A subterfuge cannot be permitted to defeat the purpose of a social legislation.

JUDGMENT :

CHAGLA, J.

1. This petition discloses a rather glaring attempt at resorting to a subterfuge in order to defeat the law and the question that we have to consider is whether the subterfuge has succeeded and whether the subterfuge should be permitted in order to circumvent the law of the land. The petitioner is the father of two major and two minor sons. In October 1949 there was a partnership between the petitioner and his father in the name of Standard Silk Mills and this partnership was doing business of manufacturing silk and dealing in silk yarn and silk cloth. Although the partnership was commenced in October 1949, the actual business of manufacturing silk was started from 13 November 1950. It seems that subsequent to 1950 the father died and there was new partnership sometime in November 1951 consisting of the petitioner and his two major sons. On 22 October 1953 this partnership purported to close its manufacturing business and it entered into an agreement which is dated 24 October 1953 which sets out the fact that the business of manufacturing silk was being closed on account of slackness In business and on account of lack of purchase of goods and on account of financial difficulties and therefore this business was being discontinued from 22 October 1953. This agreement further recorded that in future if any of the parties wanted to start any department, that party would be entitled to start that department of his own accord and at his own costs by executing rent notes to the partnership firm of Standard Silk Mills. Lest anyone should throw any doubt either on the sanity of the parties to this agreement or to the wisdom of the transaction which it was evidencing, at the foot of the agreement it is solemnly stated that the parties wore signing this agreement without any intoxication. It is the case of the petitioner that subsequent to this agreement five units were started which did manufacturing processes which wore being originally done by the Standard Silk Mills and these units were:

(1) Naranjan Weaving Works.

(2) Jayant Weaving Works.

(3) Govind Throwing Works.

(4) Tara Processing Works.

(5) Hemu Finishing and Dyeing Works.

In respect of these five units five rent notes were executed in favour of the Standard Silk Mills by the petitioner and his four sons, two of whom were minors. It also appears that the licence issued to the Standard Silk Mills under the Factories Act was surrendered and separate licences were issued to the five units and u/s 11(1) of the Bombay Industrial Relations Act all these five units were recognized as five separate undertakings. It is also the case of the petitioner that there were separate assessments of these five units.

2. On these facts the petitioner contends before us that there is no factory now in existence to which the Employees' Provident Funds Act can apply, and therefore the demand made by the Regional Provident Fund Commissioner upon him to pay the contribution necessary under that Act is an illegal demand. The Employees' Provident Funds Act was passed in 1952 and under Sub-section (3) of Section 1, it applied in the first instance to all factories engaged in any industry specified in Schedule I in which fifty or more persons are employed, and it is not disputed that the factory in question is engaged in the industry specified in Schedule I. But the contention of the petitioner is that if these five units are to be treated as separate units, then none of these units employ fifty or more persons. Attention is also drawn to Section 16 which exempts from the operation of the Act under Sub-Section (b) any other factory, established whether before or after the commencement of the Act, unless three years have elapsed from its establishment. These factories are known as infant factories and the contention of the petitioner is that as these five factories came into existence on 4 November 1953, they are infant factories and the Act cannot apply them. The answer given by the Regional