1 D.B.CIVIL SPECIAL APPEAL NO. 297/1996 M/s Vinod Talkies & others v. Union of India & anr. Date of order : 10.01.2007 HON'BLE THE CHIEF JUSTICE SHRI S.N.JHA HON'BLE SHRI JUSTICE GOVIND MATHUR. Shri M.S.Singhvi for the appellants Shri Rajesh Joshi for the respondents. This special appeal is directed against the order of the learned Single Judge dated 6.7.1995 in S.B.Civil Writ Petition no. 2052/1988 dismissing the writ petition of the appellants. The appellants had filed the writ petition challenging the order of the Regional Provident Fund Commissioner (in short, 'the Commissioner'), Jaipur dated 29.2.1988 assessing the liability of the appellants under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952(in short 'the Act'). While challenging the said order, the appellants also challenged the vires of section 7A of the Act. However, at the time of hearing the appellants gave up the challenge as the validity of section 7A had been upheld earlier by this Court. The liability of the appellants – appellant no.1 is a cinema hall while appellant nos. 2 and 3 are the partners - was assessed in two 2 parts – (a) January 1982 to September 1984 and (b) October 1984 to December 1987. As regards the former period the liability was assessed at Rs. 26,733.10p, while for the latter period it was assessed at Rs. 25,805/-. In course of hearing counsel for the appellants, Shri M.S.Singhvi, stated that in view of the amendment in the Cine- workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, establishments employing more than five persons were brought within ambit of the Act with effect from 1.10.1984, the appellants do not challenge the decision of the Commissioner for the latter period. Counsel thus confined the appeal to the former period i.e. January 1982 to September 1984. Counsel submitted that the number of persons employed in the establishment was held to be twenty one i.e. more than twenty by including Shailendra Modi and Madan, among others, but from the order read with the documents on the basis of which the finding was arrived at, it would be clear that the finding is perverse and can not be sustained. As regards Shailendra Modi counsel submitted that the Commissioner based his conclusion on a bill which on the face of it refers to payment of “commission for getting the business of booking” of certain pictures for which he was paid Rs. 600/-. By no logic, it was submitted, the document can be read as evidence of 3 payment of wages and therefore, the finding can not be sustained. As regards Madan, counsel submitted that he was held to be employee of the appellants on the basis of a receipt which merely shows payment of Rs. 130/- as the price of two quintals of lime and Rs. 10/- as cartage to him. It was submitted where an article is purchased and price of the article is paid as per the voucher to the person, the voucher can not be treated as evidence of payment of wages for establishing employer-employee relationship. We find force in the submissions of the counsel. Section 2(f) of the Act defines 'employee' to mean “any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the establishment”. In the absence of any evidence that Shailendra Modi or Madan was paid wages and the documents referred to above being not relevant on the point, we are satisfied that the finding of the Regional Provident Fund Commissioner holding them as employees of the appellants and on that basis applying the provisions of the Act to the appellants, establishment cannot be sustained. Twenty one persons were found to be employees of the establishment including Shailendra Modi and 4 Madan. Once they are excluded from the list of employees, it would follow that only nineteen persons were employed in the establishment of the appellants which was less than the minimum required to make the Act applicable. The order of the Provident Fund Commissioner assessing the appellants' liability at Rs. 26,733.10p. for the period January 1982 to September 1984 therefore must be set aside. We order accordingly. In the result, this appeal is allowed in part to the extent mentioned above, and the order of the learned Single Judge to that extent also stands set aside. There will be no order as to cost. (GOVIND MATHUR), J. (S.N.JHA), C.J. mathur/