The Employees Provident Funds Act, 1952, applies to all factories engaged in any industry specified in Schedule I in which 50 or more persons are employed. The Central Government can extend the application of the Act to factories employing less than 50 persons by issuing a notification. However, there is no provision for the discontinuance of the application of the Act in case the number of workers falls below 50 after the Act had once applied.

1. In this appeal against acquittal by the State of Bombay a short but important point of law arises for our decision. There fire three respondents in this appeal and respondent No. J is the Hathiwala Textile Mills at Begumpura, while respondent No. 2 and respondent No. 3 are its occupier and Manager respectively. On 4-3-1952 the Employees Provident Funds Act (No. 19 of 1952) was made applicable with the result that the workers of the factory began to enjoy the benefits of provident fund under the provisions of the Act. It is not disputed that the respondents complied with the provisions of the Act sometime till April 1954. On the 6-4-1954 it seems that the weaving department of the respondent Mills was closed. It appears that even though the weaving department was closed, the Engineering department continued. But the number of workers in the factory fell below the figure of 50. The employers, therefore, thought that the workers in their factory would no longer be entitled to the benefits under the Employees Provident Funds Scheme and, therefore, they addressed a letter to the Regional Provident Fund Commissioner on the 10-6-1954, pointing out that they had two departments in the Mills, one of which was the Weaving department and the other was the Engineering department and these two departments between them had 184 members of the Employees Provident Funds Scheme, but due to Government taxes, excise duty and other adverse circumstances, the Weaving department was closed from 6-4-1954 and the Engineering department had been continued. The letter also-pointed out that on the date on which it was written there were only 40 members in that scheme and as out of them the clerical staff consisted of eleven persons, there were only 29 members in the Engineering department who enjoyed the rights of the Provident Funds Scheme, In view of this circumstance, the employers requested Government to exempt them from the operation of the Employees Provident Funds Scheme from the month of June 1954 or at least the clerical staff to whom reference was made in the letter. The letter added that if the Mills were exempted from the Employees Provident Funds Scheme, the requisite rights of the workers would be given to them without any grudge. To this, a reply was sent by the Regional Provident Fund Commissioner, Bombay, on the 24-6-1954 in which it was stated that under the directions from the Government of India once a factory was covered under the Act and the Scheme, it remained covered so far as the General Provident Fund was concerned, no matter whether the number of employees ran below 50. The re-quest of the Mills to get exemption was not therefore acceded to. After this letter and the reply of Government, it appears that the respondents failed to remit the employers and employees share of contribution from 1st August 1954 onwards and they also failed to remit the administrative charges under the Act from 1st July 1954. They also failed to submit the returns prescribed under the Employees Provident Funds Scheme from the 1st August 1954. It may be stated that on the 15th November 1954 there was an insolvency petition filed against the respondents under which the property of the respondent Mills came to be in the custody of Receivers. As the employers had failed to comply with the provisions of the Employees Provident Funds Scheme, 1952, a complaint was filed against them and they were charged with offences under paragraphs 76 (a) and (c) of the Employees Provident Funds Scheme, 1952, read with Section 14 of the Employees Provident Funds Act, 1,952.

2. Now the facts, which are stated above, were not disputed by the respondents. They denied having committed any offence because they stated that the Weaving Department of Hathiwala Textile Mills had stopped working since April 1954 and that they were not liable to pay the Provident Fund contribution and the administrative charges under the Act. as the number of workers on the roll was not 5