New Delhi: The Supreme Court has held that the Employees Provident Fund Act, 1952 will not apply to aided non-governmental educational institutions if their State has put in place a separate PF law.

The State law provisions will override those of the EPF Act on deposit of the provident fund of employees of non-governmental institutions, said a Bench consisting of Justices A.R. Lakshmanan and Tarun Chatterjee.

Writing the judgment, Justice Lakshmanan pointed out, "Section 16 (1)(b) clearly mentions that establishments which are under the control of the State Government will not fall within the purview of the Central Act 1952."

The State Act would be a complete code in itself for educational institutions and the State Government exercised substantive control over them. Further, under the State law, the State Government had the power of superintendence or authority to direct, restrict or regulate their working.

The judges said aid was granted only to the recognised educational institutions. Therefore only the State Act would be applicable to them.

Rajasthan order upheld

In the instant case, the Rajasthan Government enacted the Non-government Educational Institutions Act, 1989 and aided institutions employing 20 or more persons were asked to comply with its provisions. On a batch of petitions, the High Court held that only the State Act would apply.

On an appeal by the Regional Provident Commissioner, the apex court Bench affirmed the judgment holding that aided non-governmental institutions would be excluded from the Central Act.

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