Regional Provident Fund Commissioner Vs. Trivandrum Medical College Hospital Development Society [Kerala High Court, 09-11-2016]

Employees Provident Fund and Miscellaneous Provisions Act, 1952 – S. 1 (3) (b) –Retrospective Coverage or Liability to pay Contribution – Society Functioning in the Medical College Hospitals –Whether come within the purview of the notification –Held, the employees of the Society are not liable to be covered under the Act/Scheme – Since the Society or the employees deployed by them do not come within the purview of the notifications relied on by the Department there is no question of any retrospective coverage or liability to pay contribution.

# Society

IN THE HIGH COURT OF KERALA AT ERNAKULAM

P.R. RAMACHANDRA MENON & ANIL K. NARENDRAN, JJ.

W.A.Nos.2482 OF 2008 & 1810 OF 2012 & W.P.(C)No.18647 OF 2011

Dated this the 9th November , 2016

AGAINST THE ORDER/JUDGMENT IN OP 7464/2000 of HIGH COURT OF KERALA DATED 04-11-2008

APPELLANT/1ST RESPONDENT

THE REGIONAL PROVIDENT FUND COMMISSIONER BHAVISHYANIDHI BHAVAN, PATTOM,, THIRUVANANTHAPURAM. BY ADVS.SMT.T.N.GIRIJA, SC,EPF ORGANISATION SRI.N.N.SUGUNAPALAN (SR.)

RESPONDENTS/PETITIONERS AND RESPONDENTS 2 TO 5

1. THE TRIVANDRUM MEDICAL COLLEGE HOSPITAL DEVELOPMENT SOCIETY, MEDICAL COLLEGE P.O. THIRUVANANTHAPURAM REPRESENTED BY ITS SECRETARY THE SUPERINTENDENT, TRIVANDRUM MEDICAL COLLEGE , MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM

2. THE SECRETARY, THE TRIVANDRUM MEDICAL COLLEGE HOSPITAL DEVELOPMENT SOCIETY, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM (THE SUPERINTENDENT, TRIVANDRUM MEDICAL COLLEGE)

3. THE STATE TREASUER, KERALA GOVERNMENT HOSPITAL DEVELOPMENT SOCIETY, EMPLOYEES UNION, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM.

4. THE UNION OF INDIA, REPRESENTED BY SECRETARY TO GOVERNMENT LABOUR,, CENTRAL SECRETARIAT, NEW DELHI.

5. THE STATE OF KERALA, REP. BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT,, THIRUVANANTHAPURAM.

6. KERALA HOSPITAL COMMUNITY PHARMACY EMPLOYEE’S ASSOCIATION REF. NO. 01-27/2000,, PAYING COUNTER, MEDICAL COLLEGE,, THIRUVANANTHAPURAM.

R1,2 BY ADV. SRI.GOPAKUMAR R.THALIYAL R2 & 6 BY ADV. SRI.N.RAGHURAJ R4 BY ADV. SRI.P.PARAMESWARAN NAIR,ASG OF INDIA R4 BY ADV. SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL R5. BY ADV. GOVERNMENT PLEADER SRI MATHEW GEORGE VADAKKEL R6 BY ADV. SMT.K.AMMINIKUTTY BY SRI.T.R.GOPAKUMAR

JUDGMENT

P.R. Ramachandra Menon, J.

Judgment passed by the learned single Judge setting aside the orders passed by the Provident Fund Commissioner and the Appellate Tribunal declaring that the writ petitioner Societies do not come within the purview of an “establishment” notified by the Central Government as per the notification bearing Nos. GSR.731 and 805 dated 17.05.1971 issued in exercise of the power under

# Section 1(3)(b) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952

(hereinafter referred to as Act), is under challenge in the two appeals preferred by the authorities of the Provident Fund Department. The writ petition tagged along with these appeals involves challenge against the order passed by the Employee’s Provident Fund Appellate Tribunal declaring that the respondent-Society/establishment is an exempted establishment and cannot be covered under the Act, placing reliance on the verdict passed in O.P.No.7464 of 2000.

2. W.A. 2482 of 2008 arises from O.P.7464 of 2000 preferred by the first respondent Society functioning in the premises of the Medical College Hospital, Thiruvananthapuram; whereas the other writ appeal, i.e., W.A. No.1810 of 2012 arises O.P. 4616 of 2002 preferred by a similar Society attached to the Medical College Hospital, Kottayam. The third case, i.e., W.P(C) No.18647 of 2011 is in respect of the Society functioning in the Medical College Hospital, Kozhikode. W.A.No.2482 of 2008 is treated as the lead case and reference is made to the parties and proceedings as referred to therein, except where it is separately referred to, depending upon the context.

3. The sequence of events revealed from the proceedings is that, the Government found it necessary to constitute Hospital Advisory Committees, consisting of members nominated by the Govt. of Kerala from the public at large, the official members and also the representatives of the staff and the people. An order bearing No.G.O.(Ms)26/83/HD dated 29.01.1983 was issued, prescribing the duties and responsibilities for the better functioning and improvement of the institutions particularly the Medical College Hospitals, District Hospitals and Taluk Hospitals. This was based on the recommendations of the High Power Committee headed by Dr. K.N. Pai, with the object of keeping constant vigil on the working of the hospital concerned and to render whatever assistance is necessary by way of voluntary service or financial contributions to meet the exigencies, ensuring steady development of the Hospitals/institutions. Subsequently, these Committees were caused to be registered as Societies under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955.

4. By virtue of the rights and responsibilities of the Committees prescribed by the Government, which included various functions, it was being closely monitored through the officials/authorities of the Government at different levels. So as to meet the obligations as per the Bye-laws of the Society and in tune with the requirements stipulated by the Government in the relevant G.Os, several persons/employees were being engaged by the Societies to cater to the needs, particularly in providing security to the Hospital and its premises by engaging ‘Security Personnel’ and cleaning operations to be done by engaging ‘Cleaning staff’; besides appointing Laboratory staff, Pharmacists, Clerks, Drivers and such other persons including Medical Officers. Most of the employees were being paid on ‘daily wage’ basis; whereas the Medical Practitioners were being paid on ‘contract basis’. The area of operation was widened by the passage of time and several activities were being undertaken by establishing/providing infrastructure such as Ambulance, Laboratory services, X-Ray/ECG, MRI Scanning, Blood Bank, Pharmacy/Medical Store and such other organs to cater to the need of the public, particularly the patients and the by-standers. Necessary funds were being generated by different modes, such as collection from the gate pass, the fees prescribed for availing various services, Grants and other payments provided by the Government, donations and contributions to the extent as permitted by the Government from the individuals/organisations and such other corners. The Committee was being headed by the District Collector and the organisational control was exercised by the Superintendent of the Hospital and such other officers/staff , who were connected with the concerned Hospitals.

5. While so, the competent authority of the Provident Fund Department issued Ext.P5 notice dated 03.04.1998, provisionally covering the establishment/Society under the relevant provisions of the EPF Act/Scheme and demanding contributions from 01.07.1995 onwards. The demand was based on the nature of activities being performed by the Society and also by making a specific reference to the two different notifications such as GSR.Nos.731 and 805 dated 17.05.1971 issued by the Government in exercise of the power under Section 1(3)(b) of the Act. On receipt of the said notice, the liability and coverage was disputed by the Society by submitting Ext.P6 statement of objections, particularly contending that ‘no expert service’ was being rendered by the Society so as to come within the purview of the statute. It was also pointed out that, the Society was virtually belonging to the Government and was functioning to meet the Governmental obligations/objectives, with an intent to help the general public/patients making the facilities available at a subsidised/reduced rate. It was further contended that they were engaging persons/employees only on ‘daily wage’ basis and as such, no coverage was attracted and no contribution was payable under any circumstances.

6. After completing an enquiry in terms of Section 7A of the Act, the Authority concerned finalised the proceedings and passed Ext.P7 order, overruling the objections raised by the Society and holding that the Society was an “establishment” coming within the purview of the statute. However, observing that the relevant records were not made available by the Society for scrutiny, it was held that the date of actual coverage will be finalised in the due course. Met with the situation, the Society challenged the order by filing appeal before the Tribunal, both on the question of facts as well as in law. After hearing, the Appellate Tribunal found that there was no merit in the appeal and accordingly, the appeal was dismissed as per Ext.P8 order. This made the writ petitioner/Society to challenge the proceedings before this Court by filing O.P.7464 of 2000.

7. It was almost under similar circumstance, that the proceedings were finalised by the authorities of the Provident Fund Department passing Ext.P12 order (produced in O.P. 4616 of 2002) fixing coverage and liability to satisfy contributions in respect of the workers of the Society attached to the Kottayam Medical College. The said Society, instead of availing the statutory remedy by way of appeal before the Tribunal, approached this Court directly by filing O.P. 4616 of 2002; mainly contending that the seat of the Presiding Officer of the Tribunal was lying vacant and hence the Society was not having an effective or alternative remedy, thus seeking interference of this Court under Article 226 of the Constitution of India. The reliefs sought for in both the Original Petitions were objected to from the part of the Department, filing detailed counter affidavits. The employees represented by the concerned Union/Association also apparently supported the stand of the Provident Fund authorities and sought for coverage.

8. It is revealed from the records that some of the workers of the Society (attached to the Kottayam Medical College) had approached this Court earlier, by filing OP. 6310 of 1999 seeking for regularisation in service and such other benefits. The said Original Petition was disposed of as per judgment dated 12th June 2006, permitting them to continue in service on the existing conditions of employment, till they attained the age of superannuation; subject to the stipulation that the total expense for the salary of the persons employed including the petitioners therein did not exceed 50% of the income of the Committee. The age of superannuation in the case of Security men was stated as ’60’; whereas in the case of others, it was held as ’55’.

9. After hearing both the sides, a learned single Judge of this Court passed common judgment in O.P.7464 of 2000 and O.P. 4616 of 2002; where specific reference was made to the three different notifications sought to be relied on by the authorities of the EPF Department to sustain the coverage. After threadbare analysis, it was held that the circumstances/ingredients in the aforesaid notifications were not satisfied in the case of the petitioner Societies and as such, the Societies were never extending any ‘expert service‘ as envisaged under the Statute/Notifications. It was accordingly held that the notifications concerned were not applicable to the Societies and that the Societies did not come within the purview of coverage. Since no other notification was sought to be relied on from the part of the Department, a positive declaration was made by the learned single Judge to the effect that no coverage of the Societies/establishment was possible under the above notifications. It was accordingly, that the impugned orders were set aside and the Original Petitions were allowed.

10. While disposing the Original Petitions as above, the learned Single Judge had held that, since the Government should be interested in the welfare of the employees engaged by the petitioner Societies, it was only appropriate for the Government to consider whether the petitioners should voluntarily cover their employees under the Act, since the petitioners were the Societies owned by the Government. Secretary to the Government, Health (M) Department was directed to consider the said question after affording an opportunity of hearing to the Societies, as well as the workers represented by the Unions/Organisations within three months. We have been given to understand that the matter was accordingly considered by the Government, who however turned down the same as per the order bearing G.O. No.810/2009/H&PWD dated 25.03.2009, to the effect that no such voluntary coverage by the Society was necessary. It is in the said background that the authorities of the Provident Fund Department have filed the above two appeals challenging the verdict passed by the learned single Judge in the concerned Original Petitions.

11. In respect of Society attached to the Medical College, Kozhikode, similar course was pursued by the petitioner in W.P. (C) No.18647 of 2011 (Asst. Provident Fund Commissioner) and Ext.P2 order of coverage was passed. This was challenged by the Society before the Appellate Tribunal by filing Ext.P3 appeal. Since no interim stay was granted, the petitioner Authority finalised the assessment as per Ext.P7 order. This was sought to be challenged by filing Ext.P8 appeal before the Appellate Tribunal. Placing reliance on the verdict passed by a learned Judge of this Court in O.P.No.7464 of 2000, the Appellate Tribunal allowed both the appeals as per Ext.P10 and P11 orders; which made the petitioner/Asst.Provident Fund Commissioner to challenge the said order by way of W.P.(C)No.18647 of 2011. In In view of pendency of W.A.No.2482 of 2008, the said writ petition also came to be tagged along with these appeals.

12. Heard Mr. N.N. Sugunapalan, the learned Sr. Counsel appearing on behalf of the EPF authorities and the learned counsel appearing for the party respondents, besides the learned Government Pleader who appeared on behalf of the State.

13. The facts and figures have been adverted to, as dealt with by the Original as well as the Appellate authority in Exts.P7 and P8 orders and the same was sought to be examined in the light of the relevant provisions of the statute and the notifications concerned. The learned counsel appearing for the Societies and the learned counsel representing the Workmen/Union/Association sought to reiterate the position in so far as they are concerned, as dealt with and mentioned already. The learned Government Pleader sought to sustain the verdict passed by the learned single Judge, asserting that the Societies concerned were not establishments coming within the purview of the relevant notifications relied on by the EPF Department and hence outside the purview of the statute.

14. At the very outset, the rights and responsibilities of the Committees, as notified by the Government while framing the rules and procedure as per G.O.(Ms)26/83/HD dated 29.01.1983 are to be noted; which are as given below:

# (C) Rights and responsibilities of the Committee

(a) to find out defects, if any, in the amenities and functioning of the institutions and devise ways of remedying them.

(b) To strive to maintain orderliness and cleanliness in the institutions and their surroundings.

(c) To assess monetary requirements for improvements and organise ways and means to collect funds.

(d) To exercise proper control and keep up vigilance in preventing malpractices.

(e) To help organise Health Education and Mass Medical campaigns.

(f) To organise voluntary Blood Banks and Drugs Banks, public comfort stations and by-standers dormitories.

(g) to run canteens and medical shops to provide supplies at fair prices.

(h) to initiate welfare and development activities and to mobilise donations from individuals/volunatary organisations.

(i) To maintain social discipline in hospitals (j) To take up construction and repair works not exceeding Rs.10,000 and supply of diet. Note: Regarding details and conditions of construction works and supply of diet separate orders will be issued.”

15. The field of operation came to be widened by the passage of time, as taken note of by the Appellate authority in Ext.P8 order with reference to the contents of the rejoinder filed by the Society. They are also reproduced below, for convenience of reference:

(1) Distribute free drugs worth 5-6 lakhs rupees which has been supplied as physician samples;

(2) They have taken up the work of upgradation of Thoracic Surgery work including by-pass Surgery;

(3) C.T. Scan Centre;

(4) 24 hours Toxicological Centre has been established costing of 50-60 lakhs to be completed in three stages;

(5) MRA & Digital Substraction Unit;

(6) Equipments and other facilities provided to the Hospital Blood Gas Analysor cost Rs.6.5 lakhs

(7) Established Orthopaedic Ward for 28 patients;

(8) Critical Care Unit consisting of 4 beds;

(9) Maintenance of Neurosurgery I.C. Unit in Medical College;

(10) Establishment of Stationary and Stores;

(11) Establishment of fair price medical stores in the Medical Hospital joint venture of Hospital Development Society and Hospital Clinic Pharmacy services.”

Whether the activities being pursued by the Societies could be treated as ‘expert service’ or whether the Societies were pursuing any ‘commercial activity’ or whether the Societies, by virtue of the nature of service being rendered could be brought within the purview of the statute under ‘other notifications, if any’ or if they are directly covered by the provisions/Appendix I to the Act will be dealt with in the due course. The immediate scrutiny is with reference to the notifications sought to be relied on by the Department and the ‘finding’ and ‘reasoning’ given by the learned Single Judge in this regard.

16. As contended by the authorities of the EPF Department and as rightly taken note of by the learned Single Judge, it is an admitted case of all concerned that, but for the notifications issued under Section 1(3)(b) of the Act, the Societies concerned are not liable to be covered under the Act. As per the Scheme of the statute, certain establishments are already stated as covered, as dealt with under ‘Section 1(3)(a)’, read with the relevant Schedule; whereas it is made possible to cover other establishments as well, on issuing notification invoking the power under Section 1(3)(b) of the Act. Admittedly, the respondent Societies are not ‘Factories’ and no serious attempt is made to contend that it will come within the purview of Section 1(3)(a) r/w the Schedule. The coverage is sought to be extended with reference to the different notifications bearing No.GSR. Nos.731 and 805 dated 17.05.1971 and GSR No.1398 dated 17.09.1964, as discussed in detail by the learned single Judge.

17. The scope of the notification bearing No. GSR 731 dated 17.05.1971 has been discussed by the learned single Judge in paragraph 4 of the judgment, holding that the said notification was only intended to amend the EPF Scheme 1952 itself, adding a sub-clause in Clause (b) of sub-paragraph of paragraph 1, virtually prescribing only the date of enforcement of the basic notification issued under Section 1(3)(b) of the Act, viz., GSR No.805 dated 17.05.1971. A copy of the said notification produced as Ext.P11 in OP. 7464 of 2000, reads as follows:

G.S.R.805: In exercise of the powers conferred by clause (b) of sub-section (3) of Section 1 of the Employees’ Provident Funds and Family Pension Fund Act, 1952 (19 of 1952), the Central Government hereby specifies that with effect from the 31st May, 1971, the said Act, shall apply to every establishment rendering expert services such as supplying of personnel, advice on domestic or departmental enquiries, special services in rectifying pilferage, thefts and pay roll irregularities to factories and establishments on certain terms and conditions as may be agreed upon between the establishment and the establishment rendering expert services, and employing twenty or more persons.”

This is one of the two notifications referred to in Ext.P5 notice issued to the petitioner Society. The application of the said notification is in respect of every establishment rendering “expert services” such as supplying of personnel, advice on domestic or departmental enquiries, special services in rectifying pilferage, theft and pay-roll irregularities to factories and establishments on agreed terms and conditions. Coming to the instant case, out of the above three circumstances, admittedly there is no instance of tendering any advice on domestic or departmental enquiries or rendering of special service in rectifying pilferage, theft and pay-roll irregularities to factories and establishments. The application, if at all any, could only be with reference to supplying of personnel. The primary question is whether supplying of personnel could be regarded as an ‘expert service’.

18. It is true that Security men are being arranged by the petitioner Society to meet the requirements of the Medical College/Hospital concerned. Similarly, to conduct the operations in various fields, necessary workers/employees are being engaged, either on ‘daily wages’ or on ‘contract basis’. There is no case that the ‘supply of personnel’ is pursuant to any request from the Hospital, for any ‘expert service’. Regarding the supply of Security guards, as observed by the learned single Judge, any able-bodied man can work as a Security personnel and no particular qualification or training is called for, to function as a Security personnel. As such, supply of Security personnel cannot be regarded as an ‘expert service’.

19. It is true that the petitioner Societies are engaging various employees such as Clerks, Drivers, Cleaning staff, Accountants and even as Medical Officers to deal with various operations and to do the duties undertaken by them. But could it be regarded as ‘supply of expert personnel’ or as rendering an ‘expert service‘, to attract coverage under the Act as per the above notifications? It is to be noted that the word “supply of personnel”, as it indicates, presupposes some sort of ‘head hunting’/selection to identify the qualified/experienced personnel, for and on on behalf of the establishment which requires such expert service, in turn to be appointed/engaged by the requisitioning establishment . Admittedly, in the instant case, the fact remains that the Society itself is engaging such personnel and there is no supply of such personnel to the Medical Colleges/establishments for being appointed/engaged by the latter. As such, there is no question of any engagement or appointment given to such personnel by the Government and there is no ‘master and servant relationship’ between the Government and the said personnel.

20. Another aspect to be noted is that the Medical Colleges/Hospitals concerned exclusively belong to the Government and all the Staff/Employees/Officers/Doctors/Nurses /Pharmacists/Lab Technicians recruited in the Hospital are Government employees. Selection and advice of such persons exclusively comes within the purview of the Public Service Commission and as such, the selection and identification of persons to be appointed, to do the functions in the Medical Colleges/Hospitals, can under no circumstance be taken outside the purview of the PSC, to be entrusted with a Society like the first respondent. To put it more clear, even if there is some expertise for the Society to identify personnel in different segments, they cannot be made available to be recruited by the Government in the Medical College/Hospitals, to the exclusion of the P.S.C and as such, the persons identified and employed by the first respondent Society, on its own, paying salary and such other benefits as per their terms of appointment, whether it be ‘daily wage basis’ or ‘contract basis’, is not liable to be termed as an ‘expert service’ rendered to the establishments at the receiving end, i.e., Government Medical College/Hospitals. This being the position, the first limb of the notification does not come to the rescue of the EPF Department to contend that the first respondent Society will be coming within the purview of a coverable establishment under the statute.

21. Incidentally, it is also to be noted that the terminology used in the Notification is “such as”, which is with reference to the “expert service”. In other words, when the “expert service” is defined/qualified as “such as”, giving the instances , it cannot be anything other than that, widening the zone of consideration. The terminology used while issuing the notification is not “like”, nor is there any usage of the term “etc” at the end of the specified instances. As it stands so, the scope of the notification is only in respect of the given circumstances and nothing more. For this reason also, it cannot but be held that the Societies do not come within the purview of the notification. This Court does not find any tenable ground to interfere with the finding and reasoning given by the learned single Judge in this regard.

22. The only remaining notification, which is sought to be relied on by the EPF Department is the one bearing No.GSR No.1398 dated 17.09.1964, which is produced as Ext.P9. The said notification reads as follows:

G.S.R. 1398:- In exercise of powers conferred by clause (b) of sub-section (3) of section 1 of the Employees’ Provident Funds Act, 1952 (19 of 1952), the Central Government hereby specifies every establishment of –

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

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

(iii) cost and works accountants within the meaning of the Cost and Works accountants Act, 1959 (23 of 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.”

A contention is raised by the appellants/EPF Department to the effect that the inspection report of the Enforcement officer has made out that the Societies are deploying the service of ‘Medical Practitioners’ as well, engaged on contract basis and as such, the establishment/Society will come within the purview of clause (vi) of the above notification. We find it difficult to agree.

23. The above notification only adds/stipulates some specified establishments of professionals in different sectors such as Advocates, Chartered Accountants, Cost Accountants, Engineers, Architects and of course Medical Practitioners/Medical Specialists. Even a cursory reading of the said notification is enough to hold that such establishment has to be of the Attorneys as defined in Advocates Act (clause (i)), of Chartered /Registered Accounts, as defined in Chartered Accounts Act(clause (ii)), of Cost and Work Accountants within the meaning of the Cost and Works Accountants Act, 1953 (clause (iii)), establishment of Engineers and Engineering Contractors except those who are exclusively engaged in Building and Construction Industries(clause (iv)), an establishment of Architects (clause(v)) or an establishment of Medical Practitioners and Medical Specialists (clause (vi)); subject to the condition that ’20 or more’ persons are employed, as specified, to come within the purview of the Act, with effect from 31.10.1964. Admittedly, the first respondent/Society is not an establishment of any of the above specified categories of professionals and hence, it does not come within the purview of the said notification. The finding and reasoning given by the learned single Judge in this regard is perfectly correct and sustainable in all respects, which does not warrant any interference. In the above circumstance, it is quite evident that the notifications cited and sought to be relied on from the part of the Department do not take in the respondent Societies to have coverage under the Act/Scheme.

24. However, there is a contention for the appellant/EPF department [as raised in Ground ‘G’ of W.A. 2482 of 2008], that the various activities being done by the Society include ‘commercial activities’ and ‘expert service’ and that these activities are coverable under various other notifications. It is stated that the Authority who issued Ext.P5 notice however, while conducting enquiry under Section 7A of the Act, placed reliance only on the ‘two notifications’ mentioned therein and it was not found necessary to discuss or refer to the ‘other relevant notifications’. On going through the contents of Ext.P8 order passed by the Appellate Tribunal as well, we find that the Appellate authority has referred to the various activities being pursued by the Societies which are of multifarious in nature and the main activity is providing ‘Hospital services’; such as running Laboratory, X-Ray/ECG, CT/MRI Scan, Medical Shop and the like. It is also stated in paragraph 14 of Ext.P8 order that, by a subsequent notification issued by the Government under Section 1(3)(b) of the Act in the year 1973, Hospitals run by Individual, Association or Institutions other than the establishments covered by clause (vi) of the Notification No.GSR. 1398 dated 01.07.1964 (extracted already) were also covered. If there was no entrustment of work to the petitioner Society, it was to be part of the work/function of the Medical College/Hospitals and under such circumstance, could it be treated as an establishment (Hospital) or part of the Hospital, to have extended coverage? The Appellate authority has stated in paragraph 15 of Ext.P8 order, that the Societies were doing multifarious activities and all these activities are coverable under ‘various notifications’ issued from time to time under Section 1(3)(b) of the Act. It is also stated that, notification under Section 1(3)(b) is necessitated, only if the ‘establishment’ is employing less than 20 persons. But since no such case has been projected by the EPF Department with reference to any other notification, we cannot presume existence of any such notification, to come to the rescue of the EPF Department.

25. During the course of hearing, it was brought to the notice of this Court that a ‘Benevolent Fund’ was constituted as a ‘welfare/security measure’, to safeguard the interests of the employees engaged by the Societies. In the case of the Society attached to the Thiruvananthapuram Medical College Hospital, (W.A.No.2482 of 2008) pursuant to the resolution taken in the General Body of the Hospital Development Society on 06.12.2010, an account was started under the head “Benevolent fund” in the State Bank of Travancore, to provide benefits to the employees from January 2011 onwards, in lieu of Provident Fund and that 12% of salary of the employees is being deposited in the said account, with an equal contribution from the account of the Hospital Development Society as well. It was also stated that, as on 27.01.2016, an amount of about Three Crores of rupees is lying in the said account. As per the letter No.C3- 279/16/MCH/HDS dated 27.01.2016 written by the Society to the Secretary of the Health and Welfare Department of the Government, it has been stated that a resolution was taken on 03.08.2015 by the Executive Committee of the Hospital Development Society, that withdrawal of only a sum of Rs.2.38 Crores was enough to provide benefits under the EPF Act/Scheme from 2010 onwards and that the same could be done accordingly, more so since, by implementing EPF coverage from 2010 January, there will not be any financial commitment or liability to the Government or the Hospital Development Society.

26. In the above circumstances, views of the EPF Department were called for; as to whether such coverage could be given; to be operative from January 2010 onwards. On getting instruction, the learned Sr. Counsel for the EPF Department submits that, considering the particular facts and circumstances, the relief could be moulded in appropriate terms by this Court. However, Mr.S. Ramesh, the learned counsel appearing for the respondents 5 to 19 in O.P.4616 of 2002 / WA.1810 of 2012, submits that no such segregation can be made and that the benefit of the EPF Act/Scheme had to be made applicable right from the beginning. It is stated that several employees have already left the Society, after years’ long dedicated service and it is not possible for them at this distance of time, to make any contribution, which shall be the look out of the Government/Society. Same proposition is made with regard to the serving employees as well, however adding that the serving employees are ready to contribute prospectively. This Court does not find much pith or substance in the said submission. As per the position now stands, the learned single Judge has already declared that the petitioner Society does not come within the purview of the notification issued under Section 1(3)(b) of the Act and that the employees of the Society are not liable to be covered under the Act/Scheme. It was accordingly, that the orders passed by the authorities of the EPF and the Tribunal were set aside. The respondents 5 to 19 have not chosen to challenge the verdict passed by the learned single Judge by filing any Appeal. Since this Court has already held that the first respondent Society or the employees deployed by them do not come within the purview of the notifications relied on by the Department (upholding the verdict passed by the learned single Judge), there is no question of any retrospective coverage or liability to pay contribution.

27. However, the Societies are creatures brought into existence with intent to provide various developmental measures in the Medical Colleges/Hospitals concerned, catering to the needs of the patients/by-standers/public at large, also facilitating/ providing such services at ‘reduced rates’ and doing various other welfare activities as well. It is stated that a consensus has been reached between the Society in W.A.No.2482 of 2008 and the employees represented by the Union, taking a decision at appropriate level, that coverage could be brought about from January 2010 onwards; that contribution is being made by the employees and also by Society on equal terms to an extent of 12% from January, 2011 onwards and that sufficient fund is available in the said pool to provide coverage from January 2010. By virtue of the consensus arrived at between the Society, the Employees represented by the Union and the EPF Department, we find it appropriate to order coverage by causing transfer of funds under the ‘Benevolent Fund’ to the EPF Department, to the requisite extent; in turn making it obligatory for the EPF Department to provide the benefits under the EPF Act/Scheme for the employees of the Society attached to the Medical College Hospital, Thiruvananthapuram (W.A.No.2482 of 2008) from January 2010 onwards. Further steps in this regard shall be taken and finalised at the earliest, at any rate within ‘three months’ from the date of receipt of a copy of the judgment. All necessary help in this regard shall be taken and rendered by the Government, for implementation of coverage to the said extent; enabling the employees to enjoy the benefits accordingly. This shall be done without any regard to the contents of the Order No.G.O.(Rt)No.810/2009/H&PWD dated 25.03.2009, passed in compliance of the direction as contained in the last paragraph of the judgment of the learned single Judge.

28. In respect of W.A.No.1810 of 2012, it is brought to the notice of this Court, that a General Body meeting was held on 18.01.2016 in respect of the Hospital Development Society attached to the Kottayam Medical College, under the Chairmanship of the District Collector. It is stated that the issue was discussed at length and that steps were being taken to constitute a ‘Benevolent Fund Scheme’ in the said Society as well, as implemented in the Thiruvananthapuram and Alappuzha Medical Colleges. Further steps shall be taken in this regard as to the date of constitution of the Fund, contribution to be effected and upon reaching a consensus, the same can be made available for further deliberations with the EPF Department for providing coverage on agreed basis, taking note of the situation and sequence of events as in the case of the Society attached to the Medical College Hospital, Thiruvananthapuram, dealt with in W.A.No.2482 of 2008.

29. Similar course as above, if agreed, can be pursued in respect of the Society attached to the Medical College, Kozhikode -the fist respondent in W.P.(C)No.18647 of 2011 as well.

30. Before parting with the case, it is a matter which could be taken up for consideration by the Authorities concerned, to analyse whether the activities being pursued by the Societies concerned; particularly of ‘Commercial’ in nature would come within the purview of ‘other notifications’ issued, if any, in exercise of the power conferred under the relevant provisions of the statute. Reference is also necessary to be made to Appendix I under the Act and the Schedule . It is of course possible for the EPF Department to issue a fresh notification under Section 1 (3)(b) of the Act as well or to amend the Schedule under Section 1(3)(a), particularly with reference to the relevant entry in the Appendix under the Act dealing with establishments rendering ‘expert services’ or ‘Commercial service’; with regard to which, this Court does not intend to express any opinion. Appreciation has to be made with reference to the ‘Bye-laws’ of the Society, as well. By virtue of the passage of time, the contents of the Byelaws and the widened activities/range of functions being discharged now, it has to be reasonably presumed that the Societies are doing several ‘commercial operations’ as well and some of the services are of ‘specialised nature’ requiring much expertise. Whether these activities could be considered as an activity coverable under some or other notification issued by the EPF Department is a matter to be considered by the authorities concerned and this issue is left open.

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