Chandramauli Kr. Prasad, J.
1. Union of India, being aggrieved by the order dated May 19, 1999 passed by the Employees' Provident Fund Appellate Tribunal allowing the appeal of the respondent holding that it is not covered under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, has preferred this writ application and prays for quashing of the said order by issuance of a writ in the nature of certiorari.
2. Shorn of unnecessary details, facts giving rise to the present application are that the Enforcement Officer inspected the business premises of respondent Patna Tyre House Pvt. Ltd. (hereinafter referred to as the establishment) on January 1, 1991 and found its employees strength to be 22, which included the three Directors getting remuneration and as such recommended that it shall be covered under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act (hereinafter referred to as the Act). Hence, a proceeding under Section 7A of the Act was initiated and in the said proceeding establishment's plea was that the Directors cannot be included to calculate the strength of the employees and undisputedly the three Directors have been included as employee to come to the conclusion that establishment is covered under the Act, said plea was turned down and by order dated July 9, 1997 Assistant Provident Fund Commissioner held that the establishment is covered under the provision of the Act, w.e.f. January 1, 1991 and was allotted code No. BR/7236.
3. The Establishment challenged the said order of the Assistant Provident Fund Commissioner before this Court which was registered as CWJC No. 4709 of 1998 (Patna Tyre House P. Ltd. v. Union of India and Ors.). When the writ application was taken up on August 17, 1998, establishment sought, permission to withdraw the same, with liberty to prefer an appeal, which was accorded. Accordingly, establishment preferred appeal before the Employees' Provident Fund Appellate Tribunal (hereinafter referred to as the Tribunal) who by order dated December 1, 1998 dismissed the same being barred by limitation and on account of defects which were not removed within the time allowed. Establishment thereafter filed a review petition to recall the said order and the Tribunal by order dated April 15, 1999 allowed the review petition, recalled the order dated December 1, 1998 and restored the appeal. The Tribunal on merit held that Directors cannot be treated to be the employees of a Company and accordingly held that the establishment is not covered under the provisions of the Act.
4. It is common ground that the Establishment shall be covered under the Act only when the Directors are counted as employees. It is relevant here to state that Establishment shall be covered under Section 1(3)(b) of the Act if it employs 20 or more persons. In the present case three Directors have been reckoned as employees to reach the figure of 22 employees to cover the establishment under the provisions of the Act. The question therefore is as to whether the three Directors shall count for the employees.
5. Mr. Pradhan appearing on behalf of the Union of India contends that it shall count whereas Mr. S.S. Rekhi appearing for the establishment sounds a note of dissent. Rival submissions necessitate examination of the Act. Section 1(3)(b) of the Act reads as follows:
'1(3)(b) Short title, extent and application.
(1) This Act may be called the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
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(3) Subject to the provisions contained in Section 16, it
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(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.'
6. Section 2(e) of the Act defines employer, same reads as follows:
(e) 'employer' means-
(i) in relation to an establishment which is a factory, the owner or the occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a Manager of the factory under Clause (f) of Sub-section (1) of Section 7 of the Factories Act, 1948 (63 of 1948), the person so named; and
(ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a Manager, Managing Director or Managing Agent; such Manager, Managing Director or Managing Agent.'
7. Expression 'employee' has been defined under Section 2(f) of the Act, same reads as follows:
2(f). 'employee' means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the works of an establishment, and who gets his wages directly from the employer, and includes any person-
(i) employed by or through a contractor in or in connection with the work of the establishment.
(ii) Engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961) or under the standing orders of the establishment.'
8. Mr. Pradhan submits that the Director getting remuneration is an employee and the matter stands concluded by the judgment of the Supreme Court in the case of Employees' State Insurance Corporation v. Apex Engineering P. Ltd. 1998 (1) SCC 86 : 1998-I-LLJ-274 and my attention has been drawn to the judgment, which reads as follows at p. 284 of LLJ:
'25, We may at this stage refer to two decisions to which our attention was invited by learned amicus curiae counsel. A Division Bench of the High Court of Kerala in the case of ESI Corporation v. Victory Tile Works 1973 (44) FJR 304 had to consider whether a person who satisfies the definition of 'principal employer' under Section 2(17) of the Act could simultaneously satisfy the requirements of the definition of term 'employee' under Section 2(9) of the Act. subRAMONIAN POTI, J. (as he then was), speaking for the Court observed that Employees' State Insurance Act, 1948 is intended to cover all wage-earners whether they are managers, supervisors, clerks, workmen or any other class of employees provided they fall within the definition of 'employee' under Section 2(9) of the Act. It is clear from the scheme of the Act that there is no apparent conflict or interest between the principal employer and the employee and there is no reason why if a person falls within the definition of 'principal employer' he cannot in certain cases be also an 'employee'. In our view the aforesaid decision squarely falls in line with the scheme of the Act and the decisions of other High Courts on the point to which we have made a reference earlier.'
9. Mr. Rekhi however appearing on behalf of the establishment submits that for bringing a person within the definition of employee there has to be a relationship of master and servant between the employer and the employees and in the present case the Directors themselves being the employer, it is inconceivable that they will come within the definition of employee also. In support of his submission he has placed reliance on a judgment of the Calcutta High Court in the case of Sanatan Ghosh v. Regional Provident Fund Commissioner 1991-II-LLJ-466 and he has drawn my attention to paragraph 9 of the judgment, which reads as follows at p. 467:
'9. Shri Bose contends that on an over-all assessment of all these provisions of the two Acts cited above, it will become a very anomalous position if either the Directors or Managing Director of a Company be deemed to be employee of the Company inter alia inasmuch as these very persons are deemed to be employers in the various provisions referred to above. It will also be a peculiar position if the same person is treated as both employer and an employee for the non-deduction and non-payment of provident fund amount from the remuneration payable to such a Managing Director, the very same Managing Director should be prosecuted. I think, there is considerable substance in the submission of Mr. Bose.'
10. On consideration of the rival contention, I am inclined to accept the submission of Mr. Rekhi. In my opinion no hard and fast rule can be laid to determine the relationship of employer-employee. Control, ownership, share in profit and risk of loss are the tests which can be applied to determine the relationship, Here in the present case there is nothing on record to suggest that those Directors who were paid remuneration were under the control of anybody else. The Directors, who are also paid the remuneration had the chance of profit and risk of loss and in that circumstances it cannot be said that the Directors who are getting remuneration shall come within the definition of employees under the Act.
11. Now referring to the authority of the Supreme Court in the case of Apex Engineering P. Ltd. (supra) relied on by Mr. Pradhan, same is clearly distinguishable. In the said case, the Supreme Court was considering the meaning of the word employee as defined under Section 2(9) of the Employees State Insurance Act. The definition of the word employee under the Act is not in pan materia with its definition of the Employees' State Insurance Act. True it is that while interpreting the provisions of one statute in pari materia with another statute the interpretation made of same provision of a statute is a guiding factor, but here in the present case the definition of employee in the two statutes is not in pari materia. The definition of the word 'employee' in the aforesaid two legislations is different and hence it cannot be said that they are in pari materia, so as to import the same meaning as given to the word employee in the Employees' State Insurance Act. The Andhra Pradesh High Court had the occasion to consider this question in the case of K.V. Ratnam v. Govt. of India, 1987 II CLR 345 wherein it has been held as follows:
'In so far as the case on hand is concerned, it is very hard for this Court to extend the similar principle aforementioned by any reasoned construction of the provision of the Provident Fund Act which is not at all in pari materia with the Insurance Act and hold that the restaurant section that located in the same building wherein lodged also is established by the petitioner and admittedly leased out to a third party over which the petitioner has no control whatsoever excepting to collect the amount, and the lodge are one establishment. To attract the application of the Act in respect of the employees engaged in the restaurant section being clubbed with the employees engaged in the lodging Section, these two in my judgment are different and independent establishments and, therefore for each establishment the criteria laid down under the Act will have to be satisfied before attracting the application of the Act.'
12. From the discussion aforesaid, I am inclined to take a view that the Director although getting remuneration shall not come within the definition of employee and the natural corollary of the same is that they shall not be counted as employees for calculating the employees strength. The view which I have taken finds support from the judgment of the Calcutta High Court in the case of Sanatan Ghosh (supra).
13. Undisputedly if the directors are excluded from the strength of the employees, the establishment is employing less than 20 persons. That being the position, the establishment is not covered under the provision of the Act. Hence the Tribunal did not commit any error in passing the impugned order,
14. In the result, I do not find any merit in the application and it is dismissed accordingly. No costs.