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Judgment
Mohan, O.C.J.
The reference arises out of an Order made by S. Natarajan and Nainar Sundaram, JJ. to the following effect:
Can the provisions of the Act (The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952) be enforced when the question of
applicability of the provisions of the Act is pending adjudication before the Central Government under S. 19A of the Act?
In other words, where an employer approaches the Central Government under S. 19A of the Act for an adjudication of any one of the matters
contemplated under the section, during the pendency of those proceedings, whether the enquiry stipulated under S. 7A could be undertaken and
the liability enforced. For long this Court has taken the view that where a moot question arises about the applicability of the Act by reason of the
application filed before the Central Government under S. 19A during the pendency of the application, no proceeding can take place under S. 7A
of the Act. Unfortunately in M/s. Premier Studs and Chapplets Co. rep. by partner R.K. Ramadoss And others In re, 1980 L.W. (Crl.) 226 a
contrary view was taken by a Division Bench of this Court. It was this decision which has necessitated the above reference.
On a consideration of the various rulings referred to by the learned Judges in the order under reference, we hold that there is neither a warrant
nor any necessity to disturb the existing law as far as this Court is concerned. Accordingly, we are of the view that during the pendency of the
adjudication by the Central Government of an application filed under S. 19A of the Act, there is no possibility of enforcement of the liability arising
under S. 7A of the Act. Our reasons are as follows:
S. 19A itself, as the marginal note indicates, provides for ''power to remove difficulties''. Where, therefore, any doubt arises as to (i) whether an
establishment is a factory engaged in any industry specified in Schedule I:
(ii) whether any particular establishment is an establishment falling within the class of establishments to which the Act applies by virtue of a
notification under Cls.(b) of Sub-S.(3) of S.1;
(iii) the number of persons employed in an establishment or;
(iv) the number of years which have elapsed from the date on which an establishment has been set up or
(v) Whether the total quantum of benefits to which an employee is entitled has been reduced by the employer�it is only the Central Government
which has to give such direction for the removal of the doubt or difficulty, and the order of the Central Government in such cases, becomes final.
All the above questions are fundamental in nature and unless and until they are determined it passes our comprehension as to how the liability under
S. 7A of the Act could be enforced. Therefore, with respect, we held that the decision in M/s. Premier Studs and Chapplets Co. In re 1980 L.W.
(Crl.) 226, does not lay down the correct law.
Accordingly, we answer the point of reference as follows:
During the pendency of the adjudication proceedings before the Central Government under S. 19A of the Act, the liability under S. 7A of the Act
cannot be enforced and it will remain suspended till such adjudication is over.
Nainar Sandaram and Swamidurai, JJ.
JUDGMENT : Nainar Sundaram. J.
(18-4-1990)�after receipt of the opinion of the Full Bench).
These five writ Appeals were earlier heard by a Bench of this Court, to which one of us (Nainar Sundaram, J.) was a party and by order dated
20-2-1986, the following question was formulated and the papers were directed to be placed before our Lord the Chief Justice for a reference to
a larger Bench for decision on the said question :
Can the provisions of the Act be enforced when the question of applicability of the provisions of the Act is pending adjudication before the Central
Government under S. 19A of the Act ?
The relevant facts and circumstances of the cases and how the question got referred to a larger Bench, are set out in detail in the earlier order
dated 20-2-1986. The said order shall stand annexed to this judgment as Annexure A.
The matters were referred to a Full Bench of three learned Judges of this Court, and the Full Bench, by order dated 6-3-1989, answered the
question as follows :
During the pendency of the adjudication proceedings before the Central Government under S. 19A of the Act, the liability under S. 7A of the Act
cannot be enforced and it will remain suspended till such adjudication is over.
The order of the Full Bench, dated 6-3-1989, shall stand annexed to this judgment as Annexure B. The answer to the question being given, as
above we are obliged to confirm the common order of the learned single Judge, subject matter of these five Writ Appeals, and accordingly these
five Writ Appeals are dismissed. We make no order as to costs.