Judgment

HIDAYATULLAH, C.J.I. : The State has appealed in these three appeals (which will be governed by this judgment), against the acquittal of the respondent Satpal who was prosecuted along with a firm M/s. Jai Bharat Metal Industries under Section 14 of the Employees Provident Funds Act, 1952 read with Para 76 of the scheme framed under that Act for breach of Section 16 (1) (b) of the Act. The prosecution ended in acquittal. Against the acquittal, appeals were filed in the High Court which were dismissed summarily on August 16, 1966. The present appeals have been filed by special leave against the judgments and orders of the High Court dismissing the appeals against the acquittals.

2. The facts disclosed in the case are as follows:

One Tirath Ram (who was examined as P. W. 4) started a factory by the name of Net Ram Tirath Ram on November 9, 1957. The factory was manufacturing in the years 1958-59 tavas, chaff-cutter blades. Later, the name of this manufacturing concern was changed to Jai Bharat Metal Industries. Tirath Ram was then the sole proprietor of the concern. In September 1962, Satpal the present accused and three others joined Tirath Ram as Partners. The firm, however, continued under the same name till February 13, 1963. On that date the older partnership was dissolved. Tirath Ram went out of the business and the remaining partners continued running the factory jointly. This went on till April 30, 1963. The factory was run in the same premises with the same labour and under the same name. In April 1963, the factory was removed to other premises, a new electrical connection was obtained but the old machinery of the factory save the electric motor was installed, and the factory continued, although not for the original business, but for the business of manufacturing iron nails for shoes for the bullocks.

3. The firm did not at that time maintain a register of provident, funds. It appears that it had been employing less than 20 workmen till November 13, 1962 when it began to employ 20 or more workmen. The factory reached the figure of 20 in the employment of workmen while the factory was still in the old premises. In other words, when the factory first employed 20 workmen, a period of 5 years had already elapsed from the initial establishment of the factory by Tirath Ram.

4. Several pleas were taken in defence by the respondents. Only one of them prevailed in the Court of trial and that was that the prosecution had not led any evidence to show that the factory ever employed 20 persons prior to November 13, 1962. It was, therefore, held that the period of 5 years grace allowed by Section 16 (1) (b) of the Employees Provident Funds Act would have elapsed on November 13, 1967 and no prosecution for the breach of the section in respect of 1964 and 1965 could have been started in these three cases. On the other points the findings of the trial court were against the respondents. However, in view of this point, acquittal was ordered. In appeal to the High Court, the State of Punjab took the ground that the infancy period to 5 years during which the factory was exempt from the operation of Section 16 (1) (b) was to be reckoned from the date on which the establishment was or had been set up, and not from the date of which factory establishment first began to employ 20 or more workmen. This ground was not accepted by the High Court. Hence these appeals.

5. The Employees Provident Funds Act, 1952 was passed to provide for institution of provident funds for employees in factories and other establishments. It provided for the establishment of a fund in the hands of a Board of Trustees and establishments liable to make contributions of provident fund had to recover the contributions of the workmen, add to them their own contribution plus an administrative charge of 3% and hand over the amount periodically to the Central Provident Funds Commissioner appointed for this purpose. Para 76 of the scheme which was framed under the Act pr