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HIGH COURT OF CALCUTTA
B. N. Banerjee
JAMNADAS AGARWALLA - Appellant
Versus
REGIONAL PROVIDENT FUND, COMMISSIONER, WEST BENGAL - Respondent
Civil Rule 3974 Of 1960
Decided On : SEPTEMBER 10, 1962
EMPLOYEES' PROVIDENT FUNDS ACT - SECTION 16 - EXEMPTION FROM ACT - INFANT ESTABLISHMENT - DATE OF ESTABLISHMENT - MEANING OF.
Fact of the Case:
The petitioners, a partnership firm, purchased the machinery and assets of a closed rubber manufacturing company and started a new business on the same site. They claimed exemption from the Employees' Provident Funds Act, 1952, as an infant establishment under Section 16 of the Act.
Finding of the Court:
The court held that the date of establishment of a factory is the date on which it first starts production, and that this date is not affected by a subsequent change in ownership or acquisition by a new company. Therefore, the petitioners were not entitled to exemption as an infant establishment.
Issues: Whether the petitioners were entitled to exemption from the Employees' Provident Funds Act, 1952, as an infant establishment under Section 16 of the Act.
Ratio Decidendi: The court interpreted the phrase "date on which the establishment is or has been set up" in Section 16 of the Act to mean the date on which the factory first started production. The court held that this date is not affected by a subsequent change in ownership or acquisition by a new company.
Final Decision: The court discharged the rule and held that the petitioners were not entitled to exemption from the Employees' Provident Funds Act, 1952, as an infant establishment.
( 1 ) THIS Rule is directed against several demands, made on the petitioners, under the Employees' Provident Fund Scheme 1952. The first demand for payment of Provident Fund Contribution and administrative charges was made on April 30, 1957, and the period covered thereby was mentioned as "with effect from the 13th February 1959". (Annexure C ). The second demand was made on May 27, 1959, for the period from "february 59 to April 59" (Annexure C1. ). The third demand was made on July 31, 1959, for the period from "may 59 to June 59 in addition to previous period" (Annexure C3 ). The fourth demand was made on February 2, 1960, for the period ''july 59 to February 60 in addition to previous period" (Annexure 04 ). The fifth demand was made on May 13, 1960, for the period from "february 60 to March 60 in addition to previous period" (Annexure C5 ). The sixth demand was made on July 6, 1960, for the period from "april 60 to May 60 in addition to previous period" (Annexure C6 ). For non-payment of some of the demands, several certificate cases were started against petitioners, namely,1. Certificate case No. E. P. F. 77 of 1959-60, for recovery of dues for the period from February to April 1959, amounting to Rs. 657. 15 np. 2. Certificate Case No. E. P. F. 146 of 1959-60, for recovery of dues for May and June, 1959, amounting to RS- 463. 50 np. 3. Certificate Case No. E. P. F. 315 of 1959-60, for recovery of dues for the period from July 1959 to January 1960, amounting to Rs. 1623. 25 np. 4. Certificate Case No. E. P. F. 59 of 1960-61, for recovery of dues for February and March 1960, amounting to Rs. 463. 50 np.
( 2 ) ALSO on April 30, 1960, there was started a criminal proceeding against the Manager of the petitioners, under paragraph 76 (a), (c) and (e) of the Employees' Provident Fund Scheme read with Section 14 (2) of the Employees' Provident Funds Act,
( 3 ) THE petitioners disputed their liability to pay the demand on the ground that theirs was an infant industry and invoked the jurisdiction of the Central Government, under Section 19a of the Employees' Provident Funds Act, for a decision as to their non-liability to pay. The Central Government rejected the prayer.
( 4 ) IT is in these circumstances that the petitioners moved this Court praying for a writ in the nature of certiorari for quashing the aforementioned demands and a Writ in the nature of prohibition restraining the respondents from further proceeding with the Certificate Cases started for realisation of the same and also for consequential Writs and orders and obtained this Rule.
( 5 ) ACCORDING to the case made by the petitioners, they carry on business in co-partnership under the name of International Rubber Manufacturing Company. The petitioners, in their said business, purchased from the trustees of the registered debenture trust of the United Rubber Works Private Limited, on October 18, 1958, all the machinery, plants, tools, implements, equipments, furniture and other movable articles belonging to the said limited Company, fur a sum of Rs. 2,50,000/ -. The business of the United Rubber Works Private Limited was closed at the time of the purchase by the petitioners and they alleged to have started, after their purchase, a now business, in the same site, on about February 13, 1959. They say that inasmuch as three years have not elapsed since the establishment of their factory, they are not liable, under the Provident Fund Scheme, to contribute.
( 6 ) IN order to examine the validity of the contention made by the petitioners, it is necessary for me to examine some of the provisions of the Employees Provident Funds Act 1952 (hereinafter referred to as the Act), which was enacted, as the. longer title shows to provide for the institution of provident funds for employees in factories and other establishments. Under Section 1, the provisions of the Act apply to:" (1) *** (2) * * * (3) Subject to the provisions contained in S. 16, it applies--
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