself even after the coming into force of the State Act of 1989 or the State Rules....
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....uch management shall be resorted to the managing committee. 10. While concluding his submissions, the learned senior counsel stated that the High Court did not take into consideration that the Central Act is more beneficial for the employees than the State Act as there is compulsory pension scheme, called "The Employees Pension Scheme, 1995" under the Central Act. Mr. Aruneshwar Gupta, learned Additional Advocate General, appearing for the State of Rajasthan, respondent herein submitted that, in the year 1989 the Government of Rajasthan enacted the Rajasthan Non-government Educational Institutions Act, 1989. The Act came into force on 01.01.1993. The State Government after the enactment of the said Act has clearly occupied the field concerning the deposit of PF of the employees of Non-Government Institutions and it clearly overrides the provisions of the EPF Act, 1952. He submitted that, it is relevant to mention that the contribution to the PF pertains to Entry 24 of List III of the Schedule 7 of the Constitution of India. Therefore, as far as post 1993 period is concerned, the RPFC do not have any subsisting legal right as that Act of 1989 of Rajasthan shall prevail and to thi....
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....after, framed the scheme under the rules and the respondent- institutions are governed by the said scheme. Since the State Act has received Presidential assent, the said Act would prevail over the Central Act in the State of Rajasthan as per the provisions of Article 254(2) of the Constitution of India. The said Article provides as under: 254. Inconsistency between the laws made by Parliament and Laws made by Legislatures of States: (1)... (2) Where a law made by the legislature of the State with respect to one of the matters enumerated in the concurrent list contains any provisions repugnant to the provisions of an earlier law made by the Parliament or any existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the legislature of the State. 4) that the State Act would "eclips....
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....ate in Bihar, but that it does by taking these trusts out of the purview of Section 92. In other words, the Act does not take away the jurisdiction of any court outside Bihar but takes the religious trusts in Bihar out of the operation of Section 92 so that a court outside Bihar in exercise of its jurisdiction under Section 92 will decline to deal with a religious trust situate in Bihar just as it will decline to entertain a suit under that section regarding a private trust of religious or charitable nature. Civil Procedure, including all matters included in the Code of Civil Procedure at the commencement of the Constitution, is item 13 of the Concurrent List. It has not been disputed before us that it is open to the Bihar Legislature to amend the Code of Civil Procedure while legislating in respect of religious endowments and religious institutions in Bihar, and the President's assent having been received to the Act, the law made by the Bihar Legislature shall prevail in that State, under Article 254(2) of the Constitution, in respect of all religious trusts situate in Bihar. 12. In the case of Bhagwat Singh v. State of Rajasthan (1964)ILLJ33SC , with regard to the applicab....
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....lict among the provisions in respect of the Provident Fund Scheme and the resultant effects thereto between the State and the Central Act and as the State Act has received Presidential assent, the provisions of the said Act would apply. 6) that no arguments have been advanced by the appellants in the present case with regard to the present submissions before the High Court nor were any arguments raised by the appellant before this Court. It was also submitted that in the absence of any rebuttal by the respondent, it is clear that the provisions of the State Act would prevail over the Central Act. Institution fall under exception contained under Section 16(1)(b) of the EPF Act, 1952. Section 16(1)(b) of the EPF Act, 1952 provides as under: "16(1) This Act shall not apply- (a)… (b) to any other establishment belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefit of contributory provident fund or old age pension in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits; or (c) to (e) …. 13. In order to ....
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....t itself, the "Control" by the State is in the following ways: (a) Under Section 3 of the State Act, the State Government grants recognition to the "Non-government educational institutions. It was submitted that recognition by the State is of prime importance for running and operating an educational institution. The said recognition can be withdrawn on the failure of the institution to abide by the terms and the conditions of the grant of recognition. (b) Under Section 7 of the State Act, the State Government grants aid to only recognized educational institutions. The aid given by the State can be used only for the purpose for which the aid has been given. Under Section 8, the institutions are thereafter required to keep accounts in the manner prescribed by the State. It was submitted that in such manner, the State exercises Financial Control over the institutions. (c) Under Section 9, it has been prescribed that the institutions shall be governed by a managing committee and Section 10 of the Act empowers the State to take over management of the institutions "whatever it appears to the State that the Managing Committee has neglected to perform th....
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.... , this Court defined the words "word control" as under: The word "control" suggests check, restraint or influence Control is intended to regulate and hold in check and restrain from action. We further observe that the State Government has the power of Superintendent or the authority to direct, restrict or regulate the working of the educational institutions. It was, therefore, submitted that the institutions had satisfied both the conditions (i) and (ii) mentioned above and as such they would fall within the exception contained under Section 16(1)(B) of the EPF Act, 1952. 19. In this context we may refer to the decision cited by the appellant in the case of M.P. Shikshak Congress v. R.P.F. Commnr. AIR1999SC443, in which it was stated that the provisions of the E.P.F. Act apply in supersession of the State Act. This contention is not correct; the said case is clearly distinguishable on facts as has been noted in the judgment itself. The State Act did not provide for establishment of any Scheme as has been provided under the provisions of the State Act in the State of Rajasthan. In this regard, this Court noted as under: 12…The Act did not even provide f....
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....overnment in the counter affidavit filed by them. He also invited our attention to the notification dated 14.02.1983 issued by the Government of Rajasthan in exercise of the power conferred by Sub-section 17 of the EPF and Misc. Provisions Act, 1952 exempting schools added by the State Government from the operation of the said Act subject to the condition that the scheme of the Provident Fund applicable the employees of educational institutions vide No. F7(13) Education GR 74 dated 12.11.1974 shall be reviewed by the Committee which shall be constituted by the Education Department with representatives of the Finance Department and Labour Department to review the existing schemes so as to bring inconformity with the central scheme if needed. It is beneficial to refer to the notifications dated 23.12.1988 and 26.12.1993 in this context. The said two notifications read thus: GOVERNMENT OF RAJASTHAN Labour Department NOTIFICATION In exercise of Powers conferred by Sub-section (1) of Section 17 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (Central Act 19 of 1952) and in supersession of this department notification No. F.13(9)Sh....