The High Court of Jammu and Kashmir and Ladakh has ruled that the coverage of cooperative societies under the Jammu and Kashmir Employees’ Provident Funds and Miscellaneous Provisions Act, 1961, without a Gazette notification, is legally invalid.
The case involved the Jammu Cooperative House Building Society, which has been a registered cooperative society since 1975. Although it initially had four employees and voluntarily contributed to the Provident Fund, it later sought exemption because the employee count was always below the legal threshold of five. Despite the society’s request for de-coverage under Section 18 of the Act, the authorities rejected it based on an old inspection note from 1992.
Justice Sanjay Dhar observed that:
“The mere making of an application by an employer and the majority of the employees for voluntary coverage is not enough. A decision must be taken by the Government and published in the Official Gazette. Only then does the Act and Scheme apply to the establishment concerned.”
The Court highlighted that the authorities failed to produce any Gazette notification to validate the society’s registration under the Act. It was found that the society continuously reported only 2–4 employees over two decades, with no administrative action ever taken to challenge those returns.
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Importantly, Justice Dhar emphasized:
“The applicability of the provisions of the Act to an establishment otherwise not covered becomes final only after a notification to this effect is published in the Official Gazette.”
Drawing from the Bombay High Court’s decision in Tech Movers Systems (India) Pvt. Ltd. v. Regional Provident Fund Commissioner (1995), the Court reiterated that without a Gazette notification, all proceedings under the Provident Fund Act are illegal and without jurisdiction.
The judgment also stressed:
“It is open to the employer and the employees to withdraw their consent before the notification is published.”
Thus, in the absence of a Gazette notification, the High Court declared the entire process of registration and coverage of the petitioner society under the Act as non est—meaning it does not exist legally.
Finally, the Court quashed the impugned order rejecting the society’s plea and directed the authorities:
“Issue an order for de-coverage of the petitioner-society from the applicability of the provisions contained in the Act of 1961.”
This landmark ruling reinforces the vital legal requirement of Gazette notifications for extending Provident Fund coverage to establishments on a voluntary basis.
Case Title: Jammu Cooperative House Building Society Vs UT Of J&K
