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HC dismisses appeals challenging Labour Ministry circular

Excelsior Correspondent
SRINAGAR, Dec 4: High Court today up held the circular of Union Labour Ministry whereby it was said that contractors for any work shall have Provident Fund Code (PFC) Number and the workers deployed by contractors for execution of work are enrolled as members of Provident Fund along with Universal Account Number (UAN) at the time of clearing of bills.
The Division Bench of Justice Mohammad Yaqoob Mir and Justice Ali Mohammad Magrey while holding the Writ Court judgment on the issue as correct, has up held the circular issued by Union Ministry of Labour and Employment by virtue of which the Chief Secretaries of all the States have been directed to instruct the appropriate authorities while awarding contracts to contractors, should ensure that the contractors shall have PFC Number and condition for having PFC of sub-contractor be also included in the NIT.
The appellants are stated to be working as Military Engineering contractors and aggrieved with decision of Union Ministry had approached the court by way of writ petition which was decided with the direction that none of the petitioners/contractors have approached the competent authority in terms of the provisions of the Employees Provident Funds Scheme, 1961, and instructions contained therein, therefore, the petitioners will be at liberty to approach the competent authority in terms of the Employees Provident Funds Scheme, 1961, and instructions contained therein, to seek exemption of a class of employees.
“If such a request is made, the authority shall consider it on its main merits and decide the same expeditiously preferably within a period of four weeks from the date of receipt of copy of representation when placed along with this order. This will enable the petitioners/contractors to know their position viz-a-viz the pending contracts and the ensuing contracts as well”, writ court had decided.
Thereafter, the authorities issued the other order on November, 2015, providing therein that the evaluation of T-Bid Cover-I of e-tendering, uploading of copy of Provident Fund Code number in addition to other documents required, shall be mandatory and the NIT should clearly mention that the contractor not in possession of this number shall be disqualified in T-Bid evaluation and his financial bid shall not be opened.
The appellants/contractors had filed two writ petitions challenging therein circular dated 15.07.2015, Order No. 6546/Manual/77/E8 dated 06.11.2015 along with other orders passed by the authorities in this regard with the prayer that the circular and orders are bad, unconstitutional and not applicable to the petitioners.
The appellants through their association, submitted representations before the respondents with the request that the stipulation of getting EPF code number by the bidders be waived off for all works to be executed in the State of Jammu and Kashmir, which did not find favour from the respondents.
Subsequently, a letter (no. 42552/Cir/BAI/967/E8 dated 07.12.2015) was issued by the respondents with respect to inclusion of works, contracts under the trade list with reference to provisions of J&K Employees’ Provident Funds and Miscellaneous Provisions Act, 1961.
Accordingly in fulfillment of the relevant provisions of the Act, all the engineering branches of the department were directed to make suitable clauses in the tender documents of respondent department and it was compulsory for the contractors to mention EPF number in the tender bids and in terms of letter (No. 80200/Policy/187/E8 dated 08.12.2015), it had been ordered that no tender will be opened without EPF number of the contractors.
The circular and orders passed by the authorities were challenged before the court on the grounds that the circular and the orders have been issued in furtherance of the Employees Provident Funds and Miscellaneous Provisions Act (EPF&MP) Act, 1952, which is not applicable to the State of Jammu and Kashmir, therefore, these are illegal and arbitrary orders.
Union counsel TM Shamsi (ASGI) submitted that the Act of 1961 is very much applicable to the appellants and in terms of notification (SRO 446 dated 17.12.2015), the Act has been made applicable to building construction by Departments or Corporations of State/Central Government, with further application of notification SRO 533 of 1979 dated 24.09.1979, which declares the Engineers, Architects and Engineering Contractors engaged in building and construction, designing and consultancy services, as establishments for purpose of the Employees Provident Funds and Miscellaneous Provisions Act (EPF&MP) Act, 1952.
“We have considered the submissions made, but we do not see any ground much less a plausible ground having been projected to make out a case for seeking quashment of the decision of the respondents for simple reason that the provisions of Jammu and Kashmir Employees Provident Funds and Miscellaneous Provisions Act (EPF&MP) Act, 1961 and the rules are very much applicable to the appellants- contractors, as the Engineering Contractors engaged in building and construction, designing and consultancy services have been declared as establishments for the purpose of the Act in terms of SRO 535 of 1979 dated 24.09.1979”, DB recorded.
Court added that the Government on one hand pays for the necessary cost (including social security cost) to the contractors for engaging these workers, but unscrupulous contractors do not pass the same to the workers by failing to deposit the same to the Provident Fund Organization and with the intervention of the concern Ministry/agency awarding the work, it can be ensured that all such construction workers do get their entitled social security benefits, therefore, the decision taken by the respondents is well reasoned and social security oriented.
With these observations, DB dismissed the appeals for being without merit.

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