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Judgment
Rajiv Sahai Endlaw, J.—The petitioner, a Charitable Trust duly registered under the Income Tax Act, 1961 with the objective of imparting training in traditional handicrafts such as puppet making, mask making, bamboo crafts, paper figures, toys, embroidery, tailoring and needle work without the use of power, instituted this writ petition impugning the order dated 9/11 June, 1989 of the respondent RPFC assessing a sum of Rs. 1,61,814/- to be due from it towards provident fund for the period April, 1984 to March, 1989 and directing the petitioner Trust to pay the said amount within 15 days of the receipt of the order. This Court vide ex parte order dated 25th July, 1989 while issuing notice of the petition, stayed the recovery of the amount in pursuance to the order aforesaid. Rule was issued in the petition on 23rd November, 1989 and the interim order continued, subject to the petitioner Trust furnishing security in the sum of Rs. 1,61,814/- to the satisfaction of the respondent RPFC. On 22nd May, 1990, it was informed that security had been so furnished. From subsequent orders, it appears that security in the form of bank guarantee was furnished by the petitioner Trust.
The petitioner Trust, prior to the filing of this petition, had filed W.P.(C) No. 806/1984 & W.P.(C) No. 381/1985 impugning the orders of the respondent RPFC making the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 applicable to the petitioner Trust and determining a sum of Rs. 1,17,022.05 to be due towards Provident Fund for the period from November, 1977 to March, 1984. As such when the present writ petition came up for hearing on 16th April, 2010, the fate of the earlier two writ petitions was enquired from the counsels for the parties, who sought time for inquiring about the same. In the circumstances, the files of the earlier two writ petitions were also requisitioned. It is found that the earlier two writ petitions were dismissed in default.
The counsel for the respondent RPFC has, at the outset, contended that on the dismissal of the earlier two writ petitions including that impugning the order of applicability of the Act to the petitioner Trust, the present writ petition, challenge wherein is confined to the amount due for the period April, 1984 to March, 1989 is in any case liable to be dismissed. It has been enquired from the counsel for the parties as to whether the respondent RPFC has taken any action for recovery against the petitioner Trust pursuant to the dismissal of the earlier two writ petitions and for the period after April, 1989. The counsel for the petitioner Trust states that the petitioner Trust is now defunct with no activities and no recoveries can, in any case, be made from and no payments can be made by the petitioner Trust and hence the said question does not arise. The counsel for the respondent RPFC has also stated that as far as the respondent RPFC is concerned, the present is a dead matter.
I am unable to accede to the contention of the counsel for the respondent RPFC that owing to the dismissal of the earlier writ petitions, including the one expressly impugning the order applying the Act to the petitioner Trust, the present writ petition is also liable to be dismissed. The earlier two writ petitions, as aforesaid, have not been dismissed on merits but in default of the petitioner Trust. Thus till date there has been no adjudication of the challenge by the petitioner Trust. Though the challenge in this writ petition is to the demand for the period from April, 1984 to March, 1989 but the petitioner Trust in the writ petition has also impugned the applicability of the Act. The assessment of tax for each year furnishes a fresh cause of action and in which not only the quantum of tax but also the applicability of tax can be adjudicated, unless the said question has been the subject matter of an earlier writ petition and has been adjudicated upon. In the present case, the question having not been adjudicated upon, the challenge to the demand/assessment for the period April, 1984 to March, 1989 will necessarily require this Court to also adjudicate the applicability of the Act. Thus the writ petition is maintainable and entitled to be considered.
The respondent RPFC vide its order dated 11th October, 1983 u/s 7A of the Act found that though the petitioner Trust was having eight employees only and was thus not covered by the Act but at the relevant time was found to be training 46 persons in the crafts aforesaid. The respondent RPFC held such trainees also to be the employees of the petitioner Trust and thus held the number of employees of the petitioner Trust to be in excess of twenty, inviting the application of the Act. The question thus for consideration is, whether the persons whom the petitioner Trust is training in the traditional handicrafts can be considered as the employees of the petitioner Trust or not and the arguments of the counsels were confined to the same. However, the counsels argued on the premise that "employee" as defined in Section 2(f) of the Act, includes "any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (5 2 of 1961)or under the standing orders of the establishment". The counsel for the petitioner Trust also sought to rely on The Regional Provident Fund Commissioner, Mangalore Vs. Central Aercanut and Coca Marketing and Processing Co-op. Ltd., Mangalore, . However, apprentice as aforesaid were included in the definition of employee only w.e.f. 1st August, 1988 by amendment of Section 2(f) by Amendment Act 33 of 1988. Prior thereto, apprentices were not included in the definition of employee.
In the present case, most of the period for which the assessment has been made viz April, 1984 to March, 1989 is prior to the amendment aforesaid to Section 2(f) of the Act and would thus not be covered by the said amendment. The matter thus has to be considered as the law stood prior to the amendment w.e.f. 1st August, 1988.
The respondent RPFC in the order dated 11th October, 1983 (i.e. prior to the amendment) has held that since the petitioner Trust was providing part time income to those under training with it in traditional handicrafts, the said persons fell within the definition of employee of the petitioner Trust and were required to be taken into account while computing the employment strength of the petitioner Trust. The said reasoning of the respondent RPFC is not sustainable. The fallacy therein is also evident from the fact that an amendment was deemed necessary to cover in the definition of employee, those working as apprentices in an establishment. The necessity of amendment arose only because in the absence thereof, apprentices were not / could not be covered by the definition of employee.
The petitioner Trust was doing laudatory work of keeping the traditional handicrafts of the country alive and which has been correctly described as a heritage of India. But for such efforts of the petitioner Trust, the said crafts would die leading to a great national loss. When the object of the petitioner Trust itself is to impart such training, the question of such trainees becoming employees of the petitioner Trust does not arise. It is not as if the petitioner Trust is in the business of trading in such handicrafts and for which purpose it requires to employ hands. The employee strength of the petitioner Trust is described in the order of the respondent RPFC itself as only eight. The Supreme Court recently in New India Assurance Co. Ltd. Vs. Abhilash Jewellery, has reiterated that in common parlance an apprentice is not an employee. Earlier in The Employees'' State Insurance Corporation and Another Vs. The Tata Engineering and Locomotive Co. Ltd. and Another, the Supreme Court had held that when under the terms and conditions of agreement under which the apprentices are engaged, they are mere trainees for a particular period for a distinct purpose and the establishment is not bound to employ such apprentices after the training period is over, such apprentices cannot be said to be employees in the work of the establishment or in connection with the work of the establishment.
The dominant object in apprenticeship and its object and intent is to impart and to accept learning under certain agreed terms. That certain payment is made during the apprenticeship, by whatever name called, and that the apprentice has to be under certain rules of the discipline do not convert the apprentice to a regular employee of the establishment. Such a person remains a learner and is not an employee. It is inherent in the word "apprentice" that there is no element of employment as such.
I am, therefore, of the opinion that the order of the respondent RPFC impugned in the present writ petition cannot be sustained and the writ petition is entitled to succeed. The writ petition is accordingly allowed. The Rule issued earlier is made absolute. The order of the respondent RPFC impugned in the present writ petition is set aside/quashed. Though the order in so far as for the period 1st August, 1988 to 31st March, 1989 would be governed by Section 2(f) of the Act as amended and in which respect no determination has been done therein but in view of the statement that the functioning of the petitioner Trust has come to a standstill, it is not deemed expedient to remand the matter to the respondent RPFC. Since the petition has been allowed, the security furnished by the petitioner Trust in terms of interim order in this writ petition shall also stand discharged and the petitioner Trust shall be entitled to withdrawal of the same.
The petition is disposed of.
No order as to costs.